One of Maine’s most successful serial entrepreneurs has launched a new business with the goal of advancing the local food economy into the digital age.
David Stone, who previously co-founded digital gift-card provider CashStar Inc. in Portland, has started a new Portland-based company called Forager1 LLC to develop a digital procurement platform for local food producers and the retailers who sell their products.
The service, known as Forager, has been up and running on a trial basis for several months. Stone said he already has about 100 Maine food producers and 10 retailers using it.
As of Monday, Forager is being rolled out in New England and New York state, with the eventual goal of expanding nationwide.
“We believe that local food can change the world by reducing our dependency on big industrial agriculture, improving our environmental impact, creating more local jobs, making us healthier and bringing people together,” said Stone, Forager’s founder and CEO. “Yet only 3 percent of the food we consume is local, and eight large companies control 80 percent of our food supply. By breaking down barriers to local sourcing, we hope to fan the flames of a local food revolution.”
Forager is a Web-based application that creates an online and mobile digital marketplace for local farmers and other food producers to sell their products wholesale to retailers. It’s kind of like an Amazon.com for wholesalers of locally sourced foods.
INEFFICIENT PROCESS STREAMLINED
Stone said that for retailers of locally sourced foods, the traditional process of finding and doing business with multiple local farmers and other producers has been expensive, inefficient and error-prone. As a result, the retailers can spend up to 60 hours a week communicating with farmers, managing orders and making payments, which can reduce their margins by 33 percent or more.
Local food producers also struggle with inefficient processes such as updating product availability, invoicing and depositing payments, 99 percent of which are paper checks, Stone said. Forager lets them keep potential buyers apprised of their full range of available products in real time from a computer, tablet or smartphone, thus increasing sales opportunities, while speeding up billing and payments.
Rosemont Market and Bakery is one of the retailers that have been using Forager. Rosemont co-owner John Naylor said it streamlines the process of ordering, tracking inventory, receiving delivery and paying for locally produced foods.
Naylor said doing business with 60 to 70 local farms can be a labor-intensive process, and that before the launch of Forager most of those food producers were still relying on pen and paper to track sales and inventory.
“When you’re dealing with local food, it’s a more complicated process,” he said. “Forager helps slim all that down.”
Naylor said consumers want locally grown and produced foods, and that independent retailers such as Rosemont can provide much greater variety because they aren’t buying all of their products from a single, large distributor.
However, all of the labor involved adds to the retail price. Ultimately, consumers will benefit from a system like Forager that makes the buying and selling process more efficient, he said.
“It will help push down the cost a little bit,” Naylor said. “It’s a big deal.”
Meg Mitchell, owner of South Paw Farm in Freedom, also participated in the Forager pilot project. South Paw cultivates about 20 acres of fresh fruits and vegetables each year, including apples, elderberries, plums, leafy greens, root crops, onions, tomatoes, peppers and herbs. About 80 percent of that produce is sold directly to consumers at farmers markets, Mitchell said, and the other 20 percent is sold wholesale to retailers such as Rosemont.
The first step in using Forager was to create an online product list that includes every variety of fruit and vegetable South Paw grows, she said. It now exists as a live Web page that can be accessed directly by customers via the internet.
Mitchell, who admits she is not technologically savvy, said Forager makes it easy to keep the Web page updated with current availability of each product.
“It’s pretty much just clicking a green button when it’s available, and clicking a red button when it’s not available,” she said.
Purchase orders arrive via email, and Mitchell is able to update her online inventory list after the products are sent out for delivery.
“We get an email from Forager when the customer has paid,” she said. “The money shows up in our bank account a couple days later.”
Stone said Forager is his sixth startup. He self-funded the company’s initial development and has since raised about $1 million in outside investment capital. So far, Forager has four employees and it outsources the software development to a third party.
The company makes money by taking a small percentage of sale transaction volume, similar to Amazon, eBay and other e-commerce platforms.
IDEA WITH ‘LASTING SOCIAL VALUE’
Stone said he has a knack for examining market trends and coming up with ways to solve problems that previously hadn’t been addressed through technology. He said Forager was a particularly appealing idea because it is not only a viable business, but also something that will benefit communities.
“I really wanted to do something with a bit more lasting social value this time,” he said.
John Crane, general manager, of Portland Food Co-op, said Forager is already helping the cooperative save money.
“Forager has made a big difference to our local sourcing process,” Crane said. “As a result, we estimate we save at least 6 to 8 percent in labor costs. We have been waiting for a service like this for a long time.”
J. Craig Anderson can be contacted at 791-6390 or at:
This story was updated March 20 at 10:40 a.m. to correct David Stone’s title with CashStar.