Fruit and veges in grassroots revolution
A NZ organic grow box business is going global, writes John Anthony.
GLOBAL FOOD revolution is the aim of New Zealand food distributor, Ooooby, on the back of an ambitious $1 million crowdfunding campaign.
The unusually named Ooooby – which stands for ‘out of our own backyards’ – puts together boxes of locally grown, organic produce sourced directly from professional growers and amateur gardeners.
On Monday, the concept goes live in Fresno, California with more than 600 subscribers. In July it launches in Seattle.
Ooooby’s Fresno operation caught the eye of former Google chief executive Eric Schmidt’s wife, Wendy, who backed it with US$150,000 worth of investment.
Started five years ago in Auckland by Pete Russell and his wife Katherine Russell, Ooooby operations have already expanded to Hamilton and Sydney.
‘‘It’s really encouraging to see that it’s being acknowledged at a high level,’’ Russell said.
Ooooby has around 500 customers in New Zealand and 400 in Sydney.
Russell owns 100 per cent of the business, but in about three months, the equity crowdfunding drive will begin.
The company believes it is challenging traditional distribution models by delivering straight to the customer’s door.
Russell said it was too early to say how much shares would cost or what returns investors could expect. ‘‘There are not likely to be any short-term gains, nor will there be any dividends until the business reaches 10,000 customers, he said. ‘‘This is about making an investment for a better future food system.’’ The business has enjoyed 30 to 50 per cent growth year on year.
‘‘We have to see that we’re pulling a good net return so that we can sustain ourselves, and also fund our own growth.’’
Russell said an 18-month comparison of Ooooby prices showed it was about 10 per cent cheaper than supermarkets when delivery was taken into account.
‘‘We know we have to be competitive on price if we want to make a significant impact.’’
The firm also sells pantry items such as coffee, eggs and bread, but Russell said the aim was to source produce as local and natural as possible, direct from growers.
The more local and natural a grower, the more preference it would be given, he said.
Growers are paid 50 per cent of the total retail value for the supply and delivery of produce to Ooooby’s hubs.
The business also has relationships with wholesalers, so when certain products became hard to source locally, it could still provide customers with variety.
‘‘When Ooooby started, it was buying about 70 per cent of produce from wholesalers, but now, as more suppliers come on board, between 70 and 100 per cent is purchased direct from growers,’’ Russell said.
‘‘The next few years are going to be very disruptive for businesses. We want to get the model right so it can scale rapidly and make a large impact in the food sector.’’
Russell added that anyone who grew fresh produce could be an Ooooby supplier.
He recently paid one man $100 for supplying Ooooby with grapefruit grown in his backyard.
‘‘It’s not our normal practice yet, but that’s what we’re wanting to move more and more towards.’’