Local farm stop develops new business model

Monday, June 25, 2018 - 9:34am

Argus Farm Stop, an Ann Arbor small business focused on providing sustainable food for the community while supporting local Michigan farms, has proven a successful experiment in helping both consumers and producers in the communal food system. 

Founded by Ross M.B.A.s Bill Brinkerhoff and Kathy Sample in 2014, Argus Farm Stop is a grocery store and cafe styled as a farmers’ market. The market applies a new business model, allowing customers to buy produce, dairy products and meats directly from local farmers. With the knowledge that farmers’ markets, while having good intentions, are often inefficient marketplaces for both consumers and producers, Brinkerhoff and Sample found a need in the Ann Arbor community Argus could solve.

“We knew a lot about local agriculture because we always shop at the farmers’ market,” Sample said. “We knew that farmers’ markets are a really hard way for farmers to sell their stuff. It’s a great community thing, but it’s a really hard way to sell because on a nice day they might rather be out on their farms.”

Brinkerhoff and Sample were inspired to start Argus after visiting a similar market and cafe in Ohio. Part of their business model included allowing farmers to make deliveries of fresh produce, meat and dairy products to the farm stop at any time on any day, softening time constraints attached to traditional farmers’ markets, as well as eliminating the need for a middle man.

“We were down in Wooster, Ohio, and we saw this store called Local Roots that had this new model that was an every-day farmers’ market,” Brinkerhoff said. “Where the farmers could just drop off their stuff and go back to their farm. We came back to Ann Arbor with the idea and talked to lots of people, and there was a consensus that there was a strong need in our community to further make local food economically sustainable for farmers and available to consumers.”

The business model prioritizes bringing a majority of profits back to producers. Argus maintains itself as a low-profit limited liability company, which makes this model sustainable, Sample explained.

“If they [local farms] were to sell through a traditional retailer, like a grocery store, they would get around 16 cents on the dollar of what they sell,” Sample said. “If you get a $3 head of lettuce from Kroger, the farmer who grew that is probably getting 50 cents. In our model the farmer gets 75 percent of the price. And he sets the price and he owns the product. So when you come in and you buy at our store, you know that 75 percent is going to the farmer and you know that 25 percent is going to help us run our store and pay our salaries.”

The experimental model has been a success with local farms. While several small farms were originally skeptical of the new concept, it became rapidly clear this style of selling produce was genuinely economically beneficial.

“We started with about 30 farms when we opened the store in 2014,” Brinkerhoff said. “And last year we had over 200. So it’s a lot of farms. And we looked at these farms, they are all at a point where $10,000 in extra income, which they can definitely get at Argus, makes a big difference. They do just one extra stop to drop things off at us, and they have all this extra income that comes in.”

LSA junior Katie Seguin, an employee at Argus, said farmers found Argus so beneficial they encouraged Brinkerhoff and Sample to start a second store in 2017, located closer to the University’s campus on Packard Street. Seguin commented on the uniqueness of each Argus location, as each serves the needs of its more local community.

“They both kind of serve different niches in the community,” Seguin said. “And are both different and unique, but still serve the same larger purpose of growing the local food economy. … The one on Packard gets more students; it’s right smack dab in student housing. I think it’s definitely catered more towards that crowd. There’s a lot more prepared meals and there’s more designated quiet space. At Liberty I definitely see more families and little kids come in.”

Argus has not only built a community of food lovers and customers passionate about sustainability but has also forged relationships between customers and farmers, making the mission of the farm stop even more concrete on both ends.

“Whenever they [farmers] come they get free coffee and spend some time there, and the hope is that with every delivery that they make, they’re going to have a chance to meet customers,” Brinkerhoff said. “So you’ll even see the Amish farmers coming in, sitting down, having a coffee and talking to some of the neighbors. And it really makes a big difference. Once you make that connection, it leads to a lasting change in food consumption habits. You really want to focus your food dollars to support that farmer you just met. So we try to create opportunities for those experiences to happen as often as possible.”

Seguin agreed one of the greatest impacts of the farm stop is bringing together the local community and providing a hub for people with similar investments in sustainability and food to come together, in addition to its focus on fresh, high-quality food.

“People seem really happy when they go to Argus,” Seguin said. “We get compliments on the food and compliments on the coffee. But I’ve also had people come up to me and say, ‘Thank you for having this space for me to come to.’ Because it’s so relaxing and so stimulating at the same time … it’s kind of more than a grocery store. We have vendors that come and sell pastries on the weekends. We often have fires going on outside during the winter. So it’s definitely more than just groceries and coffee, which is really, really cool to see.”

Seguin emphasized the benefits of purchasing locally grown foods from places like Argus while touching on issues students might face with affordability at a farmers’ market-style store like Argus.

“It is a farmers’ market so it’s more expensive than buying vegetables at Meijer, potentially,” Seguin said. “But also you can get really good prices by the pound. It’s hard, because I know everyone has different means to work with. But even just the eggs at Argus, once I started eating them I couldn’t go back. It’s good fresh food, it’s grown locally. And any and all of it that you can support yourself with I think is great.”

The hope from Argus is a continual propagation of its sustainable model and farmer-friendly mission across the country.

“My dream would be to see this model more widespread,” Seguin said. “I think it’s awesome that we have two in Ann Arbor … but I would love to just see this business model more accepted and used. I think it’s great to really be putting our money back into our own communities.”

Brinkerhoff agreed, saying Argus could be a catalyst for innovative business models helping both producers and consumers continue a sustainable and healthy food system.

“Our whole national food system is really in trouble,” Brinkerhoff said. “The cards are stacked against the small to medium producers. And there needs to be a way, if we really want to be surrounded by farms that are local, there needs to be new models. And Argus really has potential to help change our community. There’s a pretty interesting experiment happening here, and it’s working. It’s live and it’s happening in Ann Arbor.”