Organic and local food are hot these days, so it’s no surprise that business is brisk at Small Potatoes Urban Delivery, a Vancouver company that’s working both those themes.
Actually, explosive would be a better word to describe the company’s business these days.
Better known as SPUD, it started a decade ago with four employees. It now employs 150 and has 10,000 customers in Vancouver, Victoria, Calgary, Seattle, San Francisco and Los Angeles.
“Explosive? I think you could say that,” says founder and chief executive officer David Van Seters. “I know I’m having a hard time keeping up.”
Read Also
Agriculture needs to prepare for government spending cuts
As government makes necessary cuts to spending, what can be reduced or restructured in the budgets for agriculture?
Like other organic retailers, Van Seters is serious about reducing food miles, being eco-friendly, buying from local farmers when possible and also paying them a decent price. His competitors can only dream of his success, which is built on a devotion to boring stuff such as purchasing and tracking systems, logistics, efficient warehousing and quality control.
Those elements are the foundation of the company’s almost irresistible sales pitch, which goes like this: Why waste your time and gas driving to the store when we’ll deliver your groceries to your door for free and charge you the same price you’d pay in the store? And why settle for produce that may have been sitting for days when most of our produce was picked less than 24 hours before it was delivered to you?
In other words, while being in a trendy sector is great, what really separates SPUD from the pack is the secret of every great retailer: do a superior job when it comes to quality, price and convenience.
Are there lessons here for farmers who are direct marketing their goods to consumers? You bet.
Van Seters points to a common problem.
“You need to grow a really great product, but you also have to spend the money needed to protect that quality.
“For example, I know farmers who grow beautiful lettuce or mixed salad greens, and then deliver them in an open pick-up truck in the middle of August. So by the time they get to the city, the product is half wilted. In that case, I’d recommend investing in a refrigerated truck.”
A refrigerated truck? That’s not very green, is it?
“Sure that would increase the carbon footprint, but it would also decrease the amount of waste, so I think it would be worth it,” replied Van Seters.
But he wouldn’t stop there. The efficient thing to do – and here’s where environmentally correct meets quality control meets cost effective – would be to gather a group of other area producers and have them share the truck.
“It just makes sense to work co-operatively,” Van Seters said. “So instead of having one farmer deliver leeks to a restaurant and another driving a very similar route when delivering heirloom tomatoes, gang those orders onto one truck.
“Nor does it make sense for three local farmers to grow zucchini that’s going to be ready for harvest at the same time and create a market glut.”
Van Seters advises farmers to work together.
“This is a big part of our model,” he said. “We go out and meet with farmers. They talk about what they want to plant and when, and we talk about what we think we can sell and how much of it. And in the end, we make a commitment to buy from them, which allows them to be much more efficient at what they do.”
Consumer interest in organic and local food isn’t a fad that will one day disappear. But many of those trying to cash in on these trends will.
The survivors will be those who think like Van Seters and build systems that allow them to raise quality, lower costs and make potential customers an offer they can’t refuse.
Glenn Cheater is editor of the Canadian Farm Manager, the newsletter of the Canadian Farm Business Management Council. The newsletter as well as archived columns from this series can be found at www.farmcentre.com.
