Tech-centric organic wholesaler foodcircle says its mould-breaking digital model is empowering organic food businesses and helping build a more transparent food marketplace. Here, Alessandro Petrucciani, co-founder of the Berlin-headquartered company, talks with Jim Manson.
JM: Can you tell me how foodcircle came into being, what’s the back story to the business?
Alessandro Petrucciani: Prior to foodcircle’s founding, one of our co-founders, Dario Maritano, was running a plant-based functional food business that manufactured soups, puddings and other foods. One of the main problems he encountered was the lack of reliable sources for high-quality ingredients at fair conditions. As time passed, he shared his struggles with me over beers, and we had some dreamy conversations where we brainstormed and shared our ideas. After an intensive 15-month-long research period, we were shocked when we came to realise how broken the food supply chain really was. And so we decided to fix it. That’s when we asked Flavio Bezzeccheri, our third Italian Musketeer, to join our cause and build the first version of foodcircle.
Today, foodcircle’s global network comprises certified partners that are committed to the highest quality standards. As a state-of-the-art digital platform, we provide innovative value chain solutions alongside best-in-class service for the food industry. And we are just at the beginning!
JM: Why organic? What attracted you to the organic market specifically?
AP: Over the past decade, we each had the opportunity to gain valuable experience in a wide range of sectors. We contributed to numerous ventures’ successes and propelled innovative businesses forward in the online sphere. The vast majority of commerce has made the leap to technology-centricity. And yet, our endeavours in the food industry were repeatedly met with tedious traditional structures, an overall lack of transparency, and sluggish processes. One day, we realised we possessed the know-how to change that.
Organic agriculture is a booming global industry. Consumer awareness about the link between organics, human health and environmental protection is rapidly rising. And these values are fundamental to what foodcircle stands for. The organic sector is definitely not the single or ultimate solution to a better food supply chain. But it’s certainly a great start to instigating the changes that consumers are demanding. As the demand for organics increases, the sector continues to grapple with challenges in numerous areas, including transparency, regulations, structures, and costs. At foodcircle, we firmly believe that we can play an active role in helping solve some of these issues.
JM: What are the main points of difference/benefits to customers of foodcircle’s model, compared to traditional wholesalers?
AP: Our backgrounds are in food-tech and digital ventures. Therefore our main differentiation to other, more traditional players is that we see things from fresh and different perspectives. When we founded foodcircle, we intentionally digitalised the entire customer experience of sourcing, procuring and accounting.
Convenience, competitive pricing and traceability are amongst our strongest benefits. Sourcing ingredients via foodcircle can be done in just a few clicks, all certifications and product specs are available to download and samples can be ordered online directly. We offer also a premium digital experience for many services, including financing, insurances, logistics, warehousing solutions and more. We are building a one-stop solution for food companies. Not only can our customers benefit from our platform, but suppliers see us as an easier and more scalable way of managing existing and finding new customers all over Europe.
JM: Does foodcircle carry stock, or are all shipments made direct from ingredient suppliers?
AP: We have a hybrid model meaning that for some products we carry our suppliers’ stocks, and for other products, the shipments are drop-shipped directly. The customer doesn’t need to know the difference. They can focus on picking the right product; we take care of the rest. We always deliver to their warehouse.
“A DIGITAL SHAKEUP WILL IMPROVE BOTH THE QUALITY AND EFFICIENCY OF THE INDUSTRY. THIS, IN TURN, WILL FACILITATE STRONGER AND MORE DIRECT CONNECTIONS BETWEEN INDUSTRY PLAYERS, WHICH WILL ULTIMATELY LEAD TO A MORE FAIR AND TRANSPARENT FOOD MARKETPLACE”
JM: Traditional wholesalers in the organic food sectors often talk up their experience in the market, and maybe their long-term commitment to the organic movement. In the early years of your business, is a lack of market ‘heritage’ a concern for any prospective customers?
AP: The lack of market heritage hasn’t been a problem for us so far. One advantage is undoubtedly the fact that the organic market only recently reached the mass market, meaning that many of our fellow suppliers are also new to the industry. We started this business because we recognised industry-wide frustrations. Large suppliers immediately understood our added value and joined our platform. We understood the strong need for digitalisation and flexibility amongst the different industry stakeholders, especially manufacturers/repackagers. Now, thanks to us, they have it.
JM: In previous ventures you have been involved in businesses that challenge the established corporate model. Do you think the organic sector is in need of a digital shakeup?
AP: Definitely. Both from the consumer and the industry side. Stakeholders are very frustrated by the current process, and we’re now experiencing a new wave of managers first-hand that are actively requesting that we build a digital and smart experience with transparent and secure online transactions. A digital shakeup will improve both the quality and efficiency of the industry. This, in turn, will facilitate stronger and more direct connections between industry players, which will ultimately lead to a more fair and transparent food marketplace.
JM: How well distributed are your customers geographically – are you focused on any particular countries/territories?
AP: Our platform is currently accessible in three languages—English, Italian and German—but our customers spread out all across Europe. We delivered to 14 different countries so far, and counting.
JM: Some manufacturers will want to contract for, say, a year’s requirement of key ingredients to secure best prices and availability. Does this create any limitation for foodcircle’s current model?
AP: Not at all! Thanks to our unique data points and algorithm, we can help our customers make better decisions. One of our latest features is that we now offer long-term contracts with simplified online call-offs from the customer dashboard. This is the simplest way for any business to secure stock availability and pricing. And focus on their marketing and sales activities. We support them with the data they need to establish whether this is the best moment to close a contract.
JM: How do you see foodcircle developing in the coming years?
AP: Our focus is on building technology to serve our customers’ and suppliers’ needs. At foodcircle, we will connect the best service providers to our platform and make them available to all our current and future customers, small and larger ones. We want the organic industry to continue to grow, evolve and prosper. Our goal is to give all players in the marketplace the opportunity to buy and sell in smart ways with the help of big data and digital technology.
JM: What is your assessment of growth potential for the organic industry in Europe over the next 5-10 years?
AP: We strongly believe that consumer demand is driving sustainability into the mainstream. Consumers are usually actors for change, and it just so happens that the organic sector is finding itself in the right place at the time to provide them with solutions they are looking for. The organic industry possesses the potential to become the new norm, but there are still many challenges ahead that we will need to solve.
One such example is that of supply availability because farmers are taking considerable risks in shifting from conventional farming to organic. Their crops are more vulnerable to global regulations because Europe has the most stringent regulations in the world when it comes to organic. Thus, many ingredient suppliers find it easier to market their foods in the US or Asia. There are also the issues of logistics and fraud, many of which we believe we can solve with the help of technology.
We’re definitely seeing new trends trickling over from the US, such as the Regenerative Organic Certified (ROC) label. The ROC goes one step further than organic certification by trying to create awareness around soil problems and ensuring more animal welfare and social justice. This could be a great evolution for the organic certification.
Main image: Alessandro Petrucciani (left) with fellow foodcircle co-founders Dario Maritano and Flavio Bezzeccheri1 of 6
- This article originally appeared at Natural Products Global.