Farmers struggle as fewer people buy weekly veggie boxes
ATLANTA, Ill. — In the heart of corn and soybean country, Hans and Katie Bishop of PrairiErth Farm are cultivating an unconventional dream, one pesticide-free, dirt-encrusted sweet potato at a time.
They left comfortable jobs at an insurance company to start their farm, located about 160 miles southwest of Chicago, where they grow organic vegetables sold locally and in stores and restaurants in the Chicago area. Like many young farmers drawn to the local food movement, the Bishops were enthralled by the idea of growing and selling fruits and vegetables that end up on plates in their communities, not commodity crops exported to other countries.
Their passion remains strong, but they’ve had to adapt to a changing food industry rife with new competitors.
“They always say, ‘The consumer is fickle,’ and it’s true. They know exactly what they want. So being able to meet that demand, and it’s ever-changing, has always been very difficult,” said Katie Bishop, 40, who left her job at State Farm’s corporate headquarters in 2015 to farm full time on 25 acres outside of Atlanta, Ill.
Farmers like the Bishops have seen competitors offering their own organic fruits and vegetables sprout up like weeds in recent years. From large grocers with robust selections of organic produce to meal kit startups touting healthy and quick foods, consumers have an abundance of options. Once the province of hippy co-ops and farmers markets, organic produce can be purchased at any Walmart, Jewel-Osco or Aldi — or home-delivered via Amazon and other online retailers.
This rush of competition has hurt revenue at many small farms in Illinois — particularly those that rely on sales through what’s known as community supported agriculture programs, or CSAs. Some farms have scaled back operations or closed altogether. Others, like PrairiErth, have changed their business models to survive.
CSAs, where community members pay a certain amount for a weekly box of vegetables from the harvest, are designed to support local farming “so that the farmland becomes, either legally or spiritually, the community’s farm,” according to a definition on the U.S. Department of Agriculture’s website. The model gives farmers a consistent revenue stream with relatively low overhead costs.
But many Illinois farmers say their CSA sales peaked three or four years ago and that the concept has since fallen out of favor with consumers, who value convenience and customization.
Band of Farmers, a coalition of farmers selling produce in the area through a CSA program, has seen its ranks dwindle since forming in 2015. Fourteen of its current and former farmers — more than one-quarter of its peak membership — no longer make weekly produce boxes available. Six of them are no longer in business, said Cliff McConville, chairman of Band of Farmers and owner of All Grass Farms in Kane County.
Radical Root Organic Farm in Libertyville scaled back its operation this year after experiencing a decline in sales through its CSA program and at the Logan Square Farmers Market. Radical Root ended participation at the farmers market, dropped from about 140 CSA boxes to 70, and is focusing on business at its farm stand, said Alison Parker, 39, who started the business in 2009 with her husband, Alex Needham.
"We saw it coming a couple of seasons ago,” Parker said. “The CSA wasn’t this shiny new thing anymore.”
Nick Batchelder and Becky Stark of Midnight Sun Farm in Capron, Ill., decided this will be this last season for their CSA program. Just a few years ago, Midnight Sun packed about 100 boxes a week for its members; now, that number’s closer to 60, Batchelder said.
With declining sales and two young children, both Batchelder and Stark took full-time jobs off the farm. Midnight Sun will continue to sell its produce and eggs at the Glenwood Sunday Market in the Rogers Park neighborhood, Batchelder said. Beyond that, they’re trying to figure how how to sustain the farm into the future.
“We don’t want to hang it up and quit just because one goofy business model didn’t work,” Batchelder said. “If nothing else, I have a nice 50 acres to hunt deer on.”
Times have changed, and so must farmers
Illinois isn’t the only state that’s seeing a decline in CSAs and other direct-to-consumer farm sales.
“What you’re seeing in Illinois is what we’re seeing here in Iowa and I would guess lots of different states,” said Craig Chase, program manager for local food programs at Iowa State University. Farmers in Iowa have reported a gradual decline in customers staying with their CSA programs from one year to the next, Chase said.
As recently as 2015, a USDA survey of local farm marketing practices put total direct-to-consumer sales in the U.S. at $3 billion, with states like California, New York and Pennsylvania leading the way. About 7,400 farms participated in community supported agriculture, according to the survey, a marketing practice that brought in about $226 million. That’s less than farmers markets and onfarm stands, but still a sizable chunk of sales.
Such a survey could look very different today given the dramatic changes to the competitive grocery landscape in the last three years.
Last year, Amazon bought Whole Foods Market for $13.7 billion, a seismic deal that spurred all major grocery retailers to establish online delivery or pickup options, expanding access to fresh produce. Even prior to the deal, grocers across the board had been beefing up their natural and organic food offerings.
The meal kit industry, which offers consumers healthy, convenient options, is booming as well. Companies like Blue Apron and HelloFresh have moved aggressively into the Chicago market in recent years, and parent companies of local grocers like Jewel-Osco and Mariano’s have purchased meal kit companies and begun selling their products in stores.
“It’s not necessarily that the local food movement is going away. It’s more of a change in how consumers are buying food,” said Raghela Scavuzzo, local foods program manager for the Illinois Farm Bureau.
Farmers have to adapt to the changing times, said Arthur Neal, the USDA’s point person on developing local food systems.
"Farmers are not immune from having to deal with market competition and production innovation,” said Neal, deputy administrator of the transportation and marketing program for the USDA.
To succeed in this “day and age of convenience,” farmers have to consider diversifying not only their products but also their strategies for selling them, Neal said. Selling produce into food hubs — separate entities that can assist with marketing and distribution — can help small farmers access stores and restaurants, he said. Partnerships with other farmers also are key to survival.
Technology could play an important role in reviving old channels of commerce. Green City Market, one of Chicago’s largest and most renowned farmers markets, launched a new app this summer after noticing a decline in foot traffic, particularly on Wednesdays, said Melissa Flynn, the market’s executive director. The app allows shoppers to preorder fruits and vegetables from specific vendors. So far, more than 500 people have signed up for the app.
Times have changed, and so must farmers, Flynn said.
“Farmers can’t just show up anymore,” she said. “They have to be marketers.”
Power in numbers
The vast majority of produce sold in Chicago-area grocery stores comes from California, Arizona and Mexico.
Chains like Mariano’s and Jewel-Osco say they’re carrying an increasing amount of produce grown in Illinois and neighboring states and that they would carry more local produce if there were a consistent year-round supply.
But for a small farmer, making the leap to supplying a large grocer requires a significant increase in agricultural production and capital investment. Marketing and distribution are also significant hurdles, said Irv Cernauskas, coowner of Irv and Shelly’s Fresh Picks, a Niles, Ill.-based food hub that delivers produce from more than 100 farms in Illinois, Wisconsin, Michigan, Indiana and Iowa.
Beginning in 2016, Cernauskas and co-owner Shelly Herman formed the Fresh Picks Farmer Alliance in an effort to solve some of those challenges by providing “lastmile” distribution, technology and marketing support for farmers, they said. Though the bulk of Irv and Shelly’s business is still its home delivery service for local and organic produce, the company is trying to grow sales to retailers, too, in part to offset recent declines in sales directly to consumers.
The alliance so far has used more than $600,000 in grant money — $350,000 from USDA’s local food promotion program and the rest from Chicago Community Trust and Kinship Foundation — to buy equipment, build infrastructure, and boost marketing and technology. For example, about $37,000 of that grant money helped build a new pack house on the Bishops’ PrairiErth Farm where produce from other farms can be collected and stored before being trucked to Chicago.
The alliance is now selling produce to Mariano’s and other retailers in Chicago.
The food hub has increased its annual marketing budget to $75,000 — still a tiny fraction of what’s being spent by companies like Amazon and Blue Apron — and plans to launch a new website before the end of the year.
“We’re never going to be able to spend the marketing dollars and the technology dollars (that the larger companies do), but maybe we can do enough,” Herman said.
Farmers should use social media and other online platforms to tell their authentic and compelling stories to consumers, said Ariana Torres, an assistant professor of horticulture at Purdue University.
“The younger generations are relying more on technology to make food purchases,” Torres said. “Farmers have to embrace that.”