The Ecology Action Centre's Notes and Highlights from NGFN Food Hub Collaboration Conference

 (National Good Food Network conference in Raleigh, North Carolina; March 25th to 28th, 2014)

Day 1 – March 26^th

Meeting – Lin Peterson & Amanda Miller (Locals Seafood, Raleigh, North Carolina)

• Locals Seafood is a values-based brand.
• Started 4 years ago doing roadside peddling.
• Now do their own processing (in their own certified processing plant) and distribution (they have 3 vehicles).
  
  • Serve exclusively North Carolina-sourced seafood from the coast.
  • Work with local fish houses; drive along coast and collect seafood, bringing it back inland to Raleigh.
• Refrigeration
  
  • Modified a truck trailer with insulation and drainage capacity.
  • Use a device called a cool-bot, which overrides a standard air conditioner and turns the trailer into a walk-in refrigerator.
• Processing
  
  • Have their own processing facility, based right in Raleigh.
  • Fresh fish is brought in from the coast and processed fresh.
• Sales
  
  • An online, flexible, and catch-based system allows potential buyers to see what fish they have for the week.

Intensive Training – Setting Goals and Tracking Progress: Keys to Improving Food Hub Viability

Session 1: What is Market Analysis? Jesse Singerman (Prairie Ventures, Omaha, Nebraska) & Jessie Griffen (Green Mountain Farm to School Hub, Newport, Vermont)

• What is a market analysis?
  
  • An industry description and outlook for the future.
  • An identification of the target market(s).
  • An identification of informational needs.
    • Secondary data sources (information with implications for your food hub)
      • Includes: total market size, major competitors, target buyer profiles, etc.
      • Potential sources: censuses, gross sales info for particular market segments, consumer buyer trends, surveys, specific purchasing data, trade associations, etc.
    • Primary data sources (research you do yourself, using internal sales/trend/product data)
• What is market segmentation?
  
  • A way to determine customer types and product categories.
  • A way to quantify; a way to determine who is driving your sales and by what percentage.
  • A way to group out sales to better understand each sales group’s wants, needs, etc.
  • Potential market segmentation for Off the Hook, sustainably and traceably sourced local seafood:
    • Broadliners
    • Wholesalers
    • Public institutions
    • Private institutions
    • Small retailers
    • Supermarkets
    • Restaurants
    • Farmers’ markets
    • Community Supported Fishery
  • Important to do market segmentation because:
    • Some segments may require different handling procedures.
    • Some segments may have shifting requirements, values, needs, etc.
    • Some segments may require different levels of processing, value added, etc.
    • Identify potential new customers.
      • Determine how you can reach out, who may be on existing routes, existing infrastructure and capacity, etc.
    • Identify who drives growth, under tapped markets, opportunities, etc.
  • Once segmented, it is possible to do things like:
    • Determine how many sales ($) are coming from each segment, how many accounts each segment comprises, and what percentage of sales comes from each segment
      • Important for sales history and growth projections.
    • Offer segment specific recaps and projections for your customers.
• What is a competitive analysis?
  
  • A method of determining your organization’s or a product’s competitive factor compared to that of a competitor.
  • For example, a competitive analysis between Off the Hook, sustainably and traceably sourced local seafood versus a large scale, non-discriminatory seafood company might look like this:

Session 2: What is Operational Planning? Laura Edwards-Orr & Angel Mendez (Red Tomato, Plainville, Massachusetts)

• Red Tomato works with mid-size organizations: they have certain requirements for size and capacity to meet the demand of the wholesalers they supply.
• They began as an asset-based model:
  
  • Started with trucks, coolers, warehouses, etc.
• Realized that all of this capacity already existed, so they moved to a non-asset-based model:
  
  • Now focused on branding and packaging (a brand focus with an emphasis on traceability)
  • Product is packed at the farm and embedded with a story and traceability through Red Tomato packaging and software; food is consolidated at larger farms
• Red Tomato can consolidate produce and meet the needs of larger buyers (not just quality and quantity, but also seasonality, because they shift along the country to accommodate different suppliers in different seasons)
• Red Tomato serves as a value-added conduit for many producers; they generally don’t do more than 10% of producers’ sales.
  
  • Farm-identified and storified products go through Red Tomato with their own story and RT’s values.

Day 2 – March 27^th

Workshop –Selling a Lot without Selling Out

Sandi Kronick (East Carolina Organics, Durham, North Carolina)

• East Carolina Organics (ECO) is a food hub that maintains farmers as owners in their company; farmers are the core of their organization (although $ is divided 60:40 between staff:farmer).
• An LLC “with the look, feel, and smell of a co-op”.
• They only procure locally, but are happy to ship products elsewhere.
  
  • Note: they engage in other activities as necessary due to their mandate and need to protect the livelihoods of their farmers; when doing so, they only work with enterprises with shared values
• Purchased a warehouse with brownfield status (i.e., in a region that has been previously built upon, rather than on arable land).
  
  • They are happy to work in a less affluent region; they believe in supporting their community.
• The building serves as the ECO hub; the building is bigger than their needs.
  
  • Offers room for expansion, and also serves as a space for small organizations to work.
  • Smaller organizations have free access to ECO’s Wi-Fi, conference room, forklifts, etc.
• ECO is a values-based brand offering traceability.
  
  • Medium to larger farms are their anchors, while smaller farms can use ECO as a conduit to receive higher value for their products.

Dennis Derryk (The Corbin Hill Food Project, New York, New York)

• Corbin Hill Food Project (CHFP) is a CSA and community health program.
  
  • Serve New York City (Harlem & the Bronx) via food grown in upstate New York.
• Their vision is sovereignty; their values are rooted in community ownership, dictation, and control.
• They start by quantifying demand (as determined by the communities they serve), then gather product.
• Work as a NFP, with an LLC wing for financial matters.
• Their objective is to build a movement in their community, using the community’s lexicon.
  
  • Community is comprised of shareholders; consumers are economic citizens.
• CHFP is committed to providing fair wages for all workers; their minimum wage is $15/hour.
  
  • “We’re too tired of people working in the food business who need stamps to buy the food they’re selling.”
  • Also committed to fostering inclusive relationships with all members, including farmers.
    • All members get helped to attend meetings, etc.
• CHFP works with a local trucking company to gather product from farms in upstate New York and distribute it to various drop-off points in Harlem & the Bronx.

Bu Nygrens (Veritable Vegetable, San Francisco, California)

• VV didn’t identify as a food hub until they realized what it meant, and that they’d been doing it for decades.
• VV is women owned and operated.
• Business foundation: independent economic autonomy through supporting small to mid-scale organic farmers.
  
  • They distribute certified organic produce (95% of sales) throughout California, with additional service to Arizona, New Mexico, and Hawaii.
  • Operate via 25 routes, on the roads 7 days a week.
    • They also do fraying for other companies (fee for service) to ensure that their trucks are almost always full.
  • 80% of their business comes from distributing to independent retailers and co-ops, and they also sell to institutions.
• Committed to sustainability:
  
  • They offset their energy consumption by selling solar panels.
  • Incorporating hybrid trucks into their fleet.
  • Only 1% of the company’s waste goes to the landfill.
•  “Growth doesn’t mean getting bigger.”
  
  • Growth can also come from increasing in complexity and relationship building.

Group discussion

• How do you stay cost competitive with the big guys?
  
  • Subsidies and grants
  • Luck
  • Building relationships
  • Working with both friends and enemies
  • * Everybody in the chain needs to be a food hero
• Upcoming challenges?
  
  • You don’t get funding for building movements.
    • Take positive steps forward before you even have the capacity to act on them.
  • Determine how to get lower graded food into the market and optimize underutilized capacity.
  • Watch out for the watering down of values.
    • Ensure that growth doesn’t compromise your organization’s values and culture.
  • Ensure fair wages for all workers; food justice.
     

Workshop – Building Networks that Work

Rich Pirog (Michigan State University Center for Regional Food Systems, East Lansing, Michigan) & Marty Gerenger (Morse Marketing Connections, Norton Shores, Michigan)

• Why do networks work?
  
  • Co-operation: optimizing overall capacity of each member of the network through sharing resources.
  • Reducing transaction costs by sharing and through aggregation.
  • Increasing commerce.
  • Accelerating learning and knowledge sharing.
    • Identifying where research needs to happy and catalyze funding.
    • The network represents a group of similar organizations; better chance to get funding.
  • Faster service evaluation and more robust industry studies.
• Example: Michigan Food Hub Learning and Innovation Network
  
  • A stakeholder partnership formed together to build the movement.
  • Comprised of university members, consultants, food hub managers, etc.
  • Consolidation allows them to attract and divvy out funding to network members.

Pam Roy (Farm to Table New Mexico, Santa Fe, New Mexico)

• Part of the Farm to Table/Farm to Cafeteria networks.
  
  • Farm to Cafeteria seeks to get locally sourced food into institutions.
• New Mexico has a significant amount of food desserts, so Farm to Cafeteria is an effective way to curb the issue.
  
  • Farm to Cafeteria is a partnership-based endeavour.
  • Work with schools (they’ve reached 250,000+ students), universities, and the public sector to source New Mexico-grown produce.
  • 61 of the 89 school districts in New Mexico take part in the program.

Kathlyn Terry (Appalachian Sustainable Development, Abingdon, Virginia)

• ASD is a network of organizations, with a 15,000 ft² warehouse, 2 trucks, and an ice machine.
• ASD is in a geographic location with no markets, so they ship most of their product 6 hours way to Atlanta.
  
  • Take advantage of potential relationship building opportunities.
  • If no local markets, then they try to optimize the routes they are forced to run (share the wealth).
  • They also work for other organizations to offset the cost of their main source of business.
    • They will offer transportation services for a variety of local industries.
• They work by aggregating sparse, limited supply from small farmers.
  
  • “We’re giddy if we get a pallet.”
• Distribution cost is shared by all players.

Day 3 – May 28^th

Workshop – Stop! Don’t build that food hub!

Lily Brislen (University of Kentucky, Lexington, Kentucky)

• Case study: Grasshoppers Distribution Food Hub, a now defunct, for profit food hub in Kentucky.
• As part of her master’s, Lily is doing a “post-mortem” analysis of the food hub, which closed in December.
• Major issues:
  
  • The food hub felt obligated to serve all members of their industry/community, and through over-specialization, ended up spreading themselves too thin.
  • They didn’t necessarily have all of the critical infrastructure required to handle the work load either.
  • They shifted their business/enterprise model 3-4 times throughout 6-7 years of operation, and ran through 4 separate managers.
  • Enterprise could never scale up to the appropriate size to be profitable.
• Lessons learned:
  
  • Start with the capacity you have.
  • Don’t set your goals too high.
  • If you can’t meet the goal, work towards it slowly, rather than taking leaps.
  • Be clear and consistent from the beginning.
• Note: Most of these lessons flew in the face of other advice given by other food hub managers earlier during the conference. Many managers espoused “taking leaps”, for example.

Karen Simons (Local Economies Project, Kingston, New York)

• LEP’s objective is to build a resilient food system in Hudson Valley, New York, to promote healthy communities.
• LEP did a feasibility assessment for a food hub in the region.
  
  • Looked at the landscape to see what it needed.
  • Steps:
    • Goal: To evaluate a particular food hub model.
      • Note: it is important not to simply state, “I want to build a food hub.”
      • They determined what might be a feasible food hub/business model (food hubs can take a myriad of forms), then tested it.
    • Data: Be told what the community and geography needs; not the other way around.
      • Note: it is important to let the landscape and market tell you what is needed before you start trying to make the region bend to you.
    • Research analysis: Check out census data, processing license registry; conduct surveys, interviews, listening sessions; perform a literature review, best practice review, asset mapping
  • Results:
    • Best practice review:
      • Substantial capital investment is required for the food hub model they assessed.
      • Must be flexible: seasonable, variable, off season availability.
      • Management team: most important component for reducing risk of the project.
  • Recommendations:
    • Given the geographic extent of the Hudson Valley, a series of multiple “mini-hubs”, feeding into a larger congregation food hub point, is recommended.
    • The focus therefore needs to be on regional value chain development, creating small, resilient, and value-focused food systems that can feed into a larger system of unified values and capacity.

Todd Erling (Hudson Valley Agribusiness Development Corporation, Hudson, New York)

• Todd Erling is the Executive Director of HVADC, an agricultural economic development entity.
• His advice for those in the food hub planning phase includes:
  
  • Identify key objectives and goals, and make sure they are valid from the start (not just assumptions).
  • Determine where you will be putting your link in the value chain, and analyze adjacent links.
  • Think of the long term, and realize that assistance (financial, advisory, etc.) doesn’t stop after you cut the ribbon.
  • Assistance should be constant work; keep in touch with those in your support network.
  • Have 3 years of operating cost ready for the inevitable bumps that will arise along the road.
• Example: Farm to Table Co-Packers
  
  • F2T is a full service contract co-packing facility
  • Opportunity: Started by helping a small business that required assistance with co-packing; grew from there.
  • Note: The approach wasn’t just to build a food hub because they gained access to a financial opportunity; they had to start small and build up.
  • First steps for growth:
    • Assembled a critical mass with year-round market demand.
    • Realized it couldn’t just be a local food business; balanced with other ventures to make it profitable.
    • Launched several micro-capital campaigns to raise funds.
    • Took in any business they could to help pay the bills and get the ball rolling.
  • Fine line between sacrificing the mission by “selling out”, and to use other organizations (who may not have the same values) as a way to financially prop up and keep the original mission/business alive.
• Food hubs should actually be regarded as food nodes.

Ann Karlen (Fair Food, Philadelphia, Pennsylvania)

• Fair Food focuses on value chain development and facilitation.
• Food hubs are not going to be the right answer for everyone.
• Fair Food was started by Judy Wicks, founder of the White Dog Café, a restaurant/bar in Philadelphia with a locally sourced menu.
• Founded in 2000, Fair Food’s initial objective was to connect local farms with city chefs.
• Eventually grew and shifted to a farm to table focus, and now boasts a 750 ft² farm stand (for sales, but also for consumer education).
• The farm stand now operates 7 days a week, sourcing all food with full traceability.
• Note: Over time, Fair Food has found itself shifting to become a food hub advisory/consulting group, because they figured they would have a greater impact in this role rather than scaling up the farm stand to be a food hub.
• Key message: determine what the demand is, then find the supply.
   

Workshop – Frozen

John Waite (Western Massachusetts Food Processing Center, Greenfield, Massachusetts)

• WMFPC is a processing facility whose mission is to promote regional economic development through entrepreneurship.
• They do this by offering their processing centre as a facility for creating value added products (canning, for example), or to increase market access through freezing products.
• WMFPC works with Chartwell’s for their distribution.
• All freezing is done via quick freeze/IQF.
• All products that go through WMFPC have source ID maintained, as well as their date of processing.
  
  • Goal: All processing and freezing is done within 24 hours of harvest.
• As their customer base grows, they can afford bigger and more efficiency equipment.
• Individual Quick Freezing (IQF): a tunnel chamber, where each item is blasted with liquid nitrogen, then placed in a box (doesn’t require vacuum sealing).

Jan Tusick (Mission Mountain Food Enterprise Center, Ronan, Montana)

• MMFEC is Montana’s only shared-use food processing facility.
• Mission: to provide fair prices to farmers, affordable prices to schools, and good tasting, healthful, and nutritious locally grown food to students, while operating an efficient and fair workplace that is financially sustainable.
• The objective was to create a space where local food could be aggregated and processed, then redistributed throughout value chains, maintaining the connection to the farms where food come from.
  
  • Part of a farm to institution program.
• Steps to implementation and development of the facility:
  
  • Determined what was produced in the region, and determined regional demand.
  • Asked schools what they wanted. Note: quantified demand before buying expensive equipment.

Panel Discussion

• What is your competitive advantage?
  
  • Put the name of the farm on the product.
  • Source identification, yet manage to offer products in the same price range (and critically, offering product in the same format that institutions are used to, through local processing).
  • Aggregation with growers’ co-ops allows for more local product at affordable prices.
  • Being a not-for-profit organization.
• Is the not-for-profit model the best for this application?
  
  • As an economic development organization, the centre approach makes sense.
    • They help other small start-ups.
    • Not-for-profits often have a competitive advantage when seeking out grants.
  • Scaling up makes a not-for-profit rely less on initial grant dollars.
    • But there is no best model.
    • It all depends on the market you’re trying to serve and the resource your have in your community.
  • Schools and other institutions have allowed these not-for-profit organizations grow and scale up to a volume of throughput that allows them to afford the equipment and capacity to start generating enough money to stay afloat (without the crutches of grants).
• Successes? Challenges?
  
  • Schools and other institutions often have very specific nutritional demands, and it is integral that local businesses have the capacity to meet their criteria.
  • It can be difficult but highly rewarding to change institution’s food demands.
    • A challenge is to work with institutions to become more flexible (seasonality, shape, size, etc.) to accept products that may not always be in season, or to accept oddly-shaped produce and seconds, for example.
    • However, as the institutional demands shift, all members of the local food movements benefit from more flexibility in market demands.
  • A major challenge is always based around meeting purchasing specifications.
    • Meeting with “lynchpins”, or the purchasing managers, is important.
    • You can remind these purchasing managers about the value of sourcing locally, and the importance of being flexible to source local products.
    • One processing organization hired a sales consultant specifically to go speak the language of purchasing managers, and to help change the dialogue surrounding local purchasing.
  • Educational materials (cards and pamphlets) have been sent out to the community in general to stimulate demand while getting the message out there.