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Fostering Sustainability and Innovation in Agriculture
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Sustainable Farm Collaborative Leverages Regional Brand Identity, Extends Farmers’ Reach via Robust CSA

April 16, 2012 |

Capay Valley Farm Shop's 'Bushel' FarmShares Box

When Capay Valley Farm Shop customers open up their CSA boxes full of fresh fruits, veggies, herbs, nuts and other edible goodies, they get to appreciate the hard work of dozens of organic and sustainable farms from, you guessed it, the Capay Valley.

The Capay Valley, located in Northern California in the coastal range between Sacramento and the San Francisco Bay area, has been a hotbed of organic and sustainable farming innovation for over three decades now. To meet customer demand for organic and locally produced foods, foster and strengthen the “Capay Valley Grown” brand identity, and increase the economic viability of farms in the region, Capay Valley Farm Shop was formed. It is a collaborative of approximately 35 farms and ranches based in the Capay Valley working together to deliver a diverse offering of high-quality, sustainably produced food direct to local customers, primarily via its CSA (Community Supported Agriculture).

About 95 percent of the products that end up in Capay Valley Farm Shop CSA boxes, which the company calls “FarmShares,” are certified organic, said Thomas Nelson, co-founder and president of Capay Valley Farm Shop. Products in the CSA that aren’t certified organic usually come from smaller farms that employ environmentally friendly and sustainable practices such as Integrated Pest Management (IPM).

Capay Valley Farm Shop’s products are very diverse and include organic vegetables, fruits, nuts, meats, olive oil, wine, lavender, honey, flowers and more. Capay Valley Farm Shop currently has 26 CSA locations, or sites where it drops off its “FarmShares” for customers. About five more locations are going to be added in May, Nelson said.

Nelson added that there are also some other big plans for growth—a stronger focus on its wholesale side of the business, a new facility and an attempt to help grow meat production in the Capay Valley.

Coming Together

Capay Valley Farm Shop officially launched in 2008, but the seed for its creation was planted years before that.

“Capay Valley Farm Shop is an offshoot of efforts over many, many years in our farm community to get our farms as close to the customer as possible, and so we’ve been working on regional branding for about a decade,” Nelson said. “We’ve been creating a common identity that farms can use to say that their products come from the Capay Valley and be able to convey to customers what a special place this is.”

The effort initially grew out of the nonprofit organization Capay Valley Vision, of which Nelson was the director. The organization was responsible for conceiving the “Capay Valley Grown” brand, which was launched in 2004 as a partnership among 23 farm and ranch charter partners, according to the brand’s website. The business structure of the collaborative was formalized in 2007 and the CSA was launched in July 2008. That was right after Nelson earned an MBA at the University of California, Davis, where he focused on social entrepreneurship and worked on the business idea as a school project, he said.

The Capay Valley Farm Shop was capitalized through the founding farmers themselves, particularly through a family-and-friends type of community fundraising structure, Nelson said. Today, the Farm Shop currently provides CSA boxes, or “FarmShares”, to customers mainly throughout the San Francisco Bay area. Customers are able to learn about which farms their food come from as well as the farm’s growing methods.

How the process works

Customers have the option of ordering “FarmShares” online in three different sizes—Bite (small), Peck (medium) or Bushel (large). These range in price from $15 to $27 per delivery with discounts available for longer-term commitments. The orders can be picked up each week at Capay Valley Farm Shop’s designated sites.

The goal of Capay Valley Farm Shop is to simplify the farmer’s process of selling directly to consumers. The collaborative currently has a central packing facility of about 2,000 square feet in the town of Brooks. A truck picks up the products from Capay Valley Farm Shop’s member farms, or in some cases, the farms drop off their product at the facility. The food is then packaged at the facility, stored and then transported to the drop-off sites. The farmers set their own prices and an additional margin is added to help sustain Capay Valley Farm Shop’s business operations, Nelson said.

Business Model

“This whole model kind of falls under the model of a food hub, which we didn’t even know at the time (that we started),” Nelson said, noting that food hubs have sort of become the new focus for agriculture in the nation. “We think to have sustainable, rural communities, it’s critical to have thriving farms. To have thriving farms, they need to have loyal markets that pay well.”

Besides its CSA option—which currently has about 500 customers—Capay Valley Farm Shop also sells its member farm products wholesale, particularly to food service customers interested in buying the farms’ products in larger quantities. Nelson said this wholesale channel has been growing, and it’s an area he believes will continue to grow in the future. Currently, about 70 percent of the Farm Shop’s sales are through its CSA while about 30 percent are through its wholesale operations. He noted that he hopes to bring this up to a 50-50 balance, probably within the next couple of years.

Growing Markets

The collaborative has been trying to open the door to new markets by going after institutions, such as schools, hospitals and other businesses as customers for its CSA program, Nelson said.

California Pacific Medical Center, which has four hospitals campuses across San Francisco, has about 100 employees who regularly place orders through Capay Valley Farm Shop’s CSA, said Jay Edwards, communications manager for the nonprofit hospital group.

“Because we work long hours and hospitals are a 24/7 business, you don’t always have time to run out to the farmer’s market,” Edwards said. “So, it’s great and convenient to be able to have fresh fruits and vegetables delivered to you at work.”

Laguna Honda Hospital and Rehabilitation Center in San Francisco also joined the CSA. Loretta Cecconi, chief clinical dietitian at the hospital, said bringing Capay Valley Farm Shop on board was an effort to help boost the hospital’s focus on sustainability, particularly through its nutrition department and cafeteria.

Brian Boyce, sales manager for Riverdog Farm, says Capay Valley Farm Shop represents just one channel for the farm’s sales as it already has its own CSA program and other direct sales outlets. However, the partnership does provide certain benefits.

“By supplying the Farm Shop, we can get our product to a greater geographical area,” Boyce said. “We can serve areas that we’re choosing not to expand into. Getting our name out there beyond what we immediately serve is a positive thing.”

Going forward, there are plans to grow Capay Valley Farm Shop. There are hopes of adding a second packing facility in Esparto, a central community in the Capay Valley, hopefully by the end of 2013, said Nelson. Originally, the goal was to open the 4,000-square-foot facility this year, but the plan is being delayed due to a shortage of funds.

The Farm Shop was able to secure about $82,000 in equity investment (through various investors) late last year with the help of the Slow Money Alliance, a national network that works with sustainable agriculture-focused investors and entrepreneurs. That funding will help Capay Valley Farm Shop open its second facility.

Other goals for the future include setting up special events that showcase Capay Valley Farm Shop’s local farms and their activities (such as its upcoming “Capay Valley Olive Oil Experience on April 21”), and helping local farmers learn how to take advantage of growing opportunities in the meat production sector, Nelson said.

One of Capay Valley Farm Shop’s greatest challenges, Nelson noted, has been figuring out the optimal business model.

“A number of farms had pioneered direct-market models and really worked with chefs to connect them with great food,” he said. “The challenge for us is (to figure out) how we take the benefits of that system and make that available to a broader set of farms.”

In 2011, the collaborative’s revenues increased by 54 percent, and they grew by 78 percent for both 2010 and 2009. Meanwhile, profits are being reinvested back into the company, Nelson said.

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