Online grocer Harvie, indebted and short on cash, seeks bankruptcy protection

Harvie, a farm-to-doorstep food delivery service based in Pittsburgh, is seeking bankruptcy protection as it grapples with around $2.4 million in debt.

At least $144,000 is owed to small farmers in Pennsylvania and Maryland, according to filings last month in U.S. Bankruptcy Court in Pittsburgh. Its largest creditor, JPMorgan Chase, needs more than $100,000 to be made whole.

The company also owes money to Meta, credit crowdsourcing platform Honeycomb, coffee shops, specialty food stores and produce wholesalers.

Harvie has less than $500,000 in assets, per court records.

“Long story short, we found ourselves with a profitable business but too much debt,” Simon Huntley, founder and CEO of Harvie, told TribLive on Wednesday.

Huntley launched Harvie in 2016 as a software company to help farmers market and deliver their products. But once the covid-19 pandemic hit, “another path was becoming clear: we could do (distribution) ourselves,” Huntley wrote in a 2022 blog post.

The firm began buying local produce to assemble into boxes and deliver to customers. The boxes were fully customizable, giving Harvie an edge over farms that shipped out a fixed bundle — including many of its software clients.

Today, customers who pay an annual membership fee ranging from $24 to $199 can choose from an online array of fruits, vegetables, meats, dairy products, drinks, baked goods, prepared meals and more.

Setting up this operation was costly, and over the years, it has only expanded. Harvie recently added parts of the Philadelphia area to its delivery zone, marking its first foray outside of Southwestern Pennsylvania.

Its home base is a warehouse in Pittsburgh’s Lawrenceville neighborhood.

Only way forward

When two anticipated cash infusions — one from a local investor, another from the U.S. Department of Agriculture — failed to materialize this year, “the debt became increasingly onerous,” Huntley said.

The company cut payroll in half — from roughly 60 to 30 workers — and pulled back on marketing to help fund debt obligations, but it was still burning through cash. During the second quarter of this year, Harvie’s cash on hand dwindled to $145,000 from $279,000, bankruptcy filings show.

Bankruptcy court appeared to be the only way forward, Huntley said. The company filed for Chapter 11 protection on Aug. 1 while it reorganizes its finances.

Harvie is crafting a plan to pay back creditors, Huntley said. In the meantime, the company will keep buying products and delivering to its roughly 3,000 customers.

‘Doing their utmost’

TribLive contacted all 11 farms or groups of farms listed as a top-20 creditor in Harvie’s initial filing. Of the seven farmers who returned calls, none said they’ll stop supplying the company.

“Any business I do with anybody is a risk,” said Carolyn McQuiston, owner of Dawson’s Orchards in North Beaver, Lawrence County. “But I think they’re doing their utmost to make it work and keep things moving.”

McQuiston, who grows apples, peaches and several other fruits, was owed $9,000 as of the initial bankruptcy filing.

Other farmers are more skeptical of Harvie’s long-term prospects. But without its suppliers, the farmers noted, Harvie might never be able to pay off its debts.

“This way was a chance to keep it going and give the farmers a hope of getting some payment back,” said Nathan Holmes, manager at Clarion River Organics in Sligo, Clarion County. “I’m still kind of cheerleading for it from the sidelines from a local food perspective, but also from a creditor perspective.”

Clarion River Organics is owed about $29,000, according to the filings. That’s more than any other farm listed in court records.

It’s followed by Highland Farm Fresh in Maryland at $20,000 and Yarnick’s Farm in Armstrong Township, Indiana County, at $14,000.

Dan Yarnick, owner of Yarnick’s Farm, said he has worked with Harvie for at least three years. It was an attractive proposition — Yarnick could secure steady demand for his produce without having to juggle the marketing and logistics that go into a delivery business.

About six months ago, payments started slowing down, but orders kept rolling in. Just late last month, Harvie requested more than 100 each of tomatoes, zucchini, cucumbers and corn.

“They started out with a bang,” Yarnick said.

Now, he continued, “I know they have a lot of people they owe.”