Digitising Local Food Procurement: Forager Picks Up $4mil
93% of consumers want grocers to take the lead in supporting the local food economy and 85% of shoppers are likely to switch grocers to find more local, healthy food- Forager
Forager, a B2B procurement platform that connects local farmers with grocers to provide fresh, locally sourced food options to consumers, has raised $4 million in funding. The funding was led by private investors. One of which is Coastal Enterprises Inc. (CEI), a social impact fund focused on environmentally sustainable enterprises, “The changing climate disproportionately impacts people with low incomes. We focus financing and technical assistance to expand renewable energy, energy efficiency and green businesses that reduce carbon emissions and create jobs in rural regions and small gateway cities undergoing economic transitions.”
Another is Duncan Saville, founder and Chairman of the ICM Group. “I invested in Forager for two reasons, first this is a $40 billion fast growing market that is largely analogue and in desperate need for technology so it can scale and be data driven,” said Saville. “Second, the majority of people I know are interested in buying more sustainably sourced products, especially at the local level. This is an important market trend that cannot be ignored and is critical to the future health of our planet.”
Through digitisation and streamlining of processes, Forager’s online and mobile platform removes the friction in local food procurement, delivering efficiencies through the procurement-to-payment process, saving grocers, farmers, co-ops, and producers on time and costs. Forager also offers a proprietary vendor sourcing system that helps buyers mitigate risk by finding and vetting new suppliers.
As grocers look to digitise and consumer demands for healthy, high-quality and nutritious food continue to escalate, Forager aims to ease the way, bridging the two by leveraging automation for simplification of processes and reducing the costs of sourcing.
“In all my years as a serial tech entrepreneur, I have never seen a market sector with so much passion and commitment as local food among consumers and especially Gen Z,” said David Douglas Stone, founder and executive chairman of Portland, Maine-based Forager. “Without technology, the industry cannot scale and expand, end of story. Forager offers a vital solution to building a scalable, local food supply chain that can deliver the freshest-quality items to consumers. Local has also has proven itself as a key strategy for grocers and institutions differentiating with consumers who demand fresh, local food, especially in a post-pandemic world as Americans continue to focus on food as medicine and healthy eating habits.”
Investors believe local food will help grocers gain customer loyalty and boost foot traffic. The funding provided by Forager will be used to further develop key product features, perform necessary upgrades to further meet the needs of both farmers and grocers, and continue to grow out sales channels.
Sourcing locally not only avoids the potential supply chain risks that grow with distance but is good for our planet, and when it comes to fresh produce, good for our bodies while giving opportunity to diverse and smaller businesses.
Now operating in more than 12 states with 40-plus grocers and institutions and 500 local suppliers, Forager has seen tremendous growth and now has had almost 200,000 local products sourced through its platform to date
Germany Adopts Revolutionary Supply Chain Human Rights Laws
While the title states that Germany’s newly adopted that targets human rights abuse across global supply chains is “revolutionary” ─ which it is ─, it certainly shouldn’t be. But nonetheless, today, on June 11th, 2021, the German Parliament has ushered in a long-awaited shift to mandatory company compliance rules. After months of negotiation, the German lawmakers finally pushed it over the finish line within the final days of the current legislative period. The bill will see German multinational corporations held legally responsible for any human rights or environmental abuses found across their global supply chains.
“The German government has taken a critical step to ensure that companies operate responsibly,” said Juliane Kippenberg, associate director, children's rights division, at Human Rights Watch. “Respect for human rights in global supply chains is not something that should be optional.”
This news comes at a time when global corporations are already being pushed towards environmental, social and governance (ESG) compliance, with a massive drive to reduce Scope 1, 2, and 3 carbon emissions from their supply chain operations and a concerted effort to avoid suppliers and manufacturers that do not meet the standards that industry-leading companies are now expected to meet.
Who will the new law affect?
With Germany’s new legislation, organisations that fail to meet the rules and regulations could be forced to pay fines potentially equivalent to 2% of their annual global turnover. However, it isn’t applicable to all.
According to Reuters, under the act, companies above a certain size will be forced to establish set due diligence procedures that prevent the abuses; from 2023, only companies with more than 3,000 employees in Germany will be affected. From 2024, the rules will expand to companies with more than 1,000 employees.
Statistics from within the country suggest that the first stage of this regulation rollout will affect 900 companies, while the second stage will put 4,800 companies under the spotlight. The bill will also enable the government to temporarily exclude from public tenders companies that receive fines in excess of €175,000.
“Incalculable risks arise for companies,” said Joachim Lang, general manager at the Federation of German Industry. A word of warning from a respected leader, at a time when industry lobby groups and wholesale businesses fear that the new law increases bureaucracy and suggest that price rises may be inbound.
The Take of German Giants
After looking at the incoming legislation, Daimler AG, known more commonly as the automotive giant Mercedes-Benz, a company which, should there happen to be any ESG-compliance issues along its multinational supply chain, would pay a hefty fee, is welcoming of the push for change but hesitant about certain aspects of the bill.
“Daimler's position is: The respect for human rights is a central aspect of our sustainable business strategy. We, therefore, welcome the progress made on the Supply Chain Act. Although the regulations are very ambitious, the proposed legislation has a sound approach overall. It is based on internationally recognised human rights and on international agreements. And it gives companies more legal certainty in an area that has so far only been partially regulated.
Supply chains are not "chains" but rather exceedingly complex networks: Daimler alone has over 60,000 direct suppliers - and many more sub-suppliers. For this reason, we also consider the proposed risk-based gradual model to be sensible. The responsibility of the companies lies primarily in their own business area and with their direct suppliers. Companies must then take action in the deeper supply chain if there are concrete indications of human rights violations. Daimler AG already does that today.
Even though we support the proposed legislation in principle, we consider some aspects to be critical, e.g. the planned fines of up to 2% of the average annual turnover. Instead of threats of sanctions, we consider concrete measures, which companies must take in the event of deficits, to be more expedient. In addition, certain wordings are still vague and leave room for interpretation. Terms such as, e.g. "fair standard of living" should be phrased precisely in order to create legal certainty. Furthermore, documentation and reporting requirements should not lead to unnecessary bureaucracy and should be harmonised with existing rules. On the one hand, this does not help the people on the ground, and on the other hand, it puts a burden on the companies – and the implementation can pose substantial challenges for smaller companies in particular.”
This law is arguably one of the most important developments in the supply chain space so far this year. But it must be remembered that changes do not and will not happen at the push of a button and that democratic principles should be applied to the discussion prior to enshrining legislation into tablature. Environmental and human rights advocacy is a hike, not a brisk walk around the park ─ so, for German companies, it’s time to get their boots on the ground and start assessing their global, interconnected supply chain operations. And, hopefully, they’ll set a stellar example for the rest of us.