To survive uncertain times, small farms are pivoting to serve their local communities and compete with big box grocers online.
To survive uncertain times, small farms are pivoting to serve their local communities and compete with big box grocers online.
April 1, 2020
“We are so busy, this may not be my most lucid moment,” Amy McCann says when she picks up the phone, which hasn’t stopped ringing in days. McCann is the CEO of the Eugene, Oregon-based Local Food Marketplace, a software platform that farmers and other local food aggregators across the country use to reach customers online.
In a normal year, McCann said, her team takes on about 50 new sellers offering everything from produce to dairy and jam. Due to an onslaught of demand, however, they’ve added 20 new users in just the last week.
In a very short time, COVID-19 has virtually upended the food system. And for farmers who sell directly into local markets, it has made the in-person sales they depend on—usually facilitated at farmers’ markets, restaurants, schools, and other communal places—especially unsteady.
As peak harvest season approaches, growers have been scrambling to move their sales online, where orders can be fulfilled without face-to-face interaction, either for through traditional community supported agriculture (CSA) boxes or other creative models. At the same time, groups that support local food economies have also been working to direct consumers to these new systems so that they can continue to buy local food from home.
In Seattle, where farmers’ markets have been shut down, Seattle Neighborhood Farmers’ Markets compiled a list of its market vendors’ “alternative sales options,” and has been highlighting them on Instagram. In Chicago, Green City Market created a guide to farmers offering online ordering with pick-up or delivery. And in the Mid-Atlantic, Future Harvest and the Maryland Farmers Market Association put together a map of more than 500 farmers and markets selling local food that received over 15,000 views in just a few days.
With social distancing guidelines now extended through at least the end of April, it’s clear that a great deal of food will be purchased online for the foreseeable future. A survey released this week found that more than 30 percent of US households had purchased groceries online in the past month. That was more than double the number that had reported doing so in August 2019, and 43 percent said they’d likely continue to purchase groceries online after the crisis ends.
While markets for small, sustainable, and local producers have been taking shape online for over a decade, many have struggled to compete in the past.
But this moment presents a powerful opportunity for individual producers and local food aggregators to scale up their online presence. While competing with massive companies like Costco and Walmart is a daunting challenge, worker strikes at Amazon and Instacart may also inspire some socially conscious shoppers to support independent producers.
Farmers will also have to tackle many obstacles as they attempt to redesign entire business models right before harvest season, improvise home deliveries, and figure out how to ensure shoppers using food assistance benefits can access online ordering. But that’s not stopping a range of people and groups from jumping in—and expanding their efforts—in the evolving local food landscape.
Previously a Rocky Road for Local Foods Online
Before the pandemic, online grocery sales in the U.S. were projected to double between 2017 and 2021. But while the practice had picking up steam year over year, the vast majority of Americans still bought their food in stores. That was even more true with local food, especially since many people who prioritize shopping local often valued personal relationships with farmers and gathering as a community at markets or through CSA distributions. But that’s all changing rapidly.
Several “online farmers’ market” platforms have come and gone over the past decade, and many companies that have survived in the space—like Good Eggs and Farmigo—have struggled or had to pivot to stay afloat. “Those were mostly tech companies that thought you could solve the [logistics] problem with technology alone,” McCann said.
Good Eggs, an online marketplace for small farms that had raised almost $53 million in venture capital, shut down operations in three out of four cities and laid off 140 employees in 2013, with co-founder Rob Spiro citing the fact that the company grew too fast “before fully figuring out the challenges of building an entirely new food supply chain.” It homed in on one city, San Francisco, and has been operating successfully there, although it now stocks specialty foods beyond what’s available from local producers, like fruit shipped from Mexico and gluten-free pizzas made in Colorado.
According to the company, Good Eggs has been experiencing two to four times more demand since the coronavirus outbreak (and there are rumors of shoppers logging on after midnight to place orders as soon as new items are added to the site). The company is working to expand to meet demand: coincidentally, in mid-February, it opened a new Oakland fulfillment center that significantly expands its capacity, and it is also hiring new employees. But it’s unclear whether the company intends to take on any new farms.
“Our customers have always looked to us as a source of local food from small producers, and we feel that responsibility now more than ever,” CEO Bentley Hally said in an emailed statement. “We are doing everything we can to support our producers during these uncertain times.”
Farmigo, which started selling software for CSAs and other local farm sales, had raised about $26 million to expand its operations by 2016. But the online farmers’ market it built did not succeed; it shut that part of the business down, claiming that the logistics of distribution were much more difficult than the team had anticipated. It has continued selling software to farmers and leaving those logistics to them, and its CSA platform is remains popular among farmers.
Farmigo did not respond to our efforts to reach them for comment. But as the company’s arc illustrates, many farms and local food communities that have moved their sales online are managing their businesses and distribution themselves, rather than relying on other companies that sell their food for them.
Grassroots Organizing, Online
In Tallahassee, Florida, for example, four women started the Red Hills Small Farm Alliance about eight years ago to connect local farms to buyers in their community. The virtual market, which runs on Local Food Marketplace’s software, grew slowly and steadily, said interim director Cari Roth, and it now offers food from about 75 producers to around 500 members. (Shoppers pay $20 annually for a membership and then pay a la carte for purchases.)
Although it’s online, its operations resemble an in-person market; the shop is open during a select window—8:00 a.m. on Sunday to 8:00 a.m. on Wednesday. Farmers receive orders and then bring their food to one of the Alliance’s distribution centers, where staff members and volunteers package the food from various producers into individual customer orders. Shoppers can choose to pick their food up or get it delivered for an extra charge.
Shoppers can opt to get a CSA share from one farm, or they can mix it up. “The beauty is that I can also order a bunch of carrots, a bunch of beets, mushrooms from another place, and scones from a bakery,” says Roth. “It’s like going to a real farmers’ market, but with even more variety.”
Red Hills had been growing its business long before the coronavirus emerged, but things took off even more in recent weeks. Roth said they picked up 174 new members in one week in March. More than 440 orders came in that same week, compared to an average of about 300.
And they’re not alone. In Maryland, Chesapeake Farm to Table operates with a similar model but was previously focused on aggregating food from small farms for restaurant sales. Now, its business collecting orders from individual community members and delivering to their homes has taken off. In Seattle, farm-to-table bakery Salmonberry Goods has been hustling to aggregate more food from small Washington farms to sell through its new online shop for weekly delivery.
“We’re really hoping that now that people are figuring out how easy it is to eat local, that they’ll stick with us,” says Roth.
Since the COVID-19 outbreak, farmers across the country have also been reporting an increase in interest in CSA memberships. Since CSAs guarantee a weekly supply of produce (and sometimes other foods), they seem perfectly suited to a time when Americans are fearful of further disruptions to grocery supply chains. Signing up for a CSA that can be picked up or delivered can also mean saving a trip to a crowded supermarket.
Many small diversified vegetable operations, were already offering online purchasing before using platforms like Farmigo, but those that weren’t are now driven to do so.
Hearty Roots Farm in the Hudson Valley offers CSA memberships to residents of New York City and counties north, the area that is now the epicenter of the coronavirus outbreak in the U.S. Before the pandemic, farmer Lindsey Lusher Shute was also hard at work on developing GrownBy, a new CSA software platform that she and other farmers were planning on using in a beta phase before adding other growers later on. Now, they’re opening it up more broadly right away to help the many farmers reaching out to quickly change their business model and move everything online to stay afloat.
Shute says one thing that sets GrownBy apart is that its built by farmers, for farmers—which means everyone involved in the development has a deep understanding of how marketing and sales channels typically work offline, making it easier to figure out how to move them online effectively.
Lusher Shute—who was a founder and long time director of the National Young Farmers Coalition—says her priority is the needs of direct market growers, not the profits of the software company, and that eventually, the plan is to evolve into a national cooperative, giving users the chance to share ownership in the technology. First, though, they simply have to make sure GrownBy is effectively making online sales happen.
“It needs to pull its weight on the farm and be seen as a valuable and critical piece of infrastructure,” she said. “We’re aiming to help farmers achieve efficiencies and a level of sales that they couldn’t on their own.” She also wants farmers to control their own data and to have software that is flexible enough that it can accommodate the variety that exists between operations.
One important flexiblity built into the software allows farms that accept food assistance benefits like SNAP and WIC dollars to offer an offline payment option, so they can recognize EBT (electronic benefits transfer, the payment system used for benefits) as a form of payment and then process that payment seperately.
And while she imagined farms would facilitate CSA share pick-ups, for instance, she just added a farm outside Albuquerque that, in the face of COVID-19, decided to offer home delivery, and was able to facilitate that aspect using GrownBy.
Indeed, farms across the country have been announcing home delivery of both CSA shares and a la carte food orders. Red Hills always had a delivery option but customers rarely chose to pay the upcharge. Now, it has gotten hugely popular.
“We’ve added drivers to accommodate it,” Roth said. On a COVID-19 call facilitated by Future Harvest for small farms in the Mid-Atlantic, several farmers discussed how to work with online orders and delivery protocols. Moon Valley Farm, which had trucks that normally ran restaurant routes in Baltimore and Washington, D.C., sitting idle, saw delivering CSA shares and a la carte vegetable orders as a way to replace lost purchases and keep drivers employed.
In many locations, however, home delivery presents real business challenges. “It’s really complicated and really expensive,” said Wen-Jay Ying, who has been barely sleeping while working to keep her company, Local Roots NYC, operating. Her goal is to continue giving New York City residents access to fresh, local food while buying from the small, independent farms nearby, which have lost significant restaurant business.
Local Roots has always used an online ordering system, but once members purchase shares, most head to local pick-up sites once a week to collect them. Most of those sites—cafes, restaurants, and bars—are mainly shuttered, and maintaining social distance at pick-ups in small spaces also became difficult. Ying has been able to keep two pick-up sites operating, but many customers chose to switch to home delivery.
“Coronavirus has made the need for tech clear to many more farmers”
So, she’s been hustling to hire workers to pack produce into boxes and do the actual deliveries, which can be time-consuming and complicated in a congested city where many people live in apartment buildings. “We’ve spent every waking hour for the past five days figuring out how to use a delivery routing software and organizing people based on these different routes,” she said, estimating that the cost per delivery for the farmer or aggregator can be as high as $15 per customer, a steep price when compared to Instacart and others like it.
And getting the food to customers after orders are placed is not the only challenge farmers face when looking to sell online. In rural areas, internet access is not a given, pointed out Hannah Dankbar, the Local Food program manager at North Carolina State’s Cooperative Extension. “In North Carolina, we don’t have broadband consistently across the state,” she said.
Farmers also may lack technical expertise, and they’re now hungry for knowledge related to online sales. In response to the pandemic, a colleague in Dankbar’s department set up two webinars on getting farm products online and more than 300 people tuned in to each one.
“Coronavirus has made the need for tech clear to many more farmers,” Shute said. And while many local food enthusiasts value the chance to mingle with community members and get to know growers at a farmers’ market, the efficiency expectation around groceries is only likely to increase as more people get used to a box of fresh vegetables from Amazon showing up at their doorstep within 24 hours.
“Some of those services sort of look like ‘local’ produce or higher quality produce,” she said. But they’re much less likely to support small-scale family producers.
“I’m concerned that if we don’t engage in this digital marketplace in a real way, we’re going to be left behind. Hopefully, the farmers’ market [will go back to being] a place people will congregate. But at the same time we have to be thinking ahead and moving the field forward.”
The best-case scenario, says Dankbar, is that buying fresh-from-the-farm food online will be “a trend that’s accelerated because of the virus.” If that happens, she’s optimistic that it could give local foods a permanent space in the larger online shopping arena. “The community building associated with local food—I don’t think those are going to go away,” she says.
Top photo CC-licensed by Jason on Flickr.
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In Japan also online fresh produce purchase is getting more and more popular during this time, and consumers prefer home deliveries. Many small farmers and fishermen are losing their sales channels because of the restaurants shuttered or the price crashed down.
We've run our online market for more than three years and there are more than 2,000 farmers and fishermen registered. We have a partnership with a major transport company in Japan, so shipping label is automatically delivered to the farmer or fisherman when a customer place an order. The consumers cannot see their farmers/fishermen in person, but they can chat with them online and make posts on their 'community' page to express thanks for the food they make.
Our problem is that the home delivery fee can get pretty expensive, so we are now seeking a way to set pickup points in urban areas so that farmers/fishermen can send their produce in a larger amount and customers can just come and pickup their online-pre-ordered produce with lower delivery fee. But it's still difficult for some reasons;
(1) since we don't have CSA culture like in the US, not many people are willing to offer pickup points in the city
(2) our online ordering system is not designed to deliver group purchases.
Especially for (2), we are unsure how to organize the system for group purchases with pickups points delivery.
Please contact me if there's anyone who are willing to make us suggestions or ask questions about our model. I hope to discuss on the current shift on food distribution around the world and try to make it for the better.