Building a better supply chain for smallholder farmers
We are using smart tech to better connect smallholder producers to distribution channels, improving the cost and accessibility of good food.
I confirm that I am fully aware of the eligibility criteria, and based on its description, I am eligible to apply to the CSV Prize 2017.
Start-Up (a pilot that has just started operating)
Annual budget in 2017 (USD)
Number of beneficiaries impacted so far
Headquarters location: Country
Headquarters location: City
Location(s) of impact
USA: NYC, DC
Problem: What problem is this initiative trying to address?
Healthy, sustainable food should be a right, but the design of our current food system makes it a privilege only the wealthiest can afford.
There are over 28,000 smallholder farmers in the U.S. using sustainable practices, but because they cannot easily penetrate the industrial supply chain, it is expensive and inefficient to get this produce to all consumers. As a result, over 60% of demand for local produce goes unmet while the average farmer makes 66% less than the median household income in the U.S.
Solution Summary: What is the proposed solution? What do you see as its most promising aspects for creating shared value?
We are developing a network of synergistic organizations operating in the good food space in order to bring scale efficiencies to regional food producers and increase the accessibility of good nutritious food. By providing a shared smart tech platform and distribution logistics infrastructure, we can serve the unmet demand for local food.
The technological backbone of our network is an open marketplace that uses smart algorithms to efficiently link supply and demand and provide optimized pricing, removing the friction and cost of doing business for small producers.
Over the past 7 years, over 500 regional food hubs have developed across the country to meet the growing demand for local food. With our anchor partner, we are bringing together these hubs, starting in Washington DC and New York City, in order to aggregate local food from thousands of small-scale producers and have the basis for a platform that will allow for true efficiencies.
Impact: What is the impact of the work to date? Specify both the social and the environmental impact of your work
The first phase of our project, which lead up to the formation of Traverse Food, was done through our two primary partner organizations - 4P foods and Nextdoorganics - who together moved a combined $5M in locally grown food since ‘14. We provide enhanced market access to over 200 local farms from VA to NY and deliver nutritious food to over 4,000 families in the DC and NYC areas.
In the future, we will audit the environmental impact of the farms in our network as compared to the average large scale U.S. farm and use our platform to track the carbon savings that we enable, along with the precise dollar impact in rural communities due to the higher margins and sales for these farms.
As more than 50% of our sales are in food deserts, we seek to increase access for low income customers. We don't have quantifiable metrics yet, but we explored several programs including allowing profits from higher price markets to partially subsidize lower income areas and partnering with non-profits
Financial sustainability plan: How is this initiative financially supported? How will you ensure its financial sustainability long-term?
Currently, Traverse Food is funded from personal funds during our initial start-up phase. Our partner operations are 90% funded through earned income, with around 10% of the budgets coming from private investment or debt. As we move into the next phase, we are raising private funds through our partners, and allocating $300k out of a $1M private investment round towards this initiative, primarily used for software dev. and marketing.
We expect this initiative to be financially self sustaining once we achieve scale, through a profit share from our partner organizations. There is some risk if it takes longer to get to profitability, or if our private funding falls through. The prize money would help significantly to offset that risk and multiply our impact by getting to market sooner.
Unique value proposition: What makes your initiative innovative? How does your project differ from other organizations working in the same field?
While there are many companies developing technology for food hubs, or building cooperative networks in the agriculture space, our approach is unique because we are creating a fully vertically integrated model which provides transparency and efficiency through the full supply chain, and a high-touch customer service model which aims to make the technology and logistics portion invisible to the farmers and producers, instead of asking them to change their way of working to fit our model.
Founding story: Share a story about the "Aha!" moment that sparked the beginning of this initiative.
This initiative didn't come from one single spark, but from a series of events over many years. When I was a young child, my Grandfather would talk about how farmers like him make just pennies for every dollar spent while most of the profits went to middle men.
Flash forward to 2011 and I started running a number of agriculture focused initiatives, trying to build a better way to get food from small farms to people who wanted it. During this time we had some successes and some failures, and throughout it all we experienced daily challenges due to the fragmented and unpredictable supply chain for local food.
Drawing from my experience implementing price and sales optimization technology for a global corporations with highly complex supply chains, I realized that this fragmentation could be solved with the right platform, so I began to assemble the team to make it happen.
Where did you hear about the Nestlé Creating Shared Value Prize?
Upon recommendation from others