Food parcel machine idea picks up in Latvia

To get farmers' produce to customers faster and cheaper, entrepreneurs are developing a network of parcel locker machines specifically for food. In the coming months, delivery platform IziPizi plans to set up a new parcel office in Bauska, while entrepreneurs in Ogre, Jelgava, Sigulda and other regions are also interested in joining, Latvian Radio reported on July 26.

The first food parcel locker was already established two years ago in Āgenskalns Market. Farmers, home producers and other entrepreneurs use thermal lockers to deliver their products to customers more conveniently.

Rolands Dzenis, founder of the food kiosk company IziPizi, pointed out that machines have been set up in Rīga, Tukums and Dundaga, while one will be set up in Bauska in the next few months. Small producers are showing interest.

Dzenis said: "The products are placed in a +2 to +6 degree temperature cabinet. We currently put frozen products separately, but we also have a new solution in the works that will be specifically for frozen products. And now we have changed our strategy, because in the past we were building more of our own machines and we thought that we would attract investment as a start-up and then build it ourselves, but then we had farmers calling us from all sides and asking for it: "Roland, when will I have a parcel machine?"

"We realized that we could not do it on our own, because if we were to say that we had covered Latvia, then we would have to build 100 locker machines. That is a lot of money, because one locker machine costs EUR 18 000, and we realized that we had to change the rules and say to the farmers: if you need it, come and build it with us. We have prepared a 10-year franchise agreement where farmers can get together for a parcel machine, and we organized an event in Bauska and there are already the first interested people, and four units have been reserved. In Ogre, we are also in the process."

Most of the products that are currently in food parcel machines are higher-priced products such as baked goods, fresh meat, eggs, and other products. 

Oļegs, who was at a food parcel in Riga, was sending a small cake to a customer. "Yes, we send regularly, and at first maybe there were some difficulties, but in the last six months we have also had customers writing to us saying that it is very convenient because they can come back even at midnight."

The cooperative "Latvijas liellops" manager Alma Bērziņa said that food parcels shorten the supply chain and costs for farmers. The cooperative's producers do not currently supply beef to shops.

"The parcel machines are a way to ensure that we don't get stuck at the end of the chain, which is the supplier to the chain stores, who still put a mark-up at the end and in reality are the ones who make the money from selling the product, but here the producer can put a mark-up to cover the cost of the parcel and the logistics and reach the person directly. [..] So I think that is a very efficient model to go for. And we are still in the early stages."

A food parcel machine in Bauska is expected to open in the autumn, and there are plans to open food delivery points in Ogre, Jelgava, Ķekava and Sigulda.

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