Market District as our CSA member?
An amazing thing happened this year. Giant Eagle Market District in Waterworks subscribed to our CSA. This pilot is a bold statement about our hometown grocer making an investment in our farm. Our economic risk and stress levels go down as the number of shares we sell increases. Ideally, the CSA subscriptions would pay for our cost of operations for the whole year, allowing us to make profits on farmers markets and supplying Penns Corner which are critical to expanding the farm operations and acquiring new tools and training. That said, when we have lean years, the markets don’t get priority, our CSA members do!
As a large and efficient food retailer, Giant Eagle is making this risky investment along side all of our subscribers! With all the rain we have been getting, it’s uncertain what kinds of crops are going to make it through till fall… yet Giant Eagle is taking on some of the risk with all of us. It makes us feel proud to be from Pittsburgh, where our locally owned grocery store won’t settle for simply purchasing wholesale from the local farmers. Wholesale, while the dominant method for selling produce for most farmers, simply doesn’t provide the ‘risk management’ because the farmers don’t get paid if the crop fails.
CSA on the other hand is a commitment to pay for the service of producing food… and this preseason payment ensures that the farm will continue to operate year after year. It is a risk management plan that a farmer can rely on because the subscriptions are paid regardless of the harvest. Our responsibility as farmers is to ensure that everyone gets an abundance of crops, all on an equal level. We also strive tp provide the food in a way that inspires community interaction, in the barn, in the fields, around the table.
At the grocery level, this type of investment is extremely unique. Marty’s Market in the Strip District was the first grocer to pilot this model for one year with us in 2013. With one store front, and a small and flexible staff, they were able to make it work. Giant Eagle is a bit of a different phenomenon. The accounting departments in large companies are known, encouraged, and even required to knit-pick every transaction, ensuring that money isn’t spent frivolously and that a known quantity of inventory is received and “accounted” for in the ledgers.
A subscription to sellable inventory simply isn’t done. We cannot predict what will be harvested, when it will ripen or how many weeks we will have it… a situation that would ordinarily drive accountants crazy! However, because we strive to provide a weekly share value of the distributions which exceeds the average weekly subscription cost, our produce goes to our subscribers typically below wholesale value.
The theory we are testing is whether Giant Eagle can make profits on the produce being sold out of the shares we are delivering. We have our fingers crossed that all goes well with this pilot. If it does, our regional produce sections could wind up containing an abundance of local farm products from regional farms within the next few years.