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Tuesday, September 29, 2015

Food and Tech Disconnect

LocalHarvest.org

LocalHarvest Newsletter, September 29, 2015
Food and Tech Disconnect

Welcome back to the LocalHarvest newsletter.

Now that I've settled into my new role of LocalHarvest newsletter writer, I thought I should introduce myself. My name is Rebecca Thistlethwaite and I live in the beautiful Columbia River Gorge region on the border between Oregon and Washington. My family has a small farm/homestead of 5 acres where we grow lots of vegetables, pigs, sheep, chickens, and have a few fruit trees. When we have more food than we can eat, we sell or trade it with friends and neighbors. Before this, we used to farm commercially near the LocalHarvest headquarters down in Santa Cruz, California, where we met and became friends with LH founder Guillermo Payet. He was a big fan of our organic meat and eggs that we produced under the brand TLC Ranch.

In addition to writing for LocalHarvest, I teach a couple graduate courses in the Masters in Sustainable Food Systems for Green Mountain College of Vermont and I am the Executive Director of a regional non-profit where I live called Gorge Owned. I also do farm business consulting and have written two books on the subject- the first one is called "Farms With a Future: Creating and Growing a Sustainable Farm Business" (Chelsea Green 2012) and the recent one is "The New Livestock Farmer: The Business of Raising and Selling Ethical Meat" (Chelsea Green 2015). If you are a farmer or aspire to be one day, you may want to check out these books.

In my "spare" time, I like to play with my two kids, trail run, garden, preserve food, read, and volunteer. My dream job would be a professional philanthropist, but in the mean time I just donate time and grant-writing skills to causes that I care about, such as our little community school or school garden.

Now onto the article I wrote for this month!


I'm not a technologist (believer that technology will cure all) nor am I a Luddite (re: all technology is bad). I am writing this article on my laptop with my smartphone nearby while a white noise machine keeps my baby boy in a dependable slumber so I have time to do a little work. Some people, however, think that technology is somehow going to reinvent the way the food system operates or that it is going to magically make it more environmentally friendly, socially just, or affordable to the masses. There are examples of computer tools, such as the amazing LocalHarvest farmer database that connects farmers with consumers, which have made it much easier to find good food. Technology and computer-based applications may nibble around the edges of the modern day food system a bit, but by themselves they won't create a fundamental shift in the system that we've designed in our capitalist society (that is, unless we change or improve on the economic system that we use).

Nevertheless, not only are there a bunch of folks who think technological fixes are going to create an entirely new way of doing business, but they also think they are going to discover some vast untapped pool of money in the local food system for their enrichment. That isn't going to happen either. The food business is fundamentally a low margin business, unless you happen to be in the business of taking a tiny bit of food and sticking it in a large package full of mostly air, like a bag of chips. So I should rephrase, the good food (i.e. healthy, organic, less processed) industry is a low margin business. The fast food, unhealthy, highly processed one probably makes great margins. But we're not so interested in that.

Several startup businesses in the last five years have tried to use computer-based applications to somehow shorten the food supply chain and do away with the weekly trips to the grocery store, farmers market, or even restaurants. They have us believe that us modern day urbanites are too busy for those mundane tasks or shouldn't burn the fossil fuel to do so (I for one believe in social interaction and even having relationships with my food producers, grocery store clerks, and friendly restaurant staff). From the giant flop of Webvan in the early 2000s to more recently the meat subscription service AgLocal, artisan food delivery service GoodEggs (has closed in all but one city), and many other similar models, these efforts have proven to be unprofitable and eventually fold.

Yet we need 'middlemen models' to get food from farm to plate, ethical ones that is. There are some great examples of this, such as computer-based applications like CSAware that assists small farms and CSAs to more efficiently run their operations and act as their own distributors. Like Firsthand Foods in North Carolina that distributes pastured meats for over 90 farmers to area restaurants, paying the farmers premium prices. Or how about Veritable Vegetable (VV) in California that has for over 40 years distributed farm-fresh organic produce to retailers and restaurants around Northern California. VV also pays living wages, is a certified B corporation, and donates a considerable amount of money and produce to charities. There are many other companies out there like this and we need them to thrive. I don't fault anyone for trying to create new business models. As Robert F. Kennedy once said, "Only those who dare to fail greatly can ever achieve greatly." 

However, I think there are a lot of lessons to be learned from these business closures that I mentioned above. I will narrow it down to two that I think you LocalHarvest readers might be most interested in.

  1. Computers don't drive trucks. Turns out that code writers, app developers, and desk jockeys may not be the best suited to creating food distribution companies. Perhaps people who have worked in the industry (say 25 years with Sysco or 15 years with Veritable Vegetable) that are experts in food logistics and transportation should be the ones to lead these efforts or at least be front and center on the management team. Computer technology can only do such much, such as streamlining the ordering and optimizing the delivery routes, but it still won't wash produce, cut and package meat, pull orders, or drive trucks. This quote from Good Eggs founder is telling: "What we didn't fully understand when we started was that we were creating a new category that required a different approach to supply chains, logistics, and commerce - all of the pieces of getting food from local producers to the kitchens of our customers. It was, and is, complicated, way more complicated than we ever anticipated." Yes it is complicated, but thankfully there are many produce, meat, and full service food distribution companies out there that are making it work. Do we really think we can reinvent that wheel (or distinctly tweak it that much)? The real alternative to the food middleman model is the buy-direct-from-the-farmer model (aka CSA), which we know and love.
  2. Venture capitalists can be parasites. They thrive on quick returns and rapid growth, which is something you rarely see in the ethical food world. Venture capital has not proven itself to be a patient, sustainable source of funding necessary in creating long lasting businesses. I like to say, thank goodness our farmers are not like venture capitalists or we would have nobody to grow our food. Unlike our farmers, they are not in it 'for the long haul'.

Interestingly, in research that I did several years back while working as a social science researcher at the UCSC Center for Agroecology and Sustainable Food Systems was that the food businesses that lasted, especially through turbulent economic times, were those that were either privately held (by an individual or family) or cooperatively owned. Businesses owned by outside shareholders did not tend to fair well. They either shuttered quickly (i.e. Webvan, GoodEggs (in all but one city), or AgLocal) because their shareholders were not seeing the economic returns quick enough or they were forced to sell out, oftentimes to a parent company that lacked similar values (i.e. Applegate, Niman Ranch, Cascadian Farm, Seeds of Change, Ben & Jerry's, etc.). Can we build a more sustainable food system when the businesses designed to repair, fix, or reinvent them disappear after only a couple years or if they are subsumed beneath a behemoth multinational corporation that no longer cares about the welfare of the farmers, employees, and other community stakeholders?

I think about the $53 million in venture capital that GoodEggs raised to expand its food delivery model around the country. Or the $1 million that AgLocal raised before it even assembled its management team to market meat to restaurants. In both of these cases they started with a lot of fanfare and were considered "food tech darlings". The investor's money started pouring in. That didn't change the fundamental flaws in their business models and the fact that food margins are slim. As the founder of AgLocal admitted "the novelty of the initial idea didn't pan out". Sometimes it takes good old fashioned reinvestment of business earnings, just like farmers have to do, to build a sustainable, long-lasting business. Imagine if that $53 million instead when to build ten $5 million dollar Food Hubs around the country (akin to the Mad River Food Hub model in Vermont) that served hundreds if not thousands of family farmers to process, package, store, and deliver their food to households, institutions, and food service? Say each Food Hub was owned by the very farmers and food artisans that use its services? That would be a much better use of millions of dollars and create a vastly different food system in which the producers earn equity in the business, are paid fairly, and regionally-based agricultural systems can thrive. That is my hope... .

Cheers,
-Rebecca Thistlethwaite




From the LH Store

Garlic is one of my favorite things to eat - we literally put it in almost every dinner we make. Perhaps that is why we never get sick! We also love to grow it. You put it in the ground in the fall, practically ignore it until the spring, water for a couple months, then harvest. For optimal growth, mulch it with straw or leaves to overwinter and then irrigate regularly once the spring rains have ceased. Side dress a couple times with compost or fish emulsion and then harvest when all but 4-5 leaves have turned yellow. October is the prime month for planting garlic. Have you ordered your seed garlic yet? From spicy Russian Red to sweet Chesnok Red and so many other varieties, there is a garlic out there for you. If planting garlic is not your thing, buy some for eating over the winter.



Use CSAware and Get New Members Through LocalHarvest!

If you have a CSA or customers to manage, you should check out our CSAware software. It can save you countless hours of managing spreadsheets, putting together delivery sheets and running credits cards, plus so much more. Save yourself the hassles so you can focus on the farming and building your business.

If you'd like an online tour, let us know.



Food from the Farm: Plum Crisp

What do you do when the only avid fruit eater in the house has gone on a business trip and left you and the kids with 5 lbs of rapidly ripening Emerald Beut plums? No, its not a riddle. Its the inspiration for this month's LocalHarvest recipe.

Plum Crisp



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