Digitizing the intermediary in local food markets

Rafal Serafin reports on an APPETIT Living Lab DEMO EVENT organised as part of the CODECS project on 30th August 2024 in Częstochowa (Poland).

APPETIT technology and the APPETIT approach was introduced to farmers participating in the Spizarnia [Pantry] Local Food Market initiative in Częstochowa. The Spizarnia is a physical Saturday market, but with an ambition to supplement this with a virtual or on-line marketplace.

The event was organised as a workshop on the occasion of Poland’s largest Agriculture Fair and Harvest Festival on 30th August 2024. 20 Local Food Market stakeholders participated, including 13 farmers. The focus was on the potential for APPETIT technology to supersede the traditional intermediary roles within the food supply chain.

The APPETIT platform and the ideas behind it are being developed by a group of software developers, farmers and organisers of four local food markets in 4 different parts of Poland: Kraków, Kamienna Góra, Chojnice and Czestochowa. Brought together, the 4 local food markets have formed the APPETIT Living Lab.

The APPETIT ambition is to be much more than an on-line local food market -  a means to scale local food markets by engaging with stakeholders in new ways in order to generate more value for farmers in the supply chain.

Following the DEMO EVENT, a survey questionnaire combined with interviews and a CODECS project assessment grid were completed to capture feedback and reflections of the 13 farmers who had been invited to become APPETIT users. Their reactions – summarised in what follows - are important because it is farmer participation in APPETIT that will be critical to success in a highly competitive food marketplace.

The value of intermediaries

Intermediaries are important in the supply chain at all levels, including the local level. This is because farmers want to focus on farming not marketing. Yet they want to sell their products to those who appreciate them and are willing to pay a fair price. On the other side, consumers want choice, fresh and seasonal. They want diversity, but they prefer to buy baskets of products. They want to buy in ways that are convenient to them and to physically collect or receive their order at a time and place that works for them. What’s more, they want to be assured that the food products they are buying are authentic and chemical-free. Matching the needs of the two sides is the task of the intermediary.

But in a situation where there are many geographically dispersed farms, each with their own product offering, needing to be connected with many geographically dispersed consumers, the costs of the intermediary increase exponentially with numbers involved. Better to streamline and standardise, reduce the diversity of the product offering and simplify logistics. In other words, the pressure is to extinguish the very value consumers are after – artisanal, known origin, non-industrial, organic, agro-ecology. This is the calculus of economy of scale.

A consequence of a market shaped by the logic of economies of scale, small or part-time farms with only a limited or seasonal offering, will be replaced with monocultures and industrial farming, contributing little to rural economy. This is because the pressure is for consolidating small farms into larger units, not for diversity that generates rural livelihoods, conserves biodiversity and protects heritage landscapes.  

But if the objective is to treat small farms and their non-industrial production methods as resources or opportunities for sustaining livelihoods, revitalising rural economies, assuring food security and reforming food systems, a different approach to that of economies of scale is needed. Taking as the point of departure, the proposition that value and competitive advantage lie in sustaining diversity and decentralisation of small-scale farming, the need is to work out ways to reduce intermediary costs with increasing scale of producer-consumer interaction – the opposite of what most short food supply chain initiatives experience.

Digitizing the intermediary

The APPETIT approach and solution lies in substituting the intermediary functions with an organisational model of automation coupled with stakeholder task sharing. This model envisages a decentralized framework where every stakeholder—be it producer, consumer or promoter—assumes a multiple role, contributing to both the supply and demand sides.

Producers, apart from cultivation and/or animal husbandry, undertake tasks such as marketing, price setting, storage, and transportation of goods. Similarly, consumers partake not merely in purchasing but also in promoting, authenticating, and even facilitating the logistics of product distribution.

An IT platform is needed for enabling these synergistic processes to shape an ecosystem of cooperation, turning stakeholders into partners who share risks, costs and benefits. This prosumer approach inherently streamlines the supply chain, fostering a system that makes use of unused resources as a means  of achieving increased efficiency, reduced transaction costs, and enhanced market competitiveness. It is significant that diversity and decentralisation become the basis for competitiveness and growth.

APPETIT software seeks to enable and incentivise those involved in a local food market to co-provide ‘intermediary services’ such as information sharing, transaction settlement, billing, logistics, reporting and measuring impact on an ‘opting in’ basis. There is no coercion or command-and-control as no single person is in charge.  Sharing intermediary services in this way means potentially greater efficiency and lower transaction costs.

The APPETIT Living Lab ambition is to nurture a digital ecosystem that will connect local food market organisers with software developers to co-create IT-enabled organisational solutions for driving food sector reform and rural revitalisation.

The farmer response

Despite the optimism surrounding APPETIT, the reception from the farming community during the Częstochowa demo was mixed, painting a picture of cautious curiosity rather than unbridled enthusiasm. Of the farmers participating in the DEMO EVENT, some had already engaged with APPETIT's technology, offering insights into the practical challenges and opportunities it presents.

But the majority encountering APPETIT for the first time. The feedback in questionnaires and interviews unearthed a core truth: while the prospect of circumventing traditional intermediaries is very appealing, the reality of assuming these intermediary roles themselves — albeit in a digitized format — was a daunting proposition. Key concerns from the farmers’ perspective can be summarised as follows:

• Technology readiness (is the technology ready for the farmer?). There was agreement on the potential utility of the technology, with nods to its ease of use and anticipated productivity benefits. However, there was apprehension regarding the technology's complexity and the feasibility of integrating it into daily operations on the farm.

• Farmer readiness (is the farmer ready for the technology?): The cost-benefit analysis of adopting APPETIT technology provoked mixed feelings. While some saw the clear value it offered, others weighed it against existing practices and the potential learning investment required.

• Agricultural Knowledge and Innovation (how does knowledge flow?): A significant insight was the acknowledgment of existing skill gaps, but alongside a readiness to adopt digital solutions. Farmers expressed concerns about the resources and technical knowledge required for them to get the best out of the APPETIT platform.

• Socio-technical processes (what is the context?): Interestingly, the focus for many farmers was on immediate operational efficiencies and benefits. The direct impact of their operations on broader environmental, social, and economic considerations took a backseat in their decision-making process.

The CODECS assessment grid [included at the end of this document] was used to evaluate APPETIT technology based on a reflection on the part of the Demo Event organisers. The key findings were:

• Adoption and Use: The success of APPETIT hinges on its ability to integrate into farmers' existing  practices. This includes recognizing informal processes like information sharing, logistics, and financial transactions, and configuring the software to support these activities. Engaging farmers to customize APPETIT according to their needs and the specific opportunities of their operational ecosystem is crucial.

• Farmer Engagement: Farmers have limited interest in the wider environmental, social and economic benefits of APPETIT, concentrating instead on its potential to digitize their operations, especially in competing with supermarkets, so as to ensure their own survival.

• Information and Support: For farmers, information and support from IsoTech, local market initiators and organisers and other Living Lab participants are vital in becoming effective & self-organising APPETIT users. Study visits, joint projects, and internet searches are primary avenues for making technology decisions and engaging with technology more deeply.

• Impact and Benefits: The assessment highlighted the importance of APPETIT, with its focus on small and part-time food producers, as a means for ensuring inclusion of small-scale farming in projects, programmes and policies. APPETIT can make the value of small and part-time farming more visible. But individual benefits must deliver tangible individual benefits going forwards.

• Community and collaboration: Participation in the APPETIT Living Lab, which includes local food market initiatives like the Spizarnia [Pantry] in Czestochowa, Marchewka Mobilna [Mobile Carrot] in Krakow, Z Ziemi [From the Earth] in Kamienna Gora, and Chojnicki Koszyk [Basket] in Chojnice , showcases how collective effort brings individual benefit. Seeing others deploy APPETIT  demonstrates the value and potential of the approach. This will encourage more widespread adoption as evidenced  by interest from farmers in the Zagórzańskie Dziedziny and Dobrcz.

• Challenges and Opportunities: Safe ‘space’ for informal discussions to identify and address the challenges of digitising intermediary functions is essential. DEMOs need to be tailored to various stakeholder needs, circumstances and opportunities related to identifying intermediary functionalities that could benefit from automation.

Lessons learnt from Spizarnia farmers

The Czestochowa APPETIT Demo Event underscored that digitisation of local food markets is more of a marathon than a sprint.  Unpacking, understanding and communicating the role of the intermediary requires patience, support, and a stakeholder engagement process. The mixed reactions from the farming community highlight a clear need for continued experimentation, personalized engagement, and perhaps most critically, a demonstration of tangible benefits that resonate on an individual level.

The road to digitizing the intermediary in local food systems is paved with both opportunity and obstacle. While the APPETIT platform offers a compelling vision for the future, the cautious reception from farmers is a reminder that technology adoption is as much about the people as it is about the digital solutions, algorithms and software interfaces.

Moving forward, the focus must be on building a sense of trust, support, and shared benefit, where farmers feel equipped and motivated to embark on the digital journey as active partners rather than passive beneficiaries. More Demo Events are certainly part of this process. Perhaps in coming months, with APPETIT coming into use in the 4 locations, it will be the Spizarnia farmers who will be organising APPETIT Demo Events for other farmers and for their customers.

The APPETIT platform is currently being tested, implemented/customised and further developed in 4 locations:

CODECS Assessment Grid applied to APPETIT (Czestochowa, August 2024)

Rafal Serafin - rafal.serafin@isotech24.eu

Kaszów, 20.09.2024