Building relationships with suppliers
Five years ago, Mama Earth Organics aspired to be the only delivery company in Toronto that could offer eggs from honest-to-goodness happy hens. It wanted birds that frolicked outdoors without enclosures, but finding them meant convincing five Amish families in the Kawarthas to supply eggs exclusively to the organic food delivery company. Co-founder Alex Billingsley landed the deal, perhaps thanks to his comforting husky voice and his trust-inspiring scruff of beard. Either way, it meant 495 hens laying hundreds of eggs biweekly; they still make up the highest percentage of the company’s non-produce sales.
Billingsley, a former human rights lawyer, started Mama Earth Organics with his wife, Heather, in August 2007. The two rely on an old-school way of doing business that’s based on trust, which has helped them land partnerships with nearly 40 small-scale farmers. They have never written a formal contract for any of their suppliers. “You make one decision at a time, look them in their eyes and shake their hands. That’s how all the farmers work,” he says, adding that going slow and steady creates the foundation of a good relationship.
Wooing the Amish farmers was a bit trickier. With Ontario’s tough quotas and expensive grading costs, most producers don’t bother selling their eggs because they’d barely crack the break-even point. And the Amish don’t have email, phones or Internet to see if Mama Earth checks out. So Billingsley often drove 45 minutes to the farms from his home in Peterborough, Ont., sometimes bringing his two kids, and worked hard to gain their trust over plates of apple fritters. His strategy was to help them access an unrealized market for their eggs and produce. “The Amish were having trouble finding customers. At that point we had thousands of customers, and I assured them that we had the demand to mitigate their risk,” Billingsley says. “It’s all about making it a win-win.”
That sweet spot of profitable altruism paid off. In PROFIT’s 2014 ranking of Canada’s 500 fastest-growing companies, Mama Earth reported a five-year revenue growth of 1,043 percent. And the Amish farmers have become the company’s largest supplier, growing tomatoes, peppers and more. It turns out Billingsley had discovered something that escaped big industry. A 2014 study by consultant John Henke found automakers like GM could tap up to an additional $400 million in profit if they had better ties with suppliers.
People want sustainably sourced foods more than ever, which explains the explosion of organic grocery delivery services in Toronto. Billingsley’s now working to not get lost in the clutter. Next year, Mama Earth plans to launch a brand new website that will spotlight what the competitors don’t have: long-standing relationships with nearly 40 local farmers. Marketing is unfamiliar territory for a man used to talking to faces through screen doors more than computer screens. But this is also the guy who can charm the heck out of reluctant farmers. It will be business as usual.
Copyright 2015 Rogers Publishing Ltd. This article first appeared in the Summer 2015 edition of Canadian Business magazine