Local Farms Skip Safeway, Deliver Produce to Your Desk
Live Earth Farm, in Watsonville, Calif., knew it needed to move beyond farmers' markets, farm visits and subscriptions for veggie baskets if it was to become a profitable organic foods company. To compete with the convenience of grocery stores' produce departments, it is branching out, persuading workers in the San Francisco Bay Area to order produce online for weekly delivery directly from Live Earth Farm to their offices.
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"We believe that food is much more that just a commodity," said Tom Broz, co-owner of 18-year-old Live Earth. "We want the community to experience a direct connection with our farm."
Live Earth Farm uses an online ordering and delivery system cooked up by Farmigo, a startup that develops tech tools to efficiently connect online customers with local food providers willing to offer work-site deliveries. The program launched in December 2012. By March 2013, Farmigo (pronounced far-mee-go) operated about 20 work-site food delivery programs in California and New York. That number is expected to double by the summer.
Live Earth joins three other ranches selling carrots, greens, onions, apples and other products to Farmigo members at the Hub SoMa, a shared workspace for trendy start-ups in downtown San Francisco.
The Farmigo service is popular with companies that depend on young, tech-savvy employees working on demanding projects. Some companies, such as Etsy, a grassroots ecommerce company in Brooklyn, N.Y., offer staff members credits for Farmigo food purchases as an incentive.
A limited number of people have the time and money to visit farmers' markets or to subscribe to Community Supported Agriculture veggie boxes, said Farmigo CEO Benzi Ronen. By making sales more convenient and customized, he said, "we help local farms reach far more people, increasing their profitability and sustainability."
Ronen points out that in the grocery store model, only 9 cents of each dollar spent on food goes to the farmer, "while 91 cents goes to suppliers, processors, middlemen and marketers." With Farmigo and similar programs, he said, up to 80 percent of the price of an apple goes to the farmer.
Here's how it works: Farmigo solicits farmers and pays regional coaches to establish the program at work sites that have requested the service. After setup, the program is managed by one of the business' employees. Staff members enroll and order local produce on a dedicated Farmigo website.
For example, at the Hub, $4 will buy you two bunches of beets or kale or 2 pounds of broccoli; for $5, you can get a dozen mandarin oranges. Your credit card is automatically charged the morning after the order is picked up. One of the food providers agrees to make the weekly delivery to the work site.
Getting farmers and work sites interested in the program is easy, according to Colin Frolich, Farmigo's regional manager.
Finding time for marketing is extremely difficult for farmers, said Taylor Brady, marketing coordinator at Live Earth Farm. "Farmigo does a lot of the upfront outreach, communication and general customer management," he said.
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Promoting worker health and fitness is also part of the draw for employers. For instance, Carrot Creative, a marketing agency in Brooklyn, N.Y., contributes $10 a week toward each worker's Farmigo order as part of its company wellness program.
Farmigo is part of the explosion in food- and agriculture-related start-ups in the past two years. Research by Rosenheim Advisors and León Mayer & Co., an investment banking firm, shows that in the past two years about $1.5 billion has been invested in tech companies that help consumers learn about food, including how to buy and cook it.
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Delivery has become a major investment theme this year, said Brita Rosenheim, founder of the strategic consulting firm Rosenheim Advisors. "Investors and start-ups are betting that consumers will increase their reliance on the convenience of online ordering and delivery," she said.
Farm delivery services are expanding throughout the country. The FruitGuys, who pioneered the "fruit at work" concept in San Francisco in 1998, has regional distribution hubs across the U.S., each with a local network of small family farms and next-day delivery.
In January 2013, Samplrs, a New York subscription and delivery start-up for local artisanal food, was acquired by national social network Fancy, a rival to photo-sharing giant Pinterest.
Much like other industries that were revolutionized by the Internet, such as travel, media and financial services, "the food industry is ripe for change," said Farmigo's Benzi. When farms can collaborate efficiently, residents can buy food directly from local farmers affordably, and technology can make the execution seamless, he notes.
In Live Earth's view, there's another benefit. An online service like Farmigo introduces them to a whole new pool of customers—office workers in San Francisco, 90 miles away.
"We invite everyone who buys produce from us to drive out to Live Earth Farm and visit," Brady said. "We encourage folks to build upon the connection they have with their food."
And you thought they were just apples.