Radical Retail

19th January, 2015

Julian Cottee

3Keel reports from the Oxford Real Farming Conference - on the potential of new online platforms to transform the food supply chain.

 

 

New technology has been the driving force in the transformation of food systems over the past centuries. In 1900, 40% of the US population was employed in agriculture (and 80% a century before that), compared to just 2% today - yet productivity is higher. Technological innovation has allowed this shift. I recently chaired a panel discussion at the Oxford Real Farming Conference at which it was argued that the next major industry-changing tech innovations might come not in agriculture but in food supply chains - the way we get food from field to plate.

The Food Assembly is one of the leaders in a crop of new enterprises working on this supply chain revolution. Bypassing traditional wholesale and retail arrangements, they aim to connect farmers and consumers directly through online platforms. Called la Ruche qui dit Oui! in its native France, the company was founded in 2010 and has now launched in Belgium, Germany, Spain, Italy and the UK. At the end of last year the Ruche in France and Belgium was working with 4,200 food producers, linking them to over 100,000 active consumer members. Each week the products on offer from producers within a 150 mile radius are posted to the web platform by the local ‘Assembly Host’. Then as long as the minimum order size is met, the producers deliver their products directly to the local distribution point for collection by members. There are now over 600 Assemblies open in France and Belgium which last year sold some €18 million worth of food and drink. One of the biggest opportunities for producers is the potential to maximise their returns on the sale of produce by going direct to the customer: producers end up keeping some 84% of final sale price.

Part of the Food Assembly’s rapid growth is due to having been able to access more than $4 million of seed funding, debt and equity finance over the past years. Taking an alternative route to the same end is the Open Food Network, originating in Australia but now also becoming established in the UK. Also aiming to create an online platform for connecting producers and consumers, OFN involves a team of contributing coders working together on a non-profit basis to create open source software that is freely available and adaptable by local organisations, coops and social enterprises to fit their own specific needs. There are now a number of enterprises in the UK testing the platform, which is constantly being developed and improved. OFN and Food Assembly are just the crest of the wave - there are many other such disruptive platforms being developed using a variety of different approaches, both in the UK and in other countries.

If they reach critical mass, these ideas - which might better be thought of as social as well as technological innovations - hold out the potential not only to create stronger links back to food production from our now largely urban population, but also suggest one way of tackling the issue of low farm incomes. While our food retail system has done spectacularly well at providing affordable food and drink for consumers, its critics contest that there may be problems for agriculture's long-term social and environmental sustainability brewing down the line. If farmers can keep more of the final sale price, it is argued, they will be more able to invest in innovative and sustainable practices, and higher farming incomes will encourage new entrants to get into the industry.

A critical perspective raises questions about how far such solutions might truly be able achieve scale. How many individual consumer hubs would a farmer need to serve to represent a significant contribution to food supply? Others in the conversation at the Oxford Real Farming Conference raised issues around transaction costs and the additional time required of farmers to process additional paperwork and deliver to consumer hubs. While farmers might receive a greater proportion of final sale price, is this sufficient to cover extra costs? Other issues include the ability of farmers to accurately forecast availability, and the willingness of consumers to travel to a pick up point vs. direct to door deliveries. Online sales are now the fastest growing sector of the UK grocery market, and there will be stiff competition based on the consumer convenience factor. However the rise of ‘click and collect’ schemes from the large retailers suggests delivery direct to the door may not be such a big issue - and consumers may prefer to pick up their groceries from neighbourhood hubs such as pubs and community centres.

Watch this space: these new platforms might just be the way many of us get our food in ten years time.


With thanks to Kathleen Cassidy (Food Assembly), Lynne Davis (Open Food Network) and Peter Richardson (Westmill Organics) for participating in the panel at ORFC 2015.

Image: La Ruche Qui Dit Oui

If they reach critical mass, these ideas hold out the potential not only to create stronger links back to food production from our now largely urban population, but also suggest one way of tackling the issue of low farm incomes. While our food retail system has done spectacularly well at providing affordable food and drink for consumers, its critics contest that there may be problems for agriculture's long-term social and environmental sustainability brewing down the line.