Supply Chain Example: 100km Foods Inc.Posted: October 24, 2016
100km Foods is an interesting supply chain-related business story. It is a Toronto-area start-up that has grown considerably over the past 8 years.
Though the 100-mile diet movement keeps growing, it remains challenging for small producers to stock the pantries of restaurant kitchens and keep on top of planting and harvesting. Similarly, chefs who routinely put in 12-hour days hardly have time to drive from farm to farm to shop for everything from strawberries to Swiss chard.
“Farming is already a really complex business to be in,” Mr. Preston explains. “You have to do a lot of different things well: you have to be able to grow, you have to be able to market, you have to be able to sell. There’s a lot involved in it, and distribution for us is just one too many things.”
One company that bridges the gap between farmers and chefs is 100km Foods Inc., a distribution channel connecting the farm to the fork.
Paul Sawtell and Grace Mandarano launched their Toronto-based local food-distribution business in 2008 after having a “crisis of conscience.” After working in pharmaceutical sales and backpacking their way through Asia, they returned home with a wish to do something more meaningful.
“Chefs were saying they wanted to buy from local farmers but didn’t have time to walk down the street to a farmers’ market let alone go to a farm,” Mr. Sawtell says. “Farmers wanted to sell to chefs but were not interested and often not able to drive door-to-door, going to different restaurants dropping off one thing to each place. Grace and I looked at each other and had that cliché lightbulb moment.”
Their company now sells, markets and distributes products, including eggs and dairy, from 80 small and medium-sized Ontario farms to more than 300 restaurants, hotels, independent retailers and institutions throughout Greater Toronto and the Georgian Bay areas. In 2009, it earned an Ontario Premier’s Award for Agri-Food Innovation for creating a new distribution model that provides access to new markets for such farms.
The farmers set their own prices, while Mr. Sawtell and Ms. Mandarano play the vital role of middlemen.
The two buy products from farmers, assume ownership, mark them up, and sell to their customers. Their company is profitable: In 2008, it had a single truck and revenue of $243,000. This year, it is projecting revenue of $5-million. It employs 25 people, has 10 trucks and occupies a 8,200-square-foot warehouse facility.
“In February 2014, we accepted an equity investment from InvestEco and their Sustainable Food Fund,” Mr. Sawtell says. “100km Foods has been growing 30 to 40 per cent year over year since its inception.”
Despite the challenges involved, entrepreneurs seeking new opportunities may be encouraged by industry members’ unshakeable faith in the farm-to-fork philosophy.
“I don’t know any chef who opens a new restaurant saying ‘I’m going to focus on imports,’” says 100km Food’s Ms. Mandarano. “Local food has never been a fad in Europe; it’s just what they do. When you authentically care about local food, there’s no fear of it going away. The movement is about going back to basics.”