In January, I launched a partnership with a Pittsburgh based farmer and local foods distributor, Neil Stauffer, called Harvie Farms Pittsburgh.
The concept, that I call “Harvie Farms Local”, is about more than just Pittsburgh and is rather simple. It is a multi-farm local food distributor using the customer-friendly power of the Harvie platform and delivers direct to the consumer’s door.
The model has been very successful from a sales point of view. We have far surpassed our yearly goals already with very little marketing spend. In fact, we are working hard to just keep up with the demand for the program.
We have already started delivering, though the main season will start in late May. We are using Harvie’s “pop up farm stand” tools to run sales right now. The demand is huge. Last week, we sold out of farm boxes in 45 minutes.
My goal is not to compete with farms or existing distributors: what I want to do is build a successful farm product distribution system on top of Harvie that can then be used by farmers and other local entrepreneurs anywhere. In my view, figuring out this problem is what will truly change the game for local food economies. If we can perfect a distribution model that pays farmers to be farmers, rewards the costs of distribution, and serves the consumer well, local food can compete against national and international distribution.
In short, we need a viable business model for local foods distribution and I believe Harvie Farms Local can become that model. It is a business model, a spreadsheet, and a way of thinking that invites you to build a scaleable local foods distribution business from your farm or as a distribution business.
I conceived of this model before the threat of COVID-19 became apparent. In the meantime, this model has become even more relevant as demand for local food has surged, restaurants have closed, and online sales with home delivery is the preferred method for distribution.
Some key aspects of the “Harvie Farms Local” concept:
- Multi-farm to fulfill a larger percentage of food for a household: a farm or small-scale distributor could fulfill this.
- Goal of $1 million+ sales per farm distributor, because that is where the economies of scale start to get interesting
- Thinking about distribution from a cost-of-goods-sold model — whether this is run by a farm or a distributor. 50-60% of the retail dollar goes to farm production, the rest needs to be allocated to the costs of distribution because it is costly and complex to run distribution as a stand-alone distributor or as part of a farm operation (ie packing materials, warehouse space, marketing, software, delivery, manager salaries etc). If a farm is running this program, there are essentially two distinct businesses: a production business and a distribution business.
- Marketing is built into the model: 10% of revenue is ear-marked for marketing spend. This is very important for long term competitiveness in the marketplace.
- Home delivery via a courier service
- Simple for consumers to understand: One single large “farm box” with add-ons and a separate butcher box
- Fully customizable to consumer via Harvie
- Subscription + farm stand sales for one time boxes (with upgrade path and upsells for customers)
- The free trial version of the program is that the potential customer simply puts in their email address, we give them a coupon code off their first delivery, then they get emails when a box is available for purchase. Harvie takes this raw traffic to the website and turns them into customers.
- A packaging system using cardboard boxes with ice packs, liner bags, and insulating liners.
I want to “open source” the model to encourage you to build your own business in your local area. I want to share what we have learned so far, but understand that the Harvie Team will learn a lot more over the next 6-12 months. We want to learn beside you while we continue to develop the Harvie Farms Local concept and continue to develop the underlying Harvie software to further support the business model.
Let’s grow this model together. We can connect virtually and share a set of slides describing the business model, and a toolkit you can work with to adapt this to where you live.