Business & Economy

Pandemic, new consumer outlook create new markets for Vermont produce

Greg Georgaklis, founder of Farmers to You, has seen his 10-year-old business nearly double as a result of the pandemic. Farmers to You ships organic produce to the Boston area every week. Photo by Anne Wallace Allen/VTDigger

Just a year ago, researchers for the Agency of Agriculture saw the Vermont produce market as saturated, with little room for expansion or more producers.

But then Covid-19 came along and upended consumer food-purchasing behavior. Alarmed shoppers weren’t just stocking up on toilet paper as the virus snarled grocery deliveries and closed restaurants. Food-buyers also demanded more organic and locally produced food.

Community-supported agriculture operations reported a huge surge in memberships this spring; grocery stores, unable to get shipments from some of their traditional suppliers far away, started buying more local produce. Sales of canning supplies and freezers soared; even home gardeners stepped up their game, buying out the inventory of seed suppliers

“As a result of Covid, we saw produce operations that had direct-to-consumer relationships, like CSAs and farm stands, increase 200% in demand,” said Abbey Willard, director of agriculture development for the Agency of Agriculture. That swift change in behavior was a boon to local growers, nonprofits that support small farms, and to the Agency of Agriculture, which has been trying to promote local agriculture for years.

A small sector of the agriculture economy

According to the U.S. Census, Vermont has 716 vegetable farms and 400 farms selling berries. Another 220 sell flowers and bedding plants, and 299 sell greenhouse tomatoes, to create aggregate sales of $48 million out of a total $52 million in produce sales. 

It’s a small sector compared to dairy — which generates an estimated $2.2 billion in economic activity annually — apples and maple. 

But it has grown in recent years. Membership in the Vermont Vegetable and Berry Growers Association increased from 213 in 2010 to 360 in 2019, according to the Agency of Agriculture’s 2020 food system plan, published in late 2019. The state last year had about 70 annual summer farmers markets, 91 pick-your-own farms, and hundreds of farm stands, the agency said in its market report on many ag sectors, which it released in December. 

When the report came out, it seemed the appetite for fresh Vermont produce was pretty much sated.

“Although total direct-to-consumer sales continue to grow, anecdotal consensus is that direct markets for fresh produce are becoming saturated, so when new enterprises get established, they take customers from existing markets,” the report said. “The potential for a lot more growth among direct markets seems low.”

Farmer Richard Wiswall examines the root of a burdock plant at Cate Farm in East Montpelier on Wednesday, October 7, 2020. The demand for local produce has increased since the start of the coronavirus pandemic. Photo by Glenn Russell/VTDigger

As East Montpelier farmer Richard Wiswall put it, before Covid-19, the marketing pie for Vermont organic produce was like a pie. Wiswall owns Cate Farm with his wife, Sally Colman. 

“If a grower came in or left, the pie slices changed, but the pie didn’t get any bigger,” said Wiswall, who grows tomatoes and seedlings for Vermont markets and burdock root for markets in Boston and New York.

“What you needed to do was grow that marketing pie.”

Covid jump-starts consumer interest

Consumer response to Covid-19 grew that marketing pie. 

The story of Farmers to You — a distributor of fresh, organic produce from farms in Vermont, Massachusetts and New York — illustrates how the pandemic has altered thinking on local produce.

The company, started a decade ago by organic grower Greg Georgaklis, started 2020 by trying to raise money from equity investors to expand. In fall 2019, the $3 million-a-year company was delivering groceries to about 700 families a week — most in Massachusetts — and had 25 to 30 full- and part-time employees at its 6,000-square-foot-hub in Berlin.

Workers examine produce as they fill orders at the Farmers to You warehouse in Middlesex on Wednesday, October 7, 2020. Photo by Glenn Russell/VTDigger

“We really thought the model would grow faster,” said Georgaklis. But families were resisting efforts to move away from grocery stores toward fresh deliveries, he said.

When Covid-19 hit, Georgaklis stopped trying to raise money and started reacting to a huge increase in demand. Where in prior years a promotion might yield 30 to 40 families, all of a sudden 200 people were signing up at a time, overwhelming what Farmers to You could supply. The company went from shipping 700 orders a week to shipping 1,250 within four weeks after Gov. Phil Scott declared the state of emergency in mid-March.

“No one wanted to go to the grocery store; no one wanted to leave the house,” he said. He now has 400 families on a waiting list, he said.

Meanwhile, produce farmers were calling Georgaklis in a panic because the restaurants and institutional purchasers — like schools — that they typically sold to had closed down.

“Their market completely evaporated in a week,” Georgaklis said. “So we looked at this rapid growth, and having excess supply, and we said, ‘Guys, let’s work together and figure out how to ramp it up very quickly.” The staff at Farmers to You nearly doubled in the spring, he said. There are now 55 people there, and the company is still hiring.

In early August, Farmers to You moved into a 12,000-square-foot building in Middlesex, twice the size of its former digs in Berlin.

The future of Vermont produce

Georgaklis, who is passionate about healthy food, would like his company to serve as a model that could be replicated in other communities.  

“Vermont is unusual because we can feed these families almost everything they want from our foodshed 12 months a year,” he said. That includes greenhouse tomatoes, but not the crops that just won’t make it in any Vermont season. “Citrus and coffee, no,” said Georgaklis. “You have to eat seasonally. If you want asparagus in February, sorry; there are certain things it’s either not practical or possible to grow when you don’t have the sunlight.”

Willard’s department has been hearing from produce farmers who want to expand, and new growers looking for advice. But she noted the agency always hears from farmers with those plans. She hopes the shift is permanent, but said it’s too early to tell. 

“Time will tell how many people will return to normal procurement and engagement practices, how many people will remain uncomfortable going to large grocery stores, and how many businesses will not be able to sustain this kind of mixup in the economy,” said Willard.  

The big change, she said, is that more local and organic produce is now available in grocery stores.

“The truth is, most of the local produce in retail was at food co-ops, not at grocery store chains,” Willard said. That has changed. “When Covid came, we watched grocery stores in Vermont be very accepting and inviting to more local produce.”

Wiswall said the couple does all the farm’s planning for the coming year in December. 

“The market is strong. Has it reached the temporary zenith of what the demand is? We don’t know,” he said. “Realistically, we’re not going to cut back.”

Farmers to You expanded this 12,000-square -foot Middlesex building during the summer to meet growing demand from customers in the Boston area. Owner George Georgaklis said he has a waiting list of 400 families signed up to receive weekly produce deliveries.  Employment at Farmers to You has grown from around 30 at this time last year to 55 now. Photo by Anne Wallace Allen/VTDigger

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