However, Harvie is not a fixed cost like a new tractor or labor. Harvie is a transaction fee that gets passed on to customers in margin.
In other words, Harvie is free for farmers. Members pay for Harvie.
Cost is mostly irrelevant when thinking about whether you want to adopt Harvie.
When you determine that Harvie is the best tool for your farm and for your members based on the functionality and service offerings, then it is a matter of pricing Harvie into your shares. It’s a win for your farm, for the farm’s bottom line, and for your customers!
So, how to price Harvie into your farm share?
There are four main levers to pricing your Harvie farm share:
The per share price that members pay
For a vegetable farm share (although the same principles will apply to any other type of farm share like a meat share), you might have three price points: Small ($18/delivery), Medium ($27/delivery), Large ($40/delivery).
Members have the option of purchasing weekly or every-other-week frequencies.
This determines the gross amount of money that is coming into the farm share program.
The target value of each share
The target value is how Harvie determines how many products should be put in each members share each week, based on the per-product pricing that the farm sets (see lever #4).
By default, this value is the same as the member pays so a $27 share gets a target value of $27.
I suggest that farms adjust the target value a bit lower to cover per delivery costs such as distribution (unless those are covered in lever #3), packaging, and packing labor.
In the spreadsheet example, a $27/delivery share gets a target value of $25.25.
The cost of transportation and distribution can be covered by a delivery fee. This especially makes sense for home delivery.
If distribution cost does not get covered by a delivery fee, for example in the case of group pickup locations, distribution cost should be figured in the target value of the share after calculating a “per delivery distribution cost”.
Per product pricing
Per product pricing is where the majority of the action is in this model. This is the retail price of each product that goes into a Harvie delivery. This is the price Harvie will use to determine the contents of each members share, based on each member’s preferences and the harvest estimate, to pre-fill each member’s share.
Setting prices in Harvie’s delivery estimate builder.
The spreadsheet model works back from a cost of production (let’s call that cost of goods sold or C.O.G.S.) to a retail price. The cost of production should include everything required to get the product ready to be packed into shares, including post harvest handling. This should include a fair salary for the farmer too!
On top of the C.O.G.S., we add the percentage costs of Harvie, credit card fees, marketing/administration, and a healthy 20% profit margin.
So on average in our system, farmers have listed potatoes at $2.23, based on this model, the target C.O.G.S is $1.12. Can you produce a pound of potatoes at $1.12? Your C.O.G.S. may be different on your farm so you can adjust this up and down to get your actual retail price that you should list in Harvie in each delivery.
After that, we will schedule an Initial Needs Assessment to discuss your current situation and your goals.
We will work to determine if Harvie is a fit for your operation. I genuinely believe in helping local farms succeed, so we only work with farms that we feel like we can help. Whether or not we decide to work together directly, my desire is for your farm to have the tools you need to succeed and grow the local food marketplace.
Harvie (http://harvie.farm) is a Pittsburgh-based company that connects local consumers with local farmers across the U.S., Canada, and Australia who deliver shares of farm fresh products customized to their personal preferences.
Our company was started in 2006 to meet the technology and marketing needs of local farmers across the US, Canada, and internationally and has served 1000’s of farms in the last 13 years. The Harvie platform was introduced in late 2016 to address the changing landscape of food buying and to help farmers grow sales and profit by making local food more accessible through a customer friendly CSA / farm share model. The concept has grown rapidly. In 2019, Harvie will help 100 farmers deliver over 500,000 farm shares with much more growth planned in 2020 and beyond.
Harvie is a small team of 15 smart, dedicated individuals. We are an innovative, fast-moving, and fast-growing company.
We are looking for a software product manager with strong UI/UX skills to take feedback from throughout the company, talk to farmers, and talk to customers to build out our technical roadmap. As with any small team, you will wear many hats and we will expect you to build a product team as we grow.
Talk to other Harvie team members, farmers, and end-consumers to understand their challenges
Integrate feedback from across Harvie to develop technical road map
Write detailed specifications that can be handed off to developers
Evaluate success of features after they are released
Coordinate QA testing of new releases
UI/UX experience is a plus
In essence, guide product features through their entire creative cycle: ideation, specification, development, release, analysis, and iteration
Full-time position with some flexibility (40 hours/week)
Competitive salary adjusted upward with experience
Health benefits, retirement plan, and paid vacation
Harvie farm share paid for by the company and delivered to the office by Rivendale Farms!
Office on North Shore of Pittsburgh, 10 minute walk from downtown, free parking
Relaxed dress code and office environment
Equal Opportunity Employer
Experience generating outstanding results as a Product Manager
A desire to grow the local food market
Ability to utilize user insights, data, and statistical analyses to inform decisions
An instinct for creating simple and intuitive user experiences
Proven ability to learn quickly
Demonstrated ability to be resourceful and innovative
Experience leading projects and teams
Bachelor’s Degree in Engineering, Business, Design, Psychology, or a related field
Send resume and cover letter in PDF format to firstname.lastname@example.org with subject line “Product at Harvie”.
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
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
Assist with setting up new pick up locations
Community outreach such as helping set up tabling events, postering, handing out literature
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
Specifically targeted geographical areas
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?
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!
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.
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.
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?
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.
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.