veggie market rei
DESCRIPTION
VeggieMarketTRANSCRIPT
VeggieMarket.OrgREI Proposal
Overview
Problem
• You can’t get produce this good from far away
• Distribution companies ship from far away
• Bypassing the distributor is expensive and annoying
Opportunity
• Crowd-Source supply and demand
• Make the process painless
Problem/Opportunity
Farmers…
• Earn higher margin
• May increase production by up to 50%
• Gain access to aggregated local demand
Retailers…
• Gain access to aggregated local supply
• Enjoy painless e-commerce procurement
Strategic Advantages
VeggieAuction will…
• Create a minimum viable product within 2 weeks of funding
• Create a system of “wrap around supports,” replacing distributor
• Build a streamlined and intuitive system that makes f2b accessible
• Open new markets for CT farmers and gardeners
• Improve the quality and price of wholesale food
How we will use your funding
Competition
Direct Competition
• FoodShedExchange
• Farmer Co-Ops, Food Hubs
Indirect Competition
• Whole Foods
• Wal-Mart
• Wholesale food hubs
• Niche Distributors
• Farmstr
• Good Eggs
Business Model
VA provides e-commerce
solutions
Farmers list produce
Retailers purchase produce
VA takes a 4.5% fee
per transaction
VeggieAuction currently…
• Is finishing “front end development”
• Has managed dozens of local interviews and years of research
• Has 3 MA/CT farms ready to upload production(including my own)
• Won $2500 in seed funding through the Thomas J. & Bette Wolff Family Program in Entrepreneurship
Status and Milestones
Thank You!Please feel free to look through the appendix!
Micro Market Demand
Micro Market Demand, by the Numbers
Macro Market Opportunity
“Local food is a rapidly growing market opportunity for American agriculture…Local food is a multibillion-dollar market and growing” -USDA
Retailers
– “Local procurement is a fast-growing category with tremendous promise, and marketers that are aware of the many dynamics at play can generate significant revenues” Mintel Reports
– Barriers to entry include capacity constraints, lack of reliable distribution
Retailers, Needs by the Numbers
Produce, Needs by the Numbers
ProducersSales Channels Small (sub 50 in
sales)Medium (50 to 250 in sales)
Large (250k or more)
All
Number of Farms with Local Food Sales
86,728 15,202 5,301 107,229
Share of all farms with local sales
80.90% 14.20% 4.90% 100.00%
Local Food Sales
Marketed Through All Channels
11.10% 19.10% 69.80% $4.8billion
Direct to consumer only 33.70% 38.90% 27.40% $.9billion
Intermediated Only 3.50% 3.60% 92.90% $2.7billion
Both 11.70% 39.50% 48.80% $1.2 billion
Forecast
Notes Numbers
Growers Recruited 300Sales potential per grower 25000% of grower’s vegetables listed 0.075% of listed vegetables sold 0.85Sales transacted 478125VeggieAuction Fee 0.06VeggieAuction Revenue 28687Less Fixed Costs (@3000) 25687VeggieAuction Operating Revenue 25687
Legal Risk
• Gardeners, farmers, and meat producers self regulate.
• Government momentum behind local food, stemming USDA and other agencies, as well as provisions from the 2008 farm bill, etc.
• A change in the regulatory or governmental climate could significantly impact VM partnering opportunities and funding sources.
Innovation Touch Points• Cutting out the distributor is called “wholesale bypass,”
and according to IbisWorld, wholesale bypass represents the #1 threat to distributor revenue in 2014
• This food distribution system is significantly more efficient than a traditional “centralized system” with a wholesale distributor
• Putting retailers and producers in the same space will lead to reduced spoilage on both sides, and reduced lead-times, resulting in a better bottom line, and better produce for the end consumer
• This system favors small farms and large gardens with nearby urban-centers. This system opens up the f2b marketing channel to CT and MA farms and gardens with few sales options