‘A better way to connect producers and customers’: Farmdrop sees ‘skyrocketing’ demand, eyes expansion

By Katy Askew

- Last updated on GMT

Farmdrop eyes expansion with marketing push / pic: Supplied by Farmdrop
Farmdrop eyes expansion with marketing push / pic: Supplied by Farmdrop

Related tags e-commerce digital COVID-19 coronavirus

UK-based online grocer Farmdrop saw ‘skyrocketing’ demand during the coronavirus lockdown – and the company believes its unique business model and digital technology means this is no flash-in-the-pan.

Farmdrop was founded in 2012 with a vision to bring food producers closer to the end consumer. Founder Ben Pugh was ‘frustrated’ by what he saw as a lack of good quality, local produce at the supermarket. “He felt that in the age of the internet there was surely a better way to directly connect exceptional producers and customers,”​ marketing head Damian Hind reflected.

The business started small, with a selection of farmers’ market produce. It has since expanded to become a full-suit online grocer. “Fast forward eight years and Farmdrop is now working with over 450 producers and delivering to thousands of customers every week,”​ Hind told FoodNavigator.

The company developed its own line of ready meals, Made by Farmdrop, in 2019 that it delivers in plastic-free packaging. Range-development continues apace.

“In 2020 we have launched a new range of recipe kits giving customers the opportunity to enjoy Farmdrop’s great quality ingredients without having to cook from scratch,”​ Hind elaborated.

Tech to disrupt the food chain

Farmdrop’s has what Hind described as a ‘unique’ approach to supplying groceries. “We combine incredible fresh food and sustainable sourcing with the convenience and range of a regular online supermarket.

“It’s an all round better shopping experience. Customers know that their groceries came from a local or sustainable source and delivery is made by electric van with reduced packaging.”

This is made possible thanks to the digital infrastructure the rapidly-expanding company has developed. This technology is at the heart of the business model, which not only feeds into consumer demand for local and sustainable food – it also ensures the highest quality through ‘maximum freshness’.

Hind elaborated: “Farmdop has built its own supply chain technology that enables the local farmers we work with to see real-time orders and harvest daily for maximum freshness. The pick and pack technology we’ve developed in our hub also enables customers to buy fresh groceries from many different producers in one individual order.

“We have also developed our own website and apps to make the shopping experience easy and enjoyable.”

Supporting ‘a better food system’

Farmdrop’s focus on sustainable, local production resonates with its growing customer base.

Products marketed as sustainable are driving product and category growth. According to research from the NYU Stern Center for Sustainable Business and IRI, between 2013 and 2018 products with sustainability claims saw sales increase 29%, way ahead of an overall flat market. Despite representing only 16.6% of the category, these FMCG products delivered 50.1% packaged goods market growth in the period, reporting a CAGR 5.6 times higher than products not marketed as sustainable.

The mainstreaming of demand for ethical products has increased competition among brands who increasingly vie to be seen as sustainable or ethical. Here, Farmdrop believes it has an advantage because it is able to communicate the story behind the product.

“Our business model prioritises home-grown and organic produce wherever possible, making Farmdrop’s fresh supply chain much shorter than most supermarkets. We believe in promoting seasonality and looking after local and sustainable producers who make food the right way. We also give the customer as much information as possible about the farm or producer of the products we sell, which helps to let them know how they’re supporting a better food system,”​ Hind told this publication.

Farmdrop’s focus on sustainability, convenience and digital resonates with a trends that have been accelerated by the COVID-19 pandemic and associated lockdowns. And, indeed, the company reports a spike in interest in the wake of the crisis.

“Consumers are increasingly shifting their grocery shopping online and the lockdown from COVID-19 has rapidly accelerated that trend,”​ Hind revealed. “Orders skyrocketed during the COVID-19 lockdown as online shopping became an essential service for many people.”

Farmdrop’s response was a rapid scale-up to meet fresh demand. “We were able to unlock additional capacity in our supply chain and meet the new demand,”​ the marketing executive explained.

Becoming a ‘mainstream’ alternative to supermarkets

Does Farmdrop expect this shift in consumption patterns to have sticking power?

To an extent, yes.

“While Farmdrop’s customer base has grown considerably in the last six months, we were already growing very fast by meeting the demand for great quality, healthy food with sustainable sourcing.

“More normal shopping behaviour has resumed, [but] the level of demand for shopping online remains considerably higher than prior to the pandemic and our expectation is that this will continue at current levels.”

This is part of Farmdrop’s broader ambition – to become an accessible alternative to the UK’s online supermarket giants.

“Our aspiration is to become a mainstream, sustainable alternative to the major online supermarkets. We are fast expanding our range and offering to make shopping with Farmdrop more enjoyable and easier than ever before.”

Farmdrop is also investing in a ‘major national ad campaign’ with the aim of ‘reinforcing our value to new and existing customers’ and getting ‘broader awareness across the UK ahead of expansion’.

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