How Farmacopia Farms Took Control of Their Destiny with Vertical Integration
For many years, lifelong farmer and well-known Wall Street investor Shonda Warner has kept a careful eye on the U.S. farming industry. In particular, she was concerned that many farmers had little to no visibility of the overall pricing structure of their crops.
Frustrated by this lack of transparency, Shonda, who was already investigating ways to maximize her farms’ efficiency and profitability, began to consider how she could control more links in the supply chain.
The answer seemed clear; Farmacopia Farms needed to transition to a vertically integrated farm.
What is a “vertically integrated” farm?
Vertical integration occurs when a company, or farm, owns the supply chain (the system responsible for moving a product or service from supplier to customer). Other companies are brought in to perform a function as the product, or crop, moves from harvest to market. The result is a final product that doesn’t leave the control of the owner until it arrives on market shelves.
By vertically integrating, Shonda could lower overall transaction costs, better synchronize supply and demand, and perhaps cut out several layers of unnecessary go-betweens. All of this allows Farmacopia Farms to produce high-quality foods and sell them at reasonable prices.
Hemp, the wonder plant
Happy with her plan, Shonda turned her attention to determining the best crop to take to market in this new model.
The answer came when the 2018 Farm Bill legalized hemp, giving her the green flag to move forward with one of her favorite crops.
Hemp offered several benefits for Farmacopia Farms’ new business model:
- High margins and a booming market for hemp-derived products like high-quality CBD oil made good financial sense.
- Hemp is used in a wide variety of applications: medicine, fiber, food, protein, textiles, beauty products, and so much more.
- An excellent rotational crop that also adds valuable biodiversity to the soil.
- Best of all, for ecologically conscious Shonda, every part of the plant is used. Growing hemp supports Farmacopia Farms’ commitment to being environmentally responsible and good stewards of the land.
What they are doing now
Their first CBD oils and salves hit store shelves not long ago, and business is picking up.
Shonda and her team are keeping an eye on consumer demand trends and looking at the value they can add to their next harvests, including blueberries and hazelnuts.
Like they did with their hemp, they are looking for ways to produce higher yields while still increasing the micronutrients, flavonoids, and other nutritional benefits of each.
Vertical integration is allowing Shonda and Farmacopia Farms to fulfill several of their foundational objectives. Because they control their supply chain, they can:
- Help raise the bar on the quality of the food consumed in the average American household
- Keep the prices affordable by cutting out unnecessary middle layers in the U.S.’s intricate market system
- Ensure transparency by sharing the methods used to grow and process the food you eat and products you use at each stage of its journey from farm-to-shelf
To try one of Shonda’s CBD products, see our online shop.