Hacking the supply chain: Pete Russell at TEDxAuckland
Summary
TLDRIn 2008, the speaker, a successful entrepreneur in the food industry, attended the World Food Forum in Rome and realized the detrimental impact of large-scale food production on small farms and communities. This epiphany, coupled with the 2008 financial crisis, led to the creation of EB, an online platform that connects local food producers with consumers, cutting supply chain costs and making local food competitive with industrial alternatives. The model has proven successful in Auckland, with plans to expand globally, promoting a local food renaissance and the collective ownership of food commons.
Takeaways
- 🏡 The speaker lived in a multi-million dollar home on Waiheke Island in 2008, reflecting their entrepreneurial success.
- 🌐 They were involved in importing frozen pastries from a European multinational and selling them in Australian supermarkets.
- 📈 Their business achieved significant milestones, including ten million dollars in sales and their first million-dollar month.
- 🌾 Attending the World Food Forum in Rome made the speaker realize the negative impact of large-scale industrial food on small-scale farms and communities.
- 🔍 The 2008 global financial crisis led to a significant loss for their business due to currency fluctuations.
- 💡 The crisis prompted the idea of using technology to support local food systems, which could be more resilient and sustainable.
- 🛒 They founded EB, a business model akin to an online farmers market, to make local food as convenient and affordable as industrial food.
- 📊 The EB model streamlines the supply chain, allowing growers to receive half of the retail value, which is a significant improvement over traditional models.
- 🌱 EB has been successful, delivering over 25,000 boxes and proving that local food can be competitive with supermarket prices when delivered.
- 🌍 The business is expanding, with the first box delivered in Sydney and plans to explore new cities globally.
- 🌿 The speaker envisions a global food Renaissance, emphasizing the importance of local food systems for personal, familial, and global well-being.
Q & A
What was the speaker's initial business model before attending the World Food Forum?
-The speaker's initial business model involved importing frozen pastries from a European multinational and selling them through supermarkets around Australia.
How did the World Food Forum change the speaker's perspective on their business?
-Attending the World Food Forum made the speaker realize that large-scale industrial food was forcing small-scale family farms and artisan food producers out of the market, and they were part of the problem.
What major event occurred that forced the speaker to reconsider their business strategy?
-The 2008 global financial crisis hit, causing the Australian dollar to plummet against the euro, which led to their business going from making profits to losses overnight.
What was the speaker's idea to address the issues faced by local food producers?
-The speaker's idea was to use the technology and systems designed for complex long-distance supply chains and pair them with the short-distance advantage of local food to make local food viable again.
What is the name of the new business model the speaker started to support local food?
-The new business model the speaker started is called EB, which is designed to revive local food.
How does the EB business model work?
-EB operates like an online farmers market, allowing customers to buy from various local vendors, growers, and producers, and have them all delivered in a single box to their doorstep.
What is the hypothesis behind the EB business model?
-The hypothesis is that by pairing high-tech supply chain solutions with the short-distance advantage of local food, they could make local food as affordable and convenient as industrial food.
How does the EB model's supply chain differ from traditional supply chains?
-The EB model's supply chain is a same-day, direct link from the grower to the customer, which reduces costs and allows the grower to receive a larger share of the retail value.
What has been the outcome of the EB model in terms of pricing and delivery?
-The EB model has been able to deliver products at prices on par with supermarket retail prices, and with the added benefit of delivery to the customer's doorstep.
How has the EB model impacted local growers and the community?
-The EB model has allowed local growers to earn more and has provided a viable business model that supports the local food community, reducing waste and improving the livelihood of small-scale producers.
What is the future vision for the EB model and the global food Renaissance?
-The future vision is to connect with local food leaders around the world to create a comprehensive grocery solution that makes local food the obvious choice for everyone, contributing to a global local food Renaissance.
Outlines
🏡 Success and Realization in the Food Business
In 2008, the narrator, living in a multi-million dollar home on Waiheke Island, reflects on his entrepreneurial success with his business partners, who were importing frozen pastries from Europe and selling them in Australian supermarkets. They achieved significant sales milestones, but a presentation at the World Food Forum in Rome made him realize the negative impact of large-scale industrial food on small-scale producers and communities. The 2008 financial crisis further highlighted the vulnerability of their business model. This led to the idea of using technology and supply chain solutions to support local food producers, which resulted in the creation of EB, an online farmers market aimed at making local food viable and competitive with industrial food.
🌱 The UBI Model: Revolutionizing Local Food Delivery
The UBI model, or online local food buyers club, is introduced as a way to make local food as affordable and convenient as industrial food. The model streamlines the supply chain by having growers pick to order and deliver directly to a hub, from where the food is packed and delivered to customers. This reduces supply chain costs significantly, allowing growers to receive a larger share of the retail value while customers pay no more than they would in a supermarket. The model has been successful, with over 25,000 boxes delivered in Auckland and expansion to Sydney. The business is also exploring collective ownership through the Food Commons model, ensuring it remains aligned with the interests of all participants. The ultimate goal is to connect with local food leaders globally to create a comprehensive solution that makes local food the obvious choice for everyone.
🌟 The Future of Local Food and Global Impact
The final paragraph emphasizes the positive impact of the local food movement on individuals, families, and the world. It suggests that by supporting local food systems, people can enjoy meals that are not only good for them but also contribute to a thriving global food Renaissance. The paragraph concludes with an optimistic call to action, encouraging people to embrace the joy of eating and drinking while also supporting a sustainable and local food future.
Mindmap
Keywords
💡Entrepreneurial hustling
💡Frozen pastries
💡Global food crisis
💡Supply chain
💡Local food
💡Supply chain costs
💡Retail value
💡EB (Online Farmers Market)
💡Food Commons model
💡Global food Renaissance
💡Sustainable food system
Highlights
Entrepreneur living the dream in a multi-million dollar home in 2008, reflecting on success in the food import business.
Achieved ten million dollars in sales and first million-dollar month after two years in business.
Attended the World Food Forum in Rome to explore business expansion opportunities.
Realized the negative impact of large-scale industrial food on small-scale family farms and communities.
Felt personally implicated in contributing to the global food crisis.
The 2008 global financial crisis led to significant business losses due to currency fluctuations.
Considered the importance of local food growers and producers during the financial crisis.
Conceived a new business model to revive local food by combining high-tech supply chain solutions with local food advantages.
Founded EB, an online farmers market aimed at making local food as affordable and convenient as industrial food.
EB operates as an online local food buyers club, delivering a variety of local products to customers' doorsteps.
The business model hypothesizes that local food can be made competitive by reducing supply chain costs.
Describes the traditional supply chain process and its inefficiencies.
Proposes a same-day supply chain that allows growers to receive half of the retail value.
EB has delivered over 25,000 boxes, proving the viability of the local food model.
Prices are on par with supermarket prices, making local food a competitive and convenient choice.
EB is expanding to new cities and adopting the Food Commons model for collective ownership and governance.
Aims to connect with local food leaders globally to create a comprehensive grocery solution promoting local food.
Emphasizes the joy of sharing meals made from trusted and connected local food as a key benefit of the local food movement.
Transcripts
it's 2008 I'm living the dream
standing in our multi-million dollar
home on Waiheke Island looking out over
the city's skyline
I put my arms around Kathryn and saved
my wife and say honey we finally made it
after years of entrepreneurial hustling
and scraping we finally hit the big time
my business partners and I were
importing frozen pastries from a
European multinational and selling them
through supermarkets around Australia we
just after two years we just cracked ten
million dollar sales and we just also
correct our first million dollar month
life was good and there was plenty of
blue sky ahead sitting one morning
sipping my latte reading the local paper
I saw an ad for a presentation about the
world food forum that had just been
convened in Rome I thought I'm in food I
might meet some money and they expand
our business into New Zealand I'll go
along what hadn't occurred to me was
that the world food forum was actually a
gathering of delegates from governments
all around the world to address the
global food crisis that we were in the
grip of so and what I learned was that
large-scale mega scale industrial type
food was forcing small-scale family
farms and artisan food producers out of
the market which was in turn tearing
apart the fabric of the communities in
their areas of those business were and I
was part of the problem and sitting in
that room I felt I felt like a fox among
hounds I didn't I didn't know what to do
so
but I went home and I'm like but what
what am I gonna do like what am I meant
to do I've only a living here I'm you
know I've got a family to feed I've got
a big rent to pay I can't what would you
do and then something happened
unexpected that made it crystal clear
the 2008 global financial crisis hit
boom
the Australian dollar plummets against
the euro and we're paying in Euros
so our business goes from making great
profits to making terrible losses
overnight and the more sales we make the
more money we lose we call an emergency
board meeting and one of the options put
on the table is look let's just stop
trading until things even out a bit so
we can renegotiate us our prices with
our supermarkets and the like and in
that moment I thought wow I we're only
one of hundreds of food importers around
the country and I bet they're all having
the same meeting about the same time and
I wonder if they're putting that option
on their table and I wonder what the
supermarket shelves would look like
after just a few weeks if all the
businesses like us would just say just
stop that for a little while that food
coming in and in that moment it became
blindingly obvious how vital our local
food growers and local food producers
are and then I had an idea ah what if we
could take the smarts the technology and
all the complex all the systems to solve
the complex long-distance supply chain
and pair that with the short distance
advantage of local food maybe we could
cut enough fat out of the supply chain
to make local food viable again so with
the bunch of awesome people a lot of
awesome people
we started EB which is a completely new
kind of business model designed to
revive local food look there's more
people who have helped out
and the names up there but it certainly
is a great effort team effort
ubi is basically like an online farmers
market it's probably the easiest way to
explain it or online local food buyers
club you can buy from a variety of local
vendors growers and artists and
producers and local commercial food
producers as well and have them all
delivered on to your doorstep you know
in a single box the hypothesis for the
business model was that by pairing the
high-tech supply chain solution with a
short distance advantage of local food
we could make local food as affordable
and convenient as industrial food and
plus with the trend away from the going
the shopping experience of going into
store and buying your food and more and
more back to the old-fashioned way of
having your food delivered to your
doorstep because local food doesn't have
all the retail infrastructure all this
rent and everything to pay it might
actually be far enough behind to be
ahead so here's how it would work the
you've got your food on on ubi org the
growers basically picked to order then
deliver the food to the Ruby hub and
then it's packed and delivered to your
door all in one fluid motion okay and
the secret source of the EB model
basically comes down to the supply chain
so a traditional supply chain you the
grower grows of food then sells it and
transports it to the wholesale the
wholesaler then holds on to the food
until it sells and transports it to the
retailer the retailer that holds on to
the food until you transport yourself to
the retailer I pick the food up and
transport the food back home in that
scenario around 70% of the value of the
food is actually supply chain cost and
the growers getting about a third if
it's if it's as fresh food the Groves
getting about a third of the value which
is only really just enough to scrape by
international supply chains on the other
hand are more like five or more links
where over 80% of the value of the food
is actually supply chain costs and the
original grower or producer is getting
less than one-fifth of the retail value
and only large operations can really
afford those margins whereas with the
same day to link supply chain that we
were thinking about the grower would be
able to get half of the retail value and
the customer wouldn't have to pay any
more than they'd normally pay because we
could pretty much cut out up to 30% of
the cost of the supply chain so
everyone's better off so great theory
but would it actually work well like the
grazing entrepreneurs we are we just
jumped in and started doing it we've now
delivered over 25 thousand boxes to over
$1400 steps around Auckland and we've
got a prototype that we feel works it
does work and in the last 18 months
we've been tracking our prices and on
par we've been on par with the
supermarket End and retail prices their
in-store sticker prices and our prices I
delivered to your door so when you take
into account that the products deliver
to your door you're actually making a
bit of a saving and everyone's getting
paid above market rates we do sometimes
supplement our boxes from the markets
when it suits our growers but we always
buy directors often as possible and it's
great for our growers Bill and Marilyn
had been trying to keep their business
alive for a long time and the roadside
stall was great but it really didn't
scratch a surface going to the farmers
market is really good and it meant
losing their weekends and if they didn't
sell enough food they had a lot of waste
leftover cafes buy little buyers coops
organic shops great but after running
around really not worth the while and it
also works for our distribution team on
only three as little as 300 customers on
a space of a garage or shipping
container this is a very viable business
where everyone gets paid a good good
rate for their work today this is our
customer spread around Auckland and
we've just delivered our first box in
Sydney and we're adopting
we're looking at new cities around
around the world at the moment we're
with Ruby we're adopting the food
Commons model which is an ownership and
governance model that is collectively
owned by the participants that are
involved including customers growers all
sorts of different participants so
there's no fear of this being taken off
on some private agenda we are playing
movies displaying a very small part in a
global food Renaissance that's happening
around the world right now a local food
Renaissance it's happening around the
world right now our job is to connect in
with all of the local food leaders
around the world and work together to
piece together a grocery full
comprehensive grocery solution that
makes local food the obvious choice for
everyone but a thing that's best about
this is that the solution is actually
something we all love to do anyway and
that is sit around a table without loved
ones and the people we care about
sharing a meal made from food that we
can trust and connect with so it's good
for you it's good for your family it's
good for the world so let's eat drink
and be merry for tomorrow we thrive
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