Growing small-producer market share and profits

Keeping Company explores conversations in and around Charlotte’s business scene.

By Carrie Fenn | Contributor

Anyone who does business in Vermont knows our economic climate is a challenge. Forbes released data in October that put Vermont close to the bottom of the economic scale in the U.S.: number 46 in business costs, number 42 in regulations, number 45 in growth prospects. Not only that, Vermont has the smallest economy of all 50 states. Ouch.

These stats don’t deter small business, however. Vermont has the highest density of small businesses and employees of small business, and Charlotte is no stranger to the entrepreneurial spirit. Over 591 active businesses use Charlotte as their filing address with the Vermont Secretary of State, and many of these are farms and food producers. In an economic environment as challenging as Vermont’s, how do small producers survive?

 

Sue Thibault

Suzy Hodgson of Yourfarmstand.com signs up Sue Thibault in 2011—their 100th Charlotter. Photo: Courtesy

Enter the concept of the sharing economy—a way to put control of the transaction in the hands of the consumer. Think Airbnb and Uber, Power U, even Craigslist. Goods and services that have been controlled by large players are steadily falling into less centralized markets, made possible by the use of technology that connects people who need something to people who have it.

Here in Charlotte, we have our own example of a sharing economy with Yourfarmstand.com, an online marketplace that allows consumers and farmers to connect. For this installment of Keeping Company, I talked to Suzy Hodgson, one of the founders of Yourfarmstand.com, to get a sense of how this innovative approach to marketing local farm products is working in our small town.

Farmstand Co-op, or Yourfarmstand as it is now known, was created in 2009 with funds from a small grant by the New England Grassroots Environment Fund (grassrootsfund.org). For Hodgson and her team, the $2,000 seed grant was enough to buy an old IBM computer—to act as the market’s server—and to develop the platform for the online market. Hodgson, along with other Charlotters, including Joe Messingschlager, Bob Hyams, Mike Walker, and Matt Burke and Tanya Srolovitz of the former Bloomfield Farm, launched the market as an ad hoc community group, with a mission of “increasing access to local food.”

They hoped to create a venue for consumers that broke down some of the barriers to buying local. In talking to people, Hodgson found that the desire to buy local food existed, but for some committing to a CSA wasn’t ideal—too much of some things, not enough of others, coordinating pickup and worries about finding someone to pick up the share if the member went out of town. With Yourfarmstand, families could buy from the “farmer down the road,” but they would only buy when and what they wanted, and they could purchase from multiple farms instead of being locked into their CSA.

Yourfarmstand was borne out of the idea Hodgson had to invigorate our local economy by establishing something akin to an online bartering network. She envisioned a virtual economy whereby people received credits to their account by selling items; they were then debited for the things they purchased.

Idealistically she hoped for a sustainable local economy and 100 percent of the virtual dollars staying in Charlotte. In practical terms, that approach didn’t work. Ultimately there are fewer local consumers who are willing to make weekly planned purchases (as opposed to buying food at the grocery store) than there are local producers, and most people are either sellers or buyers and just want to use real dollars.

Other aspects of the original idea have worked quite well, however. Hodgson notes there are several inefficiencies involved in the growing and marketing of food. Even in the case of farmers markets, farmers spend several hours setting up and staffing tables, all for sales that may not happen. In the case of Yourfarmstand, the farmer knows what the consumer wants and can harvest just the amounts that have been sold. Hodgson says this lack of waste is critical on a broad scale. “Food that’s wasted is energy wasted,” she notes, and one can see she thinks about food and its impact on various systems differently from the rest of us.

Hodgson provided me with a statistic from the USDA that breaks out how an average food dollar is dispersed among the players in the food chain.For every dollar Americans spend on food, only 7 cents stays on the farm. With Yourfarmstand, Hodgson and her co-founders hoped to change that.

“Farmers that sell on Yourfarmstand are able to keep 90 cents of every dollar they sell,” she explains. That’s impressive.

Other benefits to Yourfarmstand include the lack of barriers to entry into the market. Producers can use Yourfarmstand to test products and get an idea of their marketability or to sell excess. Some have used it to try different avenues of marketing, such as partnering with another producer to create a value-added line of complementary products. Others have used it as a launching pad for their own CSAs. The system is dynamic, however, and there is a fair amount of attrition on both sides of the transaction. Hodgson notes that producers, and customers, come and go. Life changes, such as divorce, babies or going back to school, can take a farm offline.

Hodgson will call producers when she sees they haven’t posted anything in a while, often to find that the farm has ceased operation. In the case of customers, some just move away. Others leave town for months at a time. She still monitors the site to see who is in and who is out. One gets the sense that she has only slightly grown accustomed to seeing the names on the site change. She doesn’t take the losses personally any more, but clearly they still matter.

ShakeyGround Farm, on Converse Bay Road in Charlotte, has been selling its wares on Yourfarmstand for four years. Co-owner Drew Slabaugh says that he appreciates the ability to harvest only what folks have ordered on the site, but that sometimes judging how much will be available a week in advance can be a challenge. He likes having the flexibility to offer the farm’s products when they are available, even if only for a short time. The one downside he notes is the impersonal nature of the transaction. He doesn’t know who his customers are or what they are buying. Overall, though, Yourfarmstand has been a good fit for the farm.

As a consumer, Yourfarmstand has few downsides. Signing up for the site and depositing money into an account is safe and simple. The descriptions of the products are clear and accurate. Selecting products is easy, and there are plenty of convenient pickup sites. Buying groceries online requires some menu planning, but consumers are rewarded with better taste and nutrition stemming from purchasing food that is both fresh and local.

Six years in, I’m curious if, in Hodgson’s mind, Yourfarmstand has succeeded. She laughs. Hodgson admits Yourfarmstand hasn’t accomplished everything she hoped for, but the overall concept of the online farm stand has certainly taken off. There are several sites that promote the purchase of farm-fresh meat and produce delivered to your door. Yourfarmstand, she says, is limited by the size of its market, the size of its staff and its budget. Without an expensive team of developers and marketers, it can’t expand to larger urban markets with a bigger customer base. And even though almost half of Charlotte households have signed up (an astounding figure, by the way), they are still looking at a small number of consumers.

While Yourfarmstand may not go the way of its bigger sharing-economy cousins, it does have a significant role to play in our local economy. Sales on the site are over $40,000 for Charlotte consumers alone. And while that may seem like a small figure, it’s important to remember that 90 percent of those dollars went directly into the hands of a local farmer or producer. Even farmers markets can’t offer those percentages, and sales at farmers markets don’t account for waste or the farmer’s time spent staffing the stall.

Yourfarmstand hopes to make incremental growth within the market, chipping away at the stronghold less sustainable foodstuffs have in our pantries and on our tables. And they will do it one farmer, and one consumer, at a time.

Carrie Fenn has been a Vermont business owner since 1994, when she co-founded Muddy Waters in Burlington. She also owned Fibonacci’s in Shelburne and the Old Brick Store in Charlotte. She currently partners with her husband, Peter, at Charlotte Real Estate, an independent real estate agency, and Fenn & Company, a design/build firm, both located in Charlotte.

Want to suggest a topic for Carrie to cover? Contact her at carrie@thecharlottenews.org.

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