Author Archives: K. McDonald

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Food Innovation Start-Up Companies Including Door to Door Organics

In March of this year, I reported here that some expect online grocery sales to eventually account for around half of grocery sales in the developed world. The driver of that would be that the online grocer could become the cheapest source with the most selection. Back then, Reuters covered Amazon’s potential to move into groceries.

Now it is nine months later, and a company located in Louisville, Colorado is emerging as a successful model for online groceries. Called “Door to Door Organics”, the company has built an extremely efficient model of carrying out services even at very low volume levels. So far, it is operating in 30 cities that are located in 11 regional markets including Denver, Chicago, and Kansas City.

According to Arlon Group, a stake-holder in Door to Door Organics, this is one of the few companies in the online grocery business that has demonstrated profitability.

Both Amazon and Google are also trying to compete in the online grocery business, which had a 3.3 percent market share of the total grocery industry at the end of 2013. This is set to increase as much as five-fold in the next decade. So far online grocery sales are exceeding expectations in pace of growth. At $27 billion in dollar amount this year, the amount could increase to $123 billion in ten years.

Boulder County here in Colorado is a hot bed of food start up companies. In other interesting local news, an organic dried fruit company, Made in Nature, reports having difficulty finding apricot and fig suppliers. For this company, consumer demand exceeds available producer supplies.

A Boulder Ice Cream maker also reports a shortage of wholesale organic milk due to the overall strong Chinese demand for regular milk powder. As organic milk demand increases here in the U.S., apparently more U.S. dairy producers are abandoning organic production to cash in on the more lucrative sales of regular milk powder to China.

The company “Overstock” has recently announced that it would become a virtual farmers market. Overstock now has a “farmers market” webpage dedicated to orders of “straight from the farm” and “local delivery” products. The page includes categories such as “fresh produce”, snacks, preserves, dairy, and pickled products. This sounds like a great idea and I hope it is a useful outlet for producers without having killer overhead costs. There are quite a few online ventures attempting similar marketing ambitions, eventually a few will probably become the dominant outlets once they establish their name recognition and reliability.

Another interesting food innovation online company is “Plated”. This business prepares ingredients for meals and sends them to the purchaser’s doorstep, a bit like a catering service except that you do the cooking. Each week consumers can pick among changing menu options available in their zip code. Some people are apparently hoping this service will help them with weight control.

Are you thinking what I’m thinking? If more consumers order their food via the internet, then more can order directly from the small farmer-producer, and cut out the middle man. There could be many bright future opportunities for the young entrepreneurial farmer here. Already, I know a neighbor a few houses down from me who orders his organic soybeans from a farmer in Iowa, which he then uses to make his own soy milk.

Is it possible to have a trusted site for small farmer sales, similar to the platform Etsy provides for artists? Or is it too complicated getting food product certifications and approvals while weeding out the impostors such as those that appear under false pretenses at the farmers markets? Will one such platform eventually dominate from all those, including the USDA, who are currently trying?

Time will tell. Comments including other ventures similar to those mentioned above are welcome.


Sources:

http://bizwest.com/suppliers-cant-match-natural-product-industrys-growth/

http://www.businessinsider.com/how-to-cook-using-plated-2014-11

http://www.dailycamera.com/boulder-business/ci_26904820/louisvilles-door-door-organics-raises-25-5m-expansion

http://blogs.wsj.com/venturecapital/2014/11/10/online-grocer-door-to-door-organics-reaps-25-5-million-to-grow/

Photo credit: FlickrCC by Alden Jewell – 1954 Chevrolet Sedan Delivery.

Reinert Interview: The Future of Renewables

Today is the eighth post in this Monday series of subjects covered during my summer 2014 interview of Bill Reinert, recently retired energy engineer for Toyota who played a key role in the development of the Prius and then assumed the role of future transportation planning of alternative-fueled vehicles at Toyota. See his full bio here. –Kay M.



Photo by John Womack, Wikipedia

K.M.: For the past 15 years, the global ratio of fossil fuel use to renewables hasn’t changed at all and remains at 87 percent, even as global energy consumption rises. What’s the future for renewables?

Reinert: I’ve been working on various renewables in the industry since 1981. What I’ve seen is how policy makes them come and go, depending upon administrations, and depending upon fiscal conditions. When the money gets thrown, you get both good and bad projects. And there’s never an exit plan, and the industry never learns. Like in Spain where they initiated all this concentrated solar thermal power, along with the promise of jobs. But the minute the Spanish government got into trouble and couldn’t afford the incentives, the industries started imploding on each other, and the incentives ended.

We’re becoming a more energy dense world. The use of energy is increasing and renewables really are not going to keep up from an energy density point of view. Take for example, cities such as Boulder, Colorado, whose dream it is to become 100 percent renewable in the next 10 years. It can’t be done because there’s nothing on the market that takes care of the intermittency of solar or wind. And they’ll find out that the kilowatt of spinning reserves for every kilowatt of renewables costs a lot.


To see last week’s interview subject on Climate Change, click here.

Coming next week will be Reinert’s comments on the electrical grid.

Advanced Rail Energy Storage (ARES): Using Trains to Store Renewable Energy

This video explains and demonstrates what looks to be a very encouraging development in the storage of renewable intermittent energy, which is one of the greatest challenges facing us today in our desire to transition to renewables.

Just like hydro power uses gravity to make energy, this rail car, a box full of rocks, and the power of gravity can be used to store energy from renewable power such as wind and solar, which could help stabilize the power grid.

This system, called Advanced Rail Energy Storage (ARES), is being tested right now in Tehachapi, California. It uses a diesel engine and carries a four ton concrete pad. Its developers have patented the system and it has been peer reviewed.

KGET TV 17 from Advanced-RES on Vimeo.

Map of the Agriculture Dependent Counties in the United States & Future of Rural Area Economies

This post includes material from the report on the July 2014 Federal Reserve Bank of Kansas City’s symposium, “Structural Transitions in Global Agriculture.”

The subject is the lack of growth and decline of population in the rural areas of the U.S. which used to be much more reliant upon agriculture.

Although we have heard repeatedly from Secretary of Agriculture Tom Vilsack and people like RFS lobbyist Bob Dinneen about how great ethanol has been for the rural areas, when we look at the data, it shows us quite the opposite. One of the reasons for this is that the farms that grow monoculture crops like corn keep getting bigger, which means depopulation and lack of support for the small rural communities.

Changes in agricultural markets have raised questions about the future for rural America. Throughout the United States, rural populations are barely growing, or even dwindling, despite the recent agricultural commodity boom. Though rural America has historically been inextricably linked to agriculture, a smaller share of the country today is considered farm dependent. […] However, the nature of rural America has fundamentally shifted over the past 50 years. Citing USDA data, Partridge showed that in 1950, virtually all of rural America was farm dependent. By 2000, however, less than 20 percent of America’s rural (nonmetropolitan) counties were considered farm dependent.

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In addition, a disturbing graph from the USDA shows us that since the financial crisis, the urban area economies are recovering rather well when we look at employment numbers, but the rural economies have barely come up at all. The featured time span happens to coincide with the ramp up in ethanol production due to the federal mandate.

I have written about rural demographics and trends a number of times before, and there are many factors that are contributing to sobering declines in rural statistics. Just last week I learned that the rural grade school that I went to in Nebraska is shuttering its doors because there are no rural children left in the area. They waited until they were down to three students. When I went, there were around 70.


Sources:

Structural Transitions in Global Agriculture: A Summary of the 2014 Agricultural Symposium – By Nathan Kauffman, Assistant Vice President and Omaha Branch Executive.

http://kansascityfed.org/publicat/mse/MSE_0314.pdf

Rural America at a Glance – 2014 Edition

http://www.ers.usda.gov/media/1697681/eb26.pdf