FarmDrop - The Online version of a Farmer's Market. Will it work?

 FarmDrop aims to connect producers and consumers using all the latest  online retailing ideas. It is a digital version of the traditional stall found at farmers’ markets, and has been set up by Ben Pugh a former city worker, and Ben Patten. Currently the business is trying to raise £400,000 through a crowd funding initiative, and has already received £301,000 in pledges from 105 investors.

Is FarmDrop a good investment? Will it, as the two Bens hope, turn out to be “the food system of the future”.

At first blush it all looks very simple. Consumers sign up to their local FarmDrop, order their goods on line, and pick them up at a fixed central point on the same day every week.

Producers fulfil the orders and deliver them to the central point.

And a “Keeper” mans the pick up point, ensuring that customers are given their goods.

Money wise, producers receive 80% of the retail price, the Keeper 10% and the brains behind the idea also get 10%.

At present there are 17 Drops either open or in development.

The FarmDrop website summarises the benefits of the idea as follows:

Consumers receive local produce, and the satisfaction of knowing they are supporting farmers. Keepers also support farmers and earn money in the process. Producers receive the lion’s share of the retail price.

The business model raises some issues. Its definition of local is broad with producers needing to be within 100 mile radius of the central point. Some might feel that this is not very local at all. Wholesalers can be used, which adds a further layer of complication, and is at odds with the idea of wholeheartedly supporting producers.

The biggest issue is that FarmDrop has underestimated the pivotal role of the Keeper without whom the idea collapses. The Keeper is charged with signing up producers to support the Drop, recruiting the customers, and troubleshooting any problems that might emerge either from producers or customers. Their financial return from putting in all this effort is modest. The example quoted by the operation says that keepers could earn £640 per month for 7 hours work a week, 5 hours manning the drop and 2 hours on admin. That comes out at £23 per hour and takes no account of the time, petrol, or telephone costs spent setting up the drop, enrolling producers, and signing up customers, work which is likely to be ongoing as some customers and producers will inevitably drop out of the system and need to be replaced.

The return to the operators of the business is the same as the Keeper’s but their involvement seems to be limited to setting up the website, and doing some training. The founders assert that “we stand for fairness”. The allocation of reward for the hard pressed Keeper does not sound at all fair.

It would be good if FarmDrop could reassess the way the model works, for a successful method of enabling producers to reduce reliance on supermarkets is to be welcomed.

Unless they address either the load being put on the Keeper’s shoulders, or increase the financial return the Keeper receives, FarmDrop will  remain a very small business, and investors will be disappointed.