Introduction
Ooooby is a fair-food business, started in New Zealand, with a mission to provide “Local food made easy and fair, everywhere”. The business operation is a unique combination of two worlds – the traditional local food grower-goodness ethic with a digital-born customer sales and service delivery operation. The addition of the word “everywhere” is the global growth mission – currently they operate in New Zealand, Australia, and US, with all sales operations driven from a single online ordering site.
The impulse: Rebuild the food system, restore the local grower community supplying quality produce direct to local consumers – easy and fair. But to do this at scale had to be conceived as an online supply system. This is the ethic that drove founder Pete Russell and co-founder James Samuel, to start a completely new way of connecting local food consumers with their local grower producers. Evolving over several years to become a still-fledgling global business, Ooooby has redefined the online business paradigm. What was previously thought of as a physical-only location-centered business, the growing, selling and delivering of local food, has become a fully online service.
How has this developed? There are a couple of operational drivers. They are simple in concept but very sophisticated, requiring a lean human resource effort, provided the operational framework is consistent. And that point speaks directly to the future growth opportunity for Ooooby, a topic we’ll refer to in the conclusion.
Early Days of the Ooooby Story
Ooooby founder Pete Russell, with many years experience in the food service and food provider business, attended a food system talk in 2009 by activist and politician Sue Kedgley, and that became the moment when Pete Russell realised he had to decide to be on the problem side or the solution side of the good-food-going-wrong story. Local growers are being squeezed out by the trend to bigness, returns are constantly squeezed, and quality and freshness become less important than profit and turnover.
The Ooooby system as it is now looks smart, rich in goodness and product depth, but the formation of Ooooby.org as a fully online ordering and supply service took some trial and error. It was an evolution of early ideas searching for the right way to build a scalable local food service.
First a forum website was established at www.ooooby.ning.com. It served as an online community for growers, consumers and networkers to connect and share stories.
Then the Waiheke Island retail experiment – taking the Farmers Market into a retail operation. Logistically, it was very hard and not scalable. Waiheke Isalnd is a gulf harbour island, a 25 minute ferry trip from central Auckland, and a haven for professionals, wine-growers and back-to-roots urban refugees alike.
A short-lived Waiheke Cafe stand concept was trialed for exchanging local produce – another iteration of the business model, finding the market need.
A move to include the Grey Lynn Farmers market – as an aggregator of other growers’ produce – spreading the reach as the farmers market movement got onto it’s roll around the country.
Another idea at the same time: a container hub, initially set up in Grey Lynn, and later moved to Mt Wellington – the first Ooooby hub was set up to be the distribution point for local produce. This variation of the hub-and-spoke model proved a turning point in a scalable repeatable operation. The container was the operations hub for collecting grower deliveries, and for packing orders to local buyers.
By 2014 Ooooby.org was well established as a local food ordering service, and now came the time to expand. The global move started with a hub operation in Sydney – as was always envisaged, build Ooooby as a replicable business operation. Funding the growth became a business strategy decision, and eventually the crowdfunding site PledgeMe was used in 2015 to raise a total of just under $NZ300,000.
The Human Side of the Vision and How That’s Embedded into Ooooby Culture
The core ethics of the local food movement – people growing food for local people, a direct connection and as close as possible to the village market day, where local growers went to market to join in with local buyers, shopping for what was fresh, seasonal and to enjoy the community get-together time – also became the foundation of Ooooby’s culture.
A look at Ooooby’s page about it’s people demonstrates its perspective on culture and the “people spirit.” As the page byline says it, “Ooooby relies on an excellent, hard-working and committed team of people.”
While many organisations have a similar page, what could be added as the differentiator is “motivated by the simple goal of providing the freshest local produce to their local community.”
The Ooooby goodness ethic is woven into their culture, and is distinctive in a fundamental sense – no matter how technically clever and operationally smart the business becomes, it retains the founding value that I have seen in every dealing – of good quality, local food, fair to growers and buyers, grown, sold and delivered by people who care.
Sustainability and Resilience
When you have communities that organise to provide for themselves through strong local connections, you have some business advantages: You have community resilience. You have growers committed long-term, and with a strong sustainability ethic, a counter to the maximise-yield-sacrifice-ecology ethic that is a big part of what’s wrong with the industrial approach to food production.
Other essentials to the Ooooby goodness culture:
- Grower communities and alliances
- the core of an Ooooby hub and the first ingredient to set in place so that a customer community can be developed with good supply
- business relationship based on the core value – a fair return, no supply chain margins, sell direct to the consumer for a guaranteed return
- Organisation and work culture
- keeping it lean, keeping the start-up ethic, the organisation is flat, collective and works as a team of like-minded individuals each with a specific role
- the only role that so far needs replicating – hub operations manager, to ensure the collect-and-pack process works, all orders are fulfilled, customer variances are followed up, and all on-time
Current Evolution – Operations, People/Organization, Business Model and Funding and Global Reach
Originally the idea used wireframe apps and had a high-tech impulse early, although the tech play wasn’t fully adopted, mostly from cash-flow constraints. As the operational reach has evolved from early experiments with a scalable local food supply service, we can compare it with the Institute’s Digital Enterprise Model to see what aligns or differs, and look for growth markers to plan for. The diagram below sets out the ideal “pure-play“ digital business:
Here we compare The Digital Era enterprise and attributes of:
- Digital revenue
- 100% and a core competency
- Digital operations
- largely, ordering, fulfillment, customer service. more????
- Production
- the agricultural supply side, not digitise
- Digital advantage
- built on a digital-tech business model, while retaining human values
- Value creation
- based on eliminating supply chain for good grower returns and quality product
- huge potential in developing smaller self managed hubs
The Digital Future
When considering how to scale further a very few key decision points emerge. This is already a business that can only operate in the Digital Era, but is currently reliant, for a chosen location, on a delivery hub being set up and organised by Ooooby. This in turn requires a local operation and presence. We review the digital criteria and comment on where some innovation can unlock the scalability potential.
- How revenue is generated
- Revenue is 100% digital (online ordering only) and this is more easily scaled. However a tech investment is likely in a mobile app form of customer and grower engagement. Both to keep pace with competitive action, and to attract new supporters.
- How Ooooby creates advantage
- Core advantage is from a highly flexible online order tool offering customers preset and customisable order packs, with free delivery.
- How is value created
- Value is created with a near-zero supply chain with margins that fund a hub-to-door delivery service. The distribution supply chain has two minimum steps – growers deliver to an operations packing centre (hub operations), where Ooooby packing staff sort into delivery boxes that match customer orders. Contractor vans are used to collect boxes for delivery, on preset weekdays
- How Ooooby operates digitally
- The digital operations are core to how the business started. Every aspect of customer engagement is digital – online ordering software, online customer registration, online and scheduled payments, email subscription and order confirmation. Aspects of delivery also, in how delivery and dispatch is organised.
- Production – non-digital
- Food and related organic products are of course “traditionally” produced. There are aspects of production with digital opportunity, determined by growers. As operations scale, decision support tools can be used for refining margins in areas such as crop forecasting and quality monitoring.
The digital future growth opportunity envisages moving to self-managing, self-funded, community-run Ooooby hubs. The customers will organise as packers and operations owners, using the Ooooby software tools to run the customer distribution.
Ooooby’s Business Building Blocks
The starting impulse to deliver a fair-for-all local food produce service has been a core driver all through the evolution, from first attempts at a managed and repeatable operation to the digitally-smart online service that Ooooby is now. That is a tribute to founder perseverance for the restoring of healthy food traded fairly to local communities. The commitment to a fair deal for growers and customers alike is shown in this graphic from their website, showing where every $1 spent is allocated.
In Conclusion
Summing the competitive operational points that Ooooby has established and must retain:
- The online customer ordering system with back-end database, fulfillment and account history
- Commitment to the local food mission, a total commitment to quality, service, fairness
- Always refining the hub operation as a well-oiled distribution machine
- Strong and loyal relationships with local growers who are the backbone of supply
While the core production is a business based on personal relationships with local produce growers, the Ooooby customer supply business was born as a technology platform, for online ordering and social media to tell the story and attract customers. The initial capital-raising to expand used online crowdfunding, a source not available when the business started. The future growth of this fair food business is dependent on building the digital capability for customer engagement and distribution operations, and continuing to take advantage of innovations as they emerge.
About the Author:
