Farmigo’s CEO on the shuttering of the online retail platform

Thanks to FMC’s Research Director Alex Canepa for sharing this article about Farmigo’s online market demise.

Here are some quotes from the article, most from Farmigo CEO Benzi Ronen, that I think should be discussed, challenged or simply noted, depending on how you see the scaling up or technological solution conversation in regards to family farming.

Silicon Valley is sometimes guilty of hubris, thinking we can disrupt an industry overnight and do it better,” he says.

He’s confident Farmigo will be just fine, because it still has its CSA software business, which has 300 to 400 customers, depending upon the season, and revenue.

Is there a need for what we’ve been working on? There is definitely a need for it – you can debate, I think, the magnitude of the need. How many customers are willing to pay a premium for a better product?

We are currently looking for partners that can service our customers once the Summer ends. We have also sent all our customers in each region a list of the producers they love so that they can purchase directly from them – Seattle-Tacoma, Greater New York and Bay Areas.

We’re looking at it broader than a CSA platform. Right now we’re servicing CSAs very effectively, but we now we have experience working with a lot broader array of farms than just CSAs. We were working with all kinds of farms, fishermen, bakers and food artisans that wanted to get their food to market. Some of them were CSAs, and some of them were even using our software, but the majority weren’t. We feel that we now know better what software tools we can give all of them, so they can sell direct to consumer if they want, to food hubs if they want, to wholesalers and distributors, to retailers, to farm stands, farmer’s market.

The industry as a whole has grown significantly, but it’s still incredibly inefficient to source this stuff — and those are the kinds of problems I know we can fix. As a software guy, as a guy who’s been building business to business software applications with SAP that connects businesses and allows them to trade more effectively together, to trust one another and to have transparency, to me that’s a massive opportunity

Source: Why Farmigo’s Shutting Down Its Online Farmers Market

 

Other posts on food hubs.

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Farmers and Food Hubs: NFGN webinar April 16

Growers’ Experiences Selling  Crops Through Food Hubs

Thursday, April 16
3:30 – 4:45pm ET (12:30 – 1:45 PT)

Free! Register Now

What is it like to sell to or through a food hub? What are the benefits … and what is not so good? Learn directly from seasoned farmers!

We have assembled farmers representing a wide variety of experiences – different geographies (CA, MT, MI, and MA), different sizes (from 8 to 400 ac.), different products (vegetables, animals, and mixed) … who sell into different kinds of food hubs (non-profit, for profit, growers co-op) asking different services from them (simple transport, sell-through, and selling to the hub).

Each of these farms has different reasons to work with their local food hub. What works for them? What doesn’t work so well? How do they choose what to sell through the hub? We’ve asked these farmers to share their unedited experiences and advice with their fellow farmers across the country who might now be considering a relationship with a food hub.

Learn how they chose to start selling to the hub, why, what the hub demands of them, what they get in return, how they are managing risks, and how their business’ bottom line has been affected.

Considering selling through a hub? Learn from the experience of your peers. Advise farmers? Enrich the service you can provide.

Reserve your spot – click here

National 2013 Food Hub Survey-NFGN

Authored by Michigan State University Center for Regional Food Systems & The Wallace Center at Winrock International
From the Executive Summary:

Findings from the survey showed that food hubs across the country are growing to broaden the distribution infrastructure for local food. From the survey, 62% of food hubs began operations within the last five years, 31% of food hubs had $1,000,000 or more in annual revenue and the majority of food hubs were supporting their businesses with little or no grant assistance—including food hubs that identified as nonprofits. Financially, the most successful food hubs tended to be for-profit and cooperative in structure, in operation for more than 10 years and working with a relatively large number of producers. The values-based nature of food hubs makes it hard to judge many of them solely on their level of financial success.
The survey also revealed a number of persistent challenges and barriers to growth that even the most financially successful food hubs faced.
For example, many food hubs indicated their needs for assistance in managing growth and identifying appropriate staffing levels for their hubs. They also often pointed to their need for capital and other resources to increase their trucking and warehousing capacity.

NFGN Report