Alex Stefan , founder of Oomami, the world’s first social-marketplace for small food producers, aims to bring the farmers’ market experience online for consumers to source groceries direct from producers.
Australia’s food and grocery sector is a $114 billion industry, but one that is mostly in the hands of a few major players.
Figures from IBIS World show that in most food sectors a handful of large corporates generate over 50 per cent of industry revenue with thousands of smaller producers generating less than half.
Alex Stefan believes he has the solution to this $50 billion problem. Stefan has been in the food industry for 25 years, and his family long before that. Having experienced first-hand the “overwhelming reliance” manufacturers have on large distributors and supermarkets, he decided to do something about it.
He founded Oomami, the world’s first social-marketplace for small food producers, which aims to bring the farmers’ market experience online and make it as convenient for consumers to source groceries direct from producers as it is to shop at one of the big online grocery retailers.
The marketplace, which is soon to launch in Australia, has even caught the attention of celebrity chef Matt Moran, an investor in the company and big believer in the farm to table approach, who calls small food producers the “backbone” of this country.
“If a distributor or a supermarket doesn’t want to take on products [from a small producer] then they can’t grow their business,” Stefan says. “I’ve also seen situations where distributors have had their products stocked in supermarkets and then when that distributor or supermarket decides they no longer want to stock that product or brand, the company essentially goes under.”
“In 2019 that shouldn’t be the case given that we have these technologies where manufacturers can go direct to consumers and bypass the distributor.”
The relationship between manufacturers and retailers was thrown into the spotlight again recently when a supply issue between the “big two” supermarkets in April left many consumers without access to popular products.
“While [the big supermarkets] may take a lot of volume and a business could potentially grow quite rapidly, the downside is that profitability plummets because the prices that they pay are actually very low. And not only the prices but the payment terms are also quite onerous.”
Oomami operates on a similar model to that of e-commerce giants Amazon and eBay, charging a monthly fee to use the platform and commission on each product that is sold.
Manufacturers deliver product to a warehouse and then the customer determines the success of that product or range. More