This is the food supply “un-chain” concept as currently developed and implemented by the Epelia startup. Please feel free to present your own concept for a novel food supply chain in another post to this group!
(This text also appears on our European Social Innovation Competition profile.)
1. Food Supply Unchained
What happens when you connect farmers’ markets to the Web? You get a European food distribution network for small-scale producers!
We support small-scale farmers and a healthy nutrition by developing the shortest possible food supply chains – so short they are just direct links. No chains anymore!
Our idea works by creating webshops for traditional farmers’ markets that support cost-efficient combined shipment of everything a customer orders on one market’s webshop. The market effectively acts as logistics hub, both for self-organized regional same-day delivery, national parcel service delivery, and Europe-wide delivery to other farmer’s markets (acting as distribution hubs).
This model re-establishes the viability of traditional, small-scale food production, and allows these businesses to create new jobs.
2. Why does Europe need this?
Let’s use Germany as an example: in beginning of 2011, 85% of food sales were done by just the biggest four national food chain companies [source]. Now it’s probably even more. This powerful position of retail chains means that:
It is hard to near impossible to found an independent food retail business over here.
Farmers and small producers are forced to sell to these big retail chains, but often can’t because they are either not admitted or price pressure is just too much, while …
all profits go to the retail chains and intermediary merchants, while producers get very little and …
consumers often get to pay much higher than necessary prices, which forces cash-scarce consumers to buy cheaper, less healthy or even industrial, unhealthy products while at the same time …
up to a third of the food products are wasted as they move through this long supply chain.
Finally this high market concentration favoring big players also severely inhibits the access of small-scale producers to the European Single Market: during visits to trade fairs in Catanzaro and Avellino in the end of 2013, we experienced the urgent desire of Southern European producers to export to (say) Germany, but not finding a way how to …
Due to all this mess, several organizations experiment with direct sales solutions; a notable example is the Greek no-middlemen movement. Such solutions usually are framed as local food production: direct sales in the local area. This is great, yet does not solve the whole issue: export as exchange between agricultural and industrial regions is still needed in the European economy in its current state; and occasionally tasting other countries’ cuisine is a desirable feature too
That’s why Epelia’s concept, as proposed here, is about integrating local sales solutions into a pan-European logistics concept tailored for small-scale producers and direct sales.
3. How does it work?
Our central idea is to use (or re-vitalize and use) the traditional weekly farmers’ markets. They serve as an established meeting point of local farmers already, which makes them a great choice for a logistics hub for regional and international shipping. Which means that a customer ordering goods from all the farmers on one market only gets one parcel, so only pays shipping costs once. Most farmers on these markets do not have a website or even webshop, so helping them to get their products online into a shopping portal is likely to re-vitalize these beautiful markets, adapted for the Internet age.
There are some additional benefits coming in as side effects:
Local job creation. Both the tasks of the farmers’ market online facilitator and the regional shipping would mean local job creation in so far disadvantaged regions. But the bigger source of new compensated work / jobs will be the increasing sales of small-scale producers. (This new system also destroys some jobs at the side of the current big players; but the effect is still a net gain in jobs, as it mostly destroys capital gains and non-EU jobs for previously imported food, and also need more jobs for the same output due to lower automation.)
Cheaper regional shipping. Shipping from a farmers’ market as a logistics hub does not only enable cost-efficient national and international parcel / pallet shipments, but also cheap regional shipment. It’s a home delivery option for those who cannot come by themselves. This can either be done by a regional shipment provider, or directly by the person facilitating the online integration of the farmers’ market.
Outcompeting supermarkets by home delivery. Home delivery of food purchases is an emerging trend in both the U.S. and UK so far. Given some time, it may well be that this becomes the default mode how people want to buy their food, with comfort by “buy ingredients for this recipe” and “bookmarked and recurring orders” features. However, while brick and mortar markets are ill adapted to this trend, it does not require any significant capital for old-fashioned farmers’ markets to take up the newest hype …
Attracting attention with special offers. Farmer’s market dealers usually do not have flyers, newsletters of other merchandise material about their special offers that could attract additional customers. But when all their products are listed online on a food shopping portal like Epelia, potential customers can easily look up all offers of the next market day, and also receive newsletters about special offers.
International direct (whole)sale. This concept also makes international shipment for direct sales a viable option, at least for wholesale customers. The Epelia platform already includes a separate wholesale area, where institutional customers can order larger amounts. This is still too expensive for direct import if it’s only one parcel (since food is heavy for its price!), but becomes viable by using the option to order from multiple dealers at once, and get all shipped combined on a pallet.
Thoughts and comments? It’s all still baking and we are grateful for your input!