Market

From farm to shelves

03:25 SGT August 22, 2017
From
Organic food retail and direct trades are changing the face of food retail

Food at its core is all about the earth. While we are used to consuming it out of a packet these days, every bite we take supports one kind of agriculture or another. As poet and environmental activist Wendell Berry once said: “Eating is an agricultural act.” So, with each morsel, we are in effect supporting farms, both rural and urban, helping them grow and flourish.

The plethora of retail stores and supply chains have ensured we have access to all kinds of food at any given time. From fresh milk to sun-dried herbs, the array of products on supermarket shelves can fuel kitchens the world over. The growing wave of conscious eaters and sustainability advocates are drawing attention to the farms all over again.

Consuming cleaner produce grown in less chemically-laden air, water and soil is reportedly the big thing with the booming millennial generation. Not only does it create growth opportunities for smallholder farmers and independent agro producers, it also heralds a whole new way of food retail. And that gives us a notable opportunity to nourish our bodies as well as the natural and human communities we are part of.

Americans spend on food at grocery stores and restaurants. In contrast, farmers who sell directly to the public get a net profit of US$0.90 per dollar. Buying from farmers is said to not only help them but also boost the local economy.

 

GOING ORGANIC
Organic food is the buzz word. Consumers are said to be on the lookout for healthy and nutritious foods, and organic perishables have been leading this movement for a while now. The organic food market reached
US$43.3 billion in sales in 2015 in the US — more than 5% of its total food market. Today, organic fruits and vegetables claim more than 10% of the US market. As organic foods moved into mainstream food markets, many consumers turned to local farmers to ensure the integrity of their foods.

The organic movement has its roots in the natural food movement of the early 1960s, which was a rejection of the industrialization of American agriculture. Following World War II, the mechanical and chemical technologies developed to support industrial warfare were adapted to support industrial agriculture. The “back to the earth” people decided to create their own food system. They produced their own food, bought food from each other, and formed the first cooperative food-buying clubs and natural food stores.

Concerns about the health and environmental risks associated with the synthetic fertilizers and pesticides were reportedly not the only reasons they chose to grow foods organically. They were said to also be creating and nurturing a sense of connectedness and commitment to taking care of each other and caring for the earth. The philosophy of organic farming was deeply embedded in their communities. To these food and farming pioneers, organic was as much a way of life as to produce food.

Soon after, the fever caught on to other parts of the world. Dismissed as a short-lived fad at first, organic food is seen to slowly become a reality. From organic-only supermarkets to restaurants that serve organic-only food, it is everywhere. Amazon’s recent bid to purchase organic grocer chain Whole Foods Market in the US says a lot about where this trend is going.

 

TO MARKET, TO MARKET
The direct result of this trend is seen to have culminated in weekend farmer markets in big cities. While it means economic value for farmers as they can make more money selling directly to the public rather than to wholesalers, it is beneficial for consumers too as they now have access to fresh and trusted produce. According to the 2017 figures from the US National Farmers Union, food producers generally receive only about US$0.17 of every dollar Americans spend on food at grocery stores and restaurants. On the other hand, farmers who sell directly to the public are said to receive a net profit of US$0.90 per dollar. Buying from farmers is said to not only help them but also boost the local economy.

Restaurants succumbed to this fever and soon, farm-to-table restaurants are seen to have become the norm. Some of them, like the Open Farm Community in Singapore, used their ability and experience with farmers not just to source and sell organic produce but also whip up sustainable food for the shoppers. Chef Ray Adriansyah of Locavore — a gourmet restaurant in Bali, Indonesia that only uses local produce — said he loved the challenge of playing with local tastes and products to dish out special items that appease all types of customers.

Local products also cut down on the miles that food usually travels before it reaches the table or the pantry at home. While some restaurants are aspiring towards zero-mile sourcing, which means that they grow their own vegetables, it is easy to continue sourcing from farmers in and around their region and innovate with the ingredients at hand to begin with.

 

SHORT SUPPLY CHAIN
More than 80% of the total amount spent on food in the US is said to pay for the processing, transportation, packaging, advertising, pre preparation and retailing of food instead of the food itself. Farmer markets or local markets, where farmers and producers sell directly to the consumer, considerably shorten the supply chain, thus bringing down the prices. The development of short food supply chains, where intermediaries between farmers and consumers are removed, should result in fairer remunerations for farmers and higher quality local food products, supporters say.

In 2015, 15% of farmers in EU sold half of their products through these short food supply chains, according to a study carried out by the European Parliamentary Research Service (EPRS).

In 2015, 15% of farmers in EU sold half of their products through these short food supply chains, according to a study carried out by the European Parliamentary Research Service (EPRS). The survey stresses that the utilisation of short food supply chains leads to fairer prices for farmers, given fewer middlemen ensure farmers get a larger slice of the profits.

This can result in greater trust between producer and consumer. Local economies benefit from these exchanges by increasing the possibility of job creation. This is especially vital in rural, disadvantaged areas. Local markets also give consumers better access to fresh, seasonal produce and have less of an impact on the environment due to reduced production and transport associated with local foods.

Paolo de Castro, an Italian Member of the European Parliament (MEP) from the Partito Democratico (Socialists and Democrats group), told EURACTIV that short chains are more profitable for farmers and seldom alter the end-price for consumers. But beyond price, he says short chains have the huge advantage of placing the emphasis on quality, defined as the most intimate interaction between the farmer and the consumer.

“Quality here is also intended as consumer’s health and, above all, food education: through this particular form of purchase, it is possible to better understand the features and seasonality of the products,” says de Castro.

While farmer suicides, droughts, debt, crop failure and poverty scar the agrarian community in India, technological innovations, agriculture startups and aggregators, primarily driven by the youth to uplift the farmer community and mitigate some of these challenges, are on the rise. Naveen Seri founded TruTrade with the aim to eliminate the middlemen in the market. Advocating the public to uplift and financially support the small and marginal farmers, he says consumers are more concerned about health benefits of the fruits and vegetables, while the only predominant interest of the farmer is to get a higher produce and a higher price for his harvest.

TruTrade provides market linkages along with a transparent pricing mechanism, so that the consumer is not only aware of the cost of production but also knows that the maximum cost, 70% of the selling price, goes to the farmer alone.

Catering to the growing demand of organic food, especially in urban India, TruTrade is assisting 13,000 farmers to switch to organic farming, thereby creating a positive impact on biodiversity, soil contamination, water and air pollution. Further, by providing free thelas (pushcart), the
team promotes micro-entrepreneurship among pushcart vendors and farmers.

 

RETAILERS TURN FARMERS
Feeding a big, urban population is no easy feat, and the community-driven markets cropping up from the unorganised sector are novel but not fully commercial yet. The big retail operators were not lagging too far behind; they also noticed the need to embrace this shift in consumption.

After about 16 years, British supermarket retailer, Asda, relaunched its Farm Stores value brand, last seen on the shelves in 2001. The Farm Stores brand covers the whole range of fresh and chilled categories, from fruit and vegetables to meat. It featuressimple but distinctive branding of a farmhouse to reiterate on the quality and farm-style goodness.

Competitor Tesco achieved considerable success with its own Farm Brand. The introduction of the new range last year was credited as a major driver of Tesco’s better performance in 2016 with Farm Brand products featuring in 64% of consumers’ baskets over the past year.

As highlighted in Mintel’s Supermarkets UK 2016 report, half of grocery shoppers think the main difference between supermarket retailers are their own-brand offerings. Mintel research also shows that more than a third of Asda shoppers want improved quality in own-brands, but quality and range of fresh foods are also singled out as key areas for improvement. This indicates that the relaunched Farm Stores brand, with its focus on fresh, should be a welcome change for Asda’s core shoppers, says Nick Carroll, senior retail analyst at Mintel.

In Singapore, Tan Yong Shao of the Prime Supermarket chain diversified the family-run business with a fresh concept. He co-created Mahota Commune, an organic food market, restaurant, café, supermarket, traditional Chinese medicine (TCM) clinic and a fitness and wellness studio all under one roof. Tan reportedly said: “When you have
a huge group of family members who want to live together, and do so for a good reason, you must think about sustainability — to the environment, to the business and to the community.

“The word ‘sustainability’ truly applies to our family.” He continued: “Whether it is the need for crop rotation in farming, or sustaining a business that will support many generations, diversity is at the heart of sustainability.”

The farm-to-customer model is said to remove the dependence on extra storage, and with the help of technological means they aim to make the organic procuring of food more cost effective.

The expansive multi-concept space is an extention to the family business, which started as the largest pig farm in Singapore. When the farm was phased out for redevelopment, the Tan family crossed over into the grocery business and built the Prime Supermarket chain.

Tan’s father, Tan Hong Khoon, the youngest of the second generation, then moved to China in search of new markets. The elder Tan eventually started the Mahota farm, which uses sustainable farming to provide “fresh, wholesome and safe-to-eat food that supports health and well-being”.

Prime Group International currently operates multiple businesses including integrated resorts, an architecture firm and a farm — putting into practice the organic and biodynamic methods implemented by the new generation.

The Mahota supermarket in Singapore stocks up to 70% organic products, including produce from the Mahota farm in China and other local organic farms such as Quan Fa. It also includes a wine section that stocks only organic wines, and varietals from the group’s own winery in China. Apart from selling the organic produce from its own farms and catering to the changing needs of Singapore, the supermarket also imports sustainable products from Japan and Australia.

Meanwhile in Mumbai, India, the newly-launched Farmer Store is a long-awaited extention of the popular farmers’ markets run by activist Kavita Mukhi. “We plan to make organic accessible, not just to our core audience who come to the Sunday farmers’ market, but also to raise awareness and gather support from other food establishments; to support the farmers and in turn help Mumbai see an organic culture begin,” said the founders of Farmer Store.

Capitalising on Kavita Mukhi’s years of efforts, flagship network and the popularity of the farmers’ market, the launch did not see many operational challenges. While the biggest challenge remains the perishable nature of organic produce and replenishing stock on a regular basis, Farmer Store is working with trusted farmers directly and controlling the rest of the supply chain in-house to ensure quality.

The farm-to-customer model is said to remove the dependence on extra storage, and with the help of technological means, Farmer Store aims to make the organic procuring of food more cost-effective. “Yes, organic produce is slightly higher priced in general and seems much higher when compared to street vendors. But as compared to other premium retailers, our organic prices compete with their prices for non-organic goods,” says a spokesperson at Farmer Store.

In addition to perishables, the store also sources and stocks organic spices, grains, pulses, among others. As it grows in the future, Farmer Store is looking at running educational programmes with and for its farmers to spread knowledge.

Similar in concept, the brothers at Frank Food Company partnered with smallholder farmers in Bali, Indonesia, to source organic vegetables from
the volcanic soil and distributing it to a growing base of consumers in Singapore. The Frank Food Company is an e-commerce platform that allows consumers to order a constant supply of organic produce straight from the farm and delivered to their doorstep. And for a little freebie, it comes with a one-on-one sharing of knowledge, training and tips with co-founder and chef Duncan McCance.

The Frank Food Company partnered with a farming group led by Emily Sutanto from Bloom Agro, which is also the first veggie farm in Indonesia, to receive international Organic Certifications from the EU and Japan. The farm is in an elevated position between volcanoes Merapi and Merbabu, which provide nutrientrich soil in which almost anything grows. The farm is located less than two hours north of Yogyakarta so vegetables can get to Singapore quickly without long freight journeys. “Better for the veggies and better for the environment,” says McCane.

True to its name, Frank Food Company is all about an honest supply of food from the farm to your pantry shelf, literally.

Mintel research also shows that more than a third of Asda shoppers want improved quality in own-brands, but quality and range of fresh foods are also singled out as key areas for improvement.

 

SUSTAINABLE ECOSYSTEM
Buying and using organic produce directly from the farmer is said to lead to a healthy ecosystem and contributes economic opportunity and productivity to the farmer. It will also ensure their sustenance, which is important for the constant supply of food that is so crucial to our survival.

When retailers turn to organic cultivation or sourcing, they are not only meeting consumer needs but also giving back to the environment by helping the quality of soil and water and air, and protecting countless plant and animal species.

The consumption of organic food and ease of access to good quality produce is also reportedly an antidote to some of the ills of human health. The most nutritious food is often the freshest food. It is also the tastiest. Unless we grow our own food, we are unlikely to find food fresher than that at a farmer’s market or similar organic food retail channels.