EPISODE 057 : 04/14/2022
Julia Niiro is the founder and CEO of MilkRun, an online marketplace and distribution technology that makes it easy to buy food directly from local farmers. MilkRun aims to develop an alternative to today’s global food system by simplifying local food shopping and making local food growing and logistics more efficient.
Host: Ned Hayes
Guest: Julia Niiro
Listen to every episode
Topics discussed in this episode
- Detailed small business insights from Olympia, Washington
- Small business resiliency and adaptation during COVID
- Doubling community outreach during the pandemic
- Opportunities for small business loyalty programs
Watch Spark Loyalty’s Small Business Success Channel
Ned Hayes [00:00:01] Welcome to Spark Plug, where we talk to smart people working at the intersection of business and technology. Brought to you by SnowShoe, you’re smarter loyalty leader. Spark Plug is happy to welcome Julia Niiro to the podcast. Julia is the founder and CEO of MilkRun, an online marketplace and distribution technology that makes it easy to buy food directly from local farmers. She started a MilkRun in 2018 in Portland, Oregon, where we’re located as well. And she’s now preparing to scale nationally. MilkRun aims to develop an alternative to today’s global food system that’s better for people and better for growers, and it makes growing local food and logistics more efficient. So welcome, Julia.
Julia Niiro [00:00:45] Thank you. Thanks so much for having me.
Ned Hayes [00:00:47] Well, I’d love to know how you came to start MilkRun. What’s your background what’s your career history?
Julia Niiro [00:00:52] Yes, it’s very interesting. I can tell you, I never really set out to become a farmer or really a startup founder, for that matter. So I found my way into this world, but I became a farmer in 2014, actually when I moved outdoor again. Previously, I spent my career in digital marketing, so I graduated college. I was actually a creative writing and philosophy double major and didn’t find out until late in the game that the only really true career paths from that kind of degree was teaching and that I did not really think I would do well at. And that was, of course, at the time also were digital marketing, SEO, social media was still in its infancy. WordPress, actually, when it first started coming out, I started learning WordPress and Drupal and very, very beginning with blogger and whiteboard Wednesdays. So for me, I think that was a great translation of writing, recognizing that there was this skill in writing when we could use content and we could use search algorithms in the way that we named things and we named our new URLs in our products and the descriptions and all of the metadata made a huge impact for businesses as everybody was transitioning online. So I got my first internship, my senior year in college for a content management system. So the company had its own custom CMS in Fort Collins, Colorado, and I started optimizing product descriptions for the retailers that they were bringing online. And then that later became known as a field of digital marketing, a series of small startups and companies later, because that was a pretty growing field at the time. So there weren’t many of us and there were many of us, certainly in Colorado, where I was recruited by Penton Media, the largest B2B media company in the US, second largest globally. And I was recruited quite young to lead the digital marketing, internal efforts and agency. So my job was to actually take one hundred and seventy two traditionally print media brands digital and to help them transition also a content marketers dream, there’s across 17 different vertical markets. So everything from Natural Foods to Natural Products Expo was one of the Penton brands to Windows Supersite and Industry Week magazine. So very exciting. I guess that transition I was able to get in early and understand all of the opportunities that content marketing and then social media broke open for all of us.
Ned Hayes [00:03:09] Right? Well, I’d love to circle back to that idea of becoming a farmer. I know that digital media is big, but working with actual food that grows out of the ground, that’s a different world than digital marketing. Can you tell us about the dichotomy in your two worlds?
Julia Niiro [00:03:25] Yes, it certainly was. That was my life. There was very much consulting and lifestyle, especially when I move client side for pension, and I was young and this corporate world very corporate experience. I moved out to Portland expecting to end up in Seattle or San Francisco. Following that track, I landed in the middle. My best friend was living there and I decided to move into her basement, so to speak and see what Portland was all about. That’s when I met a group of chefs who were moving up from California to Portland, as many have to start a farm and open a restaurant. Now, Renata, where they would grow and raise all of the ingredients for the restaurant. This group of people were actually part of a larger company that they just come off, “tours” from outstanding in the field. So Leah Scafe, who’s a pillar in the Portland food community, one of my very best friends and responsible, very much so for my transition into farming. They had spent a decade on the road, traveling the world, hosting people out on farms to eat dinner. Those long white tables. And I met this group of people at that time, and I just honestly had my quarter life crisis when I realized there was this whole incredible movement of very passionate people who were so completely dedicated to food and to the service of food and the sustainability of farming practices of growing food and getting that close to our roots offered us and the preservation of those traditions. That for me, it really just became a no brainer, and I had no idea how it was going to help. But I realized long story short, I remember the day before I quit, Leah and I were going on a walk on the first farm that we had in Salem, Oregon, which is a whole story in itself which you just said you. Look around you. You’re not going to starve and she was right, and for me, it was always about the people. It was always about the stories. It was always about how can it be this hard to buy food from the people who are directly growing it and making such a massive impact on a daily basis? That question just kept coming up for me, and there has to be an easier way. I dove in the deep end of the pool, so to speak, and to enjoy every day since.
Ned Hayes [00:05:24] Wow. Well, could you tell us more about what MilkRun actually provides? What’s the technology that you’re providing between farm to table?
Julia Niiro [00:05:32] I’ll start with a little bit more of extension into that story, of course, when it comes to the differences that we’re able to make feel like we’re in a movement of a lot of companies that are really solving for. A lot of it lives behind the curtain of the food industry, the food that we all eat is a huge ecosystem. And when I became a farmer, that was very early days and then that led to purchasing land in Canby, Oregon and then focusing more on ranching, so livestock and regenerative farming and grass fed beef. Then that also transitioned into the succession plan of one of the last independently owned USDA meat processing facilities not only the state of Oregon, but across the country. Actually, that is my former partner, Jimmy Surland and notable chefs in Portland, ben Meyer called Revel Meat Company. So that was started their own meat company, we used to be Mark’s meats, and it was right down the street from our farm when Jimmy and I bought that and that happened the way things happen for farmers or in food right now, which is you need a USDA processing facility, if you raise livestock. You care very much about who is going to be processing your animals, and you need that stamp of approval from the federal government in order to distribute. When I say delve into the deep end of the pool, there it is. So when you start as a farmer, you’re grazing animals, you’re growing produce. You’re so committed to that craft alone. And then you start to understand what will it take for us to not even scale right to support ourselves a small farm? And then what are our opportunities? How do we serve our markets? And if you think about your average farmer, we go to the farmer’s market or maybe you’re part of a CSA program. But if you think about the small business owners and some of the challenges there and think about that times ten for a farmer, they’re having to grow their food plan and plant all of the seasons ahead. They’re gambling every day, right with the weather and all of the circumstances beyond the control. Not only that, but now they’re competing with Fred Meyer with all big-box stores, with everything that’s really sold within the commodity market. And in order to be a small farmer that’s selling direct and by the way, small farmers are 90 percent of our nation’s farmers. And really, the well-known.
Ned Hayes [00:07:35] Wow, wait wait, 90 percent still, our nation’s farmers are small.
Julia Niiro [00:07:39] Yes.
Ned Hayes [00:07:40] Could you define small? What do you mean by small?
Julia Niiro [00:07:43] I’ll use the government standard way and that is they make under 100,000 income total as a business per year. You can also look at it from an acreage perspective, but there are those different tiers of farms. So if you think about it and the classic joke, how do you become a millionaire as a small farmer or you start out with two? This is not a profitable business for anybody. This is a labor of love and land. To me, that is only been a short amount of time in our history. That has not always been the case when we really saw the commodity market pick up and Fred Meyers of the world is just the way that the world was moving so quickly. That really changed. So really about the 60s and the 70s, that’s where you saw the rapid transition of the ability to make money or to have really an attractive lifestyle of being a small farmer. And that’s where the rubber meets the road for us today, when we’re thinking about all of the issues that we have to face for a climate perspective and a population perspective, we have less and less farmers and we have less and less small farmers. And for me, when I think about it and I just looked around at all the people who are farming my neighbors, my friends, the people who taught us who are there every day right now. Those are the people who are actively working at solving some of our biggest challenges. They are tasked with having to figure out how to find customers, how to figure out how to send sales sheets for perishable goods every week to customers, how to price things, how to forecast those sales, how to deliver to customers, whether they’re restaurants, retailers or the farmer’s market, how to mitigate loss in that chain, how to afford cold storage on their farm, all of it. How to be able to afford the total cost of ownership on your small sprinkler ban when your average commute is four hours. We really think about it, right? This is the urban and rural divide at its most direct. And for me, I think to be honest, when you think about the massive amount of challenges and everything working against you, the fact that we still have 90 percent of our nation’s farmers and we still have an incredibly motivated generation of farmers who are want that call the kettle back to small, we go back to more diversified programs more regenerative. These are crazy concepts. These are fundamentals to farming and land management. I just find that amazing, and that’s where the spark hit. It was just if that is true and even how hard it is, you think as a consumer, how hard is it to consistently buy from these farmers and you’re willing to do it! Because we all fundamentally know that act alone is really a solution. And I think working in this market, especially the technical side of food tech landscape, I think that is kind of always the theme is we don’t need to build more technology or more systems or invent a new way of growing food. How do we use that to apply it to systems that work and help actually facilitate the efficiency within a system we know will solve a lot.
Ned Hayes [00:10:28] Right, when you say solve a lot tho, do you mean not only solving for shoppers to make it more convenient, but also better for farmers and having an economic impact there? Assume you’re attacking both ends of the equation?
Julia Niiro [00:10:40] Absolutely. And I’ll take it even one step further. You’re talking about this fundamental our soil, right? I mean, some of these huge issues never one to be doomsday because there are always stories of optimism, however. What do we need? We need to facilitate and grow and if anything, scale the solutions in front of us to face the environmental challenges and really the future state challenges that we have in front of us. So much of it comes down to our land or water in our air, and farmers are the people who are responsible on a daily basis who choose to make it their living to steward that land.
Ned Hayes [00:11:12] Right? Absolutely. So we take the world that you’re imagining and make it happen. What would the future of farm to table look like? Where do you think we’re going in an optimistic world?
Julia Niiro [00:11:22] There’s so much to learn. There’s so much to know. So I look forward to being interviewed again in a year and five, if you will. And I know I’ll I’ll be humbled many times over and I look forward to that because there’s so much to learn. But I do think, so this isn’t about there’s a better way, there is this world where we need to replace the commodity market or global supply chains or systems. I don’t even pretend to know enough about how to solve that or that is the answer. That isn’t the goal. The goal is how do we make the world of small farming, diversified farming, regenerative farming? These practices are inherent to what it means to be a small farm. How do we preserve those traditions and scale them and give them a place in the future that is not only more secure, but also a very viable option to the commodity market? And that’s the quest, is not how to do we forget about these systems that we all know and has been widely recognized that we need. How do we actually now create systems which for MilkRun that became version one for us was helping to reduce the middle. How do we actually help use technology to make distribution simpler and buying direct from these farmers more convenient so that the share of the dollars larger. For us, there is something fundamental in that to ensuring the world of small farming in our nation has a bigger seat at the table in the future.
Ned Hayes [00:12:36] I think that’s a really inspirational vision. And during the pandemic, a lot of decisions had to take a step back. I know consumers changed how they purchase food, even how they cook food. I know we used our kitchen a lot more during the pandemic. So how did the pandemic affect MilkRun? Did you make any changes to your business model?
Julia Niiro [00:12:54] Yes, many ways we say that we’re a company that was started in 2020 and the waves. And then I will also say what’s really interesting for MilkRun is we weren’t the traditional tech company, and a lot of tech companies only saw massive success and just unbelievable growth and gains, whether it was our strategy or our market. There were many waves of that, and it was all really based on the consumer waves, but we all went through. So, yes, early days. What I will say is I was in Techstars Accelerator 2020 when the pandemic hit, so we graduated in April and it started, it was a genuine April class. So we grew 15x in eight weeks. The company went from January, I’ll say to me is a sole and full time employed person, and I was still driving the majority of the routes. We had two vans that I had purchased off of Craigslist. Definitely wonderful people who were showing up to help support us. Like my best friend she would leave her teaching job and come help. And we were running most of the deliveries impacting from my farm on a weekly basis definitely had this vision and the technical implications. We were building this platform with this vision for some time, but the company just overnight. So that means in March we were at 28 employees. We’re doing about 500 orders a week. We also had become one of the only remaining sales channels to many of the farmers. We’re working with farmers who were not selling to retailers, they were selling to restaurants and some were at the farmer’s markets. But the farmers markets were not open either. Seattle, for example, they were completely shut down, literally overnight. That happened. The restaurant industry went away. And that’s actually even how we have the facility that we did. Wonderful friends, wilder land and sea, incredible company. I owe so much of our ability to meet that demand to them because they just moved into a giant warehouse, which is a huge fixed cost to take on. And they lost their restaurant businesses their accounts overnight, but we needed a facility to move into. So we moved. We acquired many of their staff. A lot of them are still with us today and then majority of those twenty eight people that we were able to hire just at that time, the company’s grown since then as well. They were all out of the restaurant industry, so we gave them jobs.
Ned Hayes [00:15:02] So you were able to be a sustaining force in the industry during this time of upheaval.
Julia Niiro [00:15:07] It was miraculous, really the ode to the Portland food community and how it works. Yes, we were growing and wanting to meet that moment as best we could and scaling your essential business during a pandemic. Pieces of paper on our dashboard saying we could be on the road and then we had USDA training. So we wanted to be the model of what does this look like at this time? We had health and safety precautions already mapped out. We had boxes. We had been under federal inspection. We could literally replicate that playbook to a tee at a time when there was no guidance, there was no support. There was nothing, but we had the gear that we needed. My mom had to make us face masks and I did have that order through another Techstars company, hand sanitizer, which they told me was the last that was going to be available for six months now.
Ned Hayes [00:15:51] Wow, right, I remember. Yeah. Well, I know you’ve mentioned Techstars a couple of times. Could you tell us about your tech startup experience? How did that help MilkRun get going?
Julia Niiro [00:16:01] Yes, we did. Both Techstars and Y Combinator actually in 2020 as well. But Techstars was most of our current major investors and the investors that have become mentors, friends talk about partners to a young company in such a time. They actually came to us through Techstars. The rise of the rest. Incredible. They were looking for founders like me. They were looking for companies with a mission like MilkRun, Congruent VC, incredible. We met them through Techstars community. Yeah, I don’t know what I really would have done without the support of that network, certainly at that time and everything through it. This has been an trying time for all business owners, let alone small food companies that are in the delivery space that have been riding this wave. That network, or Techstars, is a general. My 4:00 a.m. phone call.
Ned Hayes [00:16:44] Wow, fantastic. So one of the big things I’ve heard you talk about is the ability to scale rapidly, and your team has been able to really grow overnight. So your team reaches out to customers, though entirely online. You don’t have a physical downtown building, you’re reaching out to customers online. And so how have you been able to scale your overall customer acquisition and demand reach online only?
Julia Niiro [00:17:09] Yeah, great question. And that has changed. It’s been a constant learning, a of learning has been high. If anything, for us, what we did was we also chose to not make growth our number one goal. We wanted our goal to be a longer term business model. And we found out during scaling the marketplace more one to one e-commerce purchasings. We didn’t have a subscription model at that time. So imperfect foods, for example, that time they had all subscription. We did not. We were just a market. So we learned a lot about what also doesn’t scale. And instead of saying we’re going to meet this moment with just rapid growth numbers, we actually need to think about what it is that will allow us to replicate in different markets and cities. And we actually played a dangerous game of getting a little bit too close into the Oh, we’re going to compete with retailers. That is not our game, actually. We are food from farm, so we limited our SKUs. We actually did transition. Our customer base was hit biggest in Portland because they’ve been used to a really wide set of options all the time without a subscription model. We moved to only Staples Limited our SKUs, replicated that in Seattle and then in Austin, we took that risk which who knows what I would do again. But for us, then the customers, the barrier to entry was a little bit higher as well. So this was subscribing to your farmer for the long term because that’s what we want. We want to sell your entire neighborhood eggs on a repeatable, steady click so that we can support one farm, of needed for one neighborhood is kind of the concept, and we knew that was what our farmers needed, it’s what people wanted. But it still saw the new landscape for people and only can they buy their groceries online. But will they subscribe so their farmers online every week? And what we found was also talk about digital ads and then skyrocketing and three hundred dollar customer acquisition costs, which we cannot afford. So for us, it is always going back to the roots. We never had a marketing budget, so it is really, as we say, still MilkRun its thousand true fans and those are our customers. And so now you’ll even see coming out from us, we’re doubling down on that completely with owning as a membership program. Totally. How can we actually reward these members? So our customers became advocates, our suppliers became advocates, our employees as advocates instead of saying we’re just going to grow and scale, it became what can we continue to do well? And if we continue to do that well, well, maybe we won’t see the same growth numbers that other tech companies have this year. But we will be here and we will be around and we’ll be proud of the work that we did. And so that is the MilkRun lesson at the end of the day and where we continue to turn even Q one strategy planning number one is thousand true fans and our fans and customers and our suppliers, our farm.
Ned Hayes [00:19:42] Right, so that thousand true fans, building advocates instead of just customers, that is really fascinating. Can you tell us more about how you turn somebody from just a customer into an advocate or into you, as you said, a true fan. What’s the difference?
Julia Niiro [00:19:56] Not easy, right? And how do you? We are lucky enough to customers bring our products into their home every week. You get a MilkRun box. So for us, it even came down to thinking about all the little details. So when you get a MilkRun box, how do we make sure your goods are cold? How do you make sure that box feels substantial and safe, like you can trust it? And then how do we have a box that can fit all of your goods? But they also sits on a refrigerator shelf so that MilkRun can become a storage container for fresh produce? How to make it so that each one of our customers feels so excited when they open their fridge. It says MilkRun and when their kids are hungry to open and they see MilkRun and they know there’s really amazing fresh carrots in there. And we did everything from recipes on paper to these digital QR codes to just constantly keep the story fresh of humanizing that. And we know you can’t go to the store right now, but this question every day of MilkRun. Well, we want it to feel like you’re still shaking the hand of the farmer. It’s a weekly focus on that, and it’s not easy. It’s been a constant whether it was SMS testing, forward this email, refer your friends, we now can roll our cooler program out again, but we were restricted a lot from the physical products because of COVID, so we’re rolling those systems out now in a new way. But what we really found is people are proud to share their MilkRun purchase because it says something about what they value. So you’ll see more things from us like lawn signs or the cooler on your porch, because our customers love to show off how hard they work to source their grocery, right?
Ned Hayes [00:21:33] So besides the coolers, can you tell us about any technologies that you’re using to make life more convenient for your customers? What technologies do you think new startups should know about?
Julia Niiro [00:21:44] Well I mean for us, as far as kind of product, we are Shopify. We’re custom Shopify platforms. We’ve been able to leverage a lot of the tools that are gorgeous or Klaviyo. So just a lot of deep learning about the different customer segments that we have. For example, this last week we rolled out our live chat sprint. So we wanted to go back to the idea of we want to build trust. So everything that helps us build trust and help our customers recognize that they are purchasing from humans. And there are humans working hard to source and fulfill their orders every week and deliver them and has been critical. So every little piece, whether it was wall within on fleet notifications, on who your driver is so you can talk all those feedback loops, if you will, to the real humans in the team of MilkRun. That’s where we focus our investment in some of those tools. And then on the other end, from our perspective, what we’re preparing for and what we think about all the time are attributes. So how do customers want to shop? And the average customer purchases at one hundred and eighty seven unique items at the grocery store every year and is actually not that many, and about 50 percent of them can be replaced by local goods. Things outside of your toilet paper, things, if you will. And then we have customer archetypes and not everyone’s the same, and there are different archetypes, obviously, for every household. So for us, it’s also an understanding of attribute matching. So you’ll see that reflected in our new product that’s coming out later, which is based on the national concept. But that is an attribute matching game. So what are the ways that people are searching for small farmers and these really, really incredible goods from small farmers? And how do we make sure we highlight the farmers across the nation that fit into those categories, whether it’s regenerative heritage, breed, women-owned, even these pieces, for us, that’s the most fun part of what we can do that farmer matching system.
Ned Hayes [00:23:36] Right. It goes back to feeling like you’re actually shaking the hand of the farmer.
Julia Niiro [00:23:39] Yes.
Ned Hayes [00:23:39] So you’ve talked about launching in Portland, going to Seattle, going to Austin. What does the future of MilkRun look like?
Julia Niiro [00:23:47] We focus so much on our customers we ended up with at the end of the day, which is very exciting, wasn’t exactly by design, but it was an incredibly high retention model. Our customers, once they stay with us, are quite happy. It’s phenomenal. So yes, did we during 2020 go after the acquisition growth growth growth game? I wouldn’t say that that was where we focused. Our intention was definitely on how to convert customers for life. How do we let people know that your milk man, that’s MilkRun. So, now what we’ve also found and what the constant question for us during that time was and certainly after we raise a Series A and we now have really big thinkers who are helping us in our way understand, how to get to that future faster, is we have an opportunity now to because of all of the farmers within our network, certainly now who all understand are playing the direct online sales game. How can we create the nation’s farmers market and allow access for anybody across the country to purchase from our farmers based on a certain criteria, unique experiences and using that as a tool to help us generate demand for our local membership, which is where you’ll see additional items where you can buy your lower cart values on a really repeatable basis now we’ve been able to think through how do we cast a wider net for our network of farmers without compromising the localization that we ultimately want to drive people into. So that has been a very cool thing to recognize was needed both ends and to be able to view that from the retention model that we found and the local delivery.
Ned Hayes [00:25:20] Right.
Julia Niiro [00:25:21] We’re really excited about that if you can’t tell! And the lessons are hard to can you scale locally in every market fast enough? Yes and no. So the art of it now is how do we generate that demand on a national level without compromising and only adding to our ability to localize.
Ned Hayes [00:25:39] Right. Well, this has been such an engaging, interesting conversation with Julie. I just have one final question, which is what do you want your personal legacy to be? I guess another way to say it is, how do you want to be remembered?
Julia Niiro [00:25:51] Personally as a founder? I guess you don’t spend too much time thinking about yourself. I think I have learned more about leadership than I could have ever dreamed. That was definitely a certain word before I became a startup founder and certainly one that led the company through a pandemic times. But leadership now is something I’m very committed to learning every day and applying myself to. I don’t think I hit it every day, but I hope one day to be least recognized, name a few. As someone who led well in a mission driven company that had huge goals, that was navigating really wild times. We have a little bit of a misfit philosophy we’re food people, a lot of the kitchen people and farmers on our team, and we like it that way. And I know this company will be a legacy company and it will be built from the people who really were there in the fields and in the kitchens and wanted to learn how technology can help further their mission. So I hope I led well.
Ned Hayes [00:26:43] Fantastic. Well, thank you so much. Really enjoyed this conversation with you. Thank you. Spark Plug is a wholly owned property of SnowShoe all content and copyright 2021 Spark Plug Media.