Online grocer faces big-box competition

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This article was published 17/01/2018 (2283 days ago), so information in it may no longer be current.

Five years ago, when Nathan Steele started the online, home-delivery grocery store, MyFarmersMarket.com, he was not planning to be competing with billion-dollar chains like Save-On-Foods and Superstore.

After all, he was selling exclusively local and organic products to discriminating consumers without the benefit of the brand power of the chains.

As with many consumer online businesses, the barriers to entry may be lowered, but depending on the success of the concept, competition can ramp up fast.

His business concept was to appeal to consumers looking for fresh, local, organic produce as well as certified organic items from the five food groups, combined with the convenience of ordering online with timely home delivery. Deliveries from his two trucks are routed such that, depending on when you order, groceries can arrive at the door as quick as two hours from placing the order.

From the beginning, it was a professional operation. Steele did not spare any expense in the online presentation. MyFarmersMarket.com is a richly populated website, featuring about 1,000 items displayed with expert photography, including in-depth descriptions of each product along with the provenance and nutritional value of each item.

When he started, there was about one-fifth of the items MyFarmersMarket.com now offers, and he enjoyed solid pick-up in business, doubling in size for the first few years.

What he did not anticipate was that his customers would be wooed by the brand-name chains when they started to offer home deliveries, as Save-on-Foods did last year after that West Coast chain’s entry into the Winnipeg market, with Superstore following with its click-and-collect service.

“Many of our customers understand the value of local and the quality of what we have,” said Steele, a Winnipegger who came back to the city after 10 years away to start the business in 2013.

“We were the only ones doing real-time online grocery. But our stuff is a little more pricey and specialty and there were some who jumped ship.”

That was happening just as the company was turning a profit with plans to open a retail presence on the front end of the Blockbuster video location on Portage Avenue in the Deer Lodge neighborhood that he moved into about a year ago.

The retail store, called Fresh Local Fare, opened this past fall with the thinking that patrons of some of the city’s fresh markets that close in the winter will be able to continue to have a place to go for fresh and local fare. (Depending on the timing and the season, Fresh Local Fare and MyFarmersMarket.com have between 60 and 80 per cent local produce.)

But opening a fresh produce organic grocery store at the beginning of a Manitoba winter is not the best strategy when it comes to foot traffic even if, as Steele says, “It’s amazing how much local produce is available all winter long in Manitoba.”

With more than 100 local suppliers — including meat, dairy and bakery — there are also a growing number of indoor commercial growers with an expanding variety of offerings.

After successfully getting over the hump that every young business faces in the first couple of years, Steele now has to deal with competition from big-box brands along with the new challenges of bricks and mortar overhead and attracting customers out from their cosy homes in the middle of winter.

“There’s a lot of local indoor-grown greens, but also folks who are trying tomatoes and cucumbers,” said Steele, who is a gardening enthusiast himself, but has not had time to indulge in that passion as he runs his seven-day-per-week operation fighting for its piece of the pie against the mainstream grocery giants. “I’m really looking forward to my first spring and summer with a storefront operation,” he said.

martin.cash@freepress.mb.ca