Last testament to Storimarket

In November 2017, we incorporated Storimarket Limited as a for-profit social business. Our aim was to build a farm-to-fork platform for consumers to connect directly to the smallholder farmers in Africa who produce their food. Our ambition was to cut out the ‘middlemen’ (they usually are all men!) to get smallholder farmers a better deal, encourage them to farm sustainably and increase provenance for consumers. We often referred to it as fair trade 2.0 or – when we wanted to be even cooler – a mash-up between farm-to-fork and fairtrade! Our motivations were clear: to support smallholder farmers in Africa. But why?

Well, Africa is a continent of smallholder farmers, which employs about 70% of the workforce (Ehui 2016). Up to 90% of food in sub-Saharan African countries is produced by these 33 million smallholder farms (Wiggins & Keats, 2013). Despite their current importance and staggering future potential for food production, smallholders remain some of the poorest households and are vulnerable to climate change and other economic shocks (Food and Agriculture Organisation 2012). To reduce poverty and improve food security developing smallholder agriculture is crucial, particularly by providing access to markets (Wiggins & Keats, 2013).

We also saw an opportunity to serve the 32% of consumers planning to make more socially responsible food purchases, which has doubled since 2012. Many were millennials, 60% of whom ‘want to buy food and drink products that reflect their attitudes and opinions on life’ and feel their purchasing decisions have a much greater impact on society than their voting decisions or community involvement. Therefore, whilst we knew price, quality and convenience remain important factors for consumers, we believed sustainability and fairness was rapidly becoming the fourth factor - and one that would differentiate brands. Furthermore, in our new post-truth reality, consumers require complete and total transparency from food and drink companies.

We were lucky enough to be accepted onto Accelerate Cambridge at the Judge Business School. The Accelerate programme was useful in understanding some of the key concepts, approaches and tools of entrepreneurship; providing a platform to pitch and receive feedback; as well as providing a network of mentors and fellow entrepreneurs. Special shout outs to Jim and Oli at Outfield and Alex at Flit, who remain friends to this day. Also, to Chris Coleridge and Reinhard Eschbach who provided sound – but not always easy, in the case of Reinhard! – advice, which was important in the early stages of Storimarket.

Anyway, back to the business!

In January 2018, with the support of Proudly Made in Africa, we travelled to Kenya, Tanzania and Uganda to find our Producers and Farmers for our first range of products: healthy, ethical snacks. In Storimarket lingo, Producers buy inputs directly from smallholder farmers – our Farmers – to produce the retail-ready products we sell. They have transparent, fair and long-term relationships with these farmers, who in turn provide them with their best quality crops at harvest. After two weeks on the road, we had some of our first Producers: Azuri Health, The Epicurious Hedgehog (NEI Ltd), Ten Senses and Asante Mama. Again, another shout out to these amazing businesses who not only overcome significant challenges each day to produce amazing food products, but for taking a chance on us when Storimarket was merely a concept. Thank you!

Finding Producers and Farmers was just the start, we had to find a cost-effective way to get products from East Africa to our customers in the UK. Enter Bas Jansen, logistics lifer, food sustainability nut and Storimarket’s first board advisor. Offering advice and introductions, Bas connected us to the Link Global logistics network: a network of local, independent logistics companies all over the world. In Kenya, where we exported, they were represented by Mitchell Cotts; in the UK, where we imported, Aztek International was our point of contact. Both companies embraced us enthusiastically despite the fact we were a tiny start-up with no track record. Thanks for that ; )

So, what did our supply chain look like?

The first mile from farm to factory is a myriad of informal channels, which work! Trying to replicate this formally, either internally or by outsourcing, would have been expensive. So, we left it to the Producer and Farmers to negotiate this whilst we introduced compliance and quality checks pre- and post-export. However, the increasing use of mobile technology to track transactions meant we could see when crops were being harvested, when they were purchase and for how much. The next 99 miles, from factory to the customers, is well served by many reputable and reliable companies. Therefore, we chose to outsource this to Link Global and Royal Mail. This allowed the experts to do the physical movement of products, whilst we focused on telling the stori and ensuring quality, compliance and timelines were being met (although the first batch of dried mango was hand-carried from Kenya – sorry UK Customs!).

We described it as like a relay race, with the baton being passed. Storimarket’s job was the make sure the baton was not dropped nor damaged – not destroyed by UK customs for being non-compliant. Furthermore, by outsourcing the logistics, from farm-to-fork we could realise our eventual aim to step back from being an intermediary, buying and selling the products, to become a platform where Retailer Partners, Farmers and Producers can transact directly – with Storimarket facilitating the trade, compliance, quality assurance and logistics for a commission. The long-term vision was to have weekly shipments leaving East Africa for Europe, providing a route to market for smaller producers of processed products – and eventually, farmers selling fresh produce.

One of our steepest learnings, or deepest naivetes, was around compliance. The EU, therefore the UK, have some of the strictest compliance standards in the world (I’m told that food that fails UK compliance if often re-routed to the US or the UAE, which is a scary thought!). Big shout out to Simon Calder here, who joined us just in time to help us open the compliance can of worms! Simon researched and clearly outlined the compliance standards we had to meet, whilst holding compliance phone calls with our Producers. We saw compliance as a pyramid, with the foundation as the mandatory standards to import into the EU and the layers higher up representing ever increasing demands we could expect from larger retailers. By using data and information to identify the key risks, we were able to pin-point testing and reduce compliance costs.

With our Producers and Farmers signed up, and our compliance and supply chain sorted, it was time to get marketing and selling. It’s worth mentioning that a typical start-up approach is to sell first, sort out the supply later – a la Frye Festival and Theranos! – but since no one had ever tried to do what we were doing before we felt it best to ensure we could deliver: this meant establishing suppliers – and a supply chain – before we had even sold a single product. Furthermore, we didn’t want to use unauthentic stories or ‘fake it’. Instead, we wanted customers to know the real Farmers and Producer who would be providing their food. Like Phillip, from Moshi in Tanzania who grows vanilla for The Epicurious Hedgehog.

Launching into the world of ecommerce was a trial by fire. This is where Alex Rosso, our Creative Lead and graduate of Central Saint Martins, and Sharon Lindsay, our Marketing Lead based in Nairobi, came into their own. They generated some compelling content to engage audiences, set up social media marketing campaigns, designed a kick-ass website…and much, much more! Because we found, through analysis (working with the support of fellow Cambridge Accelerate alumni Amy Muz at Acting Systems), that the face of the farmer, and their real story, was important to engage customers, Sharon overcame the odds to get stories directly from our Farmers – travelling out to the farms on a regular basis. To get up and running quickly, we used Shopify to create a minimum viable product of our farm-to-fork platform to sell an ethical, snack box (total rip off!). Shopify allowed us to provide information about the Producers and Farmers, with a check-out for people to buy.

However, despite high content engagement and relevance levels on Facebook, and a growing community, we never managed to make people buy online. We’ve received various feedback as to why, such as:

- We needed to first build a community, then sell to that community. Instead, we tried to do both simultaneously (we’re impatient!).

- Our website and search engine optimisation wasn’t good enough. People engage on social media but buy through search.

- We didn’t spend enough nor for long enough. Social media is a bidding war: engagement is cheap, whereas for conversion you’re fighting for scant attention against everyone else

- Our product range was too narrow and available cheaper, and more conveniently elsewhere.

Anyway, to date, we have a mere handful of customers who came though purely online sales and marketing channels. Although, personal email lists did work, as the 3Fs (friends, family and fools) supported the cause with some early purchases.

Not to be discouraged, we found events, festivals and markets a more effective channel for customer acquisition. Successful events focused on African business, veganism and sustainability – which tied in with the customer personas we put together. These early customers who ordered our ethical snack box supported Storimarket’s launch from May 2018 and provided valuable feedback. Some of these customers became Storimarket’s most loyal supporters, providing testimonials and referrals. Alex worked to provide early customers with an experience of delight on receiving their ethical snack box (thanks to Phil Burton at Bloom & Wild, who took time from his busy schedule to talking about the ‘unboxing experience) and associated digital communication, for which we used MailChimp.

In the world of eCommerce, the Customer Lifetime Value (LTV) over Cost Per Acquisition (CPA) formula is Queen. Whilst we had found viable channels to acquire customers at a good CPA, the majority didn’t stick around long enough for their LTV to make our efforts viable. Big shout out to Sharon here who took on the challenge of trying to improve the retention of our customers, trying to use every touch point to maintain loyalty (shout out to PACT Coffee, who impressed us with their customer journey efforts so much we stole some of their ideas – imitation is the highest form of flattery!). Sadly, in September 2018, after crunching the CPA / LTV data it turned out we were at best breaking even: our CPA=LTV=£30. Not to be discouraged, with the help of Christina Savian, we took a long hard look at ourselves – locking ourselves in a meeting room, with Sharon joining virtually from Nairobi – and pivoted!

By late 2018, we knew we had a concept – some – consumers loved, but also knew that direct to consumer wasn’t working for us. In fact, we’d had some direct feedback from customers asking if we were available in their local co-op supermarket, deli or farm shop. So, that’s exactly where we went from B2C to B2B2C. Between September and December 2018, we transformed our ethical snack box product into a range of healthy, ethical snacks – again, big shout out to Alex who developed the packaging and labels. Wanting to ensure we set clear milestones for success, our goal was to get stocked in 30 retail stores for a launch in January 2019. Because our initial cash injection by the founder was all but used up by our B2C (mis)adventure, we also had to secure enough money for the launch.

By good ol’ fashioned door-to-door sales, across London and Cambridge, we managed to get our 30 Retail Partners (by now, we realised we were building a movement in partnership). Shout out here to all our early Retail Partners who – based on our enthusiasm, a prototype of our packaging, and the promise we’d deliver in January – said yes! Our early customers were a collection of value-led, owner-managed independent farm shops cooperative supermarket and delis who shared our enthusiasm for a fair, more sustainable food supply chain. We named this customer sector our ‘Buffalos’ for being strong, solitary types! A special shout out to Daily Bread, in Cambridge, who became our first – and one of our most loyal Buffalos. Throughout this pivot we kept our Producers and Farmers in the loop, appreciating their flexibility in coming under an umbrella Storimarket brand for our B2B2C launch. However, even by December 2019, we still didn’t have the money to deliver to these 30 customers!

In mid-2019, we had graduated from the Cambridge Accelerate programme to the Allia Serious Impact (now called the Future20) incubator, with support from Emma Mee. As well as providing advice and giving us a home at the Allia Future Business Centre, Allia introduced us to Foundation East. Foundation East is a responsible finance institution, seeking to support impactful businesses across East Anglia. You’ve probably guessed what comes next…yes, reader, in the nick of time Foundation East gave us the cash we needed to launch Storimarket’s B2B2C product range in January 2020.

It was a close call though: we didn’t find out until 21st December 2019 and had promised to deliver by mid-January 2020. There wasn’t a more hectic time in the business, since we had waited to pull the trigger on orders for products, packaging and everything else! Highlights include UK Customs stopping our shipment for inspection (we passed!); long nights of pizza and packaging parties (thanks friends for helping out!); the labels being sent to the wrong address (Alex jumping in the car!); and long hours on the road, personally delivering the first orders. Despite the tight timeline, kudus to the team for managing to get Storimarket products on the shelves across London and Cambridge in January 2020 – that’s us below! At the end of 2019, we also set up our advisory board, with Charles Perry, Helen Blackholly and Nasser Ahmed all agreeing to join Bas to guide and encourage us (shout out to Nasser who let us hold our first advisory board meeting at Google!).

All in all, the launch was a success: we hit our target, found funding and delivered to customers. During this time, we also found a new member, Toby Simcox, avid skier(!), corporate escapee and sales extraordinaire! Being from Bristol, one of the UK’s most progressive – and rebellious – cities, he completely got what we were doing and agreed to lead sales – after insisting we read Be More Pirate. Within a month, we added Bristol to Cambridge and London and found a new customer segment in the fast-growing zero-waste retailers – which we affectionately called our Hyenas for leaving no waste behind! A big shout out to the ladies, Lidia and Stacey, at Zero Green in Bristol who, as well as being pioneers in the zero waste movement, became advocates and supporters of Storimarket – even dropping by our inaugural sales meeting in March 2019 to offer some tips and advice.

After the initial launch, and expansion to Bristol, we were back treading the pavement to find new Retail Partners to support our cause. This meant we were struggling to maintain our ethical snack box deliveries to our B2C customers, so we decided to say goodbye to them in early 2019. We also added some part-time Retail Partnership Leads to our ranks: Rhys and Mervi, who each took an area of London as their ‘patch’. However, it soon became obvious that, although we had over 40 Retail Partners, some of our Buffalos ordered very little and rarely did so without significant prompting – so we gently said goodbye to them too. Whilst this might sound alarming that an early start up would purposely let go of paying customers, we did so knowing that a) the customer we kept accounted for 80% of our revenues and b) the customers we let go were not profitable to serve. This decision allowed us to focus on key customers – our ‘brand-halo’ Buffalos (value-led cooperatives supermarkets, award-winning farm shops etc.) and our Hyenas – so we could focus on slaying some Lions…or so we thought!

Lions were our high-profile, small retail chains such as Better Foods, Planet Organic and Wholefoods. For the affluent health-conscious, sustainability-minded consumer these chains are something of a mecca, therefore the perfect place for our range of products. Unfortunately, we’re not the only food start-up to think that! As a result, it’s a highly competitive space and difficult to even get the attention of decision makers – long gone were the Buffalo days of walking into a shop, talking directly to the manager and getting an immediate decision. Therefore, we began to design Storimarket 2.0: a more mainstream packaging design, that would cry for attention on busier, more commercial shelves. At the same time, our Hyena segment was growing, placing other demands on our product and packaging. Hyenas wanted to bulk, recyclable packaging with compelling point of sale materials that told the story of provenance, fairness and sustainability.

These competing demands placed a lot of pressure on the team, effectively requiring us to fight on both fronts – whilst also maintaining delivers to our Buffalo segment. Furthermore, whereas Buffalos and Hyenas offered short sales lead times, Lions required a significant investment of time and money. After a couple of months of being stretched too thin, we decided that Lions were not yet for us and decided to double down on delivering bulk products, with a story, to our Hyenas. Whilst we were able to serve Hyenas in the Bristol and Greater London on our own, our last mile distribution options, personal cars or using Parcel2Go, was either inefficient or lacking the Storimarket touch, respectively. Therefore, we decided to go further up the supply chain to target Giraffes (get it!?): wholesalers and distributors, who already considered most of our Buffalos and Hyenas as customers.

During this time focusing on sales, we didn’t rest on the supply chain and compliance aspects of the business. During an adventurous team visit to East Africa in May 2019 (the first time to Africa for Alex and Toby who had the trial by fire of travelling overland from Nairobi to Kampala, independently), we realised that to maintain consistent quality as we scaled, we would have to increase our efforts on compliance – including conducting regular farm- and factory-level visits. Furthermore, as we began targeting Giraffes, we would have to explore compliance further up the pyramid such as ISO, Fairtrade and Organic certifications. This led to recruitment of our first part-time farm compliance officer, Maurine Cheptoo, who was based in Kisumu – the agricultural heartland of Kenya. We also began to build a database of our Farmers and Producers, recording information and documentation to ensure we meet not just UK Customs and Food safety standards, but the emerging requirements of our customers (Simon – can of worms indeed!). We also said goodbye to Sharon on this visit, who left Storimarket to pursue a career as a health coach (suffice to say, no one felt very healthy after a night on Nairobi town, followed by Scottish whiskey and Greek dancing!)

Heading into summer, despite our best efforts, our sales plateaued. Whilst a core group of 20 Hyenas and Buffalos continued to order and generated between £2-3k each month, many order cycles slowed down and we struggled to attract new customers. Talking to our customers, we were reassured that summer is slow for all food retailers, as people interrupt their normal routines, go on holiday – and eat less (?). However, summer ended, and sales were still flat. By now, we had abandoned the idea of Retail Partnership Leads (goodbye Mervi and Rhys) as a method to open up new cities and not yet convinced some of the large distributors and wholesalers (like Suma, Infinity and Essentials) to work with us, so struggled to breakout of our established footprint of Greater London, Cambridge and the Bristol. Despite lowering our prices to be competitive with their existing suppliers, Giraffes wanted higher compliance and still lower prices, without the commitment to larger volumes.

We were in a Catch-22 moment.

To date, we had run our supply chain with hundreds of kilos, using expensive – and unsustainable – air-freight (fixed cost of £300-400, with £1-2 per kilo variable) to manage erratic demand and limit the amount of stock we held and working capital we tied up. To go to sea-freight, given the lack of less-than-container-load (LCL) options from Kenya to the UK, we knew we had to begin to export a full-container-load (FCL). That would be around 8 tonnes of products. As well as significantly decreasing our logistics costs, our Producers were also prepared to offer us lower prices for larger orders – particularly if we could confirm them in advance. So, it was chicken and egg: we needed the Giraffes to say yes so we could increase our volumes, achieve lower unit costs and invest in compliance – but they weren’t! Furthermore, we were well behind our sales targets which we had agreed with Foundation East.

We had started Storimarket with the view of disrupting the food supply chain to give smallholder farmers in Africa a better deal by connected them directly with consumers in Europe who wanted more sustainability, more provenance. The norm was highly efficient, intensive, monoculture agriculture, which was cheap, of good quality but had associated negative environmental and social impacts – which was opaque to consumers. We knew we couldn’t compete on price, but our hypothesis was that, if we offer a competitive price and great quality, we could compete on higher levels of provenance, fairness and sustainability. Whilst this might sound like naïve, bleeding-heart stuff, there’s a lot of evidence to show that the market is changing – fast!

However, despite the business intelligence to support our hypothesis, and positive feedback from customers, as we retreated from our initial B2C model – directly reaching the customer – our points of differentiation became weaker and the pressure of price became greater. By the time we were having conversations with Giraffes: wholesalers and distributors, who marketed themselves as ethical, fair trade and sustainable, the conversation had become about price, where we performed badly, rather than about our strengths: sustainability, provenance and fairness. On the flip side, we had tried and failed to own the customer, for the reasons stated above, and hadn’t found a viable way to serve our Buffalos and Hyenas directly.

At the same time as we were hitting a sales wall, we were receiving feedback from investors that we looked too much like a typical wholesaler or brand – not the disruptive farm-to-fork trade platform, which we wanted to be. We always saw the B2C ‘pilot’ and the B2B2C sales as testing and building a market which would eventually be served by our farm-to-fork trade platform. The plan was always that Storimarket would eventually step back. This was our final, unfished pivot: to take what we’ve learned about trading, compliance, quality assurance and logistics and build a technology platform where Retailer Partners, Farmers and Producers could transact directly. We had already started to use digital farm management platforms to peer into farm-level data on provenance, fairness and sustainability. Indeed, as we scaled using such digital farm management platforms was the only way we could maintain cost-effective quality assurance and compliance.

Thanks to Kon Assimov who regularly advised us on tech (as well as popping up on our pitch deck every now and then!) and who introduced us to a team of business analysts and developers to develop V1 of our Storimarket platform for several thousand pounds. By now we knew – mostly – what had to be done and known, from farm-to-fork to deliver quality food products. We also knew some of the information, for both compliance and marketing, that retailers – and their customers – valued. The platform would connect the dots, using digital farm management platforms to access data points which we would wrangle into retailer- and consumer-friendly dashboards and materials to demonstrate the enhanced provenance, fairness and sustainability that Storimarket offered. As such, the platform would automate what we had been doing manually to date. Farmers and Producers could list their products, which Retailers could browse and order. In the background, Storimarket would take care of the transactions (observing fair trade principles), compliance, quality assurance and logistics. But, with the requirements drafted, and the proforma in our inbox, we decided not to go ahead. Why?

Well, firstly – without sales traction, we were potentially building a solution rather than solving a problem. We had always tried to be market-led, which this was not. Secondly, our proposed customers: retails, distributors and wholesalers didn’t have the time, technology – nor inclination – to adopt a system. Without having enough market traction to validate our hypothesis, not knowing how our platform could integrate with the existing global food supply chain, it seemed like an expensive ‘bet’ rather than the best use of our time and funding. This marked the last foray of our journey, after which we decided to close Storimarket. We couldn’t find a feasible channel for our innovation and proposition.

During Accelerate Cambridge, we were taught about the three most common reasons start-ups fail: failure to find market-fit, running out of cash and team falls apart. I would suggest that Storimarket was guilty of the first and the third, since we still had cash in the bank when we closed. Whilst we did find consumers who loved what we did, we failed to find a viable sales channel to reach them fast enough. Nor do I think we were 10x better than the incumbents, meaning potential customers were a bit ‘meh’ or indifferent to switching. When it came to the team falling apart, this wasn’t due to us falling out. Rather, it was motivation. Without salary, nor certainty, motivation was Storimarket’s fuel! When it came down to it, after almost two years of trying, our motivation ran out.

This last testament to Storimarket lays out what we did, achieved and failed. As social entrepreneurs we are motivated by making the world a better place, so feel a responsibility to share our journey. We hope that you find it useful, interesting or entertaining – or all three! If you would like more information or details, please do get in touch. Especially, if you’re inspired by what we did and want to take up the torch! Or even if you want to steal some of our why, what and how ; )

Tom Ellum,