Producycle Interviews Part 1

I’m starting to document my entrepreneurial journey at least once every two weeks to share what I’m doing and any interesting findings and learning in the process :)

Beginning

My first iteration was inspired by Too Good To Go, but a B2B version of it. During my time in Barcelona, I ran a pilot along with 3 other project team members to connect the surplus from local grocery stores with local restaurants nearby. While we did get interest to participate in the pilot, we didn’t make any transaction. Some of the lessons I learned included the following:

1. Understand what the pain points are instead of imposing the solution. The idea means nothing if it’s not top of mind for the customers to solve at the moment.
2. Logistic and moving physical items are difficult problems to tackle, start with something smaller that involves fewer moving pieces.
3. Using Spanish, a language that I had little competency of, was daunting, but people are generally nice and can understand what I was trying to convey even though I wasn’t using accurate and precise language.
4. Talking to customers and doing > > > market research

Relaunch

After graduating from MBA, I’ve embarked on the journey to build something in the space intersecting small farmers (still need to find an exact definition for what this means), reducing food waste, increasing market access, and providing accountability and transparency for sustainability goals and commitments.

I started with interviewing farmers at the farmers’ market. It was again a bit scary to start, but I quickly got into the groove of just being present and open listeners of what the farmers or farmers’ market workers challenges and hopes were. The initial learning I got was that agriculture is a thankless industry that requires a lot of work - both physically and mentally, with very little economic return. I always remembered 誰知盤中飧，粒粒皆辛苦 (loosely translated to who knew how much hard work that went into the dish in front of us), but after having the conversations, I’m even more grateful for all the efforts that went into the food we eat everyday. Farming also comes at a long cash conversion cycle - farmers need to first buy seeds, fertilizer, labor, etc. and only receive income when they sell to a customer days later (and sometimes still waiting for the wholesalers to pay them after the products are delivered).

I interviewed a total of 21 stands spread across the 3 farmers market in Berkeley, CA. 33% of them owners of the farm and 67% who are workers at the farmers market with different levels of understanding about the farm operations.

Surplus

86% of the interviewees had surplus produce they handle in the follow way:

• 82% Compost
• 76% Donate
• 53% Sell at discount
• 65% Used as animal feed

Sales Channel

Besides farmers market, some farms also go through different channels to sell their produce.

• 67% also sell to restaurants
• 43% sell through wholesalers
• 24% sell through Community Supported Agriculture (CSA)¹
• 24% sell through online platforms

In terms of volume, we see an interesting distribution. More than half sell the most through farmers market, two of the biggest farms (300 and 360 acres) I interviewed had the biggest volume through wholesalers, but at the same time we see farms at 150 - 200 acres selling the most through farmers market. We also see some farms in the range of 30 - 40 acres that sell the largest volume through wholesalers, so from this dataset, we cannot draw clear conclusion of the acreage and sales channel except for the larger farms that are above 300 acres.

Challenges

I listed a number of issues and asked the interviewee to rate them on a scale of 1 (not a problem) to 5 (big problem):

Issue	Average	Standard Deviation	Max	Min
Finding new buyers for surplus produce	3.2	1.3	5	1
Predicting demand for products	2.2	1.3	5	1
Coordinating deliveries with buyers	2	1.3	5	1
Keeping track of inventory	1.9	1.3	5	1
Setting competitive prices	1.7	1.1	5	1
Managing orders from multiple channels	1.6	1.1	4	1
Communicating with customers	1.4	0.6	3	1

We can see that finding buyers for surplus produce (and even just produce) is listed as one of the biggest issues. This led me to focus on moving these produce and identifying additional channels and outlets that could digest this excess.

Next Steps

In addition to the quantitative information, qualitative data was also collected during the course of the interview and will be shared in a subsequent part 2.

1. A community of individuals where they commit to subscription to a certain farm (or cooperation of farms) for a share of produce on a regular occurrence. This shares the risk of farming with some guaranteed income for the farmers, and sometimes even a negative cash conversion cycle where farmers can receive the payment upfront and delivering the products later throughout the year or season. ↩