Periodic Reporting for period 1 - I Go Slow (BLOCKCHAIN BASED PLATFORM FOR BRINGING SLOW FOOD IDEAS AND FAMILY OWNED FARMING TO CYBERSPACE)
Reporting period: 2019-06-01 to 2019-11-30
The Problem:
During the last decades farming and production of gourmet foods, traditionally dominated by Mediterranean region, experienced a setback because of decrease of inhouse consumption. Wine consumption hit a record low since 2nd half of XIXth century with only 40% consumed inhouse. Extra virgin olive oil consumption reached its lowest for the last 25 years in leading countries: Italy dropped from 850,000 to 500,000, Greece from 300,000 to 160,000 tons . Consumption of quality nuts, fruits, cheese, meat products is more stable, but with similar trends. This forced the whole market towards export to strong economies with high quality of life - US, Germany, UK, Scandinavia.
Export markets bring challenges to small farms and producers of gourmet foods. They have no experience and funds to cope with refocus from local sales to export. Without dedicated marketing, foreign consumers don't know which farmers are worth the trust, while farmers don't know, who their customers are. This puts them into disadvantage reaching international markets. The wish to get the share in export forces farms to accept wholesalers as a necessity, to sell at 30-50% of prices, to agree that distributors get the largest share of value created by farmers.
Moreover, domination of big players in export markets with unverified supply chains introduces risks of product mislabeling and counterfeiting, foreign markets are filled with products without traces to the farms of origin. 69% of Italian extra virgin olive oil in US are declared as counterfeited . INTERPOL estimates that illegal industry of gourmet foods and beverages is worth €300 billion a year . This is happening because consumers don't have the means to get to know real producers, their traditions, making process of products and how those products reach them.
Objectives of the Feasibility Study:
Technical feasibility:
- to assess the costs of design of fully featured prototype
- to analyze needed scalability in production environment by measuring potential growth of member base
- to determine the need for additional expertise during design and development of fully featured solution
- to evaluate technical risks and mitigation strategies
Commercial feasibility:
- to further investigate the market risks and establish corresponding mitigation strategies
- to further assess the current IPR status
- to find ways to reduce the costs of development through integrating potentially ready components
- to perform detailed market study and find ways to attract more small farms and producers
- to get official support from Slow Food association, communities of farmers (winemakers, olive growers, etc.)
Financial feasibility:
- to accurately determine the expected costs and returns of the investment (ROI)
- to assess the financial risks
- to evaluate total capital requirements, sources of financing
Conclusion of the Action:
Based on those positive deductions project team concludes that I Go Slow Project Shall Continue.
During the last decades farming and production of gourmet foods, traditionally dominated by Mediterranean region, experienced a setback because of decrease of inhouse consumption. Wine consumption hit a record low since 2nd half of XIXth century with only 40% consumed inhouse. Extra virgin olive oil consumption reached its lowest for the last 25 years in leading countries: Italy dropped from 850,000 to 500,000, Greece from 300,000 to 160,000 tons . Consumption of quality nuts, fruits, cheese, meat products is more stable, but with similar trends. This forced the whole market towards export to strong economies with high quality of life - US, Germany, UK, Scandinavia.
Export markets bring challenges to small farms and producers of gourmet foods. They have no experience and funds to cope with refocus from local sales to export. Without dedicated marketing, foreign consumers don't know which farmers are worth the trust, while farmers don't know, who their customers are. This puts them into disadvantage reaching international markets. The wish to get the share in export forces farms to accept wholesalers as a necessity, to sell at 30-50% of prices, to agree that distributors get the largest share of value created by farmers.
Moreover, domination of big players in export markets with unverified supply chains introduces risks of product mislabeling and counterfeiting, foreign markets are filled with products without traces to the farms of origin. 69% of Italian extra virgin olive oil in US are declared as counterfeited . INTERPOL estimates that illegal industry of gourmet foods and beverages is worth €300 billion a year . This is happening because consumers don't have the means to get to know real producers, their traditions, making process of products and how those products reach them.
Objectives of the Feasibility Study:
Technical feasibility:
- to assess the costs of design of fully featured prototype
- to analyze needed scalability in production environment by measuring potential growth of member base
- to determine the need for additional expertise during design and development of fully featured solution
- to evaluate technical risks and mitigation strategies
Commercial feasibility:
- to further investigate the market risks and establish corresponding mitigation strategies
- to further assess the current IPR status
- to find ways to reduce the costs of development through integrating potentially ready components
- to perform detailed market study and find ways to attract more small farms and producers
- to get official support from Slow Food association, communities of farmers (winemakers, olive growers, etc.)
Financial feasibility:
- to accurately determine the expected costs and returns of the investment (ROI)
- to assess the financial risks
- to evaluate total capital requirements, sources of financing
Conclusion of the Action:
Based on those positive deductions project team concludes that I Go Slow Project Shall Continue.
Platform is based on e-commerce, Cloud, Blockchain technologies, promotes ideas of Slow Food movement and family-owned farming into cyberspace. For farmers the platform provides a reliable channel to present themselves directly to consumers. Underlying technological solution leaves no space for manipulations of intermediaries and builds trust. Trust gives credibility to farmers.
After feasibility study I Go Slow project team better understands the scope of technological solution. We have defined platform architecture with development, runtime and deployment technologies preselected. Our team has decomposed idea into user stories. Based on user stories and technological stack we have estimated needed expertise, time and costs of development effort.
Project team has been actively presenting the idea to associations of artigianal farmers and gourmet producers. We were successful to find some support in their communities, which is approved by signed letters of intent. We also made some agreements with companies important to business development in various directions – broadening network of producers through consulting and lobbying, getting promise of fair logistics prices by utilization of existing delivery network.
Now, after studying statistical data, participating in conferences and one-to-one discussions with farmers, we better understand the target market of artigianal producers and have selected target country and regions, where to start. At the same time, we have analyzed European market of gourmet consumers, its growth trends, sizes of available and obtainable markets. As a result, target consumer markets are defined.
Study of commercial feasibility also enabled us to better understand the monetization schemes and pricing models that can make platform commercially successful. Project team has created a business model, including the financial model for the time frame of 5 years. We now fully understand the expected costs, revenue streams, and what has the biggest impact for reaching positive numbers of Net Profit and ROI in 3 years.
After feasibility study I Go Slow project team better understands the scope of technological solution. We have defined platform architecture with development, runtime and deployment technologies preselected. Our team has decomposed idea into user stories. Based on user stories and technological stack we have estimated needed expertise, time and costs of development effort.
Project team has been actively presenting the idea to associations of artigianal farmers and gourmet producers. We were successful to find some support in their communities, which is approved by signed letters of intent. We also made some agreements with companies important to business development in various directions – broadening network of producers through consulting and lobbying, getting promise of fair logistics prices by utilization of existing delivery network.
Now, after studying statistical data, participating in conferences and one-to-one discussions with farmers, we better understand the target market of artigianal producers and have selected target country and regions, where to start. At the same time, we have analyzed European market of gourmet consumers, its growth trends, sizes of available and obtainable markets. As a result, target consumer markets are defined.
Study of commercial feasibility also enabled us to better understand the monetization schemes and pricing models that can make platform commercially successful. Project team has created a business model, including the financial model for the time frame of 5 years. We now fully understand the expected costs, revenue streams, and what has the biggest impact for reaching positive numbers of Net Profit and ROI in 3 years.
Through all results achieved by feasibility study, business model of I Go Slow platform can be evaluated as commercially feasible.
I Go Slow offers a unique solution for the problems of artigianal farming and gourmet industry. It helps to overcome challenges of getting a share in export markets, caused by decrease of inhouse consumption. It brings traceability to the origins of products and fights growing share of mislabeled or counterfeited production. For gourmet consumers it creates possibility to engage directly with farmers and producers for buying products on fair prices, directly booking guided visits and investing into next season harvest. By doing this gourmet consumers may feel satisfaction of being part of artigianal agriculture, supporting small, family-owned and quality-oriented farming.
I Go Slow offers a unique solution for the problems of artigianal farming and gourmet industry. It helps to overcome challenges of getting a share in export markets, caused by decrease of inhouse consumption. It brings traceability to the origins of products and fights growing share of mislabeled or counterfeited production. For gourmet consumers it creates possibility to engage directly with farmers and producers for buying products on fair prices, directly booking guided visits and investing into next season harvest. By doing this gourmet consumers may feel satisfaction of being part of artigianal agriculture, supporting small, family-owned and quality-oriented farming.