New Markets and Distribution Opportunities in Florida s Food System
The 2013 Educational Program Committee is pleased to share conference educational materials with you under the condition that they are used without alteration for educational and non-commercial use only. All materials are protected by copyright law. The authors kindly request their work is properly cited, including the date of publication. For more information on Small Farms, visit our website at: http://smallfarms.ifas.ufl.edu/ or contact your local County Extension Agent. For inquiries about this topic, please contact: Danielle Treadwell, Educational Program Chair. Phone: (352) 273-4775 Email: ddtreadw@ufl.edu Suggested Citation: Author Full Name. Title of Presentation or Handout. 2013 University of Florida-IFAS and Florida Agricultural and Mechanical University-CAFS Florida Small Farms and Alternative Enterprises Conference. August 2-4, Kissimmee, FL.
Beyond the Farmers Market Investing in infrastructure to catalyze regional food markets August 2013 FL Small Farms and Alternative Enterprises Conference
Wholesome Wave works to equip urban and rural communities to make healthier food choices by increasing access to and affordability of fresh regionally-grown fruits and vegetables. Our innovative programs address issues of food insecurity, farm viability, economic vitality and diet-related diseases. Our reach spans the nation with partners in 30 states operating over 300 program sites engaging nearly 2,500 farmers. 4
How does WW Investments fit with WW s existing work? Retail Affordable Access of Healthy Local Foods Wholesale? 5
? Capital that Fits Help Plan + Communicate? Opportunities/Deals Help Screen + Structure Deals
Avg. Op. Margin - Sector
Rising institutional and consumer demand for local food is creating larger opportunities for regional farms Mandates Trends 36 states passed legislation regarding farm-to-school local sourcing programs 1 in 6 consumers goes out of their way to buy local food products Institutional mandates to purchase local from large volume buyers Hospitals Universities Corporate food service Correctional facilities 30% would purchase local goods & services, but were unable to locate them #1 menu trend of 2010: Locally grown produce; Top food influencer of decade: Locavore Source: Mintel, National Restaurant Association, FoodChannel.com sourced via Food Navigator, N. Merrett, March 2009 (http://www.foodnavigatorusa.com/content/view/print/240498) and FamilyFarmed.org, Ready to Grow July 2010, (http://ngfn.org/resources/ngfn-database/knowledge/illinoisproducereport-final.pdf)); National Farm To School Network
However, the current infrastructure for food is ill-suited for small-medium size farms and regional sourcing Issues Complex system of intermediaries erodes margins for agricultural producers Aggregation and processing facilities require large consistent volumes for scale economics Regulatory requirements become expensive for smaller players to cover alone (GAP, GHP and HACCP) Source: A. Wysocki, University of Florida Agronomy Dept.
How does WW think about food hubs? FARMERS Small DTC focused Medium wholesalers Large wholesalers New entrants (vertical farm) First-mile aggregation Value-added processing Haul Last-mile distribution Value-added processing CUSTOMERS Households Buying Clubs Grocers Restaurants Large institutions Hospitals Schools Corporate Key areas requiring investment Facilities for pack-houses and preservation processing Upgrades/Changes to ensure quality and food safety Planning Tools for farmer development Technology (integrated systems for ordering, inventory mgmt, accounting) Marketing (pricing, point of sale promotions, go to market resources) Systems to coordinate cooling and trucking excess capacity Sales and marketing capability to serve different customer segments Customer service Finance working capital Flexible resources for light processing 10
Started the year with partnership, convening and research Deploy HFFI funds with CEI, direct capital to at least 3 food hubs Set foundation for operating network: New England Convening Feb 2012 11
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Wholesome Wave is filling a niche to connect mission investors with investment ready regional food & agriculture enterprises Business development Institutional Buyer relations Marketing & Operations insight Regional food Infrastructure deals Low cash flow Talent constraints Weak or no growth plan Debt aversion or confusion Grower & Producer relations Mission driven capital Policy expertise and influence Mission Investors Not enough dealflow Deals not investment ready No post financing TA/ business development assistance
In efforts to match rising local food demand with regional farms, an emerging class of micro-distributors is experiencing exciting growth Gross revenues
These local food distributors (a.k.a. food hubs ) are driven by measures of success beyond just margin Business models based on Easy one-stop source for local food ( non-sysco or complement Sysco ) Product ranges that preference local and sustainably grown Branding that favors farm story Pricing that preserves margins to farmers Driven by missions to Increase regional farm income Increase acreage for noncommodity and organic crops Create jobs and increase regional economic activity Improve access in underserved urban and rural market areas
Malini Ram Moraghan Healthy Food Commerce Investments malini@wholesomewave.org 17