Farmers To You finds silver lining in tumultuous years of pandemic

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Farmers To You finds silver lining in tumultuous years of pandemic

Sun, 04/24/2022 - 5:35pm -- tim

Farmers to You employees pack food in the company’s Middlesex headquarters. Farmers To You connects farmers and food producers in Vermont to customers in the Boston area. Photos by Erica Houskeeper.

by Janice St Onge, Vermont Flexible Capital Fund “Our mission hasn’t changed,” said Greg Georgaklis, founder of Farmers To You, “but the world has.”

Launched in 2009, Farmers To You connects farmers and food producers in Vermont to customers in the Boston area. Similar to a CSA, the platform allows people to buy groceries directly from farmers and small food producers in Vermont, but differs in that customers can order items a-la-carte and pause deliveries as needed.

The mission back in 2009 was to create a regional food system—something in between hyper-local and large-scale industrial—that would allow families and farmers to feed and support each other.

Greg Georgaklis, founder of Farmers to You, founded the company in 2009. The mission was to create a regional food system—something in between hyper-local and large-scale industrial—that would allow families and farmers to feed and support each other.

“That hasn’t changed,” said Georgaklis, “but the past few years have been a wild ride.”

When COVID-19 hit in the spring of 2020, sales at Farmers To You more than doubled in a four week period. “We went from feeding 800 families a week to feeding 1,200 families a week, and the average order size went way up,” said Georgaklis.

At the same time, local farmers and producers were looking at a season without farmers markets or their usual orders from restaurants. “There was panic on both sides,” said Georgaklis. “We had producers calling us in despair saying that eighty percent of their business had disappeared. On the other hand, we had more demand than ever before.”

Farmers To You Stepped Up

Georgaklis doubled his staff to keep orders flowing. He started promoting producers like Valicenti Pasta Farm, who were especially reliant on farmers markets, and worked with Red Hen Bakery to add quiches, soups and baked goods to the menu of offerings. “We were working ridiculous hours, but it was worth it,” he said. “Producers like Valicenti quadrupled their sales to us.”

As word spread, Farmers To You had to start putting new customers on a waiting list—which grew to over 4,000 in the early months of the pandemic. Based on the growth trajectory, the company made the decision to move to a larger facility where they could expand.

Farmers to You employees at work in the company’s facility in central Vermont. Similar to a CSA, the platform allows people to buy groceries directly from farmers and small food producers in Vermont, but differs in that customers can order items a-la-carte and pause deliveries as needed. 

This was the second expansion and move for the company. In 2013 the Vermont Flexible Capital Fund (“Flex Fund”) provided $305,000 of royalty financing (also known as revenue-based financing) to Farmers To You and brought in an additional $45,000 from patient impact investors to support the company’s first expansion from a barn in Georgaklis’ back yard to a facility in central Vermont. The funds also allowed Farmers To You to purchase additional equipment, add key staff, and streamline the website and ordering system. Georgaklis paid back the loan in full in 2020, just before the pandemic.

By the time the second move and expansion were complete, however, the lockdown was over and people were returning to supermarkets to do their shopping. “We started letting people off the waiting list and it was a big yawn,” said Georgaklis. He also noticed that some people who had joined at the start of the pandemic were canceling their subscription. “It was hard,” he said. “We worked so hard to expand capacity and then the demand was not there. We had to take a pause.”

The Silver Lining

Despite the drop in demand from its peak in spring 2020, Farmers To You maintained revenue from 2020 to 2021. They currently serve 2,000 families in the Boston area and have facilitated over $12.5 million in sales for regional farmers and food producers since 2010, $4.8 million of that in the past two years. More importantly, says Georgaklis, the pandemic proved that the model can scale, and quickly. “We doubled during the pandemic and we can double again without any issue,” he said.

“I’m excited that the model works,” he said. “We’ve had to make some adjustments, but we can be sustainable and there’s room for expansion. In the marketplace, the large scale industrial food system has shown its cracks and it’s only going to get worse because they’re not even trying to fix the problems. It gives me hope that we will have a reckoning—not overnight, but slowly over time.”

Georgaklis is also hopeful about a budding alliance between Farmers To You and other similar organizations around the country. “There are a bunch of us who started with local, slow money like we did with the Flex Fund,” he said. “People who are more concerned about their impact on the local landscape than turning big profits.”

The group is talking about how to form an alliance to help each other grow. Georgaklis invested heavily in the backend of his website, for example, and is willing to share that technology. “We already spent the money so let’s figure out how they can use the software and we can all improve together,” he said. “We’ve all been going it alone for a long time, and now it’s time to collaborate so we can scale in a way that’s consistent with the human element.”

In 2013, the Vermont Flexible Capital Fund provided $305,000 of royalty financing to Farmers To You and brought in an additional $45,000 from patient impact investors to support the company’s first expansion from a barn in Georgaklis’ back yard to a facility in central Vermont.

About the Flexible Capital Fund

The Flexible Capital Fund, L3C is a Community Development Financial Institution (CDFI) and impact investment fund that provides flexible risk capital in the form of subordinated debt, revenue based financing (also known as royalty financing) and alternative equity structures, to growth-stage companies in Vermont and the region’s food systems, forest products, and clean technology sectors.