Sustainable food: how to hack the supply chain ?
Who? Pete Russell, founder at Ooooby. One anecdote: he has lived in an eco village on Waiheke Island during 7 years.
Where? Fenice, an Italian restaurant on Waiheke Island offering some local food, a place he often comes to when he has to work.
When? July 2018.
What is Ooooby ?
Pete: It’s a channel to market for small-scaled independent producers (artisanal producers, farmers, food growers…), it’s a way for them to reach customers directly and be paid more for their food than if they’ll go for the traditional channels. It’s an online platform, a harvest to order model, meaning that we collect our orders from the customers before we put the order into the growers. So they only harvest what we’ve already sold in order to reduce food waste. It’s a way to make small-scale food affordable and convenient.
Where are your providers located ?
Our producers are located on both islands, we have a hub in Auckland and a hub in Christchurch. We need to buy food everywhere in the islands because if you stay too local you have no variety, and if you have no variety, you have no customers. If we want to have an impact we need to find the place in the spectrum where we meet our principles but we have a large enough audience to make a difference.
Right now we have a good range of suppliers. We want to make sure that our orders for the suppliers are big enough to be significant. If we have too many suppliers the orders would become smaller and smaller. We have a core of suppliers who depend on us so we have to maintain their expectations. If we invest in marketing and we grow up our customer base then we could buy from more suppliers.
Who are your customers ?
We have a loyal customer base and customers who come and go. Our core customers are typically more educated, more socially and ecologically bounded. They buy the box not only to feed themself but to be part of the solution. We joke around saying that we could send them clumps of dirt in the boxes and they would be like “oh yeah that’s cool”.
People interested in Ooooby at the moment are not from the working class. The big impact will happen when working class will try to adopt that kind of eating.
Is food part of the school education in NZ ?
Yes, there is a program called “Garden To Table” (stay tuned, we’re gonna interview them soon). They go into schools and teach kids to grow their food, then to harvest, and to take it to the kitchen to cook. I think it’s a question of generation. It’s like recycling, now for 20 years old, it’s normal to recycle whereas our parents generation will never catch up on this.
Have you heard the term “regression to the mean” ? If you think about the nature of humanity and the way we have evolved in the time, we’ve always has a symbiotic relation to nature. But the two last generations have moved away from nature and now we will go back to it because we are feeling the pain of not being related to nature anymore. So I think by 2050, we will have largely come back to “the mean”, saying “yes, that is this quality of life we want”.
The most important things are determination and ability to educate people. The persistence, the will to get going is necessary. The only way to prevent this from happening is giving up.
How does the Maori culture influence Ooooby ?
It definitely influences it. The multiculturalism is an inspiration for what we are doing. Entrepreneurship has always been (with community) at the top of the list. There is a Maori phrase “far enough behind to be ahead” that is very representative of indigenous cultures. Just like with boats. If the wind changes, the one who were behind will be ahead.
What products/experience do you offer ?
Our fruits and vegetables are similar in the north and the south island (you can see the lists on the website: carrots, greens, potatoes, beetroots….) because common crops grow in both regions. We also deliver eggs, bread, milk, meat, honey…If you’re a family you can buy most of your food from Ooooby (I would say 80%). The whole idea is we want to create a grocery experience which mean that you don’t need to go to the supermarket (or way less). It’s an alternative way of shopping. It’s not a compromise, it’s a complementary arrangement: if you can’t buy directly from the producers, you buy it from the next best thing available.
Is all your food certified organic ?
Organic labels are kind of complicated to get here. The government is trying to work on a unified model to create a single standard around organic but it’s still quite despair (there are two main private labels for now). In NZ you can still use the word “organic” without being certified, it’s not illegal. So, we have growers who are not certified because the cost & the time required to get certified is too high related to the size of their business. So they are ‘self-certified organic”, they tell us they don’t use pesticides and we trust them. But they are putting their reputation at risk and customers know them. If they want to, customers can come to the farm and talk to the farmers.
We were surprised because in Auckland supermarkets, we almost did not find any organic food…
Europe is definitely leading the way. Even in England organic sections are vast in supermarkets compare to here or Australia. You got the whole biodynamic movement which is very big in Europe, very well established. Europe has a larger scale, the market is big enough to product massive organic food. Here you can pay double for organic food. It’s because it’s a much smaller production here.
Why traditional supermarkets are not switching towards organic & fresh food ?
The challenge they have is that they depend on existing infrastructures that are very expensive. So to move to a new model like Ooooby, they would need to kill off a lot of parts of their businesses. They would have to change so radically that there would be a lot of resistance because people are basing their livelihoods on building their career and being part of the system. So it’s not a question of intention, it’s the fact that they are stuck in their system. It’s almost impossible to change their model without cannibalizing their own business.
What are your impacts ?
We have what we call our “theory of change” where we look at the different participants and how we can impact them:
> Suppliers: we want to create viability for suppliers, viability comes with sales, volume & margin. How do we bring sales volume up and how do we improve their margin ? Our goal is to improve their lives, it is a way to demonstrate that our model works.
> Supply chain workers: in a lot of countries & industries, supply chain workers work really hard and get paid very little. So we look at how our model can allow them to be paid honestly and help them to have access to food. For example, our crew gets paid and also gets 40% off on all produce, so they can buy very low cost food. It’s a double improvement for them.
> Customers: it’s all about delivering quality, high nutritious fresh food to them. If we look around, lots of health issues (diabetes, heart diseases) are related to the lack of access to quality food. The ultimate goal for us is that the produce get to our customers within 24 hours of being harvested.
> Environment: Environmental benefits stem from how the food is produced and distributed. The more we grow our business, the more food is produced sustainably which is benefiting the environment. And the other part of that one is packaging. We don’t use packaging, we just use cardboard box and some paper bags and that’s it.
Idriss Aberkane says that change is first ridiculous, then threatening and finally it is obvious. In which step do you think we are now dealing with sustainable food ?
I think it’s threatening. There are existing organisations and mindsets that are in a certain way trying to keep things the way they are. Some MacDonalds stores are closing, traditional food distributors are drifting, this is happening for 5 years and it is accelerating. This is a threatening phase at the moment but still, MacDonalds is not about to die. We are definitely not in the obvious phase.
Another important thing is that this is another cycle. MacDonalds is going down and Ooooby is growing up. But something else will come and Ooooby will go down. We don’t think that what we are doing is ultimate, there will be another cycle after us. The question is do you want to be part of the dying cycle or the one going up? For me, I want to work with people who choose the growing one. It’s exciting, it’s challenging.
There will be a time in the future when Ooooby will be less than optimal, but we will keep doing what we are doing because we will still create more positive impact than if we gave up.
What made you change from classic food business to sustainable food business?
I have asked that myself! I’ve been raised in a very natural environment. My parents had a property with a goat and a sheep… We always had this rustic lifestyle. When I grew up I was interested in business and growth. I was focused on being successful but then we had the 2008 financial crisis. It was a shock to the system. I was thinking about what I was doing. I was questioning. It has been coming back to my roots. It’s quite a big part of where I come from.
Creating Ooooby, did you change your own food habits?
Not really. My wife was already focused on food. It was more aligning my business with my life. Personally, it was not a difficult switch to make. It was logical. We were very early. You have to think about 2008 like the dawn of the sustainable food model globally. At the point where it’s at its peak, it’s like midday. Now we are probably reaching 6 am. We have been up for a little while but it’s still early. It’s time to get up and get involved in this. Over the next 5 years, I think we’ll see an acceleration in adopting more sustainable food habits.
When do you think local and organic food in NZ and in the world will be more consumed than imported products? When is midday?
It’s an important question. I think you have to think about it in a decade. It has been a decade since we’ve started. I think it’s another decade. If you think about the way things are accelerating with technologies and your generation is far more adaptable to change mentally. You got access to more and more information. If you think about the robotics used in large farms, a lot of investments in these has been big scale investments. The fact that they developed those machines means they created intellectual knowledge of how to do it. And now this knowledge is available and people are able to create it in a much smaller scale, at a much smaller cost. The cost of technology is dropping and dropping. It will not be long before young people figure out how to create a 100 square meters patch of dirt into a highly productive, high-technology organic production patch with very little labour.
With very little labour and the use of technology following organic and sustainable principles, the production in small-scale food will be far more valuable and people will be much more interested in buying that food. Why would you buy a food that had been produced in a big massive farm using chemicals when a better option is available at the same price ? That’s the tipping point. What is gonna happen in the next ten years will be more than what happened in the last 30 years just like what happened in the last 10 years were more than what happened in the 30 years before. I do think that it is not far away but it is far enough to feel like a long time.
What about Ooooby’s future?
For 10 years we have been working on the model. Improving it, learning, understanding the dynamics of the market, waiting for the right time, testing its ability to replicate. Now it can be replicated in lot of different markets. Ultimately our vision is to create a global marketplace for small-scale food. We had a very ambitious vision. We always have. It’s a single unified marketplace collectively owned and controlled by its users. Our vision is basically to create a software based on the knowledge we developed, to create a new kind of platform. We want to create Ebay but for food. The big difference with Ebay will be that with food you can not buy one thing at a time. So the Ooooby model requires complex distribution hubs. That is what we are actually working on. It’s the key element to make our marketplace works. Marketplaces like Amazon or eBay belongs on existing infrastructures. We have to build the key element to be able to replicate this marketplace.
What I envisage, the way we work in the future is that you say “Oh there is no Ooooby hub in my area! I’m gonna create a hub. I require a facility, I need this I need that…, it will cost me about…, the business plan is…” Or you could go find an existing food distributor like a wholesale and involve him in the new food system. The more players you have the more complex it is. We have to wait the timing where technologies are able to deal with this complexity. That’s the idea. It has been an idea in my mind for 10 years. It is an ambitious goal but I think the market is ready for it and technology is close to be ready too.
Want more ? Watch Pete’s TedX !
