A Farmer-Owned Local Food App Stands Out from the Venture Capital-Backed Crowd | Civil Eats

A Farmer-Owned Local Food App Stands Out from the Venture Capital-Backed Crowd

a farmer sells local food direct to consumers after making the sale through a smartphone app

At the start of the pandemic, Elizabeth Riffle built out a website for her West Virginia bison farm. Her aim, in part, was to boost revenue by allowing local customers to pre-order their brisket and strip loin for pickup at her farm and the Morgantown farmers’ market. Soon enough, though, things took a turn for the “quite messy,” Riffle says. In order to track inventory and manage sales, she had to create a separate virtual farm store to link from her website. Then, she started using a third platform to keep on top of customer communication. “And don’t even get me started on [our] beast of an accounting system—that is a nightmare,” Riffle says.

Like almost any farmer, Riffle is plagued by habitual time constraints, making this kind of laborious investment in online sales a time-suck that might hardly seem worth the effort. There is a critical caveat, however: Online purchasing is on the rise in the U.S., fueled by the pandemic as well as a proliferation of online shopping options.

In 2020, online food and beverage sales alone accounted for $106 billion, a jump of 125 percent over 2019, according to the Food Industry Association and NielsenIQ. In parallel to that growth, the pandemic’s negative effects on national and international supply chains engendered a heightened understanding among shoppers about the importance of maintaining local food systems. As a result, some Americans are now more willing to click-and-buy produce and other foods from local farms.

All of this has led various farmers and farmer organizations to wonder: Is the time finally ripe for digital sales to help regional producers aiming to feed their communities stay afloat?

Lindsey Lusher Shute has been pondering this question for years. Back in 2015, when she was the executive director of the National Young Farmers Coalition (NYFC), she’d surveyed members about what sorts of business services the organization could offer to help them make more money.

“Innovative, forward-thinking tech rose to the top of the list as the thing that could give a more modern customer experience, and they needed support on marketing and outreach to bring in more customers,” Lusher Shute remembers. At the same time, a half-dozen tech companies had entered the fray, including Farmigo, Good Eggs, Full Circle, Barn2Door, and Plough, to name just a few.

As an aggregator, Farmigo, for example, made it easier for farms to sell online but it took 20 percent of farm profits—less than the cut from selling wholesale but far more than the 95 to 100 percent farmers earn from selling direct to consumers through farmers’ markets or community-sponsored agriculture (CSA) boxes. Farmigo found the food delivery business a tough nut to crack: It stopped deliveries five years ago after failing to break even.

The challenge with these sorts of online hubs is they siphon off customers from viable local farm businesses while making them believe they’re support their local growers directly, Lusher Shute says. As a result, many farmers reliant on CSAs and similar models say they have seen a marked decline in customers. The shift has also come at a time when young farmers and other smaller-scale producers who sell their food locally have been hit hard by a number of other challenges, including soaring farmland prices, and the costs and challenges associated with climate-fueled weather extremes such as freezes, flooding, and drought.

As Lusher Shute sees it, Farmigo provides a good example of the negative effects of “tech companies coming in and disrupting industries and livelihoods, thinking about how they can increase their own margins but not about the human impacts of doing so.”

In 2019, a grant allowed the Farm Generations cooperative—which aimed to help increase equity and profitability among its member-owners—to build its own online platform. The coop has since spun off from NYFC (along with Lusher Shute), but its new platform, GrownBy, launched in March 2020, allows farmers anywhere in the country to sell their own products and CSA shares online without a venture-backed tech startup as the middleman. The platform is starting with local pickup, but home delivery and shipping options are currently in the works. GrownBy charges a 2 percent service fee and a similar fee for credit card sales; after a farm makes its first sale through the platform, it can buy a share in the co-op and a stake in its future success—another path, hopefully, to financial sustainability.

The group convened 18 farms to beta-test GrownBy last spring; among the improvements testers suggested was creating a smartphone app, which Lusher Shute says makes for “a better user experience for customers—and research shows that when customers are buying on an app they buy more.” The team also improved searchability and made sure that both the app and website alike could support any kind of farm sales, from a traditional pre-determined CSA box, a customizable box, or even just a pre-order of bread and grapes.

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The whole point, according to Mike Parker, a GrownBy co-op member, grass-fed beef farmer, and co-developer of the GrownBy site, is to “build tech that works for farmers, and to allow customer discoverability of local farms. This is something other apps are not purporting to do.” He points out that as a mechanism of a farmer-owned cooperative that’s whole mission is to support farmers, GrownBy does not have to quickly build profitability in order to pay back VC funders looking to capitalize on their investments.

As of press time, GrownBy 1.0 had 50 farms selling their products and distributing from 155 sites; another 130-plus farms have signed on and are presumably getting ready to list their own products. One participating farm is seven-year-old Rise & Root in Chester, New York. One of the co-owners of the cooperatively run farm, Jane Hayes-Hodge, had already been using an online ordering system for its spring plant sale and was thinking about using it to facilitate orders for restaurants and farmers markets customers, when COVID-19 hit and accelerated the need.

“Suddenly we were in a situation where restaurant clients weren’t buying from us but there was a huge demand from the local community, with people afraid of losing their food sources,” she says.

Hayes-Hodge says the GrownBy app enables her to sell pre-orders at all three of her markets and, with very little promotion in a very short time, has increased her weekly sales by hundreds of dollars. She says it effectively offsets weekly ebbs and flows with “some basic sales before we arrive at the market; we can harvest lettuce, tomatoes, basil, knowing that someone has already purchased them. We can also sell some stuff that we might not otherwise bring to the market because there’s not enough of it. It helps ease a little of the stress.”

GrownBy is not the only platform attempting to better serve farmers, rather than tech companies, first and foremost. Both meat-centric GrazeCart and Harvie, which concentrates on produce and flowers, also do a good job, according to Parker, of providing fresh local food to retail customers without fleecing producers.

In a similar vein, the Minnesota Farmers Union (MFU) recently launched the Minnesota Foodshed to provide what Claudine Arndt, an MFU program manager, calls an online matchmaking service between farmers too busy to seek out relationships with chefs, for example, and chefs wanting to work with nearby farmers “but don’t know where to start,” she says. Chefs and farmers can browse each others’ profiles, advertise a need for strawberries or an overabundance of juneberries, and eventually, will be able to search an in-development resources section for tips on how to work well together.

Andy Fisher, executive director of nonprofit Ecological Farming Association, believes these kinds of solutions comprise a “niche” strategy suited to young, technologically proficient farmers, and are not necessarily the best method for creating the kind of communal experience that in-person farmers’ market shopping provides. And yet, he says, “they also present great opportunities for farmers to expand their audience beyond the folks who already go the extra mile to find local food—they’re a natural progression of democratizing food access,” he says. That could include figuring out how to make GrownBy or a similar platform work for Supplemental Nutrition Assistance Program (SNAP) clients who—as of this moment—lack the ability to use their benefits for online purchases except through Amazon and Walmart.

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In fact, GrownBy’s Parker says equity for underserved consumers is top of mind for food-justice-minded Farm Generations members. And fresh local food, he says, “is a big deal. It’s a huge part of the grocery market that’s currently kept out of e-commerce sales.”

Seeking to alter that, the USDA’s Food and Nutrition Service, which oversees SNAP, recently announced $4 million in grant money to build an online pilot platform that allows clients to use their benefits to pre-order at local farmers markets. Farm Generations will be applying, Parker says, but no matter who the money is awarded to, “We’ll be keeping an eye on that, because we definitely want to integrate that into GrownBy.”

This article was updated to correct Farm Generations’ relationship to NYFC.

Lela Nargi is a veteran journalist covering food policy and agriculture, sustainability, and science for outlets such as The Guardian, The Counter, City Monitor, JSTOR Daily, Sierra, and Ensia in addition to Civil Eats. She’s also the author of science books for kids. Find her at lelanargi.com and @LelaNargi. Read more >

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