How Social Media and Online Grocers Transformed the Food Business

Finding the right balance of ingredients is essential to any recipe. Without butter, for example, a particular dish might not come together or taste right. Such is the case with the recipe for the future of food—where the butter is digital technology, the essential element enabling consumers to break away from the decades-old habit of turning to supermarkets for all things comestible. The public, it is clear, is going back to its hunter-gatherer roots, but the bows and stone knives are now blog posts and tweets. A study by The Hartman Group points out that social media is changing “the way we think about, talk about and experience food,” finding that 52 percent of Facebook users have “liked” a food/beverages brand while 43 percent regularly use social media and other digital platforms to plan meals. The local-food movement is feeding on this digital zeitgeist that’s transforming how meats, eggs and produce are marketed, distributed and consumed. Web-based retailers such as Peapod and FreshDirect are keeping their ears to the virtual ground as the business of food evolves via social, connecting consumers with food both in its raw form and prepared. And social channels including Facebook and Twitter are boosting the prospects of food purveyors large and small. One of them is a farmer by the name of Garland McCollum. “I graduated from North Carolina State in 1983 with a degree in animal science, and they taught us that we were going to operate big and feed the world—and that’s what I tried to do,” recalls McCollum, who would go on to start Massey Creek Farms in Madison, N.C. “Our business was a lot of the things you read about in terms of contract hog farms. It wasn’t good for me. I felt like an indentured servant on my own farm. We decided to make a change and went cold turkey.” So, after two decades running a commercial hog farm, the ball cap-wearing Carolinian and his father, Bill McCollum, rebooted their family operation, shelving a factory-styled outfit that sold 25,000 pigs annually in favor of small batches of free-range hogs, lambs, chickens, turkeys and ducks. Going grass-fed turned out to be the right move, especially once digital elements were employed. The McCollums established a meat and eggs booth at the nearby Greensboro farmers market and grew a roster of loyal consumers and restaurant buyers by giving the message behind their friendly smiles a Facebook landing page. At the farmers market, Massey Creek helped generate a Facebook fan base of 665 customers, some of whom represent $500-a-week wholesale orders. “Whether they find us through Facebook or while visiting the farmers market, we can continue the conversation through that social channel,” Garland says. “But we try not to be ham-handed. For instance, we’ll push a restaurant customer with a Facebook post and then mention that ‘by the way, they serve Massey Creek Farm eggs.’ If they do well, so do we.” Northern Spy Food Co. restaurant in New York City. Increasingly, eggs are also being offered by way of community-supported agriculture groups, better known as CSAs, which are helping to localize food consumption via technology. For years, CSAs depended on off-line meetings to facilitate education and distribution of locally produced squash, Gorgonzola and Cornish hens to paying members. But now, digital companies like Farmigo have set out to streamline the process with modern communications tools. The Brooklyn startup launched a social platform called Food Communities that gives consumers access to various farms such as the McCollums’ while creating business opportunities for people who want to promote local and organic agriculture. With a nod to Foursquare-like gamification, participants can achieve “Champion” status by heading up one or more communities that pick from farmers’ menus in a manner akin to an online, local-only food co-op. Those Champions then get a 10 percent commission from sales run through their Food Communities. Farmigo CEO Benzi Ronen refers to his company as “an Airbnb for CSAs.” “We want to give birth to the collaborative consumption for food,” he explains. “For us, it was crucial to bake in the social community aspect. Food Communities is a digital platform for anyone who wants to be a food entrepreneur for his or her neighborhood or school district. If kosher is important to you, start a kosher community.” Ronen’s Web-based enterprise is bringing the farmers market—virtually—to time-strapped consumers. “You have the same dynamic of people shopping around,” he says. “You can get milk from a dairy farm, meat from a meat farm and fruit from a fruit farm. What we saw was a beautiful movement that had no computer infrastructure to take it to the next level.” Farmigo also sells white-label Web software to individual CSAs like Nextdoororganics, a three-year-old group in New York City with 480 members. “We are trying to make the CSA experience as accessible as possible to as many people as possible,” says co-founder Josh Cook. “Digital allows us to scale well beyond where we are now.” What’s intriguing about the CSA movement is that “local food” through players like Nextdoororganics and Farmigo often means down to the neighborhood level. “Our closest producer is in Bushwick, Brooklyn,” Cook explains. “The next closest one is in the Bronx.” Due to the growth of the category, CSAs are getting more competitive, giving locally minded consumers more choices. Brooklynite Frank Episale selected Nextdoororganics because of its tech savvy. “When I don’t know what something is or how to cook with it, I can send them a tweet, and they respond pretty quickly,” he says. And as CSAs continue to blossom via digital media, expect to hear more on how they are reshaping consumer attitudes about food. In some single-farm CSAs, the members have zero input about what they are getting for their money, and they’d have it no other way—a novel concept in the age of limitless choice. “A lot of people get their packages and say, ‘Wow, I have never eaten this before,’” relates Cook of Nextdoororganics. “It changes how they interact with food. They become more experimental with their cooking and healthier with what they eat. And it’s about taking the burden of choice out of the equation.” While skeptics may see these savvy CSAs as fringe players in the food game, they definitely are not insignificant to retailers. The research firm Willard Bishop estimates that fresh-food formats and e-commerce will grow faster than all other grocery categories through 2017, outpacing discount clubs like Sam’s, for example. “CSAs and similar ventures will grow as long as there are enough farmers and enough consumers doing it,” says Jim Hertel, managing partner of Willard Bishop. “The question is going to be whether the following becomes more mainstream.” For the second year in a row, the national online grocer Peapod is teaming with Harvest Moon Farms of Viroqua, Wis., to offer a CSA program that entails around 50 types of heirloom vegetables. Each week, Chicago-area customers can receive five to seven veggies at their door, as well as recipes and information about the 40-acre Harvest Moon. Customers can order online for home delivery or pickup. Peapod takes the preordering out of the mix, though, compensating farmers upfront and then selling to consumers. “We expected to sell 150 boxes in the first week last summer, but we sold out in two days,” says Tony Stallone, Peapod’s vp of fresh markets. “We scrambled to get more product.” He says the CSA was set to run four weeks but was extended to seven. Can Peapod’s CSA model work nationwide? Stallone thinks so. “We took a long time looking for the right partner in Harvest Moon, and right now we are looking for that kind of fit in other regions,” he says. Another up-and-comer in the online grocery world, FreshDirect, which services the metropolitan New York area and Philadelphia, and plans to expand to Washington D.C., has been offering meats and produce from within a few hundred miles of each of its markets for several years now. Last month, it launched a channel dubbed Reliable Sources featuring products from individual farmers along with storytelling-style copy. The first week, 11th-generation farmer Lyle Wells of Long Island, N.Y., got center stage, highlighting his family’s line of zucchini, asparagus, snap peas and sunflowers. “Helping people access local food and understand who is behind the farming of the products is a trend that the market is really leaning toward,” says FreshDirect CMO John Leeman. “We couldn’t do a lot of these [local] products seven, eight years ago—we just didn’t have the leverage. But now we are big enough, so we can buy a lot of what farmers sell. And they can shift their growing practices to methods that are more generous to food taste.” Peapod and FreshDirect are in firm agreement that the local-food movement isn’t just about green-minded urbanites anymore. “Our growth in the suburbs is actually more dynamic than it is in the city,” says Leeman, whose company is also doing plenty with businesses looking to offer employees local food as the farm-to-table movement continues to mushroom. Historically, there has been a disconnect between farmers and b-to-b opportunities such as office catering or restaurants, with a middle man usually bridging the gap. But FarmersWeb, a Silicon Alley startup, wants to be that bridge, creating a Web-based marketplace. “Wholesale is difficult for farms, particularly procuring online payments,” FarmersWeb CEO David Ross notes. “And if you are a restaurateur, we’ve created a destination where it’s easy to find locally produced food.” Northern Spy Food Co., a restaurant in New York’s East Village, uses FarmersWeb to find premium producers like lamb farm Elysian Fields, while employing digital media for marketing as well. The eatery’s social wheels are constantly in motion to virally attract new customers. “I am actually shocked by the responsiveness of Instagram users,” says Christophe Hille, founder of Northern Spy. “Every weekend, my pastry chef sends me a photo for brunch that I post on Instagram, and people on the app comment, ‘I will be there in 30 minutes’—and then they actually show up. Those interactions certainly don’t drive a business all by themselves, but they help.” Farmers are also organizing by using social media. For example, 43-year-old nonprofit GrowNYC promotes 50 farmers markets via nine Facebook pages, four Twitter feeds, five Instagram accounts and a Tumblr feed. “Over the last three years, social media has hugely transformed the way we can do outreach,” says Jeanne Hodesh, a rep at GrowNYC. Hodesh’s team has created a Facebook group where farmers swap smart social tactics to promote their meats and produce. It also promotes its list of farmers to chefs on Tumblr. While digital’s effect on what makes it to the dinner table may seem to many geared toward iPad-wielding professionals with disposable income, one player, Farmstand, wants to provide access to healthy eats for those struggling to pay their bills. Starting this month, the smartphone app is rolling out a feature so users can find farmers markets that accept government-aided electronic benefits transfer (EBT) cards. “Some farmers markets include a token-based program where if you buy $10 worth of tokens with your EBT card you get $20 worth of tokens,” explains John Ford, Farmstand’s co-founder. “We want to help people of need find those opportunities.” The Greensboro farmers market runs such a program, and Garland McCollum of Massey Creek Farms says he sees plenty of EBT customers with smartphones, mostly of the less-expensive Android variety. Forrester Research analyst Sucharita Mulpuru-Kodali says Farmstand’s goodwill play underscores how consumers of all strata now use digital to discover local food. “Less-affluent consumers often use their phones as their primary Internet source,” she points out. “That is their connectedness to shopping in an environment where essentially everyone has used a digital channel to save money on food. Giving them a new way to find local and healthy food, I think that’s noble and makes sense.” After all, everyone’s got to eat, right?

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How Social Media and Online Grocers Transformed the Food Business

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Christopher Heine

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