Market to Market has broadcast numerous stories on rural entrepreneurs who have found profit by adding value to what they grow. In some cases the additional value has been captured through processing. In other instances, simply growing commodities to fit customer specifications has generated more profit. But many of the most cost-effective strategies to capture more value have come through better marketing, by identifying customers and finding a way to meet their needs.
In California a marketing firm is utilizing web technology to extend its reach and delivery of locally-grown produce to an appreciative niche of customers. David Miller reports.
Three of the five partners of a small distribution company are having dinner in Santa Cruz, California. Their company has developed a proprietary computer program that connects local organic farmers with produce markets and upscale gourmet restaurants in the San Francisco Bay area. The name of the company and the product is America Fresh. The innovative software is the brain child of this man, computer designer and farmer Brian Gardiner.
Brian Gardiner, America Fresh:"...and I found most of my time was spent on distribution, not growing. So, I decided that what I needed to do was to get the distribution going and I thought, well, you know, instead of having a farmers market why don't we put up a virtual farmers market?"
Gardiner, who has 14 years of experience as an organic fruit and vegetable grower, decided to apply his 35 years of computer software and hardware design experience to the challenge.
Brian Gardiner, America Fresh: "We have an extremely efficient communications network and what we're trying to build is a network of small, independent, locally owned, locally operated affiliates."
The idea behind America Fresh is to allow farmers to do what they do best: farm. At the same time the web site assists in the most difficult part of any farming operation: marketing. With the monetary assistance of another partner, Gardiner invested $500-thousand towards the creation of America Fresh and launched the site in January of 1998.
The site allows customers to create a shopping list and view pictures of the available produce, 24 hours a day, 7 days a week. Some of the produce includes hard to get heirloom varieties like Cherokee purple tomatoes or di Ciccio Broccoli and exotic items like edible flowers. So buyers can further identify where their food is coming from the growers names can be found next to each selection. Though anyone with an Internet connection can access the site, sales are limited to the Bay area.
Payment, a major concern for farmers, can take up to 120 days through normal channels. When an order is placed on the web site that time is reduced to almost zero through the use of either credit cards or Paypal, an Internet-based payment service.
Currently, America Fresh orders are not done exclusively over the web, some still arrive by phone or fax. Gardiner's wife Robyn, who is one of the business partners, takes care of the orders from the 45 Bay area gourmet restaurants and 5 produce markets that use America Fresh. Those restaurants include cafeterias at Bay area computer firms like Yahoo, SGI, and Cisco systems.
The company keeps no inventory, instead opting for a "Just-In-Time" marketing strategy to ensure quality and freshness. The orders come in Monday, Wednesday and Friday and deliveries are made Tuesday, Thursday and Saturday. All the produce sold through America Fresh now comes from 17 organic farms that are all located within 50 miles of San Francisco.
The whole process "from field to fork" normally takes less than 24 hours.
Brian Gardiner, America Fresh: "By the time you get it, it's five days old whereas when we're harvesting it that day, it's in your restaurant the following day and it does taste different. It's sweet, it's nutty, and it's got real flavor to it."
Brian, who often takes a turn with pick-up and delivery duties, frequently goes into the field to see what produce will soon be available. Today, he is inspecting Swiss Chard and Italian Heirloom Radicchio being grown by Andy Griffin, the owner of Mariquita Farm. Griffin grows a variety of vegetables organically on 28 acres in and around Watsonville, California. Though Griffin does not sell all of his product through America Fresh he is always pleased with the price he gets.
Andy Griffin, Mariquita Farm: "I grow a wide range of relatively commonplace vegetables for my subscription customers and what the relationship with America Fresh allows me to do is find a completely different outlet for my specialty vegetables other than the farmers market."
By selling his specialty vegetables through America Fresh Griffin is once again able to take advantage of the restaurant trade.
Andy Griffin, Mariquita Farm: "Ten years ago we had a problem where the restaurants were
putting all of our money up their nose and then vanishing. That was a big problem. We've kind of gotten past that but every business has its cash flow problems and this is a way that we can sell product, we can rationalize growing unusual crops with a pretty high degree of certainty that we're going to get paid."
On a normal summer day these beaches near Santa Cruz, California are packed. But even during the winter months, in this exclusive resort community just south of San Francisco, Cafe Cruz is able to serve 2000 customers each week.
Steve Wilson is chef and part owner of Cafe' Cruz.
Steve Wilson, Cafe Cruz:"...we feature many local wines, local food products that are produced in Santa Cruz. We're a very local restaurant and we pride ourselves in featuring local ingredients from Santa Cruz."
Wilson places the bulk of his orders to America Fresh via the phone. He is more than pleased with the quality and consistency of what is delivered.
Steve Wilson, Cafe Cruz: "...sometimes the prices are up there. But we've established a reputation here that we are trying, really going to try towards organic farming, sustainable farming. This commmunity is pretty supportive of that so its, you know, we just have to price accordingly."
When the web site launched, a large volume of orders came through the system but then demand dropped off dramatically. After investigating, it was determined that the pictures took too long to download and were unimportant to the chefs. With this in mind, work began on the next generation of software. Ordering can now be done from an on-screen list. If the buyer wants to know what an exotic variety looks like there is a link to a photograph. Since January, some buyers have taken to calling in orders while viewing the list on the Internet.
Gardiner hopes farmers across the U.S. will want to take advantage of having a direct connection to restaurants and grocery stores in their area. The company plans to license the software to interested parties for $5-thousand, which covers setup, service and training. Licensees will pay a fee of 4% for each transaction made on their personalized web sites. Gardiner has determined that any group wanting to use the software will need at least 15 chefs to make the operation profitable.
Overall, Gardiner just wants to help growers receive a fair price for their produce while providing food that is fresh, flavorful, and local.
Brian Gardiner, America Fresh: "Freshness, flavor, preservation of the countryside, survival of small family farms, economic justice, we're invigorating the rural environment, keeping more of the value dollars on the farm and in the community."
For Market to Market, I'm David Miller.