New Roads to New Markets

Transcription

1 New Roads to New Markets Patty Cantrell Regional Food Solutions LLC Food Hub Workshop Southcentral Missouri January 13, 2015 Missouri State University Fruit Experiment Station

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3 IRS: Nonprofit hospitals can claim nutrition access aid to avoid taxes Tuesday, January 6, 2015 Volume 5, Number 1 The ruling was issued on December 31 as a directive to hospitals to comply with the Affordable Care Act. It means hospitals may be able to claim tax credit for programs to reduce the cost of fruits and vegetables in farmers markets and grocery stores and prescriptions that substitute healthier foods for medicine and even help defray the higher costs of healthier school meals.

4 If Direct-to-Consumer were a Commodity 2012 Census of Agriculture data, direct-to-consumer sales alone now ranks as the 4th most popular agricultural activity by number of farms. In other words, if direct-to-consumer were a commodity (such as cattle or grains), it would be the 4th largest commodity as measured by the number of farms engaged in the practice. Gary Matteson, Farm Credit Council, May 2014 Vice president young, beginning and small farmers

5 Regional Food Scaling Up Local Food Opportunity is Ripe Gary L. Howe

6 Mid-Scale Infrastructure Washed Out

7 Yet producers and consumers connect Supply chain innovation and industry evolution happens all the time in our economy when producers and buyers not satisfied. e.g. music industry New market infrastructure emerges to facilitate growing number and types of producerconsumer connections/networks. e.g. regional food hubs.

8 The Music Industry: decentralized to centralized and back again 1890 Individual Musicians Independent Record Labels 1945 Big Five Napster P2P 2006 CENTRALIZED Drawn from: the Starfish and the Spider: The Power of Leaderless Organizations DECENTRALIZED

9 The Food Industry (System) 1880 Local farms local markets Larger farms Regional & national markets 1945 Five global retailers huge farms Local food movement Networked local food scaled up CENTRALIZED Adapted from: Rich Pirog Leopold Center for Sustainable Agriculture DECENTRALIZED

10 Regional Food Hub A business or organization that actively manages the aggregation, distribution, and marketing of source-identified food products primarily from local and regional producers to strengthen their ability to satisfy wholesale, retail, and institutional demand. (USDA-AMS) Common Market, Philadelphia PA

11 New Roads to New Markets 1. Food hub functions 2. Lessons learned 3. Value chain approach

12 1. Food Hub Functions Operational Services Aggregation, Distribution, Marketing Packaging Processing, Storage Producer Services Training (e.g. post-harvest), business assistance Certifications (e.g. food safety), insurance Community Services Health and youth outreach (e.g. cooking) Food Bank donations, SNAP redemption 2013 National Food Hub Survey, NGFN and MSU-CFRFS

13 Good Natured Family Farms Kansas City 1997: 1 farmer + bumper tomato crop 2013: 150 farms, 275 products, ~$4 mm sales Customers: Grocery chain, SYSCO, corp. & urban CSAs Source: Wallace Center report Food Hubs: Solving Local

14 LaMontanita Distribution Center Est New Mexico 1,300+ producers 900 SKUs 51% sales to parent co-op 17,000 s.f. warehouse w/refrigerated, frozen storage. Source: Wallace Center report Food Hubs: Solving Local

15 Red Tomato Northeast U.S. Sources from 80-farm network (New England to New Jersey). Coordinates sale, marketing of fresh fruits and vegetables (308 SKUs in 2013). Supplies 22 retail chains and distributors in 14 states. Source: Wallace Center report Food Hubs: Solving Local

16 Different Business Models Producer Driven (Good Natured Family Farms) Retail Driven (LaMontanita) Nonprofit Driven (Red Tomato) Consumer Driven Oklahoma Food Cooperative FarmLogix LLC, Chicago Moving Food Along the Value Chain USDA-AMS March 2012

17 Food Hub Market Models Member-owned buying club (producers + consumers) 5,000 different items 80+ Oklahoma producers Online shopping system (monthly ordering) Mostly volunteer delivery system (~ 50 sites) Source: OK Food Co-op website

18 Food Hub Market Models Online platform that connects schools, restaurants, institutions to > 300 local farms Farmers drop at 1 of 3 aggregation centers Partner Testa Produce delivers & invoices Itemized orders by farm, state, product, miles saved Service free to farms. Buyers pay percentage by volume Source: USDA-Wallace Center presentation

19 2. Lessons Learned Location, location, location Capital investment right time, place, owner Business management and growth Value chain partnerships, coordination (or presentation Item #3 Value Chain Approach )

20 Facilitation/Marketing Food Hub Facts (2013 survey) Approximately 222 regional food hubs in the U.S. Averaged more than $3 million in 2012 revenue. 62% started up within the last five years. Half are for-profit enterprises. More than half operate independently of grants. 60% total gross sales from small, mid-sized producers. Findings of the 2013 National Food Hub Survey, Michigan State University Center for Regional Food Systems and Wallace Center at Winrock International.

21 Location, location, location 75% in metro counties (large pop &/or adjacent) Only 15% in counties with pop < 20,000 Proportion of food hubs highly dependent on grant funding was higher in regions reporting food hubs in non-metro counties National Food Hub Survey, NGFN and MSU-CFRFS

22 Capital Investment The level of investment in infrastructure should match the organization s stage of development and marketing capacities. Moving Food Along the Value Chain USDA-AMS March 2012 Even Red Tomato No trucks, warehouses Third-party logistics

23 Business Management Some 2013 survey notes: 41% say increasing staff biggest barrier Also Managing growth Balancing supply, demand Funding producer and community services 2013 National Food Hub Survey, NGFN and MSU-CFRFS

24 3. Value Chain Approach Talk is Cheap... and Efficient! Facilitating value chain development without costly new infrastructure National Good Food Network webinar 2:30 CST Jan 22, 2015

25 New Roads to New Markets Patty Cantrell Regional Food Solutions LLC regionalfoodsolutions.com