Sustaining farm profitability has been challenging for North Carolina smallholder farmers facing market failure. Small farms earning between $10,000 or less and $50,000 annually in net farm income need alternative practices that will make them more profitable. This study assesses North Carolina small farmers’ understanding and attitudes towards value-added agriculture. We conducted farmer focus group interviews and analyzed the data using Qualitative Data Analysis Miner Lite. We found that the main drivers of value-added agriculture include improving on-farm profitability, product expansion, and market growth. High production costs and lack of government assistance are some of the factors limiting value-added participation.