Farmdrop: How Data, Ethics and Profitability Collide

Friday 1st December

By YFood

We’re an interactive platform passionate about driving innovation in the Food Industry using technology by connecting and supporting the most brilliant minds in the food industry.

Introducing another online shopping platform to the supermarket industry was neither new nor groundbreaking. Yet Ben Pugh, Founder and CEO of Farmdrop recognised something the industry sorely lacked — ethics. He decided to do something about it, and do it very well he did.

The e-commerce boom has seen to the explosion of innovation in the supermarket industry as players scramble to conquer the lion’s share of customers. From driverless deliveries to cashierless shops, the future of the supermarket industry would not be out of place in a sci-fi feature.

In this manic race, it’s easy to forget about the smaller figures that might fall into the cracks within the supply chain as well as neglect sustainable practices – at great expense of producers’ livelihoods and our environment.

Enter Farmdrop. Taking on the mantle of “The Ethical Grocer”, Farmdrop is an online grocer platform which connects customers directly to farmers, growers and producers. What does this mean?

This means cutting out the middleman, paying suppliers 75% of the final retail price, and giving customers access to farm-to-order fresh food that tastes great and is kind on their conscience too. Orders are placed online or via mobile app, with next & named day delivery to boot!

Having successfully raised funding and even achieved basket-level profitability so rapidly since founding (Farmdrop was founded in 2012), we zoom in on some key insights from Ben himself.

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“Be a solution to a problem”

Initially when we were a click-and-collect system, there was much less demand for our product. Asking farmers to drop off food and getting customers to collect food themselves simply wasn’t convenient enough. We soon realised we needed to evolve the product to solve a new problem — convenience. The solution lay in using new tech and electric vans to deliver food to people’s doors at a significantly lower cost. By spending way less than our competitors, we could share those gains between our farmers and customers by giving them compelling service, product and experience.

“Design your product for completely selfish purposes”

In the early days, preaching about our ethics and philosophy didn’t bring us enough customers. This all changed after we improved the convenience of the product. Many more people now use Farmdrop because they can get good food at great prices, with a compelling service. The company’s ethics and philosophy is just an added bonus although central to why we do what we do.

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“Focus on costs”

As an economist by background, I pore over the costs. So many food startups don’t make this the focal part of their business. This causes them to bleed money and fail to secure funding quickly or effectively. Obsessing over costs allowed us to become profitable at basket level a year ago, and effectively helped us secure funding.

“Be data-minded in the current funding environment”

We have such an emphasis on data within the business and this obsession allowed us to manipulate our data to figure out customer retention performance. When you’re in a position to do that, and understand your performance and decide on actionables to improve your product, and forecast what you can achieve – that’s when you can credibly go to a VC.

“Tell the truth, be transparent”

I mentioned earlier that building a great product and experience for our customers is essential but we also very consciously talk about the good we’re doing by the producers, the environment, and the customers. It’s powerful stuff and something that our customers feel really good about. And because our brand is positioned as the ‘ethical grocer’, it’s really important that the product reflects this too. Ultimately the product we have built is what is actually solving the real problems within the food industry. Increasingly, your brand and product should be thought of as the same. Build a brand around authenticity. Tell the truth, be transparent.

Ben shared his insights with us at YFood Tech Wednesdays in October 2017. YFood Tech Wednesdays is our free monthly meetup held every last Wednesday of the month. We get founders, startups, future-preneurs and larger brands coming together over their interest and passion for Food Tech and we’re always welcoming fresh and familiar faces. Be sure to join us next time for another exciting instalment!


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