Delivering the goods online

Online farmers' market boosts `eBay' service to growers, shoppers


Agribusiness
MegaFresh chief executive officer, Alex Stefan.

MegaFresh chief executive officer, Alex Stefan.

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It's not quite Amazon.com, but the new MegaFresh portal is giving ordinary farmers a low-fuss chance to join the online retailing boom

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An online eBay-styled farmers’ marketplace connecting producers with household customers is preparing to expand from its Victorian home turf to new distribution hubs in Canberra and Sydney.

Melbourne-based MegaFresh by-passes the wholesaling process taking the concept of weekend farmers’ markets to a new level, via e-commerce.

Producers are effectively selling grocery lines 24-hours a day without relying on wholesalers or stringent contracts with retailers.

Nor do they need to cart goods to weekly market events where exposure to customers is valuable, but typically lasts just four or six hours and, is restricted to those locations which suppliers and customers can travel to.

The megafresh.co platform involves a central distribution hub where goods are packed for home delivery as soon as sales are recorded on the market website – similar to Amazon.com’s burgeoning digital retailing service.

Everything from fruit and eggs, to preserves, dairy produce, and more, is listed by farmers who set their own prices and promote their own brands.

Orders received before 9am are delivered in Melbourne, via refrigerated distribution vans, by mid afternoon, or within 48 hours to regional Victoria.

MegaFresh takes a 35 per cent commission on horticultural sales, which company principal, Alex Stefan, estimates leaves suppliers with at least 50pc more profit than if they had sold into a traditional supermarket supply chain.

When you buy groceries on Megafresh you are dealing with the farmers and people who actually make the products.” - Alex Stefan, MegaFresh

The online food and grocery portal was developed by Mr Stefan, a former agriculture student at the University of Sydney’s Orange campus, who went on to make his mark in Victoria developing the Feast range of cold pressed juices.

His juice range was initially sold to cafes, but grew into the wider online market to become one of the foundation products offered by MegaFresh when it began testing its direct-to-consumer platform in mid 2017.

Mr Stefan said food entrepreneurs, including his own Feast business, tended to be blocked from expanding their contact with consumers by big retailers and distribution groups whose preference for big brands and big supply runs turned them into formidable “gatekeepers”.

Empowering farmers

MegaFresh was now giving ordinary farmers and smaller scale food businesses a means to shift the power from big supermarkets, widening their market exposure and offering more competitive pricing options.

In fact, just weeks after Woolworths’ decided its supermarkets outside Victoria and Tasmania would stop selling the Kooka’s Country Cookies biscuits range, the product listed on MegaFresh.

Kooka’s, which manufactures at Donald in northern Victoria, had been swamped with support when the big retailer announced its decision in August, prompting the biscuit maker to take advantage of today’s technology and go online.

Packaged foods, including preserves, breakfast cereals, nuts, olive oil, coffee and organic snacks, now represent an equal 40pc share of the MegaFresh offering with fresh fruit and vegetables.

Personal care products, from soap to organic skin products and toilet paper, make up 20pc.

Mr Stefan said MegaFresh’s website generated $30,000 turnover in its first month’s trading, growing by as much as 50pc a month since then.

Supplier numbers had jumped, too, now at about 200, with increasing inquiry coming from NSW producers wanting to join.

Sydney, Canberra agenda

By March he expects to open a Canberra distribution base to service southern NSW suppliers and customers, and another in Sydney after Easter.

“At least 50pc of our Melbourne business is from regional Victoria or interstate, while a big proportion of sales overall are to repeat buyers,” he said.

Meanwhile, a digital marketing campaign was set to kick off prior to the push into NSW and Canberra.

MegaFresh was also making a concerted effort to recruit suppliers who regularly attended farmers’ markets, giving them a chance to broaden their market footprint.

“If you live in NSW at Braidwood, you might occasionally travel to a market, maybe in Canberra, but you’d probably prefer to have access to those products all the time – that’s where our platform works well,” he said.

At the same time, for farmers and other product suppliers, he said local markets tended to be “a lot of work for exposure to a limited number of shoppers” whose buying habits may easily be disrupted by time constraints, bad weather or variations in what was offered during the year.

The online market could solve a lot of problems on both sides, and provide better value.

MegaFresh shoppers typically paid 10pc below typical supermarket prices.

“By mid year we’ll also upgrade the platform to offer more social characteristics to build relationships between shoppers and suppliers,” he said.

“Consumers will be able to communicate more freely following producers on the farm as the seasons change, seeking out specific feedback, and so on.”

Fruit quality tests

To enhance the transparency of MegaFresh’s horticultural offering, the company now tests and rates the nutritional value of products sold via the internet.

Sensor technology from Israel uses a light pulse, similar to the way remote thermometers measure heat, to assess sugar and other nutritional characteristics in fresh produce.

“We’ll randomly test a pallet of peaches or a box of avocados so our online shoppers can feel more confident about the quality they’re buying even though they can’t physically touch it,” Mr Stefan said.

While other online grocery shopping platforms were now commonplace, he said their business models did not focus on building suppliers’ brands or relationships with consumers.

“We’re a marketplace, not a single retailer like Coles, Woolworths or Amazon, or other businesses who promote the farmer-direct image but actually sell produce they source from everywhere.”

“When you buy groceries on Megafresh you are dealing with the farmers and people who actually make the products.”

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The story Delivering the goods online first appeared on Farm Online.

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