Benzi Ronen thinks that the supermarkets’ time is up. And his company is just the thing to speed up its demise.
“Our goal is to make the supermarket obsolete from a fresh perspective,” Ronen says.
Farmigo, his five-year-old 30-employee startup, sells produce and other products like milk and cheese purchased directly from farmers for 10%-20% less than equivalent grocery store items. He does it by shrinking the supply chain, essentially taking out the middleman. Users place an order online; the order is fulfilled by a farmer who transports it to a centralized packing hub; and then Farmigo delivers it to community drop-off points for the customer to pick up. This all happens within 48 hours.
“We don’t have a retail store,” Benzi explains. “We get rid of all of that. We source just in time.” That means there’s no waste and produce is brought directly from harvest.
Other sellers, such as Fresh Direct, also cut out the physical store. But Ronen argues that they’re just an extension of the supermarket model, with similar warehouses that keep a huge inventory on hand. By contrast, Farmigo’s hubs are filled exclusively with product that’s just been delivered by farmers and is going out for delivery.
“Our entire food system is based on economies of scale,” he explains, adding that it has contributed to the hub-and-spoke distribution model in which food travels hundreds of miles and can sit on shelves for weeks. “You don’t get fresh in supermarkets, and you also have waste,” he says.
If Ronen’s vision for the future becomes a reality, in 10 years you’ll get all of your non-perishables from the likes of Amazon, while a service like Farmigo will answer all of your fresh needs. Neighborhood stores will act as gap-fillers for last-minute purchases. Farmigo, he notes, will never be a gap-filler. Currently orders must be placed by Sunday night for pick-up on Wednesday, but Ronen says the company is on track to soon expand to multiple pick-up days.
It’s a highly audacious vision for a small upstart, especially in a world where consumers are accustomed to eating strawberries and tomatoes no matter the season, enjoy clementines flown in from Morocco and sea bass from Chile, and want purchases delivered to their doorstep within 24-hour hours.
Right now Brooklyn-based Farmigo operates just in New York City and its environs and the San Francisco Bay Area, markets picked for their divergent agricultural offerings–one strongly shaped by the seasons, the other with stellar food options year round. If Farmigo can operate in these two regions, Ronen thinks the company will be able to replicate the model and build a network of farmers across the country.
Farmigo could eventually reach about 20%-30% of the U.S. population based on people’s buying habits and guidelines, Ronen says, adding that community-supported agriculture programs (CSAs) currently reach less than 1%. Unlike CSAs, in which users must commit to weekly deliveries for a season from one farm, Farmigo lets customers place a one-time order and change selections every week. You pay as you go. Ronen views CSAs as supplementary to other grocery shopping. He envisions Farmigo as a replacement for all fresh needs.