Startup Profile: Online Harvest Propels Local Food Movement
June 30, 2011 | Robert Puro
To continue to grow and expand the local food marketplace will require innovative web-based solutions that provide consumers with greater access to producers and vice versa. One company at the forefront in this area is Santa Cruz, CA-based LocalHarvest, which since its formation in 1998 has focused on the development of a range of online products to strengthen consumers’ personal relationships not only with the food that they consume, but also with the sustainable farmers who produce it.
LocalHarvest’s product development efforts to date include the following: a definitive online public nationwide directory of small farms, farmers markets and other local food sources; a search engine that enables consumers to locate local sustainably grown food and products available from family farms; and an online store to help small sustainable farms develop markets for their products beyond their local area. A little over a year ago, the company also began offering a new CSA management system software product called CSAware to help CSAs more efficiently manage their back office operations.
I recently interviewed Erin Barnett, Director of LocalHarvest, to learn more about the company’s history, products, business model, and commitment to sustainable agriculture.
Q: Can you tell me about the origin of LocalHarvest and how the company has evolved since it began operating in 1998?
Erin Barnett: At the beginning it was a project of a company called Ocean Group, whose founders wanted to offer a gift to organic farmers in the form of a national directory so that members of the public could easily find the direct-market farmers in their area. Later LocalHarvest was incorporated on its own, but didn’t really have a viable income stream to support itself. So in 2003, the online catalog was added. All of the 17,000 farmers that are part of our directory sell directly to the public in their own communities and small portions of them also do mail order. Those who do mail order can sell their products through our store so that people anywhere in the country who want to buy directly from farmers, but want products that may not be available locally can get them directly through our site.
Then about 3 years ago we started developing another set of software (CSAware) that is meant to meet the needs of CSA farmers who were telling us that they loved many things about running their CSA, but running the office wasn’t one of them. We have developed quite a complex and robust set of software that will manage all manner of things having to do with running a CSA. It really has been the project that has been in the forefront for the last few years.
Meanwhile the national directory continues to grow. We get about 5,000,000 unique visitors to that site (http://localharvest.org) every year and 10 – 20% of those, depending on the season, are people coming in to look for a CSA. We sell quite a number of CSA subscriptions through our online catalog. We have the largest directory of CSAs in the country, something like 4400 CSAs list with us right now. We have a monthly newsletter that goes out to a couple hundred thousand people and several others that promote farm events customized by area that go out weekly.
Q: Is LocalHarvest a non-profit or for-profit company?
EB: It’s a for-profit. The decision was made very consciously not to become a non-profit, because our founder (Guillermo Payet) is very interested in whether people can make a living by doing good work. So it has a little bit of a social or business experiment element to it.
Q: What is the company’s business model?
EB: LocalHarvest takes a sales commission on the products sold through the catalog and we also are supported by donations by our members. The members are the people who come in and create a listing in our directory and there are about 25,000 of them. And that was a deliberate business decision not to charge them to list their business in our national directory, because for some small farmers any fee would be considered prohibitive.
For CSAware, we do all of the software integration and development and consider ourselves to be an outsourced and ongoing development partner in the technology realm. We charge 2% of their sales.
Q: How did the idea for CSAware evolve?
EB: We’ve been working with CSAs for 11 years already so we knew going in that each one ran a little bit differently and that the model was evolving very quickly, particularly with the kinds of CSAs – we call them ‘3rd party CSAs’ when its more of a food aggregation and redistribution system – where 3rd parties are buying food from farmers and creating a CSA that way.
We are very invested in making CSAware flexible. The software should bend to fit the farm, not the other way around. We’re bringing on members deliberately slowly in order to be able to offer a really high level of customer service particularly at the beginning. It’s kind of a slow evolution to bring a set of software that’s this complex into the market and do it right.
Q: What are the broader goals of LocalHarvest with regard to sustaining agriculture and insuring access to healthy locally grown food?
EB: Our mission really is to help smaller-medium scale farmers thrive and encourage direct marketing in all its many and evolving forms. The larger goal is to transform the way that we eat in this country, because we really believe that when direct marketing is thriving in a community, when there is a healthy number of small and mid-scale farmers serving an urban center of any size, that that is a healthy way to create community. Those relationships inspire change that affects people’s health at the physical, emotional and really even the spiritual level. Making connections with people, land, farmers and food really has the potential to create large-scale change in our society.