New York Distributor Brings the Farmers’ Market to the Supermarket; Increases Local Food Access
January 3, 2014 | Susan Botich
Dan Horan had a notion back in 1989 that started with a college essay and turned into a business plan: enlist the cooperative efforts of various small farms in the region to supply supermarkets with locally produced foods. The idea of bringing the farmers’ market to the local supermarket was planted, he says.
“Fast-forward to 2010,” says Horan. “I sold the company I was involved with and hired my first employee.”
The name for Horan’s new venture, Five Acre Farms, came from the principle of small, local agriculture serving its local communities, according to Horan.
“Our focus was on the mainstream customer,” says Horan, “improving their access to local food where most of the shopping is happening—in the supermarkets. Less than 10 percent of people can support the farmers’ market. We wanted to be in the mainstream shopping centers.”
Keeping prices at a level affordable for most people is important to Five Acre. But also, paying the farmers who supply the goods enough to make it possible for those farms to stay in business is vital, according to Horan.
“If we paid our farmers the federal standard, we would be paying just enough for those farmers to go out of business,” Horan says. “The government price standard to dairy farmers is not enough. In this country, we’ve lost 88 percent of our dairy farmers since 1980. But we ask our dairy farmers how much it costs them to farm; we’re willing to pay a little more because we think consumers will.”
Horan saw how small farms were being squeezed out of the marketplace due to the competition of the large farming industry.
“I felt that farms were going out of business incredibly fast,” says Horan. “We wanted to be part of the solution, not the problem.”
Buying local farm goods at prices that worked for the small farmer while keeping supermarket pricing at a healthy “middle cost” for the consumer was the answer to getting those local products to be competitive in the markets, according to Horan.
“We like the middle price—that difference, we think, is in reach for enough of the population,” he says.
Five Acre Farms handles most of its client relations the old-fashioned way, according to Horan.
“We tend to make long drives to visit farmers,” he says, laughing. “Most of it’s face-to-face in the barn, at the kitchen table, that sort of thing. It takes time but we have to earn a reputation.”
Though the original hope for Five Acre was to offer all organic foods, Horan found that the necessary pricing to make it work economically would be a problem for most consumers. Keeping the organic model in mind as a long-term goal, he feels that, for now, by offering naturally produced products of superior quality at more affordable prices to a broader market is better serving the majority of shoppers, he says.
In 2011, Five Acre put its first product, milk, on supermarket shelves, starting with 150 markets across the area. Beginning with milk and cream, Five Acre expanded to fresh eggs, then fresh-pressed apple juice and apple sauce, according to Horan.
“We really like the way it’s going,” says Horan. “We don’t want to offer products to the wealthiest only. Probably about three quarters of the population aspires to buying local foods and about one quarter can afford it. We know there’s a top two percent that will pay any price and another group who will buy based on price to a certain point. Those customers are who we’re trying to access, meeting that demand.”
Five Acre focuses on marketing its products to shoppers on-site, according to Horan.
“We do demos in supermarkets,” he says. “Once people taste it, they think the few extra dollars are worth it. Our milk is just what comes out of the cow. It’s not standardized. Sometimes there’s more cream, sometimes there’s less. Our eggs are to market very quickly. Usually, that’s a product that’s sitting in a warehouse for, sometimes, weeks. People see there is a noticeable difference in fresh eggs.”
Five Acre Farms now employs 12 people, according Horan.
“Our plan is to continue to grow and fill out in the supermarkets in the Northeast and in a couple of years to be in several hundred stores with more and more variety of products on the shelves.”