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John Soi is double majoring in Global Resource Systems and Public
Service and administration in Agriculture. He is passionate about fighting the
growing global double tragedy obesity and malnutrition thus his interest in food
systems.
Elise Kendall is majoring in Global Resource Systems with a focus in
sustainability. She is driven to develop solutions for the growing globalization of
our world and its effects on environment, social, and economic sustainability.
Amy Rasmussen is a major in Global Resource Systems with minors in
Entrepreneurial Studies and Chinese Studies. She is excited about finding global
and local solutions for poverty.
.
Connor Stein is a double major in Animal Science and Global Resource
Systems with an interest in the health and well being of humans, animals, and the
environment that connects them.
Dylan Clark is studying Environmental Studies and Global Resource
Systems with specific interest in stakeholder driven international development.
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I. Table of Contents
I.Table of Contents ................................................................................................... 3
II. Executive Summary...............................................................................................
III. Analysis of the Business Situation.......................................................................
IV. Products and Services............................................................................................
V. Marketing Plan.......................................................................................................
VI. Operational Plan ..................................................................................................
VII. Management and Organization.........................................................................
VIII. Financial Plan .......................................................................................................
II. Executive Summary
There are over 870 million hungry people in the world today (FAO, 2012).
The most shocking aspect is that everyone, including businesses, are faced
by the problem of having extra food that ends up in landfills. It is estimated that
roughly 1/3 of the food produced for consumption (approximately 1.3 billion
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tones) gets lost or wasted each year (FAO, 2012). With global population
approaching 9 billion, therefore there is an bold need to ensure there are no more
hungry people and food waste becomes a past tense. Technology advancements
have made the world a click away and thus it’s imperative that food security
follows the same route. With this idea in mind, Foodchange was formed by
five Iowa State students who are determined to take food security to a new level.
To curb this pressing problem, we decided to create the first ever online food
exchange platform where excess food can be advertised and willing consumers are
able to access before they end up in landfills. This is the principle that inspired our
name Foodchange: a change in the way we view food by utilizing small excess
amounts of it, similar to minimal amounts of pocket-change leftover from a
purchase.
Foodchange is revolutionary because it reduces food and money waste;
mouths will find the food before it gets wasted. Money generated from the extra
food can be saved or used for other needs. On the other hand, the willing consumer
reaps savings since the price of the extra food is sold at a reduced retail price.
Additionally, Foodchange has the potential to improve the diets of the
impoverished by offering the opportunity to purchase wholesome nutritious foods
at remarkably, particularly in present food deserts. Furthermore, this idea can
change the way we as consumers view an excess of food; a potential earning rather
than a regretful waste. Foodchange will continue to promote Dr. Norman
Borlaug’s legacy and belief that food is a moral right.
All individuals and businesses have faced the problem of having food that
they are unable to consume which unfortunately is often wasted. Our solution is
to develop an online market exchange center where consumers are able to advertise
their extra perishable foods and someone who can use them will be able to
purchase them. This is the principle that inspired our name Foodchange: a change
in the way we view food by utilizing small excess amounts of it, similar to minimal
amounts of pocket-change leftover from a purchase.
This idea is revolutionary because it reduces waste, makes money back for
the consumer who bought too much or is unable to use all of his or her products, as
well as saving money for a person who buys the products for cheaper than store
price. In addition to alleviating food waste, this idea has the potential to improve
the diets of the impoverished by offering the opportunity to purchase wholesome
nutritious foods at remarkably low prices. Everybody can be a buyer and
everybody can be a seller. Furthermore, this idea can change the way we as
consumers view an excess of food; a potential earning rather than a regretful waste.
III. Analysis of the Business Situation
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The main barriers to a properly functioning global food system are reckless
food distribution, food waste, production insufficiencies such as monoculture
requiring an inefficient value chain, and economic and trade barriers such as food
aid dumping, economic tariffs, and commodity subsidies. Understanding these
principles helped us cultivate and explore potential solutions. Additionally, the
requirements set forth by the Thought for Food challenge ask for a project that is
transferable, sustainable economically, socially, and environmentally, and that
challenges the status quo.
Compounding global problems of population growth, biodiversity loss and
increasing per capita consumption have created a world where 12% are
undernourished. Through reducing systemic food waste, increasing value chain
efficiency, and promoting education these challenges can be met by a generation of
global thinkers. Through challenging the global dogma of progress, we strive for
balanced social, economic, and environmental growth through holistic solutions.
IV. Products and Services
Our project idea is to develop a website and social network based on local
buying and selling of food. With this concept, anyone from local farmers to a
student that purchased too much food for the week could advertise produce to
gains and a local buyer could purchase it. We believe that the very competitive
pricing offered by this network along with the desire for some socially conscious to
purchase locally and reduce waste would create an expansive market.
This new cloud based “farmers market” would maintain a database of
average prices per commodity so that users would be able to see their savings.
Additionally, each urban area would have at least one public trading location that
would enable buyers and seller to feel safe and comfortable meeting each other.
They will contact one another through the website to arrange an agreement. We
will create a geospatial database and map of commodity prices per location. This
would enable sellers, particularly small farmers to find the best paying market.
As safety and liability would be a potential barrier, we have investigated
precedent of similar websites that allow for market trading, but do not take part in
the financial transaction. The precedent seems to be that the websites are not liable
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for the goods traded. For example, Napster was able to maintain itself for a
number of years as does craigslist. We will require all members to register and
their information will be verified. Users of our website must also sign an
agreement that they acknowledge and understand that Foodchange is just a
platform and not a business entity. They also must agree that Foodchange prohibits
exchange of alcohol and other illegal or restricted food products and violators of
this rule will be barred from using our services. Additionally, a buyer feedback and
rating system will be implemented (such as with Ebay and amazon) to give the
buyer more confidence in the seller’s food. There are currently no FDA
restrictions on private trading of many foods, such as at farmers market. This is
the template we would be working under.
We will create a geospatial database and map of commodity prices per
location. This will enable sellers, particularly small farmers to find the best paying
market. Our organization will strive to reduce food waste and ensure equitable
distribution of food. The organization will be run by five like-minded individuals
and will focus the operation to the geographic location of Ames, Iowa. Ames,
Iowa has a population of about 50,000 and thus can serve as an ideal pilot location
while still keeping a big potential for growth in the nearby Des Moines area. Iowa
State University is home to over 30,000 students. There are a substantial number
of people both inside and outside of the University who may not have access to
food while some people in the community throw away food.
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The Foodchange Market Transfer Center (designated physical exchange
location) will be a safe and public location within each city or town that people are
trading in. The combination of Foodchange simply connecting individuals and the
buyers and seller exchanging food for money on municipal or other public property
will greatly reduce litigation potential. The system would depend on a deal made
between the seller and customers with a prior agreed upon price. Both parties
would then meet at the Foodchange MTC to exchange money and food at a
predetermined time. This approach will not only curb hunger, but also reduce food
waste considerably. It would also be more efficient and convenient than the
conventional farmers market.
This example of a personal profile on the Foodchange website shows the social
networking features and the business aspects.
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V. Marketing Plan
The website will be primary means of providing information about the
organization’s activities and the availability of products. The challenge of directing
potential Foodchange members can be done by using classic marketing strategies.
Our intended methods include written word, fliers, social networks, email, and
reusable Foodchange branded bags.
Many free means of organization are typically utilized in Ames because of
the university. Using chalk on sidewalks and classroom blackboards to promote
As seen in this image of Foodchange’s homepage the geospatial components and
newsfeed will help potential buyers and sellers see the action and use in their area.
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events is very common. The distribution of flyers around campus is also very
typical. Social media such as Facebook and Twitter will also be an important
aspect of our advertising. These methods will be used to target students and people
who work at the university.
Methods of communication via online social media will be especially
effective in a college campus where people of interest will be easily reached in
masses. Students within specific majors and organizations can be reached with
ease due to the extensive availability of emailing lists and Facebook groups. By
utilizing these sources we will be able to promote interest and awareness of our
network to groups who are likely to be interested; therefore targeted students will
be reached systematically, simultaneously, and in large numbers.
To appeal to the rest of the Ames community and reach students who do not
fall within the targeted groups but nevertheless will still be interested in
Foodchange we will have reusable Foodchange branded bags for members to carry
their goods. Simply by carrying these bags full of food across campus, through
Ames, and onto the community public transport system (cyride) Foodchange will
be advertised and our members will be paying to do it.
Potential sellers we will be targeting include local growers with excess,
overstocked restaurants, university dining, and any other community programs or
events. We will target them by personally contacting businesses in Ames and
advertising around the community. Anyone who buys and sells will be benefitting no
only themselves by getting a cheaper price, but the community and the world by not
wasting this food.
Markets which are potential competitors include grocery stores, farmers markets,
and food pantries. FoodChange MTC will be a separate market niche because it is
essentially a for-profit food thrift store. Food which may be difficult to market to grocery
stores for sellers can be sold here. It is easier for a seller to sell at the MTC because they
will not have to wait. There will be no uncertainty as to whether the time put in is worth
it because the sale is guaranteed. FoodChange is also different from a food pantry
because sellers have incentive, and many food pantries require proof of financial status.
All people are encouraged to use the FoodChange MTC. All types of products can be
sold. Packaged goods, raw goods, refrigerated foods, meats, produce, and many other
categories can be sold at the MTC.
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VI. Operational Plan
Business start-up steps include finding a long-term location, website and
database construction, attaining business documents, advertising organizational
purpose and structure, and coordinating volunteers to help.
Ideally the most accessible location for a pilot market transfer center is
within Campustown, an area across the street from the Iowa State University
campus which is highly concentrated with restaurants and bars as well many
apartment complexes; both are expected to have an excess of food which will be
available for donation or sale. There is currently a community wide initiative to
redevelop the Campustown area with the intent of better catering to both university
students and the community. This current redevelopment can prove to be an
opportune time to become a part of the Ames community.
The goal of our exchange center is to facilitate all transactions in a manner
that will ensure the safety of both buyers and sellers in a comfortable environment.
Upon entry both parties will be asked to identify themselves and will be able to
create simple name tags to aid the process of identifying the second party. Our
facility will be equipped with accurately calibrated scales to help parties quantify
the product they are selling and agree on a fair price for both parties and inform the
buyers and sellers of the market price to allow for any additional bartering. The
information of the transaction will be reported to the market exchange center
attendant, who will act as a transaction supervisor and database operator. Required
information to be included will be the names of both involved parties, nature of
interaction (donation or transaction), product and brand name if applicable,
expiration date and quantity.
The information recorded will provide Foodchange with a valuable insight
of local food distribution, sales, and consumption. We will have a strong
understanding of the foods that are commonly bought in excess, popularity, and
consumer demographics. Consumer demographics will be understood by matching
transaction information with the information given in each party’s profile.
To ensure the wholesomeness of the exchanges within the facility we will
have all exchanges video recorded. By no means do we endorse or facilitate the
sale of drugs or any illegal substances within the confines of the market exchange
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center. If said transactions are suspected by law enforcement we will be
cooperative and allow the use of our video recordings for investigation.
Furthermore we reserve the right to inspect any and all items brought into the
confines of our facility to protect the legal safety of Foodchange and all of our
members.
VII. Management and Organization
The Foodchange will essentially work as a platform such as ebay. Therefore
we do not engage in the business of buying and selling of commodities but rather
facilitate a means of food exchange between the parties. This is to prevent potential
legal issues. The website will serve as the primary means of information about the
organization and will be used to coordinate the timing of market exchanges.
Anyone will be able to buy or sell at our market. Our organization is a non-profit
entity that offers a new market to sellers, and cheaper products for consumers, and
ways to reduce waste for everyone. We will also have a rating system available on
the website to rate sellers in order to keep food safety and quality higher. Food
prices from the grocery stores in Ames and nearby areas will also be displayed in
our website so sellers and consumers can make ‘smart pricing and purchasing
decisions’.
Deals for selling and buying will be made online. The sellers will be
required to post pictures of the items and descriptions online. This will be able to
prevent future potential issues for instance, if a seller transfers a product, and the
quality / quantity is unreasonably dissimilar, the deal can be cancelled sooner than
later. This will also help in food safety assurance. This will also help with food
safety. The Market Transfer Center will serve as a station for dropping off /
picking up commodities up.
All members of the team will participate in day to day operations of
Foodchange. The website must be monitored and updated constantly for safety
compliance. Our group members will be available on email / phone to respond to
customer concerns or questions pertaining the website. As Foodchange expands in
future, there will be a potential of hiring some staff members.
VIII. Financial Plan
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Projected expenses will simply surround the startup, maintenance and
promotion or the website. This will include obtaining a business license, start-up
fees, website domain fees, and fees for basic management staff. We hope to be
supported by volunteers in order to cut costs and get the community involved.
People would be willing to volunteer for an organization like FoodChange because
its mission is to decrease waste and has the potential to offer lower prices to
consumers and help expand potential markets for sellers. Revenue will be
generated by the allowance of advertisements on the Foodchange website as well
as the sale of transaction information recorded at exchange centers. As the
exchange locations will be municipal or public property, there will be no cost
associated with infrastructure.
The initial start-up funding of TFF would serve as funds for the location and
business start-up expenses. Such expenses will include tables and chairs to aid in
exchange as well as accurately calibrated scales to assist buyers and sellers reach a
consensus on a fair price.
Long-term fees include advertising such as flyering which incurs printing
costs, Foodchange branded reusable bags, updates to business licenses and
documents, for the server, for any required business insurances, and any staff who
will be required to train volunteers.
A source of funding for start-up costs is grants. One such organization that
provides grants for reducing waste is Iowa’s Department of Natural Resources
SWAP program. Long-term sources of revenue to website and business overhead
will be raised using advertisements on the website, Foodchange branded bag sales,
and the sale of market information and consumer demographics.
Becoming a member of the Foodchange network will require each person to
disclose personal information with our server. Information may include name, date
of birth, email address, location, primary Foodchange interests (buying, selling,
organic, specific foods), and an optional profile picture. This information allows
for advertisers to display their advertisements on our website for only specific
profiles; allowing Foodchange to profit and advertisers to improve the
effectiveness of their advertising.
Food retailers may find this information especially interesting for their own
marketing strategies. With the profile information along with their corresponding
buying/selling information we will have a unique insight on consumer preferences,
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purchasing behavior, and consumption behavior; information that will be very
unique to Foodchange.
A minor source of Foodchange revenue will come from the Foodchange
branded bags mentioned earlier. While we may be able to sell these bags for profit
within our exchange centers this is not expected to serve as a significant source of
revenue. Instead, these bags will serve as free Foodchange advertisement and has
the opportunity to greatly reduce our advertising costs. While members travel to
and from their exchanges their Foodchange bags will be visible leaving these
witnesses curious about what they have seen.
Detailed information of each exchange within the facility will be recorded in
a Foodchange database. This information has the potential to be of great value to
food producers, processors, and retailers. By knowing how much food is or isn’t
wasted, processors will be able evaluate their packaging decisions and adjust them
accordingly. Since the adjusted amount will satisfy the same needs of consumers,
processors and retailers will have the opportunity to sell less product for a higher
unit price and can expect an improved allocation of their resources. The
effectiveness of said adjustments can be measured by any changes of the amount of
a specific product exchanged within our facility. This approach allows our business
to sell our information to other businesses at least twice; the first time to identify
an opportunity for improvement, the second time to evaluate the success of an
implementation, and each adjustment made thereafter will require another sale for
further evaluation.1
