Farmbox Direct launched in 2014 when founder Ashley Tyner was looking to find high quality, affordable fruits and vegetables for her and her daughter while living in New York City. Her work schedule was busy so she didn’t have time to make weekly trips to the farmers market to find local produce. Even when she did have the time, she didn’t have a car—like most people in NYC—so could only buy what she could carry home. She figured she wasn’t the only person in NYC with that problem so she started researching options for how to get better access to fresh, high quality, local produce. Because she grew up in a family of farmers and spent summers working at her uncle’s farm in the Midwest, she already had some knowledge and connections to get her business off the ground.
Fast-forward six years, her business suddenly boomed seemingly overnight. She told a journalist from Marketplace that she woke up on March 14, saw the order volume and said: “There’s no way we could have taken that many orders overnight, but we did. We are doubling the company every 24 hours.”
The surge in orders was driven by two main factors. The first is that panic buying was creating shortages across the country in grocery stores; customers began turning to online delivery but even the largest players like Instacart and AmazonFresh became backlogged in orders. Customers began turning to smaller players to fulfill their grocery needs, especially as people began to stay at home and rely more on more home cooked meals. The second is that many new customers were looking for a way to get groceries delivered to their older parents or grandparents so that they could avoid stores and stay home.
That being said, Farmbox Direct previously had strong B2B relationships supplying schools, restaurants, and hotels. With shelter at home orders in place, that volume dropped dramatically but fortunately since the consumer business increased rapidly, they were able to keep all employees on staff. Additionally, with the increased business she was even able to hire more members to her customer service team to support the B2C growth.
Farmbox Direct was already an online business that had digital infrastructure in place to take advantage of offline shopping moving online. The main changes they made for COVID-19 were in safety measures to help keep their employees, supply chain partners, and customers safe.
There are two phases of the future we can look at for Farmbox Direct. The first is the next several months while COVID-19 keeps people at home. The second is once the economy goes back to a new normal in a post-COVID world.
In the first scenario, we have already seen demand spike for fresh produce boxes as people are relying more on delivery versus making the trek to the grocery store. I anticipate that within the month of May, demand will increase even more as Tyson Foods has come out claiming there will be a shortage of meat on the market. For context, on April 26, John Tyson, chairman of Tyson Foods, wrote a blog post that highlighted how the company has had to shutter facilities across the nation. As facilities close, farmers around the country won’t have a destination to send their livestock. In addition to food waste, because a portion of the supply chain is closed, he expects that “millions of pounds of meat will disappear from the supply chain”. This speculation has already caused panic buying across the country, emptying meat aisles in grocery stores and warehouse clubs. This will push people to buy, cook, and eat more vegetarian food as meat becomes inaccessible. This is analogous to the uptick in bidet sales after toilet paper panic buying caused shortages.
What the new normal will entail post-COVID and when it will start is still a mystery to all of us. In terms of grocery shopping habits, I believe that while many people will resume regularly going to their nearest bricks and mortar store, there will be a larger population (relative to pre-COVID) who will continue to shop online. A barrier for many people shopping online is that they cannot pick their own produce, it is more expensive, and they have to plan ahead/wait for their groceries. COVID has forced consumers to try out new services that they otherwise may not have used, almost functioning like a sampling program. My hypothesis is that after trying the service, many consumers will realize that they still like the quality of the product they are receiving, the extra cost may be worth the time savings from actually going to the grocery store, and that planning ahead may be easier than expected. By learning the value of the service, they will be more likely to continue using it once we enter a post-COVID world, creating a halo effect for all of the grocery delivery services, including Farmbox Direct.
I believe it will be hard to sustain the growth levels they will reach during COVID but they can help retain more consumers if they create content for how to use all of the seasonal vegetables that come in each delivery. This could range from low tech solutions like including a recipe card in the box, or a digital solution like creating a recipe generator that makes suggestions based on the seasonal inventory in the box and what is in the customer’s pantry. The solution stems from the concern that when we enter the post-COVID world, people will have less time to experiment in the kitchen like they currently are and that they will only want to buy what is needed for the week (versus receiving Farmbox Direct picked selection for the week). Lowering the search costs for content that is directly applicable to each delivery will help cross that barrier.