By: Sheila Shayon | Brand Channel
CEO Benzi Ronen calls them “people powered farmers markets,” but his startup, Farmigo, is actually much more.
The online farmers market is a community supported agriculture company that is quietly disrupting food commerce, though on a smaller, but more unique scale than related operations like Amazon Fresh and Fresh Direct. Instead of just allowing customers to order fresh produce through the online system, Farmigo extends a business opportunity to local farmers, allowing them to sell their harvests to an eager online community, set their own price, and earn a supplementary income.
“We’re trying to find people who have always been passionate about building a better food system, but they could blog about it and they could cheer about it, but there was nothing material that they could do to take action,” Ronen told Forbes. “Now they are able to be part of the solution. They’re able to do something actionable and make money along the way.”
The Champion Initiative launched in July in northern California, New York City and northern New Jersey, putting the tools to create and manage communities of customers in the hands of farmers. It even hired the former director of sales and marketing integration at Avon to get an insider’s take on how to grow and manage small, personal businesses.
Farmigo gives Champions a dashboard replete with marketing tools and local media support once they’ve established a location and invited a minimum of 20 people to join. Users must place orders two days before a delivery date so local farms can harvest-to-order and deliver to a central location managed by Farmigo for distribution to individual customers. Champions receive a 10 percent cut of their community’s sales and food discounts, while Farmigo takes a 20 percent commission with 10 percent for the partners that help with packing and distribution.
More than 3,500 CSAs use Farmigo’s software and the company has raised $10 million from investors including Benchmark Capital and Sherbrooke Capital. Ronen “envisions thousands or tens of thousands of such “food communities” five years from now,” he told Bloomberg Businessweek. “They’ll be in people’s buildings and backyards, run by PTAs as school fundraisers, offered by yoga studios and employers.”
And as for scaling its biggest hurdle, convincing people to buy produce over the internet, many of the industry’s big brands have already done the heavy lifting for Farmigo, with programs likePeapod and Fresh Direct tapping urban consumers who may have little access to farm-fresh goods. But Ronen is confident: “Our assumption is that in the next three years it will start to be the norm to buy your food online, not just your cereals but also your fresh items.”