Carrot Cashflow: A Revolutionary New Farm Store Model (CC12)

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Episode Summary

Farmer’s markets are a great way to get local food fresh from the farmers, but let’s face it—not everyone can spare the time to go to farmer’s markets every week. Well, what if there was a hub for local produce that’s open and operational 24 hours a day, 7 days a week, 365 days a year?

In this episode of Carrot Cashflow, Bill Brinkerhoff of Argus Farmstop talks about their business model that not only stimulates their local food system, but also allows the farmers to set their prices, and also serves as a center for community-building.

Today’s Guest: Bill Brinkerhoff

Bill Brinkerhoff is the owner and co-founder of Argus Farm Stop in Ann Arbor, Michigan. After seeing the challenges of the local food system, he, his wife, and a third partner decided they wanted to address the issue and bridge the gap between local farmers and customers who wanted local food. Argus Farm Stop has since been a place not just for getting a local food fix, but also a center for community building.

Relevant Links

           Argus Farm StopWebsite | Instagram | Facebook

In this episode of Carrot Cashflow:

  • Diego introduces the episode’s guest, Bill Brinkerhoff (00:37)
  • The resounding Why behind starting the Argus Farm stop (01:50)
  • Why don’t we see more local food shops? (03:23)
  • How much goes back to the farmer? (04:59)
  • Is a local food shop model conducive to making a livelihood? (06:02)
  • Argus Farm stop’s breakdown of customers and converting customers into locavores (07:31)
  • Success based on a heightened experience (11:09)
  • A shopping experience where everyone is welcome (14:40)
    • The different logistics of a farm stop (17:32)
  • What Argus Farm stop does to maximize customer experience (19:26)
  • The signage balance: just the right amount of information (22:07)
  • Filling the shelves with local food (24:25)
  • Argus Farm stop’s consignment model (29:02)
    • Improved food waste with going local (30:29)
  • Some initial reservations as a storeowner (32:33)
  • The catalyst to offering local produce online (34:10)
  • The additional work that comes with selling goods online (39:54)
  • Managing the images and descriptions for the online store (43:31)
  • Going beyond selling: Argus Farm stop as a center for building community (44:47)

Check Out My Book: Ready Farmer One: The Farmers’ Guide to Create, Design, and Market an Online Farm Store (2022) by Diego Footer & Nina Galle

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CC12 - Bill Brinkerhoff

[00:00:00] Diego Footer: Carry cashflow. Profitable farm business starts here. Today, it's all about getting local food under one roof with Argus Farmstop founder, Bill Brinkerhoff. Let's get into it.

[00:00:31] Welcome to carrot cashflow. I'm your host Diego, DIEGO. Today, we're talking, bringing local food under one roof. And to do that, I'm talking to the Argus farm stop founder. Bill Brinkerhoff. Bill has a really unique business. His dream was to get more people eating local food. So he set up a store, the AR farm stop that buys hyper local food and sells it to the community.

[00:00:59] It's became a huge success with farmers and in their town. It's become a local meeting place if you wanna contribute to the food scene, but don't want to go to the farming route. Or if you're looking for a farm business to start, consider. Following in the footsteps of bill Brinkerhoff and what he's done with the Argus farm stop.

[00:01:18] Now let's jump right into the conversation. Here's Bill.

[00:01:26] Bill Brinkerhoff: Hi, my name is Bill Brinkerhoff and I'm one of the founders of Argus farm stop which is located in Ann Arbor, Michigan. We are just coming up on our seventh anniversary and we started AR farm stop to make purchasing local food easier. We're a mission based entity that is looking to stimulate our local food system and increase local food sales.

[00:01:49] Diego Footer: Yeah. Starting that seven years ago. What was the cause? The why

[00:01:55] Bill Brinkerhoff: Mm-hmm um, so. We were at a point in our I started with my wife and then a third partner, and we were kind of at a point where we were you know, have a career juncture. And we were looking at how we could actually transition our career, suspend our focus on efforts that were more local in nature.

[00:02:13] Um, and we started to investigate like the local food system a little bit in more detail and one of the unmet needs or the real challenges is that it was a little bit difficult to buy local food. There was there was a lot of demand in farmers and they're willing to produce amazing local food.

[00:02:33] And there are a lot of customers that really wanted that local produce as well. Um, but the, the connection between the two had been limited to farmers� markets and CSAs like farm share. And farm stands and, and those are all great things. Like that's where you can meet the farmer and you can experience local food, but it's not really the way that people shop.

[00:02:55] Um, it's not the way people buy most of their food. Um, and we actually happen to be down dropping our middle sun off. In college at the in Wooster, Ohio and came across a store called local roots. And it was at this point where we were trying to explore where we could apply ourselves. And we, we found a model that they openly shared with us. And then we took it and modified it. And then that became kind of the basis for Argus farm stop.

[00:03:23] Diego Footer: I've seen local stores, like what you do as I've traveled around theUS, but not a lot. And there's, I don't know if there's any near me. Why is that? Why don't we see more models like this?

[00:03:39] Bill Brinkerhoff: Mm-hmm well I think the in, in America, the, the food system has gradually moved to more and more industrial in its nature where you're purchasing things from farmers that are far, far away from where the from where the the distance between the farmer and the customer is, is significant.

[00:03:57] Um, and it has put like downward pressure on prices. It's made it harder to be a small farmer. Um, and one statistic that we see is that on average, across the nation, the out of every dollar of sales, like a produce at a grocery store, only 15 cents goes to that farmer. Um, and the 85 cents of the dollar goes to the middle people, the distributors and the retailers.

[00:04:23] Um, and it's not that any of those other intermediaries are bad. It's just our food system is set up that food travels on average 1500 miles from farm to table. And that takes a lot of effort and cost and it and it just pushes backwards. And so the folks that grow our nation's food are generally price takers. They're not price setters.

[00:04:41] And it makes it quite difficult for the, you know, the small local farmer to compete against this kind of industrialized system. And so that's, that's one of the challenges is just the, the economics of growing produce com compares the industrial system is challenging.

[00:04:59] Diego Footer: So in a model like you run, comparing it against the traditional model where 15% makes it to the farmer, how much makes it to the farmer in your model?

[00:05:10] Bill Brinkerhoff: So in our model currently, we're paying 75 cents. Uh, so we're paying five times higher to the local farms. And the 25 cents that we, that we keep is enough for us to run a high quality store that's open every day and has staff that can help represent those farms and tell that farmer's story to people that are shopping, you know, every day of the week and all year and all year long.

[00:05:32] Uh, you can be sure that all of the food is local, and you can be sure that the farms are getting as much money as they can. And so we're organized as a, kind of a mission based entity. So we're looking to cover all of our costs and have a high quality store, but we're not looking to take lot of profit out of the system.

[00:05:50] And so, we really think that this reflects, a true economic, advantage for farmers. Like the cost of buying local food.

[00:06:02] Diego Footer: If somebody did wanna run a store like this as a livelihood, is, is this model conducive to doing something like that?

[00:06:11] Bill Brinkerhoff: I'd say definitely. And I think, you know, when we were having initial discussions in the beginning, we met with businesspeople who'd been in retail, been heard about this model and that was their advice was make sure the economics can support.

[00:06:27] People to bring them in here cuz you don't wanna be so mission oriented that no one else can copy it like it. So it's not a completely a mission of philanthropy. Yeah. But it is, I would say a mission-based business that runs like a business. And so we pay our staff higher than competitive wages.

[00:06:47] Um, and now between both stores, we have a staff of 60 people, across full-time and part-time, so it's a, it's a big group. Um, I think if we would've known that right at the beginning, we might have been a little terrified at how big this could get. And we weren't really worthy, you know, but we started with, you know, 12 staff and 30 farmers.

[00:07:08] Um, and it's just been growing each year as more customers want to support these farms, and they just find that they're too busy, you know, they were out of town or something happened and they missed their normal local food outlet. There was no plan B. So, you know, we've become the predominant kind of plan B when you can't buy local food and other methods.

[00:07:31] Diego Footer: Where do you think most of your customers come from? So they could come from, I see several buckets, one, they could be CSA customers or farmers, market customers that just would rather shop in a store two. They could be somebody who's just gone from a call it a larger scale, traditional brick and mortar. And they've shifted over. uh, where do you think you're really drawing people from?

[00:07:56] Bill Brinkerhoff: Yeah, it's interesting. Um, I think this is one of our biggest miscalculations in the beginning was how many people are interested in buying local food if only it were easier. And I think it may be similar across different communities, but maybe for every person who does make it to the farmer's market on Saturday.

[00:08:17] We think there's 20 or 30 or 40 others in town that would've intentionally, they would've, it's just, they couldn't for whatever reason. And sometimes it's just weather, you know, like in rainstorm, we had a big rainstorm last Saturday, makes it real difficult to go out and shop in in the past. You know, those farms would have to.

[00:08:38] Pack back up, all that produce that didn't sell and bring it back to the farm. And it was kind of a lost situation, you know, with Argus. Now, most of the farms sell at the farmer's market and drop it AR anything that didn't sell at the market. And so it gives them that second outlet. So I think the biggest segment for us in terms of customers are people who are intentionally interested in supporting local farms, but just couldn't because it was not easy enough for them to do it. And they had busy lives.

[00:09:02] I'd say the second big segment. And one that we're kind of excited about is converting people to be more locally oriented in their eating, called a locavore. And so we may have a customer who comes in doesn't know really what we're about other than we're interesting store with some nice displays, but maybe, you know, they're looking for, you know, they're looking for artichokes, for example, for a dinner that they're making.

[00:09:35] And we actually have some farms in Michigan that grow artichokes locally. Um, not to say that they're not available, but if it's the wrong month, probably not. Cuz we are in season and local with the food that we're selling, and we'll start a dialogue with that customer and just ask 'em what they're looking to make.

[00:09:50] And we may propose a parsnip translation or a turn up translation in, in for the recipe that they're gonna make. They'll normally go away try that, give us a shot and I'll come back and say, you know, that parsnip that we roasted for that dish was like, amazing. Like no one had had it at the dinner table.

[00:10:08] Um, what else do you have? And so we start to see a transition from people coming into the store originally, you know, with the recipe list and looking to buy what they had pre-thought about for dinner where we have some and we don't have EV you know, all of the things always and switch. To uh, stopping at us first and seeing what's in season, what just came in.

[00:10:31] It's a very dynamic market and what is coming in every week changes every week of the year, and they're interesting and amazing and vibrant things that come in, but it's a little bit of a different way of shopping that require some education and some learning. And so we really also appreciate customers who hadn't been aware of local food.

[00:10:50] We get to take along the journey. And sometimes, you know, six months later, they're stopping at our store first buying what they have, and then they go to the big store to finish off and get their citrus food and their aluminum foil or whatever else that we don't have. Um, so I think those are the, the two main segments.

[00:11:09] Diego Footer: Yeah. How much of do you think your success is built upon creating that experience? And I'm a big believer in this. Like you don't leave home unless you have to. And a lot of times, if you can replicate something at home, you know, like at the store, like I could go to big box brick and mortar and buy it, or I can order it online.

[00:11:31] Like I might as well order it online because there's no enhanced experience for me for walking around that big box to get it. But if I go to a winery. Or a brewery or someplace that makes bread local, I can go in and I can browse, and I have questions of what is this, and they can tell me how they made it.

[00:11:49] Bill Brinkerhoff: Yeah. So I'd say it's, it's quite interesting, the experience in the store is, one of community. Um, the farms that sell through our store always get free coffees. And we have a full cafe. Which I'd say also economically underwrites, how we can pay out so much to the farms is the, the cafe component, which we originally did for kind of, you know, to make the finances work so we could pay the farmers more.

[00:12:24] But we found the true, real benefit of the cafe portion is it creates this sense of community. Where that farmer, when they're making a delivery, can linger, they can get a cup of coffee and they can spend 15 minutes 30 and talk to customers, but they don't have to invest their entire day, in the store.

[00:12:44] They can then, you know, have those conversations as a customer. What it means is if you're in the store for a half an hour, you're gonna see a farmer making a delivery of something and have a chance to talk to that farmer. And that's just an experience you don't have at the big box store.

[00:13:02] The farms are not allowed to come in and, you know, help, you know, talk to the staff about how to sell their products. You know, you have to deliver to a loading dock at a certain time at our store. It's organized, around the farmer to make life easier for the farmer. They can deliver any time of the day, any day of the week, whenever's convenient for them.

[00:13:25] And when they come in, they're a little bit like a rockstar. It's a celebrity situation. Um, you know, John OI is here in the house, you know, you know, our staff is also very enthusiastic and attuned to this local food connection. And so you feel that energy and I'm always amazed at no matter what kind of day you're having to go in and feel the appreciation from the farms that they have this outlet that is such an economic boost for them, and then feel the appreciation from customers.

[00:13:57] And we've had some that literally break into tears and they see this much local food on display. Like one of those beautiful produce sexy. You only see in the big grocery store. There's not a it's entirely filled with local items. It's showcasing and displaying and automatically MIS. The produce from 20 local farms that is all displayed in a beautiful way.

[00:14:22] So I think this experience of the farms and the display and the like the passion to help grow this local food system is something that customers really feel.

[00:14:33] Diego Footer: Yeah. I love the way you describe it online, too. It's like, it's a, it's a full farmer's market in a store. That's open seven days a week.

[00:14:40] Bill Brinkerhoff: Yeah. I'd say another, just a feature of it is it's not like a boutique stopping experience.

[00:14:47] You can definitely you know, go and see what's happening, but it is set up so that you can go if you've got 15 minutes and you wanna get your shopping done, cuz it's a busy day, you can make your loop around the store and you can get your produce. You can get, you know, your garlic potatoes.

[00:15:03] You can get, you know, milk from two different Creamery, you know, and pick up, you know, some meat and be at the checkout counter in a few minutes and then pay once with a credit card. And have an easy transaction and you're out the door and it also allows us to accept EBT and double up food bucks for low income customers.

[00:15:24] So I'd say no matter who you are, you know, that in-store experience was set up to be, to mimic how people shop, like to create that. Like we wanna have one stop shopping. So I wanna be able to make dinner. I want to, from everything I need for the dinner and one stop, wanna be able to pay for it quickly.

[00:15:44] Diego Footer: So really your job as the store owner. I mean, if we take out the cafe out of it is to cultivate a, a great customer experience. So customers come back and to market to new customers cause you can't set the price. Farmer�s doing that. So your job is to get as many people coming through the door, as you can, and to make sure that they come back time after time, after time.

[00:16:05] And then if you do a good job at that, you're gonna get paid as the store owner, the farmer's gonna get paid, and everybody wins.

[00:16:12] Bill Brinkerhoff: Exactly. And I'll maybe I'll amplify in that a little bit. Um, the so the cus the, the experience that customers have and they come into. And AR farm stop is one where we, we, we have a, an organization in Ann Arbor called Zingerman's has a great delicatessen, has a great Roadhouse, but also they've cultivated a culture that whenever you go into any of their institutions, you feel welcomed.

[00:16:39] You feel recognized, not overly, but you know, it's a great experience. And so we engaged them to help us train and develop training course for our staff to do a whole set of things for staff like the creation of an environment where customers feel welcome and that staff feel enabled and empowered to have lots of degrees of freedom to make sure that experience is a good one, you know, has really been fundamental for customers and the customer experience.

[00:17:14] And so I think cultivating that experience between staff and the training cuz customer service is it's natural for some people, but not for everybody and there's procedures and approaches that�s Zingerman's taught us that are, that we've really used. And, and we feel that they're important.

[00:17:32] Um, I'd say the other part, that's quite different in your original question about why aren't these all over the country. So the logistics of running a farm stop are daunting compared to a normal store. So in a normal, like a normal whole foods or a normal bushes or Krogers, you have quite a limited offering of produce.

[00:17:55] It might be, you know, 30 items that are sold and pretty much sold year round. And the restocking and replenishment is a kind of a checklist. And maybe once a day, or once every few days a truck comes in with all that stuff. And it's one delivery, normally a semi truck and you load it in and pallets and you know, it's one whole pathway.

[00:18:17] Um, if you can replace that idea with like a store like ours and I'd say each store, you know, had pretty significant sales, you know, on a, on a yearly basis. It's now supplied by a hundred to 200 farmers. They're showing up at all times of the day. Um, there's not, there's never been a semi truck. It's always been pickups and vans and whatever the farm has as they're coming to town.

[00:18:42] um, and how do you like coordinate so that you have the right product and not too much and not too little? Um, and so I'd say that like the behind the scene logistics of matchmaking process and realizing that we have, we have some farmers that, that only want to text, they really don't want call. And we got other, we have Amish farmers that.

[00:19:04] You get a phone call and they ask what they should bring in and you gotta be ready for that phone call �cause that's the only chance you're gonna get before they show up. And so the communication and logistics are the other main part of the Argus kind of model to work on beyond the customer experience.

[00:19:26] Diego Footer: Hmm. When a customer does show up, so you have, you have store layout, you have store display how the product's displayed within the store. And then beyond just the general store ambiance itself, you have signage and then you have people. What goes into creating a good customer experience and why I'm asking this is.

[00:19:49] There might be people who want to do this model. There might be people who have just a farm store on their own farm. And a lot of times I think the, the strategy, it's probably not a strategy, but it's, we'll just put everything out. Here's a price, go at it and we'll ring you up. What do you think it takes to really maximize a customer experience to get I say, a full value out of that customer?

[00:20:15] So they, they enjoy that. They come back and they, and they get what they need and maybe. Some things that they hadn't considered coming in.

[00:20:26] Bill Brinkerhoff: Yeah. So that's a, I mean, an interesting topic, I I'd say, you know, we were certainly inspired by the farms that sell through farmers markets and how they display and make their produce look amazing and compelling.

[00:20:38] And so to take as much of the aesthetics of those displays into incorporate it into a store where we use the same principles, but we go beyond that. So one of the principles is to, you know, to stack it high and watch it fly. Um, this is, you know, abundant displays sell much better than sparse displays.

[00:21:05] Um, if we put out a dozen ears of corn and try to replenish as each customer takes some. No, one's gonna buy that corn. Um, if we put out 150 years of corn in a display that looks interesting, people that had no idea that they were gonna buy corn are not gonna leave that store without, you know, half a dozen ears.

[00:21:25] And so for us, it's been a journey. I can say we started off with and feel like it's the same. I think I would encourage people to jump and have fun and have creativity with this. There's a little bit of, like, I don't wanna scare people away that you have to be at some perfect level, but there's a whole gradient of expertise about around how to display in.

[00:21:51] Diego Footer: Totally. Totally, totally. I mean, you go in a high-end retailer ever, and I mean that stuff's not just put out there on racks, like it's yes. It's aggregated as outfits and with similar stuff. What about this? This comes up a lot. When people talk farmer's markets. Signage, so you could have here's your carrots, you could have price four hours a bunch, then you could have non taste carrots, four hours a bunch.

[00:22:16] Then you could have, you know, nine day carrots, four hours, a bunch great. And soups for juice raw, and then you could have next to it. Okay. You know, here's the grower that grows them. Where's the sweet spot. You know, again, I know there's a deep science to this, but where's the sweet spot for signage, but that somewhere between okay, not enough. And you're overloading somebody with information.

[00:22:40] Bill Brinkerhoff: Yeah. So it's a, it's a good question. Um, and we started off putting too much on there and we had really, essentially what were almost three by five cards in front of every single item. And if you recall, like, so we may have carrots from three different producers.

[00:22:55] So for us, a key differentiator is that the name of that farmer who grew the food is gonna be on that label, on that signage. So a Monroe farm's carrot is gonna be distinct from a contrary farm's carrot. They might have different growing practices. They're gonna look different. Um, but for us, it's the farm name.

[00:23:18] For sure. The growing practice, for sure, especially if it's certified organic, and we have no grown produce in the store, but some are certified organic and other use organic inputs. And then the price and what we've done is shrink that from a three by five card to a narrower, more concise label and we let the produce do the talking.

[00:23:47] And so the carrots you're gonna see now, three carrots displayed side by side. They're gonna be gorgeous, different choices, and you'll make your choice based upon which carrots look the best and right below it you'll see grew it and which practice. Um, and I think that that mixture has turned out to be better than trying to overload the signs and.

[00:24:10] We give most of the starring role to the produce itself with a definitive and in similarly constructed credits, you know, to the, to the farmer, the price and the growing practice.

[00:24:25] Diego Footer: When it comes time to filling the shelves, what are the mandates that you've put out there? Because it could, you. Could be very easy to start ever expanding the net mm-hmm oh, this is what local means. 30 miles. Ah, it's a hundred. No, it's it's 500. Mm-hmm what if you set out, if, if it comes into the store, then it must�

[00:24:47] Bill Brinkerhoff: E X. Yeah. Yeah. So we so our, our approach to local food is is aimed at the customer experience that customers want a choice.

[00:25:02] So it needs to be local but they don't just want things from one farm. Normally they would like maybe two or three choices. So whether it's carrots or pork chops that there's two or three farms, there's two or three. They normally have slightly different methods of production or growing practices. So that variety is, is important.

[00:25:21] When we started with the 30 to 40 farms, it was pretty much one of each thing. Um, and then we've grown last year, had around 200 farms selling through the store at any across the year and probably a hundred at any one time. Um, and the intent of that is to have the full shopping experience all local with like some choices.

[00:25:42] At the same time customers, when you start to have six or seven choices, It makes it harder for customers to shop not easier. It's, it's exhausting. Um, when you have too many places and it also dilutes the economics to the farms. And so we've targeted to have, you know, 2, 3, 4 producers of one item and.

[00:26:07] And it all needs to be local where those farms are participating in the store. So the fact that for produce that they need to really deliver to the store for fresh produce, need to deliver to the store probably twice a week. So they would come on Saturdays with the farmer's market normally, and then they probably would need to be back on Wednesday.

[00:26:27] And that requirement that they're in the store and they're delivering twice a week tends to limit the, the, the radius. So we don't have a mile radius that we define local. We define local as able to participate in our community. Um, and I'd say with that being said, we have, like, all of our producers are from Michigan, except for, I think we have one kombucha producer from Toledo, Ohio.

[00:26:57] But Toledo, Ohio is 50 miles away and it's closer than Travers city. And we do have, you know, a Turkey producer up in manna that re an Solona that really does Turkey and that's what they do. And I think we will reach, you know, far. Within our state or within our confines to give the customers a very interesting and full experience.

[00:27:25] So we kind of say as local as possible is a rule. And at the end result is still, everything is within most. Everything is in the state. We also in general, want to pay these farms as much as possible. So this consignment method of payouts where we pay 75% of their actual sales. What's unique about Argus is the farmers own their goods and they set the prices.

[00:27:51] And that model is really meant to break the paradigm of traditional grocery stores, where in a traditional grocery store, you pay the producer as little as possible, and you sell it as much as the customer will bear. And we did not wanna go down that pathway in our store, if something costs $4.

[00:28:12] And the math is on the wall, you know, $3 is going directly to that farm. And so it really also lets people shop without thinking more about that mission in mind, they know the math, they know it's a transparent financials. And I'd say the vast majority of farms are producing in participating in that they're local and that they're selling in this way that they take 75% of sales.

[00:28:42] There are a few producers, like our big bakery and our big Creamery that have to do wholesale. They just can't handle heck the accounting of a consignment basis for a big, crazy business like they have. Yeah. Um, so we buy wholesale a handful of things when that's the best alternatives,

[00:29:02] Diego Footer: Let's say I sell carrots. I bring carrots into the store. I price. I create the pack size that I want use put 'em on the shelf when they sell, 75% comes back to me, whatever doesn't sell, I take it back?

[00:29:19] Bill Brinkerhoff: Right. That, so that's the model. And I have to say in the beginning, there was some skepticism because under consignment models, the farms normally got the short end of the stick, �cause they were liable for that for the shrinkage and the waste.

[00:29:33] I will say at August's, there�s almost no waste. Um, we have one residential compost container that we use and it's mainly full of coffee grounds. Like there is completely unlike the industrial system where lettuce, which lasts about 14 days from when it's picked, until it really starts to rot, you know, spends a portion of that getting the 1500 miles from farm to table.

[00:30:02] By the time you see it in a local grocery store, it normally has three or four days left. So if you don't need it and you go away for the weekend, it's gonna be not in great shape. If you contrast that with locally sourced food that was picked within a day or two, it just, the entire store sells out for us every, every three days.

[00:30:24] There is not things that linger us for the most part. And we had a, a university of Michigan crew come try to study our food waste. And they came in with scales and, you know, did a out measurement system. And there was just, there was not food waste, little pruning and printing of yellow leaves here and there, but in general so I'd say the food waste is another benefit.

[00:30:48] We don't talk about it a lot, but there�s a huge improvement in food waste compared to the traditional system, by having proper refrigeration, misting and, you know, we, we carefully create the storage conditions for each item, whether it's apples, potatoes, or lettuce, so that they are in great shape for customers to buy.

[00:31:15] Um, so set the food waste aside because it, it turns out it was a skepticism in the beginning. It hasn't turned out to be the case. We do have some farms that deliver more than we than we, they, we both know would normally sell. And we have a local organization that provides food fresh produce for food banks.

[00:31:35] And so a number of farms will have a standing order to say, sell as much as you can. When I come back on Wednesday, we�ll food gather the rest and food gather, being a verb for food gatherers, which is our Ann Arbor food bank. And so we've become a little bit of a hub for farms when they really have an overabundance of things to give us a little bit more than anyone thinks would sell.

[00:31:56] And there is this I would not say food waste, but an intentional diverting of kind of unsold produce to the food bank. And other than that, we, we do accumulate sales and we pay out twice a month. And so from the first to the 15th, we run sales and then we close on the 15th.

[00:32:17] We crank up the computers on the 16th and calculate all of the payout reports and files, and normally have all the farms paid within a few business days at the end of each, you know, half month period.

[00:32:33] Diego Footer: When you started this, what were some of your reservations as the store owner of selling consignment versus wholesale?

[00:32:42] Bill Brinkerhoff: So our, the biggest reservation were, is, were farms gonna come like under this model? Um, so we had a lot of, in our mind, we had a bunch of failure scenarios, like, like it's pretty good if you're starting a business, like. Before you get too far down the path, like do your own risk assessment and think about how this thing is gonna fail and be aware of those and brainstorm how it might go off the tracks.

[00:33:09] And I'd say one of the areas we thought it might go off the tracks is if the farms look at this and don't trust us with their produce because it is like, you know, literally we're taking their baby. And if we're not, if we're not selling it or if we're mistreating it, and they're not happy, then it's over before it began.

[00:33:29] I think with the relationship to the consignment model was just specifically, you know, could we convince enough farms that this might work? Um, and we started with really the most influential farms in our area and spent time with them and explaining how this might work. And it took months to kind of get them on board with this new concept.

[00:33:50] But by the time we opened and by the time really the second payout came first or second payout, they could not believe the size of the checks that were coming their way. Um, and the high percentage of produce that they bring. That's sold at a great price in a way that gets them great economics.

[00:34:10] Diego Footer: Your store's been open seven years. It's seven days a week. Now people can go shop physically in person, which was great. But you know, as you know, from Instacart through DoorDash, Amazon, everybody's now in with COVID has shifted to also wanting to buy stuff online. What was the catalyst for you guys to also offer an online option?

[00:34:36] Bill Brinkerhoff: Sure. So the original catalyst for us to move online were local chefs from restaurants would come in and realize that we're the place that all these farms come to. And they would see something in our store like fairytale eggplant, or whatever it was that week. And they would say, whoa, that's amazing.

[00:34:55] And they would buy the entire like display, which was great. You know, our mission is to stimulate the local food system. And if they wanted to buy all that, that was. But as that's happened in a more and more regular basis, it was also short changing customers who came in and, you know, bunch of produce just got taken up by a big buyer.

[00:35:17] Um, and so we wanted to have a more organized way to make our products available for farms or for chefs to see what was coming in from farms. And so we did a search of online platforms and selected Local Line as a way to host this restaurant sales. And also we had a preschool in town that wanted to provide local produce bunch of it for their school.

[00:35:43] They had, I think, multiple sites in town, and they want as part of the food and part of the activity of their preschool to work with local food. And so they became a big buyer. They were another one that was, they would come in and really try to buy a lot of stuff all at once from the store. And so Local Line let us have an online presence for chefs and preschools.

[00:36:05] Literally like our bigger customers in the beginning. And that's all we had in the March a year ago, right before COVID set in, we had seven orders, and we thought it was great. You know? So these were seven big orders, so we're not gonna come and disrupt the store. The farms had a little bit more notice they could bring more in and it was organized.

[00:36:27] Um, and so we were happy with that. Um, and with COVID. Right. It was happening, we had customers that were like in the age demographic that they knew that this thing was targeted at them. There was no vaccine, they were going to ground and they asked us, is there any way you can just, you know, make local food available for us, cuz I'm my apartment, you know, for the next two months I'm hunkering down and we said, of course we can bring whatever you want.

[00:36:55] Like we had no idea how we're gonna do it. Um, and then we began the process over the next two months to transform every single thing we sold to sell it online, as all of our customers, you know needed to buy food in a safer manner, in a more convenient manner and where we had seven orders that first week in March, we went on to have 3000 orders online over April, May, and June crazy, a volume of people.

[00:37:30] We had to CLO we have two locations. We had to close one of our stores and we put two full-time shifts of packing or nothing doing nothing, but order fulfillment and packing all these orders for a good duration of the, kind of the peak of the pandemic. Um, and so for us, the transition to online was originally to serve bigger customers.

[00:37:56] Then it was to serve COVID customers. And now what we've seen is the habits and the exposure where people may not have been comfortable buying online is something they learned how to do during COVID and many of them like that a lot. And they're continuing to use that system. And so it's grown to a substantial segment of customers that are not necessarily ones who've been in the store or shopped in the store in the past.

[00:38:25] They're more people that preferred to shop online, got accustomed to buying through Argus on Local Line from all of these different farms.

[00:38:37] Diego Footer: So you've gained probably customers as a result of adding the online.

[00:38:41] Bill Brinkerhoff: Definitely. Yeah, definitely. Yep. Um, yeah, it, it for us last year, the online sales during COVID were over a million dollars.

[00:38:55] Um, it was a lot of food being sold that way. It was a lifesaver for the farms because last year, the farmer's markets in our area were closed. There was no other way really to buy local food, other than Argus and Local Line. We kept one of our stores open with social distancing, but the majority of sales last year went through the online business and, there's customers that are for whatever reason, prefer to shop online and makes it super easy.

[00:39:27] And I'd say even for us, you know, when, when we need to check on something quickly, we can call the store and see if they have something, but you can also just check online, cuz it has an accurate inventory and you know, what's available, especially at different meat cuts or whatever, it's all up there.

[00:39:43] And so there's some appeal for us. It was the first time we actually had to start tracking inventory in our door system. It's a different approach than a consignment sales shop.

[00:39:54] Diego Footer: So you bringing new customers more sales you had to do it as a result of COVID, but it sounds like you'll keep it going now as we've moved past COVID. , but it's not a free lunch. Like there's additional work required. Do you have now? Probably what, like a full-time person just managing the staff and the inventory on the online side. And

[00:40:15] Bill Brinkerhoff: yes, his name is will Moyer godsend ha and, and really curates the online offerings. And also weekly produce boxes have come in.

[00:40:29] As well as, as kind of part of the offerings. And we, you know, we said, so we had closed our second store to only do online. And now that COVID, and the vaccine rates are in healthier situations, our customers in the neighborhood want their store back. And we want our cafe, which hadn't been operating in that store and we have a Tavern license that hadn't been operating.

[00:40:56] And so we just acquired a third space where the online business and the grocery are gonna move together and leave us with a kind of a cafe Tavern operation in two, you know, two store fronts that are probably, you know, 300 feet apart. And so it'll be. I think a great opportunity for the online business, the produce boxes, and the in-store to have like you know, we've been busting at the seams, so it'll give us some more space to work in.

[00:41:27] Diego Footer: So for the online model that you have, it's a hub model through Local Lines. So you are responsible as the store owner for listing everything and taking the payment, and then you pay it out to vendors after it sells.

[00:41:42] Bill Brinkerhoff: Yes, we it's the same model as in the store, so it is for the most part, it's all, it's mainly consignment items.

[00:41:52] And so the way we work with Local Line is as if we're one giant farm who happens to have like 700 different SKUs of items and the, the fact that those, like, it was 700 and you know, we're trying to figure out the reasonable mix. It might be 300 or whatever, but to have a full offering from these different suppliers, it's something we curate the mix and generally we add it into inventory on Local Line when it comes into our store.

[00:42:22] So we count it when it arrives, it goes up for sale and sells. And we do a fair amount of trading horses between the in-store and the online. So if we have extra of something like meat is one area like how to sell meat online was a challenge �cause you know, we weigh 'em at the register.

[00:42:44] When you buy it in the store online customers, we really didn't wanna. Have a two-step process. We wanted to have fixed prices, you know, for, you know, like for a, for a pork chop. Um, and so we had to do ranges of weights for each item and put a fixed price on it. Um, but the one, the pork chops, you know, it's like a bell curve, like almost most of the pork chops coming in are in this range.

[00:43:07] And we can sell 'em in three different weight ranges on Local Line, but the edges, there's some big ones and some small ones, sometimes that come through cuz local food is like that. But we can shuffle those over and sell 'em in the store so that we can really keep the online stocked with a reliable supply, you know, of a manageable set of meats and weight items.

[00:43:31] Diego Footer: Hub model, so you list it when it comes in, whose responsibility is it for images and description of that product?

[00:43:39] Bill Brinkerhoff: So we do it when we input it into the system. And sometimes we have help from the farmer. Like if the farm has promotional like logo and things like that, we'll make sure for all of our farms that we have their logo and we can print that onto either, you know, display signage, you know, if it's in store if it's Local Line, we found it's better for us to take picture.

[00:44:03] What exactly is being sold than to use stock photos. And so we generally will have a system as part of our receiving process. That's it, it's a little bit of a burden in the beginning when you're setting up all the new items, but once it's set up, it is it's great to have a picture. That's an accurate picture. That's a nice one, a big item you're selling. And

[00:44:21] so we do. We do the input. And again, the farm dropping off, our purpose in life is to make life easier for them. Uh, they'll drop off and they can go, and we just take care of the rest and that's, you know, the 25% that we take, you know, we cover, we do the signage of it's in store. We do the picture and the description, if it's online.

[00:44:47] Diego Footer: When I think about the average store out there, a grocery store, I mean, or regardless, of course. Sure. Not. I think they're viewed as stores. It's where I go to buy something where I hear what you're describing, and I think. That's not, it, it transcends store, and it becomes a fixture in a community for, in a few ways like you, because you're getting community working there.

[00:45:13] You have community coming to purchase stuff. And people who live in that area are selling stuff that they grew there. So. It's deeply rooted in many layers and it's not just where I go to pick something up and grab something, it becomes a bit of a hub. How do you see what you're doing as building community?

[00:45:40] Bill Brinkerhoff: Yeah, I think the community that's being built around each farm stop is really pretty incredible and energetic. In both of the locations where we built out stores, they were kind of defunct and decrepit locations. One was a former service station that became a failed marijuana dispensary. It had blight, it was not a great place mattresses upside down, outside.

[00:46:07] Um, and it's been transformed to a place where the community gathers. It's not too far away from like an elementary school. There'll be kids that come down directly with permission to their parents and they'll get, you know, a drink at the store. It's a place where by bringing together, I guess the staff, the farmers and these customers, there's a very, very strong energy and sense of community.

[00:46:35] That's built around there and. Who's the person who's picked up on this a lot is a faculty at the university of Michigan named Peter Allen. And he's had students, he runs kind of an intentional design course for development. And he's had students try to incorporate this farm stop concept as a way to build community and to put it in, you know, find the places in a town where it can go.

[00:47:02] Where, what we see is when the farm stop came in. It we're actually listed by the realtors as a key advantage of moving into our neighborhood is you�re near Argus farm stop. We've had, you know, developers like, you know, try to include these cuz they see the value of having some community centric place like a farm stop in amidst their development.

[00:47:31] And so I feel like the community that's generated by local food with this kind of approach with farmers and customers has been super, super good. And we think it's an important, an important part of what we do

[00:47:48] Diego Footer: There you have it bill Brinkerhoff of the AR farm stop. If you wanna learn more about the amazing work that Bill's doing at Argus, check him out, using the link below.

[00:47:58] If you wanna learn more about the selling and marketing of local food, check out my brand new book, ready farmer one. It's the farmer's guide to selling and marketing. It's gonna help you increase your reach, get more customers and earn more. Whether you're selling online or offline, this book should help you sell more and make more.

[00:48:21] Check it out on Amazon or visit us@readyfarmerone.com. Thanks for listening to this episode. I hope you enjoyed it, but more importantly, I hope you do something with the information in this episode to make a more profitable farm business. I'm Diego. And until next time, be nice. Be thankful and do the work.

 

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