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The standard model of farming is slowly becoming economically unsustainable. Supermarkets are constantly squeezing their margins, and food producers are ultimately bearing the brunt.
They're getting smaller returns for their produce, all while being dependent on these supermarkets to get their harvests out to market in the first place. A poll by food and farming alliance Sustain, of 500 farmers across England and Wales, found that although 86% of farmers are currently supplying produce to a supermarket, only 5% would prefer to continue that business relationship.
For farms to be profitable as standalone businesses, they need to be able to exercise more control in food supply chains, especially during a time of massive disruption. So, some farms are taking matters into their own hands, bypassing retailers altogether and selling straight to the public. Others are finding more creative ways to get their produce out to people, whether that be through vending machines or rural tourism opportunities. Meanwhile, some are leaving the food supply chain altogether, instead opting to explore how their farms can contribute to more high-value and resilient industries.
How two farms opened new revenue streams
In 2018, Ben Crawford and Rebecca Goldberg started growing mushrooms from their home in Jackson, South Carolina, after finding that they weren‘t available locally. A few months later, after seeing both the health and medicinal benefits of mushrooms first-hand, they started to grow them professionally – a ‘massive leap’, they say. Owning land – and all the investment in equipment that requires – was out of reach for them, so the pair settled on growing out of 320 square foot shipping containers. In that space, they can cultivate the equivalent of 2,200 square feet worth of field-grown crops. They bought their first container in June 2018, launching Circular Farm. Today, they have three containers, with a fourth on the way.
They were selling around 90% of their mushrooms to restaurants when the pandemic first hit and demand dried up. Ben and Rebecca took all of the pivot actions you'd expect a farm to take: they started selling to local markets and grocers, as well as selling directly on their own website. Alongside that, they developed a licensee relationship with CropBox, a technology company specializing in precision farming in shipping containers.
‘We built our own container farm and found that something didn't quite work. We fixed it, but we were looking for someone who could build container farms better than us,’ Ben says. ‘We have a contract drawn up with CropBox, and a two-year agreement as the sole licensee.’
‘Our income was just through selling fresh mushrooms and support from grants,’ Rebecca adds. ‘We now have CropBox clients and fruiting kits, too.’
Currently, revenue is equally split between the four sources, but they'd like to taper off the grants soon. ‘We have a cap on the amount of fresh mushrooms that we can sell from our farms. As we grow, our income will eventually be from CropBox and from providing growing substrates.’ That's part of why Ben and Rebecca are now exploring a more in-depth franchising model with CropBox: they're looking to earn a commission on any mushrooms that are grown using their educational materials, to get their brand name out there, too.
Growing Circular Farm as a business has been all about investing in a larger idea than just growing crops – for Ben and Rebecca, that was spreading knowledge about the health benefits of mushrooms. That same premise, of investing in a bigger idea, has allowed UK-based Gareth Davies to expand his hydroponic hop-farming business. A former web developer, Gareth started growing and selling hops, launching Dark Farm in Wales in 2014. ‘It was a lifestyle choice first, business option second,’ he says.
Gareth also offered beer kegs online, and they sold out instantly. The kegs currently make up 80% of turnover for Dark Farm, and the revenue helped him launch the Brew Tank, a homebrewing tank that he sells in two sizes at three different options and price points. ‘Homebrewing equipment was a natural extension,’ he says. ‘We had the hops from the farm, and the kegs as the dispenser – what was left in the middle?’ Gareth tapped into two big pandemic trends: cooking and brewing at home, and getting into crafts and making things by hand. Homebrewing sat at the intersection of both and he saw the business double during lockdown.
‘There are 101 ways we can diversify the business. We don't need lots of funding to have a professional operation,’ Gareth adds. But he is enjoying and looking to grow the equipment side of the business because it has brought him into contact with keen homebrewing hobbyists. ‘Being in fulfillment means that we lose the relationship with the customer. Now we recognize customers' names, and more face-to-face interactions would be great.’
Making farming accessible
Even for businesses outside of the food and agriculture sectors, farming is becoming a more appealing and accessible business. Take Matiere Premiere, a perfume brand from Paris. It has its own rose farm, which, in the brand's own words, ‘is a way to connect with the essence of the work of a perfumer: creating the fragrance itself, but also supervising the quality and production methods of the raw material’.
Rooftop and urban farming allow the industry to go anywhere, making it much more appealing to other businesses. ‘Property developers in particular need to realize they have a key role to play as they control so much land that could be used in a more sustainable way,’ says Clive Nichol, CEO of Fabrix, a property development and investment company. ‘We don't want to replicate anything that resembles modern-day farming. We are much more excited by introducing rewilded spaces, growing edibles and prioritizing the soil.’ This shows that there is a way for service-based businesses to get involved in farming as well.
In London, Fabrix is incorporating a rooftop forest into a workspace, complete with edible plants. And, in Berlin, the company is working with Atelier Gardens, part of the city's film district: ‘A flock of chickens has already found a new home here. The chickens contribute by eating waste food and producing eggs, and we also have our own beehives.’
For many farming businesses, space can be hard to come by, especially in urban environments. So, Fabrix also opens up tenancy agreements with other small agriculture businesses. This enables them to share physical space, as well as build a community around urban farming.
For LA-based fashion brand Christy Dawn, extending its production responsibility to include cotton cultivation meant getting to grips with the challenges that cotton farmers are facing. The business has started a farm-to-closet initiative, partnering with farmers in Erode, India, to farm cotton using regenerative techniques. Through its Land Stewardship program, customers can also get involved, by contributing $200 towards the regeneration of one of 500 plots of land.
Finding the finance to pay for the farms up front, and then maintaining them to a level of profitability has been challenging – especially when the Christy Dawn team realized how exposed they were to the elements. ‘Collections are dependent on how much rain and sun a small corner of the earth gets,’ says CEO Aras Baskauskas. ‘At the beginning of the season, we figure out how much the farm will cost. This includes everything from the farmer's salary to compost bins and the tea that farmers drink during breaks. This means we can't just buy cotton from elsewhere if the yield is lower than expected.’
Aras adds that agriculture ‘is an accessible industry if businesses are willing to dig into their supply chain and take time to understand and change all of the processes that go into making their collections.
‘Currently, all of the risk of working with nature sits on the farmers' shoulders. In order to make fast and effective change, businesses need to share the stakes with farmers and pay for the process.’
This article was first published in Courier issue 46, April/May 2022. To purchase the issue or become a subscriber, head to our webshop.
