It’s all about the people

Dear Farmers and Supporters,

I have been thinking over the past few weeks about the people who work here and make Harvie possible. Harvie is about helping farmers create economically sustainable local farms and farmers are the soul of Harvie… but it takes a whole team of people to bring Harvie to you.

Part of what we do is build technology systems and software at Harvie, but it is much more than that. Marketing, support, sales, programming, developing new features, fixing bugs, on and on.. it simply does not work without the people. We are now a team of 15 smart and passionate people!

I am deeply grateful for their work and dedication. I hope you get the chance to talk to these people in the coming months and years.

These reflections stem from some employee changes here at Harvie over the past few months, both the sadness of losing a long time employee and the excitement of working with three new people.

Michael “Q” Roth recently left Harvie/Small Farm Central after almost seven years of service in customer support. If you have worked with us, then you have probably been on the receiving end of Q’s support. He became quite popular with our farmers and a few farms took the time to say good bye and thank you in video form:
https://www.youtube.com/watch?v=thKEoWvzKRE

We also have four new people who have joined the Harvie team in the last few months: Lauren (support), Kiera (support), Lucy (support) and Mackenzie (Farm Outreach).

This week, I got everyone together in Pittsburgh for a “Harvie summit” stay-retreat. We have been having some long-range planning meetings so we can continue to grow and serve our farmers effectively. Here is a photo of the team volunteering at Grow Pittsburgh’s Braddock Farms this week:

Image

We are doing big things together and we are all so excited to grow our success alongside our farmers.

-Simon Huntley
Founder and CEO, Harvie

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!

Let’s talk business

By Simon Huntley

Originally published on the Small Farm Central blog on 05/24/2017 

In every business, there is some “customer acquisition cost” (CAC from now on) — in other words, how much do you spend to acquire a single customer?

In my experience, for most CSA farmers this number is close to zero and not something you think about.

Even if you are not spending money on traditional advertisements, there are costs to find new customers. There is a website hosting fee, staff or personal time to develop content for the website, Facebook boosted posts, email marketing software like MailChimp, time spent developing content for email marketing, and on and on. So even at a basic level, if you think your cost of customer acquisition is $0, it is not.

I asked farmers on the CSA Farmer Discussion group on Facebook about their CAC and answers ranged from up to $100 to as low as $2.

Here is where it becomes a major blind spot and perhaps a systemic problem within the CSA movement/industry. The meal kit companies like Blue Apron, food hubs, and grocery stores have the economies of scale, the marketing expertise, and cash to spend $100s to acquire a single customer. So they can spend money on Facebook ads, Google Adwords, direct mail and whatever they can figure out to acquire a cost at less than their target CAC.

So if they are able to do this, they take the air out of the room from a marketing perspective and it does start to pull people away from CSAs and towards programs that have better marketing reach. If Blue Apron spends $100 to acquire a customer and the average CSA spends $3 to acquire a customer, that means on average that a potential customer is going to hear about Blue Apron 33 times for every one time they hear about the CSA! Can you blame them for choosing Blue Apron? They almost don’t have a choice!

It is certainly not getting easier. In the early 2000s, a farm could just show up and tack a CSA sign on their website, get some good press, and fill up their membership. People were actively going out and looking to join a CSA farm in these years, so it was relatively easy to find new customers. In this new landscape, where there is a lot of competition from all angles, I believe that we need to get better at marketing in general and starting to think about CAC and the types of channels you can use to reliably generate new customers at a profit will be important.

This is one of the trade-offs in using direct-to-consumer farm marketing: if you sell wholesale or through a food hub, they take care of finding the customers and you will get a lower percentage of the retail dollar. In a CSA, you are getting close to 100% of the retail dollar, but you need to go out and find those customers and finding customers is not free!

Acquisition cost also needs to be paired with your retention rate and the lifetime value of your customer. So if your retention rate is very low, then you cannot afford to spend as much to acquire each customer because you will not be able to spread that cost over multiple seasons. So acquisition cost and retention are intertwined in this way.

I have seen a couple rules of thumb in the larger business world that may help us to think about CAC in the CSA context. One rule of thumb is that a business wants to see CAC paid back within a year of the initial sale, so in the context of a CSA, if your average yearly spend per customer is $500 and you have a gross profit margin (minus marketing spend) on that of 20% then your aim should be to get CAC to be below $100. Assuming you have a fairly good retention rate (>60%), over the long term this will pay back well for you, although you will need to do some more calculations with your own numbers to make this analysis work for your situation.

There are many ways to view this, but the rule of thumb that I am thinking about is to look for a CAC that does not exceed 10% of the first season that the member is with your farm. For example, if your average price is $500/season then a CAC of $50 should be profitable over the long term.

In some ways, I hate to be the guy injecting all of this business terminology into CSA because these are such high-ideals business. However, I think there is a lot to learn from the wider business world that we can apply to CSA programs so you have the freedom to go out and develop your business to impact more people while building a business that supports your family.

In the end, it is all about the goals you have for your farm business. Are you getting the CSA membership numbers you want? What is your most profitable marketing channel? If dealing with these kinds of issues like customer acquisition is not in your skill set, you may need to hire someone with these skills, delegate, or consider pursuing other marketing channels like wholesale that don’t require this kind of work.

How do you think about customer acquisition cost within your CSA? How much are you willing to spend to acquire one customer?

In your corner,

Simon Huntley

Will Blue Apron (and other meal kit delivery) replace CSA farms?

By Simon Huntley

Originally published on the Small Farm Central blog on 07/26/2016

Community Supported Agriculture (CSA) is under pressure throughout the marketplace. When I started working on CSA farms in 2005, in many areas of the country there were few options to buy from local farmers besides farmers markets.

In the intervening 10+ years, the market has changed.

We have Whole Foods, grocery cooperatives, farmers markets every day of the week (9000+ now!), food delivery concepts and much more. The plethora of options is changing the way eaters think about joining a CSA farm and their expectations. If CSA does not work for them, there are a lot of more flexible options out there that may work better for them. There is even a lot of confusion about what CSA is and what CSA is not.

We cannot stick our heads in the sand and pretend that nothing is changing. The CSA model has evolved since it came to the United States in the early 1980s and we’ll need to continue to change to stay relevant. I’ll write more about the future of CSA in the near future.

One of the new concepts that has taken inspiration from CSA are the meal delivery services that deliver pre-apportioned recipes ingredients to your door step. It’s a meal in a box. One of the biggest of these services is called Blue Apron.

Earlier this summer, I signed up for Blue Apron to learn from their model and figure out how we can use their success to improve the CSA model.

One estimate is that 3% of the US population has tried a meal delivery kit service. From the numbers that I see, that is likely higher than the proportion of the US population that has tried CSA.

Blue Apron’s tagline is a “better way to cook”. It has many competitors including Green Chef (https://greenchef.com/home) “deliciously simple”, The Purple Carrot (a vegan concept) https://thepurplecarrot.com, Freshology “Inspired. Healthy. Living.” https://www.freshology.com. There are many others.

Signing up for Blue Apron

I was impressed by the website experience: you sign up for a weekly plan that will auto-bill each week but you can pause deliveries as long as you remember to pause by the right day. I signed up for a weekly plan for a family of 4 which was probably a bit too much because my young boys (1 and 5 years old) don’t eat as much as an adult or teenager. There is some choice in the recipes you receive or you can just accept the default. There is no vegetarian option.

It is not cheap. My plan cost $69.92/week. That is is $8.74 per meal, per person while the average in-home dinner meal costs $4 per person. So this service does not compete with the grocery store: it competes with restaurant eating and it is probably for the higher end of the market. This is not a service for the family with a small grocery budget.

In the welcome email, Blue Apron promises “Fresh, Seasonal Ingredients”, sourcing from local farms (local to whom? This just is not true), and cooking tips and techniques.

Perhaps it is pedantic to focus on their promise of “local farms”, but here is what the email says about the producers:

I hope that Blue Apron is supporting a local farm somewhere, but it is not local to me in Pittsburgh. This kind of casual deception is disturbing and I’m sure most eaters can see right through it, but as true local farms, you must push against these deceptions and tell your story to your customers. This is one of your largest advantages, so make sure you are clear on it with customers!

Cooking with Blue Apron

The Blue Apron box showed up on my doorstep delivered by FedEx on the day that Blue Apron promised. An email is sent on the shipment day to announce the meals that will be delivered so you can plan for the week.

Everything looks great when it comes to the doorstep: the box is beautiful with huge ice packs at the bottom of the box. Everything comes in pre-apportioned ingredient packs. For example, 2 ounces of butter in a clamshell container. One of my first thoughts is how wasteful all of this is: the home delivery, the cardboard box that I will throw away, the ice packs, and the tiny containers of cheese. It is hard to imagine dealing with this amount of waste on a weekly basis.

However, it is impressive in a lot of ways. It totally takes the thought out of cooking. Blue Apron provides glossy recipe sheets that describe in detail how to cook each dish. I think we can learn from this in our CSA farms: people don’t know how to cook and there is value in completely spelling it out for them! They are clearly willing to pay more to lose some of the stress of figuring out what to cook and how to cook it.

Here is an example of the recipe cards:

The recipes are not super simple. They take some time to put together. I found in the recipes that my wife and I made, it took about an hour to get food on the table.

I’m a pretty good cook. Ever since my first experience in college of living on my own, when I realized that all I knew how to make was pasta, I have gradually built up my skills in the kitchen. However, one thing I noticed about Blue Apron is that since everything was so spelled out on the cards it made me stupid: I put a whole head of garlic in a small amount of salad dressing which overwhelmed the whole salad and ruined it with way too much raw garlic. And I like garlic.

In hindsight, that was obvious, but since the recipes cards did not exactly spell out the amount of garlic to use, I just put the full head of garlic. So I’m not sure if these meal kits actually help people learn to cook on the fly like a CSA member needs to know how to cook: to look at the ingredients available and put together something that works.

However, the meals were delicious. The quality of produce was outstanding. It took a lot of the thinking out of deciding on meals for the week and shopping for the ingredients. It is hard for me to see someone doing this in the long term, week-after-week based on the waste and the cost so I see long term retention as difficult for these services, but it is a really fun and easy way to cook new dishes.

Do Meal Kits Compete with CSA?

Yes, I think they do. They are changing the expectations that members have for food delivered in a box. There is zero food waste — everything is used in the recipes you are given.

Wasted food in a CSA is a huge problem. It makes members feel bad and they decide to go with more flexible options like farmers markets in the future. So I think the cooking education part of CSA is huge. We need to make sure our members are successful with their boxes and that is not easy!

The produce from Blue Apron is of impeccable quality. If a CSA member gets less than the best quality food in their boxes, they will go elsewhere. To compete over the long term, the product in a CSA box needs to look at least as good as the product in Whole Foods or in a Blue Apron box.

However, on your side as a CSA grower is the story and connection that you have to your customers. I think if we try to compete with the Blue Aprons and the Whole Foods of the world, as small, independent producers we will always lose over the long term.

CSAs need to become more customer centric to react to a changing marketplace — we are not the only game in town any more! — but we also need to be mindful not to lose what has made CSA so successful.

The magic and the way forward will be found in balancing those opposing forces.

I’ve been diving deep into this problem, spending time with the research and with CSA members to better understand their experience. Look for more on this topic in the near future!

I would love your feedback. What kinds of competition are you seeing in your local area?