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GOURMET NEWS NOVEMBER 2017 www.gourmetnews.com NEWS & NOTES 7 Farmstead Launches Nation's First Sustainable Digital Grocer in San Francisco Farmstead, the new artificial intelligence- powered digital micro-grocer reinventing the supermarket model with technology that sources and delivers local food from farm-to-fridge in 60 minutes, announced its official launch in the San Francisco Bay Area on October 5. Founded just 12 months ago, Farmstead has completed more than 15,000 deliveries to thousands of Bay Area customers, and has raised $2.8 million in seed funding from Resolute Ven- tures, Social Capital, Y Combinator, and Joe Montana's Liquid 2 Ventures. "Farmstead's goal is to fundamentally transform the American grocery experience with AI technology," said Farmstead CEO and co-Founder Pradeep Elankumaran. "In 2017, consumers shouldn't have to drive to the store, stand in a line, and buy food of questionable quality which then goes to waste. By sourcing and delivering the best products to customers in just the right amounts in under an hour, we help our customers throw out less food and take fewer trips to the store each week, cutting down on waste and pollution." Farmstead's fulfillment model is specifi- cally designed to reduce rampant waste in the grocery industry. Using proprietary software, Farmstead customers can quickly select items from a carefully curated array of local farm produce and grocery prod- ucts. After just one order, Farmstead's AI calculates and predicts users' habits to know exactly how much food to order from local sources daily, weekly, seasonally and annually, reducing food waste substantially. "This is what a truly efficient, eco- friendly grocery experience should look like in an industry with a model that hasn't changed in 60 years," said Resolute Ven- tures Partner Mike Hirshland. "Farmstead's digital micro-grocery model dramatically improves upon the traditional grocery store, and utilizes the gig economy to mod- ernize what has been a low-tech, wasteful sector." Farmstead's grocery fulfillment model cuts out the supermarket altogether. "Food is such an integral part of life in the Bay Area, along with technology and environ- mentalism, and Farmstead has blended these things together perfectly," said Joe Montana, Partner at Liquid 2 Ventures. "We're excited to have the opportunity to invest in Farmstead and look forward to helping them grow nationwide. We believe they will make a big impact on the sector and the lives of Bay Area families." By stocking a constellation of micro- warehouses in the Bay Area with just the right amount of local, minimally-packaged foods, Farmstead delivery drivers are algo- rithmically routed to use the most efficient, traffic-free, eco-friendly routes, resulting in less congestion. Farmstead has chosen minimal packaging and reusable ice packs and bags, which drivers collect along with milk bottles from prior Farmstead deliver- ies for reuse. Farmstead matches local supermarket prices and won't force users to meet a min- imum amount after their first order. Cus- tomers can choose flexible delivery options including one-hour, same-day and weekly services. If a customer joins a weekly eco-optimized delivery route, their order is delivered for free. Otherwise de- livery is just $3.99 and one-hour delivery is $4.99. Any food that isn't purchased by Farmstead customers is donated to na- tional food bank network Feeding Amer- ica, which sends it to a shelter for women in the Bay Area. GN Hurricane Damage Continued from PAGE 1 Cattlemen's Association in Texas. Almost all the 8,000 or so members of his organ- ization are "cow-calf guys," he says – the men and women who raise the calves that are shipped to graziers to finish off on pasture before going to feed lots for grain finishing. Damage for his members means beef prices will be higher down the road, he explains, because there will be fewer calves going to market, and prices will be higher for those that do. Moreover, he says, the graziers who sell to the feed lots may see a loss of income be- cause they need to send cows to the sale barn at lighter weights. That may be be- cause they need the income to make re- pairs, or because their hay "blew into the Gulf of Mexico," and they can't feed their herd over the winter, Hyman says. "Our members saw flooding, some loss of livestock, loss of hay and feed supplies," he says. "Of course they saw damages to their homes, barns and fencing, too." That last – fencing – poses a big problem during the storm, he says. "In a flood, nor- mally, the cows will survive because they float," he says. "The calves are the ones who panic – they get hung up in fences, trees, or brush, and they drown." Rebuilding those damaged houses and barns will cost more, Hyman says, because lumber prices are rising just as they did after Hurricane Katrina hit New Orleans. He says he's seeing a 10 to 15 percent in- crease in "everything you need for build- ing, from lumber to nails." Hyman says that 1.2 million cattle were lost to Hurricane Harvey – a blow to the state's $10.5 billion cattle industry. Texas is also the number one beef exporter in the U.S., with exports valued at $855 million, according to Texas A&M's agricultural eco- nomics department. "The short-term effect is that we have fewer calves to sell. We've already seen a lit- tle spike in calf prices. Down the road, beef prices may be 1 or 2 percent, maybe 5 per- cent higher." He acknowledges that the hurricane's impact on Houston's many refineries mean higher prices at the gas pump, which hurts his members as much or more than fuel retailers and their cus- tomers. But he carries another concern in the back of his mind. "The one thing I'm worried about is that the average age of the farmer/rancher in Texas, just like everywhere else, is 60-plus years. Many of my members are over 65. Those folks may look at the damage to fields and fences and say, 'it's just too much to fix,' and leave the business. I don't know who's going to replace them." Texas also produces a lot of other high- dollar agricultural products, Texas A&M reports. These include $1.8 billion annually in milk; $1.7 billion in broilers, $1.2 billion in the corn that is used to fatten the cattle and chicken; $439 million in vegetables, and the same in eggs. All these industries suffered various impacts from Harvey, of course, and all will be affected by higher gas prices. Florida Growers See Mixed Aftermath from Hurricane Irma The citrus crop is a big part of Florida agri- culture, but the state also produces a lot of the winter fruit and vegetables that con- sumers take for granted. Ready-to-eat sal- ads and sandwiches may also cost more, because of price hikes in the cost of their ingredients, caused by rising gas prices and reduced numbers of workers to harvest those crops. "In winter time, Florida is the number one source for the produce that people all over the country see on their plates," says Lisa Lochridge, Director of Public Affairs for the Florida Fruit and Vegetable Associ- ation in Maitland, Florida. "Florida's the top producer of tomatoes, yellow squash, snap beans, oranges and grapefruit, cucum- bers, watermelon and sugar cane." Citrus growers were hardest hit by Hur- ricane Irma, she says, because the storm started in south Florida and moved right up the middle of the state. "Not many growers were not affected by Irma," she says. "Growers in south Florida saw more damage – 50 to 75 percent — but in some cases, smaller growers may have lost their entire crop." Perhaps even a harder blow was that the citrus growers "were looking at a better year than they'd had in a while," Lochridge says. "The biggest damage was fruit stripped from the tree branches by wind, but standing water for many days afterward may also have caused damage to the roots of the trees." Florida vegetable growers were slightly luckier, she says. "If there's a silver lining at all, it's that the winter crops weren't in the fields yet. Growers experienced field damage, so there's cleaning up for them to do as they prepare to plant. But they're get- ting it done. I just spoke with a strawberry grower today, who said they're planting every day." Those growers may see a delay in getting plants to set out, as the plant nurseries themselves recover from hurricane dam- ages, but Lochridge says she doesn't expect to see a significant setback in crop produc- tion. "The harvest may be a little bit light at the beginning of November for shop- pers," she says, "but it should pick up soon after that." Higher gas prices may or may not be a concern for Florida growers, Lochridge says, because gas prices may have stabilized by harvest time. A side concern for fruit and vegetable growers, says business analyst Moody's, is that temporary housing for seasonal farm workers was destroyed or damaged in the hurricane, which means there may be fewer workers to harvest crops. Georgia Poultry Growers Escape Worst of the Storm Poultry accounts for 46 percent of Georgia's agriculture – the most of all its agricultural products. Poultry and all its allied indus- tries contribute $25.5 billion, the Univer- sity of Georgia's Poultry Science School reports. On an average day, Georgia pro- duces 30.4 million pounds of chicken, 7.6 million table eggs and 5.6 million hatching eggs. It has been the top producer of broil- ers since 1998. Today's big poultry farms are models of efficiency, but they have a huge vulnerabil- ity – feeders and waterers are electric-pow- ered and so are the critical ventilation systems that provide fresh air and help reg- ulate temperatures inside the poultry houses, which can hold 20,000 birds or more. A power outage during a storm can threaten an entire flock. Luckily, says Mike Giles, President of the Georgia Poultry Federation in Gainesville, Georgia, poultry farms invariably have gen- erators. Hurricane Irma pushed through Georgia but "at the farm level, it was minor damage and no losses. There was a disrup- tion of a day or two for the processing plants, and 200 to 300 farms lost power for a couple of hours." Because there weren't significant losses, chicken prices should stay stable. For retailers and their cus- tomers, that means little or no change in prices. GN

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