Camilla Gardiner
April 12, 2013
CITRIS Paper 1
With the boom of the green movement and increased demand for organic products,
the US Department of Agriculture was required to set standards for the use of the word
“organic” and determining the factors that made farms and their products organic. If a farm
wishes to call their product organic, they must go through an application and review
process through the USDA. The parameters that the USDA created focus on inputs and
methods.
Products that wish to be labeled organic must be made without synthetic substances
or ingredients, certain prohibited non-synthetic substances, non-agricultural substances,
non-organic agricultural substances, ionizing radiation, and sewage sludge.
Certain synthetic substances are allowed as long as they don’t contaminate the
crops, soil, or water. Some examples of these substances are alcohols (if used as
disinfectants or sanitizers), chlorine materials, copper sulfate, and insecticidal soaps.
Certain prohibited non-synthetic substances include ash from manure burning, arsenic,
and lead salts. Although these products could be classified as “natural” or “organic” because
they are non-synthetic, they create a serious health risk for consumers and therefore
should not be used in crop production.
In addition to these input standards, the USDA created practice standards that
organic producers must follow. Some practices they focus on are soil fertility and crop
nutrient management. They require that organic farms produce crops in a way that
maintains or improves the physical, chemical, and biological aspects of soil health and
decreases erosion. Soil nutrient levels and fertility must be managed through rotation,
cover crops, and application of plant and animal materials. These materials must be applied
in a way that doesn’t contaminate groundwater, crops, or soil with a surplus of residues.
Some of these allowed materials include animal manure, composted plant and animal
materials, or non-composted plant materials. Any application of synthetic fertilizers or
sewage sludge is prohibited.
Another required means of land management is crop rotation. This increases soil
organic matter, provides pest management by disrupting their seasonal patterns, manages
soil nutrient deficits, and provides erosion control. Crops can be rotated with sod, cover
crops, green manure crops, or catch crops.
Organic certification is very costly and can be difficult for some small farms to
incorporate into their budget. The process of certification can take up to a few years,
depending on how quickly paperwork is done and how long it takes for the farm to be
assessed. Farms can be denied certification due to minor infractions, even if their overall
practice is above and beyond the necessary criteria of the USDA.
When looking at farms to provide ingredients for Awesome Bars, I will be trying to
increase sustainability of the overall farm-to-table life cycle of the ingredients. Certified
organic farms are a good starting point because they have already gone under close
scrutiny from the USDA, but I am looking to find farms that also try to minimize their
overall inputs through reutilization of waste or capture of natural energy sources. Some
examples of this include using plant waste as compost, effective rainwater capture, solar or
wind energy usage, or biodiesel use.
Camilla Gardiner
CITRIS Internship
Week 2
Currently, Awesome Bars acquires their ingredients from wholesale distributors.
Working with these distributors requires large-scale orders, causing Awesome Bars to have
to store large amounts of food. Some of these items could be perishable, but the main issue
is that such a small company doesn’t have the space to store large amounts of food. A
solution to this could be ordering ingredients through a farm or CSA that allows smaller
and more frequent deliveries. This could decrease stress on the company to find places for
food storage as well as provide support for local farmers.
Awesome Bars presently orders their ingredients from Pacific Gourmet and
SunRidge Farms. Pacific Gourmet is based in San Francisco and provides specialty
ingredients to companies in the Bay Area and beyond. Their goals are to provide high
quality, local or organic when possible, and affordable products. They carry over 2,000
products, ranging from meats and fish to chocolate. Their mission of finding alternatives to
GMO products and supporting local and sustainable farms seems to work well with the
goals of Awesome Bars, but they don’t provide contact directly with these farms.
SunRidge Farms is a much more established and wide-spread natural food
distributor. They have a large variety of products sold, although they specialize in nuts and
trail mixes. A company like SunRidge Farms is dedicated to providing natural and organic
foods, but might not be the best fit for Awesome Bars because they are so large-scale and
commercial.
I think that the best option for Awesome Bars is something along the lines of
Community Supported Agriculture (CSA). CSAs currently offer farmers a way of selling
“shares” of their yield to consumers, who usually pay to have weekly shipments of their
produce delivered.
Since CSAs are a well established connection between farmer and consumer, I think
their system could work very well with the needs of Awesome Bars. If there is a way to buy
a “share” of an almond farm, Awesome Bars could receive small and frequent (weekly)
shipments of almonds straight from the farm. Most farms provide seasonal produce, so it
will be difficult to find a farm that will provide this service. Although, if Awesome Bars buys
a “share” and promises their business for an entire season, the farm might be more willing
to work with them.
One of the issues that many almond farms face is finding yearly purchasers. Many
farms then sell their almonds to large-scale distributors who can multi-year contracts for
their entire crop. This gives a certain amount of freedom to the farmer because they don’t
have to worry about selling their final crop, but it basically gives the distributors complete
control of each farm. If Awesome Bars could provide the same financial stability to small
famers but allow them to maintain control, they would become a very valuable customer.
One issue with working with a CSA would be that they only provide seasonal
products. The farms might only be able to provide almonds or other nuts when they are
being harvested, which would be difficult for a company like Awesome Bars who needs
these products year-round.
I am currently looking into farms that provide delivery services around the Bay
Area, but most of them only provide produce. There are also many local farms that sell
their items through farmers markets or other local markets, so I am going to look into
places that sell local almonds. Researching at the Berkeley Farmers Market will be an
important step, and hopefully I can reach out to vendors closer to Awesome Bars’ bakery.
Camilla Gardiner
April 26, 2013
CITRIS Paper 3
Financial modeling through excel is a very effective way of analyzing different
possible business models and optimizing profits. Excel allows you to make complex
equations based on variables, such as cost of inputs and amount of each input bought.
These equations can then be optimized to find the most cost efficient production technique.
This will be very effective for Awesome Bars because it can be implemented to analyze the
different options of farms to use. By creating equations that compare the amount of
ingredients available from each farm and their respective prices, Awesome Bars can find
the most efficient way to source their ingredients.
To make the model for sourcing ingredients, we made an example model with a
company buying apples and oranges. The objective goal of the company was to maximize
profits while selling apples for $1 and oranges for $1.20. There are three possible farms, all
different distances away and with different prices. The price of transportation is assumed
to be $0.50 per mile, so distance away is a contributing factor to overall cost of sourcing the
fruit. Farm 1, 50 miles away, will sell up to 1000 apples at $0.50, then sell the rest at $0.25.
Farm 1 will also sell up to 1000 oranges at $0.60, then sell the rest at $0.35. Farm 2, 60
miles away, will sell up to 1000 apples at $0.40, then sell the rest at $0.35. They will sell up
to 1000 oranges at $0.50, and then sell the rest at $0.40. Farm 3, 70 miles away, will sell up
to 500 apples at $0.50. They will sell up to 500 oranges at $0.70, and then sell the rest at
$0.30.
By just looking at the prices and distances of the three farms, we can see that some
will be more cost efficient than others. For example, sourcing apples from Farm 3 will be
more expensive due to price and gas costs. Determining the sourcing of oranges will be
more difficult though, because farm 3 offers the lowest bulk cost but is the furthest distance
away. This is where optimizing the function of (Profit =revenue – cost) will help us find the
best way to source the apples and oranges.
To set up the equation, we need to find the overall revenue and overall cost. The
company states that they want to sell 5000 of each apples and oranges, so the revenue will
be (Price of apples)(Number of apples sold)+(price of oranges)(number of oranges sold).
Since all of these numbers are constants, we can calculate that the revenue will be $11,000.
To maximize profit, we must minimize cost. Total cost will be the price of each item
multiplied by the number of items bought, adding in the price of gas to each sale. The total
number of each apples and oranges has to equal 5000. By using the “Solver” application, we
can find the values of products bought from each farm that either minimizes the cost
function or maximizes the profit function.
Other factors that could be added into the equations could be carbon emissions for
each farm or number of items in each delivery. Adding on more layers into the calculations
will give us a better understanding of the true costs of each farm’s products.
The next step in my research will be to go a farmers market and talk to farmers
about the options they could offer in terms of sourcing ingredients for Awesome Bars. By
acquiring information from these farmers, I can gauge their interest in working with a
company like Awesome Bars and acquire a sense of the framework that will be necessary
to create a working relationship with the farmer. Hopefully by speaking to multiple
farmers, I will be able to set up a financial model similar to the one described above. This
will allow me to practice using Excel as well as start to figure out what type of farms will
work well for Awesome Bars.
Camilla Gardiner
April 29, 2013
CITRIS Paper 4
This week I conducted “field research” by going out to a farmers market and finding
potential farms to source almonds from. I went to the Temescal Farmers Market in North
Oakland. The goal of this trip was to establish connections with local almond farmers and
learn how to address potential suppliers.
The first farmer I approached was from Massa Organics. They are a small family
farm located near Chico, focusing on grains and nuts. They were selling bags of rice and
almonds, but also had a large container of bulk almonds that caught my eye. I began by
asking whether their farm sells their products to any companies in bulk and if so, how they
do it. The man working at the stand wasn’t a farmer himself, but worked at the many
farmers markets where they sell their products. He was very enthusiastic to talk to a
potential buyer and was very interested in working with a company like Awesome Bars.
When negotiating types of delivery, he said the best option for them would be to have
Awesome Bars pick up their order from the person working the stand at the Saturday Ferry
Market Building farmers market. After further negotiation, he said that they might be able
work out a delivery system if the drop-off was somewhere close to the market where they
sell. This would work out well for Awesome Bars because they would receive weekly
shipments of almonds of whatever quantity they might need. One issue that he brought up
was that the type of almond offered depended on the season. This could change the taste of
the bar or alter the baking process in some way. Another issue is that Massa Organics is
located about 160 miles north, creating a large carbon footprint for transportation.
Although they do their transportation in large shipments, overall gasoline costs are
significant. Massa Organics was willing to sell their nuts at $10/lb for an order over 5 lbs.
The next farm that I approached was a nut and dried fruit farm called Inzanara
Ranch and Produce. They seemed a bit more unsure about selling their product to me
because they were worried about laws regulating pasteurization of almonds. The USDA
requires farmers to pasteurize their almonds to decrease risk of salmonella or other
contaminants, but Inzanara sells unpasteurized nuts. When selling their product to
companies that make almond butter, Inzanara is required to ship their nuts 3 hours away
to have them pasteurized before selling them. This greatly increased to cost of the nuts as
well as increased their carbon emissions. Bulk unpasteurized nuts from Inzanara Ranch are
about $7/lb, but the price would be increased if they were required to pasteurize the
almonds before delivering them. Inzanara Ranch is located in Hughson, which is only 100
miles away.
The third stand that I approached was a granola company. I introduced myself as a
granola bar maker and started asking about where they sourced their ingredients. The girl
working at the stand didn’t know exactly where everything came from, but said they were
able to make a lot of their connections from getting to know other vendors at farmers
markets. She gave me the card of the owner of the company and I emailed her asking if she
could give me any tips about sourcing local granola ingredients.
The next step in this process seems to be to learn more about exactly what
Awesome Bars needs in terms of type and amount of almonds. Both farms asked the
quantity that they would need to supply as well as what type of almonds I needed (both
questions I was unable to answer). By familiarizing myself with the needs of Awesome
Bars, I can keep doing research to find the best farm options for our needs, then do a
financial analysis to see which farm can provide the most sustainable and cost-efficient
product.
Camilla Gardiner
May 9, 2013
CITRIS Paper 5
After going to the farmer’s market last weekend, I was confident that I could find a
farm to work with Awesome Bars. The one I was most interested in was Massa Organics, a
grain and nut farm near Chico, CA. They are a small family farm focused on the connection
between agriculture and ecosystems. They are dedicated to cause net benefits to the soil,
air, and water quality through environmentally friendly practices. These include capturing
and recycling rainwater for irrigation and planting fallow crops during fallow seasons.
They are also committed to reconnecting with the community that consumes their product.
Massa Organics hosts field trips for local schools and is very active in Community
Supported Agriculture programs in their area. As well as benefiting their soil and water
conditions, Massa Organics is helping the surrounding ecosystem by creating wildlife
habitats, such as nest boxes for multiple bird species.
The goal of their farm is to meld the current technologically powered agricultural
system with the old style of working with the natural ecosystem patterns. They hope to
have a farm that is technologically advanced, but less dependent on resource inputs and
more beneficial to the environment.
A farm like Massa Organics completely encompasses all of the social and
environmental sustainability qualities that Awesome Bars would love to partner with. I was
incredibly excited to find the farm, but their almonds cost $10/lb, which is over two times
what Awesome Bars currently pays ($4.50/lb.). There is no way a small business on a tight
budget can pay double for their ingredients. This realization caused a serious decrease in
my confidence levels and I started to wonder if this project was even going to be possible to
do.
This price discrepancy brings up some questions: Why does producing with a
sustainable system like Massa Organics’ create such high costs? Where are these increased
costs coming from? Is it even economically feasible to try to find local and sustainable
almonds close to the price that Awesome Bars currently pays?
To answer these questions, I need to talk to the farmers directly – but not just as a
potential buyer. I need to find out the way that the farms work and the issues that arise
when trying to produce sustainable food. Clearly there is a small-scale market for their
products (otherwise they wouldn’t be able to operate), but I am wondering whether a farm
like this could produce for a larger buyer (like Awesome Bars).
This week I focused on making connections with as many people as possible. By
initiating email contact with multiple people, I am hoping to find ways to learn more about
the process of distribution and factors that influence costs.
I emailed the Farmers Market association hoping to be connected with someone
who could help me answer some of these questions. In terms of creating connections with
local farmers, they told me to go to markets directly and talk to the farmers there because
they are unable to give out the names or addresses of the members of their organization.
That was kind of a dead end, but hopefully I can go to an information tent at a farmers
market and ask them questions about the farms there. I also hope to learn more about
creating partnerships with farms through the founder of Nana Joe’s granola. She said that
they source all of their local ingredients through farmers they met at farmers markets so I
am going to go to a farmers market with her and see how she creates connections with
them. This will help me figure out how to approach prospective farmers in a way that
makes them interested in working with Awesome Bars.