Who’s benefiting from the billions invested in food startups? Not Middle America

On one occasion I spent Saturday morning in a conference room that overlooked the lower half of Manhattan and all of New York Harbor. I was joined by colleagues and investors who were discussing a proposed software tool with similarities to an organization I had worked with in Oklahoma, the Oklahoma Food Cooperative. I was there, in part, to advise them on the cooperative’s benefits and pitfalls. Money was the big question: how much does it cost to build an online transaction system for local food? I told them how, when the Oklahoma Food Cooperative launched in 2003, a man named Walter laid $50 on a table and claimed his right to be member number one. Collectively, the founding members raised a few hundred more dollars, maybe a few thousand at most, to build their first website ordering system. Years later the system was rebuilt by a farmer who was also a web developer. Again, the investment was paltry. As I explained this, the room was silent except for a brief interjection from someone who thought I hadn’t understood the question. The numbers discussed for the project at hand that day were north of a million.

But the disparities I saw in financial capital were only half of the story. The entrepreneurs and investors I met outside of Oklahoma moved through the world with a confidence and fluency I seldom encountered back home.

I was most intrigued by startups with strong similarities to the Oklahoma Food Cooperative, since it was a system I understood. When Good Eggs launched in Brooklyn I was an enthusiastic early shopper, and I later applied to work with them, making it through two interview rounds before the position was eliminated due to budget cuts. In the process, I read up on the company and its founder, Rob Spiro. Spiro had spent his early career in tech, not food—and rightly so, some would argue, considering the digital infrastructure that Good Eggs requires. But aside from a summer spent on a friend’s family farm, nothing in his resume indicates he had experience with the intricacies of moving perishable goods or building relationships with farmers.  

Burch’s story is very different. For years he educated himself in the world of food and agriculture. He learned about food and distribution at every level—from the field, to produce aisles and restaurant kitchens. In contrast to most tech entrepreneurs who start food companies, he is well versed in the world his company inhabits. But his biography is illuminating in other ways as well.

According to Burch, his journey to entrepreneurship begins like this: on a senior trip to Cancun in 2001, he got his high school girlfriend pregnant. His already fuzzy college plans were thrown to the wayside so he could support his future son. A family friend offered him a job at one of the only French restaurants in Oklahoma City.

“Growing up I had a lot of home-cooked meals, but we didn’t eat out much,” Burch says. “On special occasions the real fancy restaurant we would go to was Red Lobster or maybe Olive Garden. That was all shattered pretty quickly my first shift at La Baguette, just looking up and down their menu and thinking, ‘I don’t know what any of this food is.’”

La Baguette also gave him his first glimpse of a local food economy.

“There was this guy who had a greenhouse, and he would grow herbs and sell them to restaurants,” Burch says. “I remembered him coming and banging on the backdoor and the chef getting all excited. That was the first look I got into the kind of career I modeled for myself.”

He decided he wanted to move deeper into the world of food, closer to the source. So he took a job at the only natural grocery in town, and within a week, his enthusiasm earned him the role of produce manager. After six months at the grocery, he left to follow a new love interest to Savannah, Georgia, but he didn’t lose his interest in food.

“I started calling organic farms on day one,” Burch says. “I had tracked all of this food back to the produce section, and now I wanted to track it back to the field. I had never seen blueberries growing on a bush, I had never seen squash growing, I had never pulled carrots out of the ground.”

After working in the fields at Walker Farms, Burch realized that they were facing one of the most common barriers for direct-market growers: they were spending so much time growing the food that they didn’t have time to sell all of it. He saw an opportunity that would become the first seed of Urban Agrarian. He borrowed his girlfriend’s Jetta wagon, loaded it down with produce, and headed into town.

“I started going to all of the nicest restaurants—all the places I hadn’t been able to afford to eat at. I went in through the back door,” he says. “I had done a little pedicabbing in the off-season, so I had gotten to know the town pretty well. I just started banging on doors.”

He was buying produce directly from farmers, one Jetta-load at a time, and selling it to any and all takers. He decided to expand and leased an apartment to use as a warehouse. There were potatoes and beets in the dining room, carrots with their tops still on crowding the refrigerator. Because the produce didn’t fill the entire space, he rented out the bedroom to a friend, who lived amid the food like a vegetable hoarder.

His then-girlfriend-now-wife graduated college and became pregnant, so the couple moved back to Oklahoma City, which is when Burch decided to turn his produce hustle into Urban Agrarian. He borrowed $5,000 from his grandfather and bought the Veggie Van, a piece of equipment he considers so pivotal that he hopes to one day enshrine it in a local food museum, like the Spirit of St. Louis.

Over the next nine years, Urban Agrarian grew and evolved. Every time I talked to Burch he was on the verge of launching something—an online ordering system, a new market, a series of farm dinners. He acquired major accounts and the love of the community. His retail space and operations hub is the anchor in the revitalization of Oklahoma City’s historic Farmers Market District. But in October of 2016 he called me, explaining that despite rising sales, he was still struggling to make ends meet, thanks in part to failing equipment and a time-consuming ordering infrastructure. By January he had announced the company’s closure on social media, which elicited an outpouring of grief and support from the community and local press. He had never received more than $225,000 in investment. By contrast, Good Eggs has received $46.5 million to date.

If you ask Burch what he would have done for Urban Agrarian with more money, his answers mirror those of any low-income worker: he would have avoided bank fees and bought better vehicles that didn’t break down all the time. For years, he didn’t even own a hand truck to move food in and out of his warehouse—“It was all backs and shoulders and muscle.” Over time the inefficiencies took their toll. “It is very expensive to be poor,” he says, “not just in this business, but in life.”

There are barriers at different levels in American society. There is one level at which your mother struggles to feed you, where there are no trips to Red Lobster or to Cancun for spring break, and there is no family friend with a French restaurant. But there is another level, one inhabited by America’s middle class, in which life has the appearance of prosperity and choice. Doors aren’t closed, but they are hidden, like secret chambers in a video game. Hardly anyone at this level has the contacts or even the mindset to seek out a $46 million investment. It is a wonderful thing to sit in a skyscraper in Manhattan and discuss multi-million dollar food system projects with investors from across the industry. But there is no equivalent room in Oklahoma City or elsewhere in Middle America. And no one in Manhattan can ever know fully what those communities need.

As a result, millions will be invested this year in food system solutions that are not designed to serve the vast, largely rural interior of Middle America. If businesses like Urban Agrarian cannot garner the investment they need to survive, farmers and other local food purveyors will eventually follow them down. Individuals will suffer, and their communities will suffer, too.

In the case of Urban Agrarian, however, there is an alternative narrative. While contemplating this article I realized that Urban Agrarian has more in common with another food company, Baldor, than with Good Eggs. According to its website, Baldor’s very first incarnation was a produce pushcart, rented for $5 by Louis Balducci Sr. in 1918. Balducci served his community with the pushcart before expanding to larger enterprises, including a produce market in Greenwich Village. Today Baldor is a thriving regional food distributor with a strong commitment to working with local farms and sustainable producers, and in the last year they’ve made bold moves to eliminate food waste.

Could the $5,000 Veggie Van be the equivalent of the $5 Baldor pushcart? When Burch announced that Urban Agrarian was closing its doors, he was approached by several investors who saw potential in the company’s retail concept and established relationships. As of today his storefront is open and he is currently in talks to revive the company with the help of a capital infusion, a market expansion, and the addition of new advisors. He isn’t interested in raising millions, and that’s probably a good thing considering the fate of other businesses who used their cash to grow too fast before flaming out, privileging their investors wishes ahead of community needs.

If you ask me how I feel about the billions of dollars venture capitalists have sunk into food system reform, I’ll tell you: I’m angry. What does Good Eggs have to show for its $46 million? The company is delivering expensive local food in San Francisco, where grocery stores already abound. But if you ask Burch, he will tell you he’s hopeful. Oklahoma’s state motto is, after all, “Labor conquers all,” and after nine years of slinging local food, he’s still in the game and hoping someone can shave off a few hundred thousand to throw his way.