Home Delivery is the Future of Local Food

This year, I’ve been on a mission to test grocery delivery services to understand the changes that are happening in our market

I am surprised by how much I enjoy Whole Foods’ home delivery service as a busy father of two young children. I simply log-in to the “Prime Now” app during the day, place my order, and have the order show up on my doorstep later that evening in a two-hour window.

The delivery is “free” with a suggested tip for the driver. I always leave a $5 tip.

This is a huge time-saver for me that I can use to spend time with my kids, clean the house, exercise or relax. 

I am not alone. A recent study suggests that 60% of urban shoppers are buying groceries online for home delivery. 

Put it another way: in 10 years, do you expect more people will be buying food online for home delivery or less?

If you answer “more” to that question, you need to start to think about home delivery as part of your farm marketing plan.

We are doing a small pilot of home delivery in Pittsburgh with Penn’s Corner Farm Alliance this season so I’m deep into thinking about how Harvie’s home delivery capabilities can help farms compete in this changing landscape.

We have many tools built into the platform including home delivery areas, up-charges for home delivery, a way collect home delivery instructions from customers, exports for the RoadWarrior app (for delivery route optimization) and more.

Some things to think about:

  • You need to charge for it. I created a spreadsheet to think through cost-per-mile, salary, and density of deliveries to come up with a base cost for home delivery. It depends on many factors, but I can’t see you doing it much less than $7.50/delivery. This cost must be passed on to the consumer in some way.
  • Choose a defined delivery zone, probably in a higher density urban area to start is the best bet.
  • Will you do the delivery or outsource it to another company? Local courier companies or services like Lyft and Uber can make sense.
  • No more pick-up locations for farm share takes away that logistical issue for you and for your customers.
  • It’s much more attractive and convenient for customers and it supercharges your marketing because you don’t have to worry about how close each person is to a drop site as long as they are in the delivery area.
  • Consider going 100% home delivery or this may be a good way to start a farm share program if you have not done one before.
  • Increase your product line from other local producers so you can fill more of the grocery budget for each customer to make the cost of delivery more worthwhile for the member.

My goal with Harvie is to grow the market for local food beyond the true believers who have supported local farms in the past. Home delivery is a part of that puzzle because it removes many of the barriers to joining a farm share program.

I would be happy to discuss the home delivery strategy for your farm in the future. Just reach out when you are ready to discuss!

-Simon Huntley, CEO & Founder, Harvie
simon@harvie.farm

About Harvie Farm Team

Interesting in taking your farm share sales to the next level?

The Harvie Farm Team is a sales team for your farm. The goal is to help you take your farms marketing efforts to the next level by bringing on team members and executing campaigns on your behalf that can assist with promotional activities. There are a couple different ways to participate. Choose one or both!

How it Works

Farm Team Members

Harvie will work with you to find and train “team members” that will act as brand ambassadors on your behalf. This includes

  • Helping craft outreach descriptions for team members
  • Training and marketing materials for team members
  • Monthly call to touch base with team members
  • Monthly reporting for payout
  • Workplace Wellness Farm Share Program

Goal

  • Assist with setting up new pick up locations
  • Community outreach such as helping set up tabling events, postering, handing out literature
  • Blogging
  • Sharing information on social media
  • Set up workplace farm share sites
  • General cheerleader for your farm

Member Acquisition Program

 Harvie will work on your behalf to plan and execute Facebook ad campaigns. This includes

  • Custom ad copy (images and text)
  • Creation and management of the Facebook ad campaign
  • Includes an interactive chat bot, follow up text messaging and email drip campaign.
  • Reporting and analysis

Goal

  • Lead generation
  • Share sales  
  • Specifically targeted geographical areas

Details

Harvie will assess a 10% fee for member acquisition program for the first year and 5% in the second year. This essentially covers our cost to plan and execute the campaign as well as pay for the ads.

Harvie will send you a monthly sales report for all farm team members. The farm will then pay out the 10% commission to the team members on a monthly basis for the first year and 5% for the second year.

Interested in learning about how the farm team can help your farm reach its goals?

Set up a call with our community manager, Stefanie here https://calendly.com/stefaniejo/marketing and please indicate this is a call for farm team!

CSA Day is this Friday!

It is CSA Day this Friday — the perfect time to buy your farm share for the 2019 season!

To celebrate, we are running a contest! The winner will receive $250 towards their CSA / farm share. To enter:

  • Follow harviefarms on Instagram
  • Like this post and tag a friend who might be interested in a CSA / farm share program
  • For extra entries tag your farmer or repost this image or this image on Instagram or Twitter with the hashtag #CSAday

About CSA and CSA Day

Community Supported Agriculture (CSA), or farm share, is a simple concept. A consumer buys a membership with a farm and gets a “share” of products from that farm throughout the growing season.

Since the first CSA farms started in the United States at two farms in Massachusetts in 1986, this model has been wildly successful with many thousands of CSA farms in the United States, Canada, and spreading to the rest of the world.

CSA / farm share is a vital piece of the local food economy because it allows small and medium scale farmers to compete against the traditional food system by guaranteeing a market for their crops.

CSA / farm share is good for consumers too because it is the best way to form a relationship with a local farm and get the freshest, healthiest, and tastiest food into the kitchen.

Whether you care about the viability of local farms, land use, environmental issues like the long distance that food travels in the traditional food system, or you just want to eat well.. you should be in a CSA program.

Here at Harvie we are doing our part too by making CSA programs more customer friendly in the age of Amazon Prime, Blue Apron, and the plethora of other food buying options you have — customizable shares (never want beets, never get them!), low up-front cost payment plans, scheduling around vacations, and recipes for the products you get each week. We want to make it easy, fun and tasty for you to support your local farm!

CSA Day

Five years ago, I ordained the last Friday in February as “National CSA Sign-up Day” (since shortened to CSA Day) because, based on our data, it is the most popular day of the year to sign up for a CSA / farm share. More info at http://csaday.info/.

So this week, if you have not already, join your local farm’s CSA / farm share program and make a promise to your farmer and yourself that you will buy healthy, fresh local food throughout the growing season.

Find Your Farmer

If you do not yet have a farmer, search harvie.farm or csaday.info/directory or reply back to this email with your address and I’ll find a farmer in your area.

Thanks for supporting your local farmer!

FarmFan is shutting down Jan 4th, 2019

Dear FarmFan Customer,

As of January 4th, 2019, we are going to discontinue the FarmFan service.

Thank you for coming on this journey with me and my team. Since we launched in 2014, FarmFan has sent over 2,500,000 text messages to farmer’s market customers.

In five growing seasons, I’m proud of what we accomplished with FarmFan, but it never achieved the critical mass of farms and markets to make it a viable long-term business. It is time for us to say good bye the FarmFan.

We will take some of learning from FarmFan and apply it to our Harvie platform and allow farms to send text message reminders to their members when farm shares are delivered to a site.

In the intervening years, there have been a variety of text message reminding programs that have come on the market for more general use so if you want to keep doing text messages for your market customers, you should be able to find a service to do that.

Creating new products is messy work and some things work and some things don’t. That is the nature of the work I do. After 12 years in this business, that is one hard lesson that I have learned. I’m proud to say that we will keep innovating and working along side you.

If you have any questions, please let me know.

Best and thank you!

-Simon Huntley
Founder and CEO, Harvie & FarmFan

Sales Channel Profit Margin Analysis Spreadsheet

My core mission at Small Farm Central / Harvie is, “make local farmers more profitable.”

As a local farm, you have many different sales channels available to you. For example, as some farms saw CSA sales decline, they shifted their sales to “small-scale wholesale” like aggregators or restaurant sales.

Or you may be trying to decide between running a traditional CSA and transitioning to Harvie — how will the extra costs and benefits effect profit margins? This spreadsheet helps me to be confident that I can help farmers be more profitable even as they pay us a higher fee than before.

Or perhaps you are considering moving to larger scale wholesale from direct-to-consumer channels: how will this change effect profit margins?

Each sales channel has a different cost and profitability profile and I realized that I could put this all on one spreadsheet so I created this “Sales Channel Analysis Worksheet” that is freely available on Google Sheets:
https://docs.google.com/spreadsheets/d/1RUIlbKG9ESC8VCauOhR4HkqDsuDa2BHsTcd5cxcHkj0/edit#gid=0

I have gotten feedback from several growers on this, but I would love more feedback and to keep improving this spreadsheet.

I have added comments to many of the cells to describe the thinking behind each assumption. Feel free to add your own comments and reply to mine! I think this can become an excellent resource for our community going forward.

To put in your own numbers, go to:
File > Make a Copy

I would love to see your work so share back with me!

The most interesting lines for me are row 38 with “Profit margin” and then extrapolating from that, ” Gross sales needed for farmer salary” (row 40). This data point describes, at a given profit margin, the scale of sales you need to drive through a sales channel to provide a fair farmer salary. However, “farmer salary” may also be paid through other line items like labor percentage (rows 3-6) or admin cost percentage (row 13), so that should be taken into account as well.

This spreadsheet does not tell the whole story of farm profitability of course and each farm will have different numbers, but I think it is a useful of making decisions and planning the long-term future of your operation.

How to Increase Lifetime Value of Member from $600.81 to $1,222.57 (+103%!)

I’ve talked for years about how retention is a key statistic for a farm share program. High retention means happy members, less work and marketing cost to maintain membership each year and it makes growth much easier!

There is also an argument I can make with math that makes it clear why retention is so important.

Here is a video describing the results:


Introducing Lifetime Value of Member

Lifetime Value of Member (LTM) is the measure of how much a member will spend with your farm over the life time of their membership.

Our newest staff member, Pablo is also a data guy so he has been digging into retention numbers on Harvie now that we have year-over-year data. We can compare that to data that came out of Member Assembler with the “CSA Farming Annual Report” that we did in 2014 and 2015.

In the 2015 Annual Report, we found the average year-over-year retention rate for CSA / farm share to be 46.1%.

For Harvie, we are seeing an average retention rate of 67%. That is a relative increase of 45% over a traditional CSA program.

This is a huge increase and validates the year of customer research that I did before developing the concepts that underlie Harvie.

So how does this translate to the bottom line or the “Lifetime Value of Member”?

So for a traditional CSA farm at 46.1% retention, on average each member will be retained for 1.29 years. Using the average cost of a farm share from the 2015 CSA Farming Annual Report of $465.75/year, the Lifetime Value of Member is $600.81.

For a Harvie farm share, to do a fair comparison I will use the $465.75/year and then add in 5% “delivery extras” sales because that is how much we see, on average, that members add to their share each week giving us $489.03/year.

At the average Harvie retention of 67%, each member will stay for 2.5 years. So the Lifetime Value of Member for a Harvie member is $1,222.57.

So this difference in retention takes the Lifetime Value of Member from $600.81 to $1,222.57. That is an 103% increase in LTM! Wow!

To be clear, this means that every Harvie member is worth twice as much a traditional CSA / farm share member.

Now take that increase, invest in marketing, invest in efficiency, invest in your employees, invest in your quality of life, or invest in spending time away from the farm with your family.

This is why I do the work I do. It is gratifying to see that my hunches and my research on how we can improve the profitability of CSA / farm share programs are being validated in the data.

“You’re Really Going to Pay That?” or How I’m Going to Make your Farm More Profitable

[Also in this series: The Albatross of Vegetables,  “We sold out 7 weeks before first delivery…”, Here’s how I help market farms  ]

(No time to read? Harvie is the kind of cost that makes you money.)

Dear Farmers and Supporters,

At the root, my work for the last 12 years has been about helping local farms achieve profitability. That’s my ultimate vision: that farming the way we do can and should be economically sustainable to the farm family and the people who work on the farm. (Read One Dollar, One Vote.)

I want to help farm achieve financial success, but to do that we need to charge for our services.

So, the case I must make with farms is, while you pay us, Harvie will at least maintain profit margins, if not increase them. If I can’t make this case, your farm should not adopt Harvie.

Here’s what farms using Harvie say about the cost of the service:

“The cost of Harvie seemed steep, and we definitely hesitated before signing up.  What we’ve realized is the cost isn’t just for great software, it’s for marketing assistance and customer service support, too.  I’ve spent significantly less time answering and solving basic questions like how to put a hold on a box, how to set a vacation hold, questions about payments, and so much more.  Our customers, even longtime members who would support us no matter what, have been extremely happy with the Harvie system, and tell us all the time how much they love it.  It’s hard to imagine going back to the old way of doing things, and I love giving our customers what they want.”  – Barr Farms

“We’re loving everything about Harvie. I initially was thinking my goodness a % of my sales goes to a tech company…and geez, another % to credit card processors??? In all reality, it works so well and the support that you receive with Harvie is amazing. You know when you finally get to that point that you can buy a really high quality tool that works so well in so many conditions….that’s Harvie. But that’s not it. They have people on their team that help create promo and marketing material for your farm. Its really exciting to be part of a great network of enthusiastic farm people. I’m a total cheerleader for Harvie because its helped my business.” – Sustainable Harvest Farm

“As a farmer using Harvie I can tell you that the fee is pretty easy to justify in saved time. I suspect I am one of the smallest farms using the platform, but this year for about $150/wk I’ve cut my share administration time down to about 30min/wk, increase customer satisfaction by miles and take two mornings off farming a week to spend at home with my toddler. I no longer have to track payments, deal with a complicated inventory system like when I used Farmigo, or even answer customer emails most of the time as Harvie support has usually answered and sorted requests or problems before I even sit down for lunch and check my messages. Best of all, almost all my work time is now spent farming! I haven’t tracked hours to be sure but I believe I’m saving several hundred dollars per week.” – Daniel, Country Thyme Farm

How much does it cost?

$500 one-time set up fee

7% of sales, with discounts for farms over $250,000/yearly revenue

3% fee for credit card transactions

Simple. We only get paid when you get paid.

What does this include?

  • The technology platform to run a high retention CSA / farm share program
  • Cooking Suggestion Engine: members get recipe and cooking preparation suggestions based on their box
  • We’ll set up your Harvie site for you
  • Marketing / sales assistance, consultation, and resources
  • High quality customer support both to you as the farmer and your consumers
  • Training from set up to setting delivery estimates to delivery logistics
  • On-going support from my team to make sure you are using Harvie

How to pay for it?

This is an increased cost, so you must account for this in your margins. There are a variety of areas you could look at to justify the added cost:

  • Many of our farms increase prices to cover the fee since this is a service to the customers.
  • Many farms give 10-30% more retail value in shares than members pay for. With Harvie’s technology and customized shares, members get what they want and they get retail value. This means that our farms can generate 10-30% more revenue off the same production.
  • Decrease in admin time means saving on staff costs – many of our farms report not needing a dedicated farm share manager.
  • Harvie helps farms grow membership so the same equipment can be used to serve more members which increases profitability.
  • Moving farm sales from low margin channels like wholesale to high margin farm share sales increases profitability.
  • Reduced marketing expense due to higher retention rates.

Cost-Benefit Analysis

If you are a “numbers” person you will appreciate this Cost-benefit analysis spreadsheet to quantify the added costs and benefits of Harvie. Download your own copy and edit with your own numbers using these instructions or I can work through this with you.

For example, an average 250 farm member farm will see a yearly net-benefit of $72,000 by joining Harvie.

Harvie is the kind of cost that makes you money.

Also check out: