Healthier food and closer to the consumer

In recent years, consumer interest in healthier habits and the adoption of a more balanced and natural diet has increased. This opened a space for organic products, a topic that recently gained prominence with Anvisa's approval of the new regulatory framework for pesticides in Brazil, debates on the effects of these products on people's health and quality of life gained strength.

Currently, it is relatively common to see spaces on shelves dedicated to this product category in large chain markets. In 2018, the Brazilian market for organic products reached the mark of BRL 4 billion in revenue and in terms of extension of land dedicated to this production, it is 12th in the world and 3rd in Latin America¹.

Despite this growth, these products are still relatively difficult to access for the population in general, either because of the difficulty of distribution or because of financial barriers, as they are generally more expensive than their non-organic counterparts. A similar scenario of rising demand and short supply is found in countries all over the world.

It was to address this problem that companies such as Thrive Market (USA), Naaber (Estonia) and Organic Net (Europe) created a collaborative marketplace for organic products. In it consumers, local producers, transporters, DCs and small retailers form a network to bring organic products to consumers in a more efficient and less costly way.

 Organic Net interface

On this platform, consumers have access to a menu of organic products and negotiate prices directly with producers. In this way, there is the possibility of the producer being able to negotiate better margins and consumers having more direct access to local products. This addresses, from a theoretical point of view, the question of the price of these products, since it would allow consumers to have access to the same products at a lower price.

The other challenge concerns availability and delivery. This is also a possibility to be traded on the platform itself. These companies, in general, offer the final consumer two options: deliveries made by the producer himself or by a network of transporters that participate in this platform.

In addition to the carrier agent varying from platform to platform, the delivery destination also varies. Some adopt the click and collect model, with the support of registered stores and small retailers, while others offer direct delivery to the end customer's home.

If the transport agent is a service provider, it is part of a freight supply network with different points of origin and destination. This would potentially allow these carriers to plan and optimize their routes, whether checking demand for places of interest, thus avoiding the cost of vehicles running empty, or consolidating cargo through shared delivery between different producers. In addition, there is an environmental benefit to having vehicles travel shorter distances to connect local producers and consumers. These companies, in general, have their remuneration model based on a percentage of transactions that occur on the platform and in advertisements.

Although the collaborative model is still a relatively recent business model, it has grown significantly in numbers, especially in the general cargo transport sector, in which the supply of drivers is large and on these platforms the need to an intermediary, such as a freight forwarder, for example. Of course, there are counterpoints in this scenario regarding the sustainability of this model in the long term, mainly with regard to labor uncertainties and service provision guarantees, as shown by the recent case of the Rappi delivery man who had a stroke on the job and the company was not able to answer that.

Sources:

https://www.organicnet.co/en/

Folha de S. Paulo – https://www1.folha.uol.com.br/mercado/2018/10/carrefour-quer-vender-5-bi-em-organicos-ate-2022-diz-presidente-no-brasil.shtml