Is the Internet the Future of the Local Food Movement?

Yet another food-tech startup rakes in the VC cash.

(Photo courtesy Sourcery)

Oct 9, 2014· 2 MIN READ
Steve Holt is a regular contributor to TakePart. He writes about food for Edible Boston, Boston Magazine, The Boston Globe, and other publications.

When it comes to technology, the food service industry is stuck in the 1980s. That's how Ashwin Mudaliar sees it, at least: Chefs often peruse paper catalogs for ingredients and supplies, phone or fax their orders to suppliers with a paper check, and receive an invoice on—you guessed it—paper.

Mudaliar is hoping to change that with a bit of newfangled tech distruption. He's the business development director for Sourcery, a startup that hopes to bring food service technology into the 21st century—with a small-scale, locavore twist. As Mudaliar puts it, “Sourcery builds software that helps restaurants manage their relationship with food suppliers, and vice versa.” Specifically local food suppliers.

The supply chain has long favored the large, wholesale distributors like Sysco and U.S. Foods—which in turn hawk products made by large, industrialized food companies. It’s very difficult, Mudaliar says, for smaller suppliers to hire a dedicated sales and marketing team, let alone accounts receivables staff. And many great, smaller companies are overlooked because they “haven't penetrated the 'word of mouth' cycle within the industry,” he adds. All of which makes it unnessecarily difficult for restaurant to stock their kitchens with ingredients from local farms and food companies. With its online directory of wholesale suppliers and growers, Sourcery hopes its platform will help the small cheese- or fishmonger get discovered by the big-time chef in New York City or Los Angeles. Investors apparently believe the startups vision can work: The company recently raised $2.5 million in seed funding.

“We believe that our platform will democratize and make readily accessible any number of the tools that have been cost prohibitive and only accessible to the largest players,” Mudaliar says.

Sourcery is just one of many high-tech food companies that have popped up in the last several years specifically servicing businesses and consumers looking for local, sustainable food. It’s perhaps ironic that a movement rooted in smallness, simplicity, and human connection is increasingly propelled by smartphones, tablets, and Silicon Valley coders (and investors). But thus far, it's proved to be a promising bit of cognitive dissonance.

Boston seafood company Red’s Best developed a tracking software that follows a fish from the ocean to the dinner plate, allowing consumers to scan a QR code with a mobile device and see a biography and photo of the fisher who caught the fish. Elsewhere, the Internet is being touted as the new farmers market. Washington State-based Farmstr is a platform that connects local producers directly with customers, eliminating the need, ideally, for farmers to sit at a market for 10 hours on a Saturday or Sunday regardless of how much product they sell. Earlier this year, the company raked in $1.3 million in angel investment, which will allow it to expand its services beyond the Pacific Northwest.

In a fast-growing local and organic food sector, the ability for a pig farmer or beekeeper to connect directly with a chef or consumer is precisely what is attracting investors to companies like Farmstr and Sourcery. But can the most expertly-coded, VC-financed food retail platform steal any kind of significant market share from the establishment? One of the biggest challenges for Sourcery’s success, Mudaliar says, is the intensely personal working connections that are formed between suppliers, chefs, and distributors that are inherent to the paper-and-handshake-based system of yore. Critics say these platforms threaten these human-to-human relationships, but Mudaliar says Sourcery may actually have the opposite effect, as fixing those slow and antiquated processes frees everyone involved up to nurture the human touch.

“The human connection is not what needs to change,” he says. “Overcoming initial doubt about the value of technology has been the biggest challenge.”