Agriculture and the food industry are quickly entering the era of platform economics. The rapid development of digital interfaces is not exclusively a matter of matching supply and demand. Collaborative platforms have emerged alongside marketplaces, some dedicated to finance, others to exchanging services. Professionals are reinventing and rediscovering older forms of solidarity. Finally, private individuals are also getting in to the game, radically overhauling everyday practices and rewriting codes.
Agricultural produce and food, as well as equipment or supplies, are available on many platforms. In France, Le Bon coin sells second-hand equipment. In some US cities, Amazon Fresh allows customers to do grocery shopping online. Airbnb offers farm holidays, while crowdfunding platforms such as Kisskissbankbank provide funding for agricultural projects.
But there are also specific platforms for agriculture and food. They can be divided into five major categories.
To start with, platforms are coming into being as “marketplaces”, or virtual meeting places, that match the supply and demand of goods and services by bringing together users and professional suppliers.
Initially, these marketplaces specialized in agricultural equipment and inputs. The Agriconomie platform, for instance, is a meeting place for distributors (retailers and wholesalers) and farmers in the market for inputs (seeds, fertilizers and pesticides), spare parts or small farming equipment. The “open” interface allows any company acting in a professional capacity to sell products on the website. It bypasses conventional circuits by replacing both newspaper classifieds and advertisements in specialized media.
Digital technology allows these platforms to target the global market…while still being rooted in the local (national) economy. A global leader in agricultural equipment, Agriaffaires is an open platform that was established in 2000 and specializes in the wholesale distribution of agricultural equipment (cars, trucks, tractors, combine harvesters, etc.). Both new and used products are offered for sale or lease by dealers/distributors, traders, manufacturers, and also farmers. The site is owned by MB Diffusion Group, which has created versions in over 25 countries, including the USA, Germany and Great Britain.
These marketplaces do not only involve intermediate consumption, but also – and this is a novelty – agricultural production. Hence, they replace wholesale markets. For instance, Biagri, an electronic marketplace created in early 2016, aims at “bringing together professional suppliers and buyers of agricultural products in order to conclude sales transactions.” Farmers advertise their products on the platform by indicating product specifications (including quality and place of production), available quantity and possible delivery dates. The seller may opt for a fixed minimum price or a tender (in the latter case, the seller allows the buyer to submit an offer). A buyer (trader, broker, cooperative, farmer, etc.) can respond to the ad or make a purchase announcement by specifying their requirements in terms of quantity and delivery dates. The platform serves as an exchange for feed, grain, fertilizer, fodder and straw, oilseeds, and potatoes, among other products. Payments are made by bank transfer after delivery. But the usefulness of these platforms is not limited to bringing together buyers and sellers. They also offer management services for contracts and invoices, in order to simplify administrative procedures. Furthermore, an independent lab analyzes and controls the products for sale.
This type of platform is also wide-spread in Africa. Examples include M-luma in Senegal and M-Farm in Kenya. However, poor knowledge of digital technologies and limited access to the Internet (despite the rapid development, especially in Kenya, of an economy based on the mobile phone network ) have hampered the development of such platforms among African farmers. On M-luma, producers can promote their offerings by phone via a call center. M-luma then publishes the ad on their site. The products are mainly fruits (banana, lemon, papaya), vegetables (eggplant, carrots, celery, cabbage, cauliflower, green beans, potatoes, etc.), rice and millet.
Trade and sharing
Collaborative sites, whether commercial or not, form a second category of platform, which puts the emphasis on sharing and exchange and in which both users and providers are professionals.
WeFarmUp, a platform for the “sharing of equipment” among farmers, is the latest example in the world of agriculture. Farmers rent out some of their equipment via the site, in order to obtain a source of income. Other farmers lease the equipment, in order to meet a specific need or to test a machine before purchasing it. According to one of its founders, Jean-Paul Hébrard, the aim of this platform is to help solve two major problems facing farmers: namely, massive debt and irregular income. John-Paul Hébrard wants to create communities of farmers to obviate the need for farmers to go further into debt and to provide them access to high-performance equipment, while also providing a source of complementary income. In the US, MachineryLink solutions by Farmlink offers a similar platform. It works on the same principle, but on MachineryLink solutions farmers renting out equipment can also offer their services.
Collaborative platforms promoting local production and combatting waste have also emerged in the food industry. In compliance with the public procurement code, the French platform Agrilocal tries to bring together local suppliers and “public buyers that need mass catering services” (secondary schools, retirement homes, hospitals, etc.). A buyer starts by expressing their needs. The information is then transmitted via the platform to local suppliers who may or may not respond. The buyer then chooses among the different propositions and places the order. The Agrilocal platform is available in approximately twenty French departments. The Loc’Halles Burgundy platform has a similar goal.
The Californian Copia platform aims, in turn, to connect companies that have a food surplus, such as restaurants, with people in need, in order to fight against food waste and assist the needy. The companies order a vehicle that collects leftover food and brings it to a food bank or a homeless shelter. The Food Neighbourly platform in Britain or Foodsharing in Germany work according to the same principle.
Professionals and private individuals
There is also another type of collaborative platform that brings together users who are private individuals and professional suppliers. Transactions mostly involve the provision of food by producers in such a way as to favor so-called “short supply chains” (circuits courts).
The best known example in France is La Ruche qui dit oui. Created in 2011, this platform links producers and consumers for the purpose of selling/buying foodstuffs (fruits, vegetables, bread, cheese, meat, etc.) produced within 150 miles of the point of distribution. As of today, it comprises some 4000 suppliers and over 100,000 regular users. The open platform allows any producer to sign up as long as the producer meets a number of agricultural production standards (environmentally-responsible agriculture vs. industrial agriculture). Its specificity consists, on the one hand, in the “hive” – a point of distribution close to consumers’ homes, where they can pick up their orders and even meet producers – and, on the other, in the “hive manager,” whether a private individual, an association or a business. Producers determine the selling price of their products themselves and pay a 16.7% commission on sales as compensation for the platform and the hive manager. Other French platforms that follow the same model include Locavor, Marchands de 4 saisons or even Label fourmi.
Some such platforms allow customers to order food directly from producers and retrieve it in a locker inside a store (Au bout du champ) or to contact farmers directly in order to purchase their products. Others even organize visits, meals and leisure activities on the farms themselves (Bienvenue à la ferme).
Crowdfunding platforms are also interested in the agricultural sector and the food industry. In this case, providers are private individuals, consumers or professionals.
Miimosa is “a place for exchange, sharing and solidarity between a community of contributors and project leaders” in the fields of agriculture and food (with a focus on local products). The platform provides a link between “project leaders” and “contributors” who are private individuals. The former present their project to the site and specify the amount of funding they need to carry it out. The latter fund the projects through donations in accordance with their means and wishes. They do, however, receive a sort of in-kind compensation (product, meal or weekend). The platform is financed in the form of a commission of 8 to 12 % on the required amount.
The Blue Bees platform presents several distinctive features as compared to Mimosa. It finances environmentally-friendly projects in the agro-food industry (especially organic farming projects), including abroad. It also provides funding in the form of loans. Finally, it involves “local actors” (design office, associations, NGOs, fair trade companies, etc.) who “identify and structure projects and support their implementation.”
Peer-to-peer: private individuals come into play
This last type of platform only involves private individuals, who, according to a peer-to-peer logic, figure as both suppliers and users. These exchanges, whether commercial or not, concern mainly catering and gastronomy and involve private individuals eating together or sharing prepared meals or even food products.
VizEat is a collaborative platform for sharing meals (aka food-surfing). It aims at connecting tourists and hosts who wish to have them over for a meal at their homes. The guest reserves and pays for the meal on the online platform. The “services” are remunerated at a price that is freely set by the supplier: it includes the cost of food and hospitality. The platform is a place for exchange and sharing. The website claims that “VizEat meals are similar…to eating with friends rather than a commercial activity.” Hosts cannot “use this activity as a trade.” Hence, the hosting must only be done occasionally and on a non-professional basis. The site takes a 15% commission on the price set for the user. VizEat is present in over 60 countries. Other platforms based on the same principle include VoulezVousDiner and BonAppetour in France, as well as Feastly, Bookalokal and EatWith internationally.
Some platforms link providers with users for sharing prepared meals (Kelplat.com, Comuneat, Mon Voisin Cuisine, Munchery) or even leftovers (Supermarmite). On the Kelplat platform, for example, the client reserves his prepared meal and pays online. They can then visit the chef, pick up the meal elsewhere or have it delivered at home.
Sharing also extends to food products via food barter platforms for exchanging fruits, vegetables, fish, meat, eggs, mushrooms, seeds, plants, honey, pasta, and spices. There are many examples in North America, such as LA Food Swap in Los Angeles and Chicago Food Swap in Chicago. As part of the LA Food Swap, the community organizes various “events,” during which its members, who previously registered on the platform, barter homemade or homegrown products.
From tractors to organic honey, the economics of platforms is emerging as an accelerator that is also considerably simplifying trade in the fields of agriculture and food. But it also acts as a disruptor: farmers evolve into providers of services (from agricultural work to the accommodation of tourists). Conversely, private individuals become farmers. Nothing new? Not quite: Due to their visibility and advertising, exchanges are integrated into the formal economy, thus opening opportunities for all kind of experiments. The vigor and speed of dissemination of these innovations is hardly a surprise: Were not farmers the first inventors of trade, during the Neolithic period? For the last two and a half centuries, agricultural and food products have been a discreet, but crucial part of all major economic developments, from the industrial revolution to the revolution in services and mass consumption.
More on paristech review
On the topic
By the author
- Synthetic biology: what industrial prospects?on September 6th, 2016
- Government as a platform, or how open innovation can help modernize public administrationon June 24th, 2016
- Sustainable mobility: carmakers pick up speedon April 26th, 2016