On the Money

FarmLogix helps give local farmers a lifeline to big kitchens

Farm to table 2.0
Farm to table 2.0

Like many parents, Linda Mallers found herself working on a PTA. fundraiser at her children's school. The single mom of four had been boxing local produce from nearby farms in Wisconsin and selling them to friends, an effort she parlayed into a community fundraising effort in 2012.

In a world of grab-and-go drive-thrus and processed meals, the fresh fruits and veggies were a hit, which gave Mallers a big idea.

"Our local high school in Evanston Township asked how they could put the produce in their cafeteria, and that's how we got our start," Mallers told CNBC's "On the Money."

The fundraiser led Mallers to launch Chicago-based FarmLogix, a technology platform that connects local farmers to large institutional kitchens. Mallers drew on her technology background, having worked in the futures industry, then for a food distributor in Chicago.

"I realized this platform that I had for 20 years really translated well to the local food movement and it opened up doors," Mallers said. "I had always been in the business of creating online communities for people who can't find each other otherwise."

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The farm-to-table segment is gaining in popularity among consumers.

A January 2015 Agriculture Department report found that "producer participation in local food systems is growing as the sale of food for human consumption through direct-to-consumer and intermediated marketing channels [including institutional sales] appears to be increasing."

Citing data from the Agricultural Resource and Management Survey and census of agriculture data, the report said that local food sales totaled an estimated $6.1 billion in 2012, the latest year for which figures were available.

The technology allows detailed farm identification to be maintained through the supply chain, an ongoing issue in the industry because of how quickly food moves throughout warehouses and distributors. FarmLogix has done $8.5 million in sales so far, and bootstrapped the startup with investments from friends and family.

Today, clients include food delivery service Skokie, Illinois-based Peapod and Philadelphia-based food services giant Aramark — which has helped Mallers put healthy foods in more than 1,000 schools across the country.

Many of the schools are kindergarten through 12th grade, but some colleges and universities have been added. These include Boston University in Massachusetts and Chicago's Loyola University.

"It's helpful to us because consumers are more and more looking for transparency in the foods that they buy and the foods that they eat," said Scott Barnhart, senior vice president of the global supply chain and procurement at Aramark. "They want a safe way to understand where they are getting their food and where it is being supplied from."

For farmers, the platform is free to use. FarmLogix has a "boots on the ground" team that goes into regions to get to know the farmers and figure out who might be a good fit for the platform, with some help from the Agriculture Department, Mallers said. Once identified, the farmers have a video profile created for them by FarmLogix, along with consumer tools that allow people to learn where their food comes from.

Each of the more than 200 farms FarmLogix is working with have a free web page in the system, Mallers added, and they go into the schools FarmLogix works with to talk to students about sustainability.

For Mallers, running her own business also presents the opportunity to achieve dual missions — educating low-income children about healthy eating, and paying it forward to other working moms. The company has 10 employees, 80 percent of which are women.

"We help farmers change their lives and be sustainable and viable, but on the other end, their food is going into low-income communities — our program feeds half a million kids," she said.

"And we have a business that supports women, moms that want to go back to work," Mallers added. "We are very supportive because we are a tech company working remotely with a flexible schedule."

On the Money airs on CNBC Saturdays at 5:30 am ET, or check listings for air times in local markets.