I read this piece in Fortune this morning and it got me thinking:
The article describes how coffee roasters in the US are working closely with coffee farmers to reduce the risks born by the farmer and increase their margins on the coffee they grow and sell. This goes beyond the minor bump in price that farmers see through Fair Trade or Organic branding.
I have also been reading William Cronon’s excellent book Nature’s Metropolis which describes the early market structure and logistics of the grain and lumber trades in Chicago. The lumber market in Chicago used to depend upon unloading the white pine milled in Michigan and Wisconsin from ships on Lake Michigan and sending it to lumber yards in the prairie states by rail. The mills concentrated on white pine because that species was light enough to float logs to the mills. When the white pine forests were depleted the whole operation changed when railroads were extended into forests of hardwoods and heavier conifers which cut out the lake carriers and greatly reduce the volume of lumber that arrived on the docks of Chicago.
Both of these writings feed into what I have been thinking lately about how to engage local building trades and disrupt the conventional building and development model. Specifically, how does a small developer compete for the increasingly scarce resource of skilled construction labor with larger operators building bigger projects?
The answer contained in both of these readings is to figure out a way to get close to the source so you can help the other party do better. How to improve communications and logistics so that the small developer can provide a steady work flow for the trades that want to work close to home and with less volatility.