Organic farm produce is an obvious candidate for selling over the web: customers will appreciate the 'direct from the farm' access to products, and are likely to be in high-earning groups who are prepared to pay extra for quality.
A number of websites have sprung up to cater for this growing demand. Organic producers have to be approved and licensed; so most organic web businesses are already established as producers themselves before they set up a website.
We spoke to five organic web businesses, some of which are doing very well. But a director at one company, who did not wish to be identified, said that there is a war of words going on in the market. "There is simply not as much organic stuff being produced as some operators would have you believe they are selling," he claimed.
All the sites were using other routes to market as well as the internet. The wide variety of approaches also indicates a market very much in its infancy and with everything to play for. The signs already point to the fact that businesses will have to expand through partnerships to take on the supermarkets, or provide a niche service - there is little room in the middle ground.
The fresh food co
The fresh food co set up its home delivery service selling vegetables and Cornish fish in 1989. Always exclusively mail order, it set up its website in 1996. Owner Thoby Young describes it as a "heritage website" due to the relatively long time it has been established. "The site was very simple in 1996, just providing information. People started placing orders by email so we very quickly developed the site further," he said.
He claims that in the five years since the site was set up, the fresh food co has commissioned a lot of work with external IT suppliers. "The original website was designed on an Apple Mac. The static information on the site was soon replaced by a simple online shopping system using internet service provider tools. We ended up with a shopping cart system devised by an independent supplier. This is run on Linux on a server and is database driven. It is fantastically fast - it has to be because there are many products and customers who order weekly. The speed is critical," said Young. The site is designed to respond quickly, with little in the way of graphics, Java and Flash.
In conjunction with a third-party solution provider, the fresh food co devised its own software to manage subscriptions from customers who wanted to place forward orders. "This type of thing was not available off the shelf [so] we commissioned it. We hold zero stock so most software is not suitable," explained Young, adding that the software is not for sale "although we have toyed with the idea. But then we would be turning into an IT company - although it sometimes feels as if we already are."
The company is still run by two people despite a year-on-year increase in turnover of between 20 and 30 per cent. Young says that he plans to continue outsourcing most services, and to maintain the profitability of the company by keeping it with just two staff.
The site now serves a global market. "We will ship anywhere, and indeed we do. We had an order for fresh Dover sole from Kentucky," said Young. Getting perishable products into the US can be complex, but the fresh food co found a transport company that had an arrangement with the Food and Drugs Administration for a small amount of perishable food. "Luckily we have had no delays at customs yet," he said.
The company now does 70 per cent of its businesses through the website. It markets the site mainly through PR activities, although Young concedes the difficulty in having a long-term strategy because the market is changing so quickly. "Up to a point you have to make it up as you go along," he explained.
Somerset Organics recently won the UK's Ecommerce Business of the Year award from Barclays Bank and the Sunday Telegraph. Owner Richard Counsell said that the company got the idea for its website soon after it took up a stall at a farmers' market in Bristol.
"For £20 a pitch we had a position in a city centre market," he said. "We got a brilliant trade and we got customers saying their friends and relatives in other areas would enjoy the produce too. The website followed on from that 18 months ago." Somerset Organics was turning over £400 a week at the farmers' market. Since then it has attracted 8000 private customers and has turned over between £500,000 and £750,000.
As the site took off, the company quickly banded together with other local meat producers to give it a strong supply-side operation. It has since branched out and now takes stalls at two central London markets which attract thousands of customers. It cooks its own produce for these markets, allowing people to sample the goods, and the stalls carry literature about the online operation and vouchers which can be spent at the site. Counsell explained that the site is designed to reflect a market stall approach, answering commonly asked questions about health concerns and recipes.
Around 15 per cent of its business comes from London, but perhaps a more surprising statistic is that 42 per cent comes from Scotland. Counsell says that this was unexpected at first, but points out that Londoners have easy local access to quality produce, unlike those in more remote areas. He has regular orders from Jersey, the Isle of Skye and even from a research scientist in Alaska.
The company has big plans for its web presence, intending to establish a central site with suppliers in every single county of the UK. The idea is that consumers will purchase from the website but will be supplied by the producer closest to them, thereby supporting local organic farmers. The farmer will get a percentage even in cases when they cannot supply the order and it is fulfilled by an alternative supplier. Counsell claims that he now has 300 farmers interested in this. "This way we can undercut the supermarkets. It is quite exciting," he said.
Graig Farm Organics
Graig Farm started its organic business in 1988 and decided to set up a web presence at the beginning of 1997. Owner Bob Kennard explained that the original idea was simply to promote the organic business. "It was partly educational: about what organic means and who the farmers are," he said.
When Kennard decided to take the next step and move into selling produce from the site, things did not go smoothly at first. The farm decided to use its existing web hosting company to help set up the site, but was not happy with the service it received. "We lost six months when they hadn't got it sorted," said Kennard. The site finally went live in May this year.
Customers can make orders online, but as Kennard points out, one of the problems of selling meat is that it is not possible to give a precise price for a particular cut as the weight varies. Customers are asked to accept that the price may vary on items highlighted in red, and Kennard claims that there have been no objections to the final amount deducted so far.
Graig Farm positions itself at the top end of the organic market and promotes itself in food magazines. "It is important that there is perceptible quality because of the premium charge," said Kennard.
Howbarrow Farm became fully licensed as an organic producer in 1998 and launched its website at the beginning of this year. A web designer who lived locally produced the site for £250 plus £100 worth of organic produce. Owner Paul Hughes said that at the time he was being quoted up to £5000 from commercial designers.
The site has mainly been promoted through partnerships with e-shopping malls, but Hughes explained that this has not been a success. The site partnered with specialityfoods.co.uk earlier this year, with visitors being able to link to Howbarrow Farm through the latter's website. When a customer decides to purchase, they are linked back to the specialityfoods site where WorldPay online payment facilities can be used. However, since March this has resulted in just four sales.
"It was really disappointing," said Hughes. "Our enthusiasm went out of it." He has now signed up with e-directory, a similar mall-based site. This costs £800 for three years but 50 per cent of that has been subsidised by the local Business Link. "E-directory are putting loads of money into publicity for this," he said.
In an effort to drum up web business, Hughes explained that the farm has decided to change its product line. "Meat isn't easy to sell by mail order. People can't see it and it is hard to provide small quantities. People expect an enormous range and it is hard to keep it all in stock," he said.
The farm has now opened a separate business selling organic puddings, which have a chill cabinet life of up to five weeks. It will sell its sticky toffee puddings alongside hams, turkey and vegetables on the e-directory site. "We feel this reflects the seasonality of the organic business," said Hughes. "In fact, we are considering having a counter on the site to indicate how many turkeys, for example, are left."
Highland Organics has doubled its turnover since it set up its site a year ago. Director Peter Pulham said: "It just seemed like a good idea at the time. We were already doing nationwide delivery with TNT for £5 and this had grown by word of mouth." It uses an external website designer to design and run the site.
The company delivers in London with its own vans, which all carry the web address, and promotes itself through whole page adverts in local papers. "We supply one very large private allergy hospital. The hospital recommends people to buy from us," said Pulham. In common with other suppliers of organic produce, most of its customers have a high disposable income, but Pulham added that mothers of young families, who are not necessarily well off, also buy regularly.
Highland Organics is building on its success. It is about to open another organic supermarket in Mill Hill, London. It is in the middle of creating a new website "with Flash Art graphics and everything moving". The new site will replace the current three to four pages with eight new pages, and is expected to go live around the end of October.
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