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By Kiersten Dirks, Marienthal, KS.

The COVID-19 crisis has accelerated the exploration of alternatives to the current food distribution system that was already underway. A relatively new company called Foodshed is perfectly poised to take advantage of this ferment. It’s addressing a key part of the food supply chain, and the success of its first partnership with a major grocery chain is opening new doors for its expansion.

With 56 supplier farms operating across the Midwest and Northeast, Foodshed says it has already identified over $30 million of year-round local produce and is connecting those local farmers to volume commitments from its wholesale market partners every day.

Foodshed.io is in the second year of its most significant partnership yet, with St. Louis regional supermarket chain Schnuck’s Markets Inc. Schnucks is one of the few remaining family-owned chains of this size; founded in St. Louis in 1939, it’s a third-generation grocer whose 112 stores serve customers in Missouri, Illinois, Indiana, Wisconsin and Iowa. 

Following consumer trends and tastes in the local-food movement, Foodshed wants to recreate an era when most produce consumed by Americans was grown locally. But it wants to achieve this by using up-to-the minute tools and technologies of the digital era to preserve the efficiencies of scale that led to our current system.

“The system we have now is about moving things thousands of miles by truck,” said Foodshed.io co-founder and CEO Dan Beckmann. “We specialize in moving produce that’s grown less than five hours away. Fruits and vegetables are grown today for their ability to survive chilling, packaging and long-distance travel. But ‘traveling produce’ tastes different. Selecting for those traits frequently results in bland produce that doesn’t optimize nutrients. We want to make that tastier, healthier produce available to everyone. A lot of produce in the current system is not picked ripe, for example, so it can ripen on the way to the store or on the shelves.” Locally grown hothouse tomatoes can have thinner skins for better taste, for example, because they don’t have to survive long-distance travel. Locally grown corn, canteloupe melons and even onions are better-tasting, he says.

On its website, Foodshed.io  describes its mission as “solv[ing] the inefficiencies of local food distribution.” It is not a direct-to-consumer operation. Rather, it forges new and better connections between local producers of produce (and some dairy products) and outlets including institutions and grocery chains. Using technology, it is adapting the advantages of efficiency and scale enjoyed by larger food operations to a local scale. By doing this, it hopes to improve market opportunities for smaller local produce farmers.

“Foodshed is able to work closely with farmers on food safety practices while also advising farmers on quantities to grow to help ensure we have local product available for our customers,” said Schnucks vice president of produce and floral Mike Tipton.

“We want to make sure farms are stabilized, with customer contracts that allow them to plan and look ahead, but still allow them room for those speculative, higher-priced sales from farmers’ markets and restaurants,” said Beckmann.

Foodshed’s staff of nine—four co-founders and five employees—directly tackles the myriad tasks in the nuts and bolts of local food distribution: acting as a middleman between grocery chains and producers, ascertaining demand, estimating costs of production, and putting together truckloads. “We have three hubs around St. Louis, some of them Amish-supplied,” said Beckmann. Foodshed.io says the farmers operating on its platform already know in February what produce needs to be grown, how much, and the amount of spending that would be dedicated to their region. By connecting those farmers directly to a network of consistent demand from its buyers, and vice versa, it helps to stabilize seasonal business.

The Foodshed.io platform says its use of blockchain technology has helped its farmers and buyers navigate the coronavirus pandemic's threat to food safety. “There have been no COVID-19 outbreaks on any of our supplier farms,” said Beckmann. “USDA food safety measures already provide the correct precautions and responses.” Schnucks also provides a rigorous food inspection handbook of its own to comply with. Foodshed’s platform provides verified traceability, helps farmers with compliance paperwork, allows buyers to know the date food was harvested, where it came from, who handled it and what procedures were followed, increasing transparency in the supply chain to ensure safe handling of food. “We were already planning for other disasters, but our procedures were perfectly adapted to the COVID-19 crisis,” said Beckmann.

It's a tricky balancing act, Beckmann acknowledges, because “we have to run things efficiently and make sure nothing gets thrown out.” Customers like Schnucks want to preserve efficiencies and avoid any wastage. “As far as local produce goes, we try to backhaul product on our trucks from the farms to our warehouse to help cut down on wasted food miles. This is something we would like to do more of in the future,” said Tipton.

Foodshed.io and Schnucks are also driven by a goal of making the fresh produce available to all customers, including under-served parts of the city, and that means keeping prices low while ensuring that farmers still make a decent profit in a business where profit margins for the grocers themselves are often razor-thin.

Beckmann admits the task is not easy. A lot of people are talking and writing about food distribution systems, especially in the wake of the COVID-19 crisis. But the space Foodshed.io is operating in has no direct competitors as yet because “a lot of people thought we were crazy to be doing this,” including some former employees, said Beckmann. The company originally began operations in New York, delivering to restaurants. But Beckmann was convinced that Midwest consumers would be just as receptive and supportive of the better taste and nutrition of fresher produce.

The Schnucks partnership, which took two years to set up, is sweet vindication for Foodshed.io’s vision, and the company is ready for new opportunities. “Now we can talk to any major food retailer with a successful track record in our back pocket,” said Beckmann.

David Murray can be reached at journal@hpj.com

Foodshed.io reinvents local produce distribution

By David Murray

The COVID-19 crisis has accelerated the exploration of alternatives to the current food distribution system that was already underway. A relatively new company called Foodshed is perfectly poised to take advantage of this ferment. It’s addressing a key part of the food supply chain, and the success of its first partnership with a major grocery chain is opening new doors for its expansion.

With 56 supplier farms operating across the Midwest and Northeast, Foodshed says it has already identified over $30 million of year-round local produce and is connecting those local farmers to volume commitments from its wholesale market partners every day.

Foodshed.io is in the second year of its most significant partnership yet, with St. Louis regional supermarket chain Schnuck’s Markets Inc. Schnucks is one of the few remaining family-owned chains of this size; founded in St. Louis in 1939, it’s a third-generation grocer whose 112 stores serve customers in Missouri, Illinois, Indiana, Wisconsin and Iowa. 

Following consumer trends and tastes in the local-food movement, Foodshed wants to recreate an era when most produce consumed by Americans was grown locally. But it wants to achieve this by using up-to-the minute tools and technologies of the digital era to preserve the efficiencies of scale that led to our current system.

“The system we have now is about moving things thousands of miles by truck,” said Foodshed.io co-founder and CEO Dan Beckmann. “We specialize in moving produce that’s grown less than five hours away. Fruits and vegetables are grown today for their ability to survive chilling, packaging and long-distance travel. But ‘traveling produce’ tastes different. Selecting for those traits frequently results in bland produce that doesn’t optimize nutrients. We want to make that tastier, healthier produce available to everyone. A lot of produce in the current system is not picked ripe, for example, so it can ripen on the way to the store or on the shelves.” Locally grown hothouse tomatoes can have thinner skins for better taste, for example, because they don’t have to survive long-distance travel. Locally grown corn, canteloupe melons and even onions are better-tasting, he says.

On its website, Foodshed.io  describes its mission as “solv[ing] the inefficiencies of local food distribution.” It is not a direct-to-consumer operation. Rather, it forges new and better connections between local producers of produce (and some dairy products) and outlets including institutions and grocery chains. Using technology, it is adapting the advantages of efficiency and scale enjoyed by larger food operations to a local scale. By doing this, it hopes to improve market opportunities for smaller local produce farmers.

“Foodshed is able to work closely with farmers on food safety practices while also advising farmers on quantities to grow to help ensure we have local product available for our customers,” said Schnucks vice president of produce and floral Mike Tipton.

“We want to make sure farms are stabilized, with customer contracts that allow them to plan and look ahead, but still allow them room for those speculative, higher-priced sales from farmers’ markets and restaurants,” said Beckmann.

Foodshed’s staff of nine—four co-founders and five employees—directly tackles the myriad tasks in the nuts and bolts of local food distribution: acting as a middleman between grocery chains and producers, ascertaining demand, estimating costs of production, and putting together truckloads. “We have three hubs around St. Louis, some of them Amish-supplied,” said Beckmann. Foodshed.io says the farmers operating on its platform already know in February what produce needs to be grown, how much, and the amount of spending that would be dedicated to their region. By connecting those farmers directly to a network of consistent demand from its buyers, and vice versa, it helps to stabilize seasonal business.

The Foodshed.io platform says its use of blockchain technology has helped its farmers and buyers navigate the coronavirus pandemic's threat to food safety. “There have been no COVID-19 outbreaks on any of our supplier farms,” said Beckmann. “USDA food safety measures already provide the correct precautions and responses.” Schnucks also provides a rigorous food inspection handbook of its own to comply with. Foodshed’s platform provides verified traceability, helps farmers with compliance paperwork, allows buyers to know the date food was harvested, where it came from, who handled it and what procedures were followed, increasing transparency in the supply chain to ensure safe handling of food. “We were already planning for other disasters, but our procedures were perfectly adapted to the COVID-19 crisis,” said Beckmann.

It's a tricky balancing act, Beckmann acknowledges, because “we have to run things efficiently and make sure nothing gets thrown out.” Customers like Schnucks want to preserve efficiencies and avoid any wastage. “As far as local produce goes, we try to backhaul product on our trucks from the farms to our warehouse to help cut down on wasted food miles. This is something we would like to do more of in the future,” said Tipton.

Foodshed.io and Schnucks are also driven by a goal of making the fresh produce available to all customers, including under-served parts of the city, and that means keeping prices low while ensuring that farmers still make a decent profit in a business where profit margins for the grocers themselves are often razor-thin.

Beckmann admits the task is not easy. A lot of people are talking and writing about food distribution systems, especially in the wake of the COVID-19 crisis. But the space Foodshed.io is operating in has no direct competitors as yet because “a lot of people thought we were crazy to be doing this,” including some former employees, said Beckmann. The company originally began operations in New York, delivering to restaurants. But Beckmann was convinced that Midwest consumers would be just as receptive and supportive of the better taste and nutrition of fresher produce.

The Schnucks partnership, which took two years to set up, is sweet vindication for Foodshed.io’s vision, and the company is ready for new opportunities. “Now we can talk to any major food retailer with a successful track record in our back pocket,” said Beckmann.

David Murray can be reached at journal@hpj.com

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