FOOD CONNECT ADELAIDE WILL CEASE TRADING IN THE NEW FINANCIAL YEAR
In its short life to date, Food Connect Adelaide (FCA) has experienced many highs and lows in its efforts to bring the pioneering Food Connect model of community-shared agriculture to the residents of Adelaide. Regrettably in recent months the financial situation of FCA has deteriorated to the point where, in consultation with our accountants and the broader national Food Connect family and community, we have reached the conclusion that it is untenable for us to continue trading in the existing circumstances.
OUR STRUCTURE AND ORIGINS
FCA is a not for profit social enterprise that is based upon the original Food Connect Brisbane business model. A separate legal entity from the other Food Connect projects in both Brisbane and Sydney, FCA was established by its founders as a form of Community Supported Agriculture (CSA), i.e. a risk sharing operation between growers and consumers. FCA is structured as a not-for-profit; its directors can never sell the business for their own personal gain. All directors at the establishment put loans and donations into establishing FCA, as did two other generous individuals. This business model has been untested in the Adelaide market and was seen to be an innovative response to environmental, social and economic sustainability issues in the food system.
OUR SUCCESSES:
- High engagement with the community regarding food issues
- Many reports of subscribers trying new produce
- New growers encouraged and old growers appreciative of a business model which works for them; paid fairly and promptly.
- Delivery of incredibly fresh, local produce
- Interactive educational experiences via our beloved farm tours
OUR PAST SIX MONTHS:
There have been a series of events that have led to a reduction in subscriber numbers.
Seasonal/Climatic
- The ‘Hungry Gap’ last spring – subscribers not happy with range of produce and leave
- Christmas Holidays – always a major impact causing box number drop-off as people go away on holidays, yet business costs remain high. Subscribers cancel boxes. Many chose not to return.
- Home gardens over summer bountiful – best year for gardens for years – many subscribers cancel subscriptions
- More diseases on some organic crops due to warm wet summer. Reduced quality affects some resubscribing.
Economic climate
- Two of our major growers ceased trading which forced us to use lower quality and more expensive replacement produce. Keeping box standards to subscriber expectations becomes more expensive and subsequent patchy quality resulted in many complaints about value for money.
- South Australia is current experiencing tough times in retailing, with many businesses being forced to close their doors
- Feedback from exiting subscribers reveals strong expectations about value for money, lack of ability to order individual items (e.g. extras) and grocery items
How we tried to adjust
- March – review of business model by Directors with the input of new Director. Planned changes to address value for money and ordering issues with on-line ordering system released, price cut and new conventional box lines introduced well ahead of schedule.
- April – launch of online ordering system enables expansion of extras and grocery lines. Some difficulties with transition to subscriber’s use of online system. Price cut of 10% provided to assist with customer retention.
- May – launch of a ‘Winback’ campaign for old subscribers based on implemented changes to improve system. Assumptions were made that the improvements would result in a substantial increase in subscribers (all ex-subscribers were contacted) but a poor response was evident (i.e. not enough ex-subscribers resubscribed). Conventional boxes prove moderately successful but organic box lines show no growth.
ISSUES:
- Adelaide is renowned to be a difficult market to trial any new product
- Under-resourced e.g. low capital in business as structured as not-for-profit. Few people willing to put in venture funds as no potential to sell a share.
- No successful grant support from local, state or federal Government despite strong social, environmental outcomes and support for local food system development provided by Food Connect Adelaide
- Limited financial resources places a huge drain on directors (as they carried significant extra unpaid workloads) and did not allow further changes required, e.g. software upgrade required to enable choice of produce, home delivery arrangements.
- Diminishing supply of organic produce as the pool of local growers is reduced, making reliable supply difficult, particularly at certain times of the year
OUR RESPONSE TO THESE FINANCIAL DIFFICULTIES:
- Our last delivery will occur on Wed 29th June and Thurs 30th June 2011. We are in discussions with our accountants to determine the best course of action for all creditors.
- This will result in some loss for subscribers on their subscriptions paid in advance. We are working to minimise this impact as much as possible. Farmers and other suppliers will receive minimal impact due to the prompt payment terms Food Connect Adelaide operates with.
- We will keep all current subscribers informed via email when the process required by our accountants become clearer and aim to maintain a transparent process. Additionally, our accountants will be in contact with all creditors (subscribers) to inform you of the process of your account settlement. They will organise a meeting to which you will be invited. There they will follow the normal procedure in situations like this. For those wanting to talk about the future of alternative food systems in Adelaide there will an opportunity to do so at the end of the meeting.
- If you have any queries about this process, please do not hesitate to contact us on admin@foodconnectadelaide.com.au and we will get back to you as soon as we can. The next few weeks will be hectic as we wind up the business and we appreciate your patience with this process and ask that you direct all queries to the above email address and not your City Cousins.
- Before contacting us please refer to the terms and conditions of your subscription. http://www.foodconnectadelaide.com.au/?page_id=422
- Outstanding styrofoam boxes cannot be returned to your City Cousins this week but will make a great extra esky for camping or a water-wise planter for some seasonal greens and herbs!
On a more personal note, this suspension of trading for FCA has been a very difficult decision after 18 months of hard work to introduce a CSA scheme into our local community. Our work has been incredibly rewarding and we thank everyone involved for their passion and commitment to local food distribution. Needless to say we are all deeply, deeply distressed at these current events and thank you all sincerely for your business and your interest and passion for local food. This loss of our wonderful FCA community is quite wrenching but we do hope you continue to support our local growers by keeping an eye out for their produce in markets and stores and maintaining an interest in the politics of local food systems.
Keep local alive!
Yours sincerely,
Sally Fisher, Kelly Jones and Simon Martin
Directors of Food Connect Adelaide
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