Not All Subscriptions Are Digital: The Community Supported Agriculture Movement

The community supported agriculture movement strives to fund sustainable organic local farming through a dedicated subscription. The farm-share model, in which consumers make an annual payment for a share of a farms yearly output, demonstrates the advantages of recurring payment models in an offline setting.

Source: Bigstock

As sales of organic food continue to grow, some consumers are getting savvy to the issue of “greenwashing” — that is, agricultural practices that are a lot less environmentally friendly than producers and retailers advertise, even if they slap an “organic” label on their product.

With the understanding that shipping even organic food over long distances inevitably imposes a carbon cost, small, indie farmers are appealing to these eco-conscious customers by offering them sustaining subscriptions that keep the farm afloat and guarantee a steady supply of organic, locally grown food.

These farms are using a subscription business model for the same reasons that other firms like: Steady guaranteed revenue streams ensure against the vagaries of weather and customer fickleness and other unexpected challenges.

This business strategy is called “community supported agriculture” (CSA) or “farm share.” It works like this, according to the Cornell University Small Farms Program:

  • CSA members invest in a farm for an entire season, pledging support in return for a weekly box of produce harvested directly from the land they are investing in.  These shares are picked up at a specific location, giving people direct access to produce and other farm-fresh products.

However, a big part of the marketing behind the movement is tied to the ideology and eco-enthusiasm of consumers, as detailed in a frequently asked question at the FairShare CSA Coalition website:

  • CSA is MUCH MORE than just a weekly delivery of food or food products. Community Supported Agriculture (CSA) is a powerful investment in your health, community, and local economy. It’s a partnership between farms and consumers that keeps independent businesses thriving, helps families eat seasonal, local produce, and charges farmers and consumers with the responsibility of building a strong, equitable food system.

THE GREEN FOOD MARKET

The appeal of organic foodstuffs has been growing, as measured by annual revenue

(Source: Organic Trade Associations, via Statista)

That’s not just in dollars, but in area under cultivation:

(Source: USDA, via Statista)
 

What’s more, the U.S. consumers seeking these organic products tend to skew young and female:

(Source:Statista survey of NAICS Code 11 data)

That youth-trending customer base is key. According to a report at the Growing Produce trade website:

  • Millennials like organics for themselves and their families, and currently 25% of them are parents. Within in the next 10 to 15 years, 80% of them will be parents, according to a study by the Organic Trade Association. Those demographics bode well for continued organic produce demand.

Granted, local organic agriculture is a small chunk of the organics market, which is itself a small chunk of all agriculture. But niche businesses can thrive in small markets, and the increasing number of CSA-participating farms suggests that the niche has not topped out. Check out this data from Civil Eats:

(Source: Civil Eats)

 

More recent data from the USDA shows the trend continuing up to 7,398 farms in 2015:

 

(Source: USDA Census of Agriculture Highlights)

 

EVOLVING TO BETTER SERVE A SUBSCRIBER BASE

The growth seen in CSA sales, farms, and subscribers is not a simple scaling up. Rather, this growth has included maturity and evolution to better serve consumer needs, such as growing new varieties of produce and other organic offerings. According to a USDA report:

  • Many CSAs still use the traditional business model of a farmer or network of farmers offering consumers regular (usually weekly) deliveries of locally-grown farm products, particularly fruit and vegetables, during the growing season on a subscription or membership basis. The report shows that some CSAs have modified this model to include new products, partnerships and technology to create sustainable local food businesses.

The same report found that CSA farms are diversifying by adding meat, dairy, eggs, flowers, and so on.

A Maine newspaper reports that some CSAs are working to deliver product offseason, and even in winter.

Another way that CSA providers are adapting to changing times: Marijuana farm shares!

The farm-to-table movement has gained proponents and popularity in recent years, and although the trend has been primarily associated with restaurants, the needs of environmental-minded consumers are pushing them towards CSAs as a way to extend the lifestyle.

That’s both a healthy lifestyle as well as an eco-friendly one. According to the USDA report quoted above, CSA farms are also partnering with corporate wellness programs. The science behind that is supported by a scholarly paper on the effect that CSA subscription has on members. According to a paper by professors at the Universities of Kentucky and Michigan, the fact that subscribers lock themselves into a farm share program changes their behavior. Specifically, subscribers ate more servings of vegetables and went out to eat at restaurants less often.

  • Shareholders are compelled by the CSA to use their full share by virtue of the subscription-based purchasing model. In survey comments and follow-up focus group conversations, participants likened the CSA experience to a weekly puzzle in which they were motivated to use their full share. The CSA challenged new shareholders to get creative with their food preparation. Many explained that this challenge made them explore new recipes on their own or use farm-provided suggestions for preparation

Regardless of one’s industry, the idea that the act of subscribing changes subscriber behavior is most intriguing for all subscription-based companies, and it suggests that deeper analysis may be revealing.

However, the advantages of the subscription model go well beyond the effect on subscriber behavior, or even the eco-friendly marketing benefits. Rather, the subscription model, in which customers prepay for their share of produce, offers financial advantages for farms especially, given high early costs to get a crop into the ground. Civil Eats explains it this way:

  • The CSA farm structure is also designed to reduce the farmers’ reliance on bank loans. Traditionally farmers purchase inputs in the winter, but do not sell their produce until late summer or fall harvest. To purchase their inputs up front, farmers are forced to take out operating loans, which accrue interest until harvest season sales. CSA provides access to working capital for farmers, debt free, while increasing community investment in their success.

Of course, there are perils and challenges in any growing, successful market. According to The New York Times, some middlemen grocery delivery services are using the CSA label to describe how they buy from local farms and then deliver to customers. The chain of custody gets harder to follow as middlemen step between farm and table, especially when those middlemen include non-local olive oil and avocados in their services.

  • As demand for local and organic produce has ballooned in the last five years, so have other ideas for connecting farmers to customers. Now, online hubs are using sophisticated distribution technology to snap into the food chain, often using “C.S.A.” to describe what they deliver. The term is not regulated in most states, so companies can define it as they wish. Peapod, the online shopping service owned by the international grocery giant Ahold, delivers farm-sourced boxes throughout the Northeast; FreshDirect offers a variety of C.S.A. options in and around New York City.

If imitation is the sincerest form of flattery, then these faux-CSA providers are showing that the farm-share subscription model has something valuable to offer.

INSIDER TAKE

Community supported agriculture demonstrates that there is innovation in the subscription model taking place well outside the digital realm. Finding ways for customers to identify with and buy into your product, to become fans and supporters as well as mere subscribers, works as well for spinach as for Spotify, as well for arugula as for Adobe.

 

 

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