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Local organic food systems haven't developed sophisticated distribution networks just yet. Chefs source products through word of mouth or by scouring farmers markets. On the other end, farmers often manage orders and deliveries with a scattered system of phone and email.
Farmsreach, an online marketplace for local food producers and buyers, hopes to address some of these issues. Founded by Melanie Cheng, an IT industry veteran and food enthusiast, Farmsreach is a sort of eBay (Nasdaq: EBAY) – or Match.com, depending on how you look at it – for farmers and chefs. After four years as the head of Om Organics, a nonprofit that connects organic food buyers and sellers in the San Francisco Bay Area, Cheng – armed with detailed knowledge of the idiosyncrasies of the local organic food market – began work on Farmsreach in 2006. She assembled a team that includes CEO Lana Holmes (startup consultant and truffle farmer) and CTO Tom Pepper (creator of the Winamp media player).
The online marketplace offers local growers the efficiencies of a large-scale food delivery operation such as Sysco (NYSE: SYY) and gives restaurants, schools, hospitals and stores a centralized ordering tool. Buyers can browse produce, compare prices and place orders. Sellers can manage their “stall,” edit product availability and set up deliveries. Cheng says. “Once we have historical data on what buyers want to buy and what farmers are producing we can help identify areas in the food system that can be improved.”
With each transaction, food miles are reduced and farmers, who currently receive only 20 cents of every consumer food dollar, keep more in their pockets. With major retailers committing to sourcing more local food – Wal-Mart (NYSE: WMT) recently announced plans to purchase $400 million per year from local markets – small food growers stand to profit if they have access to a scalable, online distribution system.
Farmsreach is in public beta in San Francisco with a mobile component and more regional rollouts in the works. The service is free at the moment but will charge 5 percent once the system is on the way. The company was one of 10 companies featured this spring at Earth2tech's Green:Net LaunchPad, which featured companies that are using information technology to fight climate change.
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