Social Business-Run Multi-farm CSAsocial business chart

Case Study - Food Connect

Food Connect was started in 2005 by Robert Pekin, a small group of farmers and some dedicated Mums from Brisbane who were keen to see a fairer model of food distribution in their own community. Robert had previously lost his 300 cow dairy farm to the prevailing pressures imposed on many family farmers and was left farm-less, home-less and dangerous. Over the next seven years Robert became an Agrarian Journeyman exploring all the possible solutions that could, maybe someday, end the terrible inequity in the Food System globally and nationally.

By the time Robert arrived in Brisbane he had established or assisted nine enterprises based on the Community Supported Agriculture (CSA) model and researched the most successful adoption of the principles from around the world. The time had come to put down a model based on this learning in a larger city. From a leased warehouse Food Connect established itself with no loans and no savings, purely from the forward subscriptions of the dedicated subscribers and supporters of this new model of doing food ethically, equitably and efficiently. The forward payment subscription model (6 weeks minimum) and the unique community distribution (known as the City Cousin network) that Food Connect has pioneered is the reason why the model has such powerful meaning in the community.

In 2009, Food Connect Brisbane was awarded the ClimateSmart Leadership Award by the Queensland Government and the People's Choice Award by the Banksia Foundation. Food Connect Brisbane currently supplies an average of 900 boxes a week to Brisbane households and the growth over the past 5 years is reflected in the growth of operating results from 2008 to 2011 shown in the table below:

Year 2008
($000's)
2009
($000's)
2010
($000's)
2011
($000's)
Revenue $1,315 $2,091 $2,193 $2,632
Cost of Goods Sold $664 $1,149 $1,092 $1,264
Gross Profit % $51.1% 46.7% 52.2% 52%
Expenses $639 $970 $1,088 $1,326
Operating Surplus (Deficit) $1 ($28) $13 $42

 

Legal Structure

Food Connect is a Not for Profit Company Limited by Shares (the first of its type in Australia). Food Connects constitution was completely re-written to reflect those aspects of a Not for Profit considered important to a social business working with farmers and selling food.

NOTE; This type of legal structure (commonly known as CIC - Community Interest Company- is not supported by the Australian Corporations Act however moves are afoot to replicate the great work from the UK regarding supporting legal structures like this. The B Corp model of business structure and reporting framework (see http://www.bcorporation.net/) is also a good reference for this type of exciting business.

Business Overview

Food Connect is a non-profit CSA project operating in the Brisbane region. Food Connect operates on the basic CSA principles, however, it aims to extend the range of environmental and social benefits as below. Indeed, one of the difficulties in studying the Food Connect model is the lack of a single comprehensive business plan or statement of intentions. Therefore the following list of social and environmental intentions has been drawn from the website, from internal documents provided by Food Connect for this study, and through conversations with coordinators and staff:

Social goals

Environmental goals

Social and environmental goals


Summarily, the core business of Food Connect is a complex weave of social, philosophical and environmental principles and objectives that are supported by subscription to a food delivery service. As demonstrated by Figure 1, the intention of Food Connect is to unite the four major stakeholder groups in a way not conceivable in conventional markets. The roles of the main stakeholders are outlined below.

Farmers

Besides the obvious role of growing and providing the food for delivery to subscribers, farmers have other responsibilities within the Food Connect model. All participating farms are required to operate on environmental principles that are prescribed by Food Connect coordinators. Farmers are also encouraged to participate in educational practices, such as opening their farms to tours, and sharing knowledge with other members of the Food Connect community. In addition, farmers are encouraged to form bioregional associations.

Homestead (Administrative & Operational Centre)

The "Homestead" is the operational and administrative centre of Food Connect, and has two main functions; the organisation, receipt, packing and delivery of produce to the City Cousins, and administration of Food Connect operations as a whole. As listed above, the business has multiple ambitions, many of which are considerable in terms of their administrative requirements.

City Cousins

The role of the City Cousins is to receive the produce each week from Food Connect deliverers, so that subscribers can pick up their boxes from them. A 'Community Animator' has also been engaged to work with the City Cousins in order to build their capacity as local leaders, helping them to strengthen local communities to deal with the impacts of climate change. Ideally, the City Cousin role would provide a link to the farmers and administrative centre for subscribers.

Subscribers

Customers pay an up-front subscription to Food Connect in order to receive weekly boxes of fresh produce. Subscribers pick these up from City Cousins, and are encouraged to form relationships within their City Cousin community. In addition, subscribers are offered opportunities to become further involved with the Food Connect community via farm tours, visits to the Homestead and by supporting and/or participating in the many relevant events promoted by Food Connect.

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