Increasing revenue opportunities for small and mid-size farms through a unique, data-driven personalized marketplace that integrates locally-grown food sales with agritourism experiences

Goals / ObjectivesSmall and mid-size family farms operate nearly three-fourths of all farmland and account for about half of all production.These farms struggle to keep their operations running and net farm income has seen little improvement over the past two decades [1].Small and mid-size farms have an average operating profit margin of less than 10 percent, placing them at high risk of financial problems (USDA) [2].Local food has been the subject of federal, state, and local government policy in recent years as consumer interest in and demand for local foods has grown. The growth in consumer demand is not necessarily translating into increased marketing opportunities for small and mid-sized organic farmers. Many studies have shown that marketing is a major challenge faced by small and mid-scale organic farmers to access direct-to-consumer (DTC) opportunities for their local food products. In 2017, just over 6% of U.S. farms were marketing food for human consumption locally through so-called DTC marketing channels [3-7].We seek to determine the feasibility of a new mobile app, LocalCart® that small and mid-size farmers can use to sell locally grown foods and unique touristic experiences in a sustainable direct-to-consumer business model.Overall, the state-of-the-art electronic platforms are not equipped to provide these essentials. Our research shows consumers want new features that are convenient, save time, produce better meaning, and are fun to use (See Table 1, Letters of Support for Stakeholders and Tourist Customers). Farmers struggle with outdated systems that deplete their time, resources, and morale (See Table 1, Letters of Support for Business Customers). Some existing marketplace solutions try to solve this by aggregating sellers, but they process payments directly for sellers. This cuts out the granular data that's needed to drive a new business model that lightens the burden on farmers and produces intuitive e-commerce that consumers want. Our proprietary technology generates new forms of data, captures value with it, and enables more efficient marketing bridges for farmers and businesses. It's like an Airbnb model that acts as an intermediary for property owners. In our case we add proprietary technology that leverages our data thesis further. This suggests there are critical business needs, management, and programmatic implications for rural producers.The present state of the art in e-commerce is not built for marketing agricultural, forestry and aquacultural commodities and value-added products produced by small farms, so numerous gaps in the agricultural DTC ecosystem require our technology. As internet connections spread further into rural areas and smart devices penetrate the world's largest agricultural markets, more opportunities to use technology for the benefit of farmers are being unlocked. The total value of the global digital farming market is expected toreach $10.2 billion by 2025 [8]. An online marketplace could help farms who sell food directly to customers compete with other retailers by reducing the costs (such as time and transportation) of transactions at in-person markets such as farmers markets or other traditional markets.LocalCart®, registered by the applicant in the U.S. Patent and Trademark Office, is a transformative solution that fulfills the marketing needs of small to mid-size farms while enhancing interactivity and the overall customer experience [9,10]. The essential challenge is the elimination of technical and socioeconomic barriers faced by agricultural providers struggling to generate business for products and services in an evolving marketplace [11-13].Table 1. Letters of Support, As FollowsAgritourism SegmentName of Supporting Organization, Business, or PersonStakeholdersUSDA Virginia Rural Development Office; Virginia Cooperative Extension (VCE) of Loudoun; VCE Economic Development Program; Virginia Foundation for Agriculture, Innovation and Rural Sustainability; Mary Joynt (Clayton Communications)MentorsJohn Casey; Robert Smith; Eric ByrdUniversity ContactsWest Virginia University (WVU) Extension Service; Ajay Aluri, WVU Business School; Stacey Kemp, Shepherd University Business SchoolDestination Marketing Organizations (DMOs)Visit Loudoun; Jefferson County Convention and Visitors Bureau (CVB); Visit Hagerstown - Washington County CVBBusiness Customers / Wineries, Brewers, DistillersFabbioli Cellars; Hillsborough Winery + Brewery; Old 690 Brewing + Harpers Ferry Brewing; Breaux VineyardsTourists CustomersMartha Marshall; Paul Boynton; Canal Towns PartnershipProducer & Merchant OrganizationsLoudoun Valley Homegrown Markets Cooperative; Alta Jones; Harpers Ferry Merchant Association; Hillsboro Business Alliance; Restoration B&B; Caspio; BizIQInvestorsCenter for Innovative Technology; West Virginia SBDC; Loudoun Economic Development; Koev Brothers; GusherBackground and RationaleBackground and technical approachIn the current e-commerce ecosystem (search engine and social media), platforms collect data by recording the online activities of customers. They monetize that data by selling placed advertisements. For example, if a consumer searches for places to stay, they will soon find themselves tracked by ads for hotels across the spectrum of digital platforms they use [14].Mobile is a preferred way to access consumer goods [15-18]. Existing platforms have focused mainly on the monetization of shared data rather than generating and using quality data. In contrast, our model builds new types of data with user food preferences and interests that pertain specifically to agritourism businesses. A consumer might include tastes for concord grapes, organic beef, and family-friendly food products in their profile. These become customer addressable datapoints to guide and promote consumer marketing with a refined, interest-based granularity that aligns supply and demand in a way that is otherwise difficult, if even possible, for a rural small to mid-size farmer to achieve. The current state of the art does not produce this level of detail. As our technology is scaled up and enters new markets, farmers could promote products, services, activities, and events with precision. Customers get what they want when they want it. And farmers will be able to access direct customers more easily through the platform, providing the needed results.We follow scientific methodology as articulated by the Lean Startup curriculum to test our value proposition hypotheses, assess feasibility of the technology, validate the business model, and determine go-to market strategy for our App [19-22]. Since we function as a technology to facilitate a direct-to-consumer agricultural marketplace our target audience consists of small to mid-size farms and their customers. We must conduct additional detailed research interviews with both groups to ensure that we are solving their needs. By conducting in-person interviews with our target audiences, we can assess feasibility with greater accuracy than surveys.