Farmer-to-Consumer Direct Supply Chain – The Role of Logistics Technology

Farmer-to-Consumer Direct Supply Chain

From farm to fork, the agri-foods supply chain is typically a long journey with multiple touchpoints. Once harvested in a farmer’s barn, the produce is first sent to primary processors, who clean, cut, package, and sort the crops into appropriate sizes for sale. 

From the processor, it then moves to wholesalers who distribute the produce to retail stores or fresh foods markets in cities and towns. From the market/retail outlet, it finally reaches the customer for consumption. 

Did you know? On average, food travels around 1,500 miles from the farm to a consumer in the US. 

While the agri-foods supply chain is quite complicated in itself, there are also a set of common challenges faced by farmers and growers throughout the supply chain journey.

Challenges in Farm Foods Supply Chain

High operating costs

Due to the presence of a number of intermediaries, the overall cost of operation in the fresh foods supply chain tends to be quite high. According to data gathered by the USDA Economic Research Service, for every $1 spent on food by US consumers, 7.8 cents goes into farm production, while  17.3 cents of the food dollar go into the “processor” step and  12.6 cents of the food dollar go into the “distributor” step of the fresh produce supply chain. 

Perishable nature of farm foods

The very nature of fresh foods is perishable, and that is the biggest challenge in the farm foods supply chain. Except for cereals and pulses, which usually have a longer shelf-life, the majority of the other farm produce is perishable consisting of fresh fruits, vegetables, milk, and dairy products. 

It is, therefore, essential to maintain the quality and freshness of the produce right from the time it is harvested, till it reaches the end customer. It includes storing and transporting them at the right levels of temperature and humidity levels throughout the supply chain.

Last-mile bottlenecks

The farm foods supply chain is highly time-sensitive. The produce must reach the customer in its best shape, without any damage in quality. Transportation plays a crucial role in the distribution of farm foods to consumers, especially perishable produce. A lack of proper transportation infrastructure such as cold storage or refrigerated trucks often hampers the quality and freshness of the produce.

Also, ineffective dispatch and delivery planning leads to underutilization of the delivery fleet and extra miles driven. Lack of supply chain visibility is also one of the biggest logistical challenges in farm foods distribution.

Farmer to Consumer: D2C is the future of farm foods supply chain 

The COVID-19 pandemic has only added more complexities. With retail stores, supermarkets and fresh food markets closed down for uncertain periods, farmers and poultry dealers have had to let go of traditional selling methods and rethink business models to reach their customers, while ensuring cost efficiency and high-speed last-mile deliveries.

A number of farmers have embraced digital selling options such as listing their business on online platforms and opening up their own web stores for customers. Farmigo, FreshDirect, Good Eggs Inc., and Crop Dots are some online farmers’ marketplaces that are working towards connecting consumers and community centers directly to local farms and building a sustainable farm foods supply chain in the United States.

As in several other industries, such as retail and consumer goods, direct to consumer selling is gaining popularity in the farm foods supply chain too. The D2C model allows farmers to skip middlemen such as processors, wholesalers, and retailers and directly sell their fresh produce to customers. 

Raw Generation Produce Box, Misfits Market, The Chef’s Garden,, and Imperfect Foods are some of the top farm-to-fork D2C brands in the United States, that offer a range of hand-picked farm produce including cereals, fresh fruit and veg, and cured meat and poultry products to consumers at the doorstep. 

Some businesses are going a step further, allowing customers to create custom subscription boxes of fresh organic foods, delivering them on a weekly, bi-weekly, or monthly basis. 

Optimizing the Farmer-to-Consumer Direct Sales with Logistics Tech

While going direct to consumers is a solid way to reduce operating costs and middlemen interference in farm foods distribution, adopting Artificial Intelligence and logistics tech can optimize every leg in the supply chain. 

Route planning and optimization solutions can help in planning day-to-day dispatch activities from farms to customer locations, automating manual planning processes, and bringing more accuracy. 

Route optimization also helps in selecting the shortest, most optimal, and cost-effective routes to deliver farm produce to customers, reducing fuel costs, and improving delivery efficiencies significantly. 

Last-mile visibility tools allow businesses to track the movement of goods through the supply chain, right from the time it is packaged and dispatched till the time it reaches the customer’s doorstep. Farmers can also share real-time status notifications with their customers, thereby building a sense of trust and transparency.

Direct to consumer selling may be a rising trend, but it is gradually shaping up the future of the farm foods supply chain, reducing the time and distance between farm to fork, as well as connecting farmers directly with customers. 

Whether you’re just beginning your farm-to-consumer journey, or delivering farm produce directly to customers already, logistics tech will play a crucial role in fulfilling dynamic customer demands, improving last-mile efficiencies, and setting your farm foods delivery business apart from competitors. 

Locus helps enterprises optimize last-mile delivery operations with AI-enabled logistics tech. Get in touch with our experts for a free demo or a quick tour of our services.

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