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The Spoon

Daily news and analysis about the food tech revolution

farms

Sales Through Grass Roots’ D2C Meat Marketplace are up 400 Percent Over Last Year

One of the many ways COVID-19 has impacted the meal journey this year is how we get our meat. The pandemic illustrated the shortcomings of our over-consolidated supply chain and the inequalities experienced by the people working in industrial meat-processing facilities.

If there is a “fortunately” to be found at all with the pandemic, it’s that it has come at a time where there are more options than ever for people to buy meat directly from small farms.

Grass Roots Farmers Cooperative is one of those options. Founded in 2014, Grass Roots offers an online market where consumers can buy meat that comes from small farms. Based in Arkansas, Grass Roots mainly works with farms in the southern region of the U.S., but ships directly to the lower 48 states.

I spoke with Grass Roots Founder and CEO Cody Hopkins by phone this week, and he told me that business has been up 400 percent year-over-year for the company, which now has 25,000 customers and is on track to do $7 – $10 million in sales this year.

Part and parcel with consumers looking for new ways to purchase traditional meat is an increased desire for transparency in the supply chain that gets that meat to their door. To that end, Grass Roots has taken the extra step of integrating blockchain into its supply chain, so it’s products are tracked from the farm to the table.

Grass Roots is among a number of companies, including Butcher Box and Crowd Cow, offering online marketplaces for people to buy craft meat. The bigger question for companies like Grass Roots et. al. is whether its COVID-driven boom will last after the pandemic recedes (though the coronavirus certainly doesn’t appear to be abating anytime soon). Will people still want to buy online or avoid industrial farming when they can return to the grocery store?

Speaking for myself, I recently switched to mail order meat for staples like chicken and seafood, and the whole process has proven to be extremely convenient and price competitive with my local grocer. For me, mail order meats has actually transitioned into permanent behavior.

Harvie’s Customizeable D2C Farm Sales Platform Could Help Local Growers Survive

Connecticut farm Farmer Joe‘s Gardens announced today it is partnering with Harvie, an online farm share platform, to pivot and serve people during the COVID-19 pandemic.

Pittsburgh, PA-based Harvie connects people online with local farm shares, also known as Community Supported Agriculture (CSAs). By using its service, Farmer Joe’s Gardens can specialize its CSA boxes based on individuals’ preferences. “For 10 years, we’ve packed a standard box of food for each member regardless of what they like and what they don’t like,” Farmer Joe noted in a press release. “We now have the technology that allows us to customize each box, so we make sure each member gets what they want.”

Going forward, Farmer Joe’s Gardens will go onto Harvie’s platform and enter a list of all its available crops. At its core, Harvie is a D2C sales platform connecting small farmers with local consumers. Harvie’s algorithm will match the crops to each member’s preferences to optimize their order, which can be one-time or a subscription box, like a CSA. It sends the lineup to the customer, who has 24 to 48 hours to make changes and order extras from the farm, like milk or eggs. Harvie then sends the optimized order back to Farmer Joe’s Gardens, which takes care of the fulfillment and delivery.

To be clear, Harvie does not actually grow any crops itself — it just manages farm share subscriptions for agricultural producers. According to Harvie’s CEO Simon Huntley, who spoke with me earlier today, the service’s real value-add is in its personalization feature. “The original CSA box is just farmers throwing whatever they have in a box,” he said. “We’re helping farms provide customization at scale.” Harvie also handles any customer service requests and provides add-ons, like recipe recommendations and storage tips.

Farmer Joe’s is a hyper-regional example, but overall Harvie — or services like it — could be key to help local farms survive through the coronavirus pandemic. In a time when small farmers are struggling to stay afloat with COVID-19 shutting down farmers markets and restaurants who typically purchase farm-grown food, growers are looking for new ways to get their products into the hands of consumers. Optimizing D2C sales, like CSAs, could make the difference between surviving the growing season and having to fold completely.

Thankfully for farmers, the popularity of CSAs is actually on the rise. According to Yelp, sales of farm shares have risen a whopping 405 percent since the beginning of March. But in order to make it through this crisis, farmers will have to make sure that folks who sign up for CSA continue their membership. Having a customized produce offering could go a long way in maintaining customer loyalty. As a bonus, personalized CSAs could help cut down on food waste, since people aren’t stuck with a basket of produce they don’t like or know how to prepare.

Thus far Harvie works with 150 small farms in the U.S. and Canada. According to their website, Harvie member farms see an average increase in retention rates of 15-20 percent. According to Huntley, the coronavirus pandemic has actually helped sales for their growers — Harvie farmer’s sales are up almost 200 percent. He also noted that they’re seeing an increase in farmers signing up for the platform. “We’re in the right place at the right time.”

To work with Harvie, farms pay a $500 setup fee and a 7 percent transaction fee on all farm share purchases. Harvie also takes a small percentage of credit card sales.

That cost is not insignificant, especially if you’re a local farmer struggling to stay operational. But with markets and restaurants closed, or at least drastically reduced, CSAs are the only way forward for many farmers. If services like Harvie can help them gain a larger swath of loyal customers, even just to get through the pandemic, it’s likely worth the fee.

Farm’d is a Marketplace for Restaurants to More Easily Buy From Local Farms

There are lots of reasons that buying local food is better. It’s better for the environment, better for the community, and better tasting. But for restaurants and retailers, buying locally sourced food may not be easier. That’s why Farm’d created a B2B marketplace to connect those food buyers with local food growers.

The premise is pretty simple. Farmers can list and sell their products on Farm’d’s service, and chefs and other food buyers in that area can select and buy them. Farm’d Co-Founder and CEO Chris Damico got the idea when he was a restauranteur and looking to buy local produce. “There was no economical way to get locally sourced food,” said Damico, “and I was frustrated by the options the Syscos of the world were offering.”

So Damico launched Farm’d in January of 2018. “We have a 400 restaurants and retailers on the platform. We’ve got 70 farms selling 1,200 SKUs, all within three hours of Atlanta.”

Right now, Farm’d facilitates meat, dairy and produce sales. Since produce is seasonal and not every fruit or veggie is available in every region year-round, Damico says that it’s only 30 percent of Farm’d’s sales.

“Anybody can sell tomatoes,” Damico said. “You’re not going to buy beef from just anybody. That’s how are we different. Direct, transparent and favorable.”

Another key differentiator for Farm’d, according to Damico, is that the company doesn’t own or use any warehouses, and delivery drivers are all independent contractors. “The farm is the warehouse,” Damico said. “We pick it up when someone wants it and our IP is in the routing.” Damico said that deliveries are made on a daily basis.

So far, Farm’d has raised roughly $3 million in seed and angel funding. The company makes money by charging farmers a straight 10 percent cut of its sales generates via the platform. Farmers can set their own price and tack on the 10 percent fee on top of their sales or subtract it from the total.

Farm’d is part of an interesting overall trend of startups that are in the business of connecting volume food buyers with smaller brands. Pod Foods is a marketplace that connects retailers with smaller CPG brands, and WeStock is a platform for consumers to tell their local grocers which brands they would like to see in store.

Given that Farm’d is simply a marketplace, and says that its special sauce is more in the logistics of food delivery, there’s no reason that it can’t scale relatively quickly to new markets. They still need to enlist new farmers and drivers, but no matter where you are in the country restaurants want food and farmers want to sell food.

If that happens, eating local while eating out could become easier than ever.