AgLocal, the Andreessen Horowitz-backed marketplace that connects farmers to meat buyers and distributors, is now launching in New York City with 20 celebrity, top-rated and otherwise widely known chefs on board. Currently in a private testing period, AgLocal introduces technology into an ordering system that, to date, has largely operated offline through phone calls, faxes and, yes, sometimes even Post-It notes.
It’s an industry ripe for disruption via technology, and though today’s focus is on connecting animal farmers to buyers, the platform itself has the potential to grow beyond that in the months and years ahead. The company raised its first million in venture funding before they had even recruited a full team to build the initial product, in fact, because of this potential, AgLocal CEO Naithan Jones tells us.
The system, an online marketplace for buyers, sellers and distributors, allows local farmers to set up LinkedIn-like profiles describing themselves, their farm, how their animals are raised, what they eat and more. It’s the kind of information that top chefs want to know when selecting the ingredients for their carefully crafted dishes. Some restaurants even put these kinds of details on the menu – noting that it’s “grass-fed beef” or “organic” or that the meat is purchased at a nearby, sustainable farm, for instance.
AgLocal’s system not only allows chefs access to this marketplace where they can search and sort through the various farms and cuts of meat offered, even more importantly, it gives them a new, more efficient way to have their orders fulfilled. Traditionally, these chefs’ orders are placed through late-night voicemails, emails, faxes or phone calls. “There’s a lot of mistakes that can happen,” explains AgLocal co-founder and CTO Mike Hsieh of the current methods. “There’s a lot of order inaccuracies when someone wakes up and checks their voicemail at 5:30 in the morning. It’s like, ‘I think he said 10 t-bone steaks. I’ll just write that down,’” Hsieh says.
The company’s first meat distributor partner, serving AgLocal’s top-rated restaurant customers in New York, is Pat LaFrieda Meat Purveyors – an $80 million operation that has yet to be automated. “They run their business on paper,” Jones remarks. “It’s complete chaos, and a perfect case for software. It’s voicemails, it’s a few emails, it’s sticky pads of notes and spreadsheets. They’ve got people calling farms to see what product they have on hand and matching that manually to restaurants via the phone.”
Now with AgLocal, the distributor has an online inventory management system, and a way to receive and fill the orders coming in from the chefs. The restaurants use the e-commerce side of AgLocal’s system to shop the cuts of meat and place items in a cart – a system that’s not all that different from buying an item on Amazon, except that they don’t pay at checkout. The meat is first cut and weighed to determine pricing. AgLocal takes a 4 percent transaction fee from the farmers, and again when the chefs order from the distributors.
Invoicing is also managed through the AgLocal platform, so instead of writing checks, AgLocal has integrated the new payments infrastructure from a Midwestern startup called Dwolla, a platform that enables bank-to-bank transfers in realtime. Though the startup now has people in New York and the San Francisco Bay Area, we should note that it too was a Midwestern company; AgLocal got off the ground in Kansas City – a perfect example of a startup that took inspiration from a local industry, then leveraged technology to change it.
Jones himself grew up in a family of chefs and farmers and knew first-hand of challenges that face independent farmers today. “For us, the mission is to make sure these farms are more sustainable, that we’re actually creating more farms, and helping the farms that do exist not to go out of business,” he says.
He explains that so many animal farmers today are land rich but product poor. They have the capacity to scale up two, three or even four times, but don’t because it means more work and the margins aren’t very good, or they have to turn to mechanized farming techniques to really grow. So these farmers just sell off animals at half their weight and maturity to keep operations small. “But they could start doing full weight on pasture if they had spoken-for demand that had good margins in it,” Jones tells us. “Here’s where the transparency and efficiency of software comes in – because we’re delivering that to them,” he adds.
Technically speaking, Jones says AgLocal’s system could also scale up today very quickly by adding more distributors. But the company knew that it was important to first get some of the best chefs in the country on board, as they actually move the culture in their industry. That’s one reason why the early launch is limited to a “who’s who” lineup of celebrity chefs, Iron Chefs, Top Chef (TV show) winners, and Michelin-starred chefs.
The current chef list includes:
- Harold Dieterle: Top Chef winner; The Marrow
- Harold Moore: Commerce
- Wolfgang Ban: Seasonal
- Kevin Lasko: Park Avenue
- Josh Capon: Burger & Barrel; 3 time burger bash winner NYC
- Brad Farmerie: Public
- Seamus Mullin: Tertulia
- Eddie Huang: Baohaus; YouTube show- Fresh Off The Boat; NYT best seller book out right now “Fresh Off The Boat;” Recent speaker at TED
- Phil Conlon: Swine
- David Mawhinney: Haven’s kitchen
- Sarah Simmions: City Grit
- John Moody: Bell, Book and Candle; Grows vegetables on a roof garden above the restaurant in NYC, using Hydroponics.
There are others, too, but those are the names which can be disclosed right now. For the company’s upcoming expansion to San Francisco, Michael Min and Dominique Crenn are already committed.
“What we’re going to get out of this is a software platform that the entire natural food industry relies on down the road,” says Jones. “Once we solve meat, it’s going to be very easy to add on byproducts, and add on more distributors…it will become a full-on suite for the entire market.”
The company will be raising another round soon to start making that happen.
Article courtesy of TechCrunch