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Selling local products through food hubs: new Maryland report

Selling local products through food hubs: new Maryland report

wallacecenterreport

This blog is the second in a two-part series on selling farm products through outside distribution channels like food hubs (read the first blog here). The Wallace Center recently released a new report on Maryland Food Hubs. The Wallace CUSdemandforlocalfood_wallacecenterreportenter partnered with SMADC on the report, looking at research SMADC has undertaken in the past few years on Maryland food hubs (existing and emerging), and the knowledge the Wallace Center has built around food hub and food system work at the national level. The report focuses on the opportunities and challenges for Maryland food hubs, both existing and emerging.

Listed, are five challenges facing Maryland Food Hubs, two and four are good for Maryland farmers to keep in mind:.

  1. Access to capital
  2. Access to adequate supply
  3. managing pricing, sales, and growth
  4. Food safety and regulated markets
  5. Balancing margin and mission

Farmers have an advantage on the market right now, there is more demand for local products in Maryland through food hubs than there is supply. Farmers are also being faced with more regulations with regards to food safety. The report outlines more information for Maryland farmers to take note of. Transparency is also important. Make sure your products are labeled/tracked through the whole distribution chain and that hubs are accurately promoting your farm and products.

Since food hubs are not “one size fits all” models, The report showcases Local Spotlight sections each highlighting the existing Maryland food hub models. Farmer owned cooperatives who serve a tight geographic region (Garrett Growers), a for profit business buying in from farms within a broader region (Friends and Farms), and a business connecting chefs and farmers through an online ordering system and delivery model (Chesapeake Farm to Table). We recently had the chance to tour to Friends andWallacecenterreportmarylandsector Farms and the nearby Maryland Food Center Authority, and we are hoping to tour of Chesapeake Farm to Table this summer. If you are interested in attending let us know (pwentworth@smadc.com) and we’ll be sure to put you on the mailing list for updates.

 

The full report and more information can be found on SMADC’s website here.

 

Selling local farm products through food hubs- new national report

Selling local farm products through food hubs- new national report

msu

This blog is the first in a two-part series on selling local farm products through outside distribution channels like food hubs. This week, MSU Center for Regional Food Systems, along with The Wallace Center, released the 2015 National Food Hub Survey findings, which indicates that the food hub model can be financially successful across a variety of legal structures and geographic or customer markets.national_food_hub_survey_2015

Food hubs are businesses that aggregate and distribute source-identified food products, i.e. food that carries it’s farm name through the supply chain. As consumer interest in local and regional foods grows, the market for food hub services also grows. The findings of this report, together with the 2013 National Food Hub Survey, are the beginning of a data set that tracks what food hubs look like and what impacts they are having across the United States. What I found of most importance in the findings is that, 90% of food hubs who responded are increasing market access for small and medium farms as part of their daily operations. With many small farms judgling off-farm jobs and limited budgets, this is good news for those who are trying to be a farmer, a marketer, and a distributor.

National Food Hub Findings
Snapshot of key findings. Click to expand text.

“Food hubs bring great opportunity, but they face unique challenges that will require investment and innovation to overcome,” said Dr. John Fisk, Director of the Wallace Center at Winrock International. Some challenges food hubs face include: 1) securing capital, 2) securing more products, and 3) responding to opportunity to grow. More than 50% of hubs are concerned about securing more supply – and growth could be a liability for at least 40% of hubs because of barriers to adequate capital and limited delivery, warehouse and staff capacity. The full report is available online, as well as a webinar recording of key findings.

We will cover the challenges and opportunities specific to the Maryland region (based on a second new report!) in the next two posts for this series.

If you’re interested in learning more about food hubs and how they are operating in Maryland, I encourage you to join us next week at Friends and Farms in Columbia, Maryland for a tour of their food hub, and a short discussion with the Wallace Center. Email me at pwentworth@smadc.com to learn more.

Chefs and Farmers Initiative Creates Movement

Chefs and Farmers Initiative Creates Movement

Across the country there is momentum to bring more local food to restaurants. Recently we wrote a blog on upcoming trends for restaurants where locally-sourced foods topped the charts for yet another year. Innovate solutions are popping up everywhere in the Chesapeake region too. However, farmers and chefs are busy people who are usually running in two separate directions. So how do local restaurants find all these wonderful farms, and how do farmers make connections to new chefs?

Southern Maryland Chef and Farmer Events

Over the winter of 2015, local catering company Herrington on the Bay, invited chefs and farmers from the Herring Bay region to come together over lunch in order to tackle this question. Herrington organized the meeting, reaching out to local agriculture organizations like SMADC and AAEDC for lists of farmers in their area who sell wholesale and chefs who are interested in local products. Ideas were shared, new connections were made, and a Facebook group was created to allow for transactions to begin to take place. As the year went on, both parties realized that more had to happen to take this concept to the next level.

Herrington Purpose, Mission, Vision for the group
Guiding  principles for the group.

Over the winter of 2016, just a few weeks ago, Herrington hosted a second event, expanding to include a wider reach of producers (including meat, dairy, and produce) and chefs. Around 50 attendees showed up to hear from Anna Chaney, owner and operator of Herrington and Honey’s Harvest Farm, about plans to get more local food on to more local plates. Chefs and farmers are busy people so to have them in the room together was an accomplishment in itself!

Additionally, Chesapeake Farm 2 Table (CF2T) was invited to demonstrate the distribution model they’ve come up with for Baltimore. Becky (owner and operator) and Audrey (general manager) of CF2T laid out for the group what was needed to start their operation:

  • A network of member farmers and chefs wiling to participate
  • An online ordering system that handles multiple farms products and chefs payments (additionally farmers and chefs can do payment offline)
  • A coordinator to receive food to one location (the Hub). Farmers drop the food off in clear plastic bags (vs. crates or other materials) since they will not be returned
  • A vehicle and a driver to deliver to Baltimore restaurants

What’s next for Southern Maryland?

The conversation was buzzing as people mingled, many meeting for the first time, learning about each other and exchanging contact information. Relationship and trust building, from year to year, and a networking group is invaluable!

Local Food Featured At MD Chef/Farmer Event
The kinds of meals we were conspiring to create were also in supply at the event.

The group concurred that this was something needed to benefit the region. There are still many pieces of the puzzle to solve. Who will run it? Can it be run as a pilot program for the region? The intent is to get better food on the table, but it also has to pay the bills for both sides. The group must be willing to work together in some capacity so that a 50 mile transportation radius (likely for our rural area)  isn’t so onerous (for example, maybe a farmer brings product to a central drop point where the van can pick it up). In essence, have more people driving 15 miles vs. 50. And as Anna said during the meeting, “if we all give a little, we can get a lot.” And there are some leaders who’ve already stepped up to the plate to put these pieces together!

Keeping a Regional Perspective

It is imperative that we create synergies across the region to increase local food supply, and profitability for farmers. That’s why it was fantastic that CF2T came down to meet the group, and why SMADC has been happy to lead the efforts to bring the Maryland food hubs (emerging and established) together a few times a year. CF2T said they enjoyed getting to know their neighbors to the south and they were excited to see what’s next for local food sourcing in southern Maryland! We are too!

If you are interested learning more about these ongoing efforts, email us anytime at info@marylandfarmlink.com.

 

Food hub workshop yields a bountiful crop of ideas

Food hub workshop yields a bountiful crop of ideas

Next to the U.S. Department of Agriculture, the Wallace Center, Winrock International Screen Shot 2015-07-16 at 5.07.06 PMknows more about food hubs than any other organization in the country. One program of the Center is the National Good Food Network which regularly holds webinars about food hubs. The USDA often supports the Wallace Center in its research and workshops on food hubs.

Vineyards at Dodon in Anne Arundel County
The Vineyards at Dodon in Anne Arundel County

 

Understandably, Southern Maryland Agricultural Development Commission was thrilled to co-sponsor a workshop held at The Vineyards at Dodon last week with the Wallace Center for emerging food hubs appropriately titled “Emerging and Early Stage Food Hub Development Workshop.” Joining us were representatives from Chesapeake Harvest, Miltons Local, South Central PA, Community FARE, Arcadia Center for Sustainable Food and Agriculture, Chesapeake Farm to Table and Garrett Growers Cooperative, Inc.

As expected, the Wallace Center provided a plethora of information about food hubs. However, the focus of the workshop was a facilitated discussion about what works and what doesn’t and participants had the opportunity to ask the tough questions.

Screen Shot 2015-07-15 at 6.01.44 AM
Devona Sherwood, Program Officer, at the Wallace Center, listens to a response by Haile Johnston

Attendees were excited to be able to discuss food hub formation with Haile Johnston, co-founder of Common Market, a non-profit located in Philadelphia. It operates in the black. This year, they expect to sell $3 million in food. His hope is to enable new food hubs to succeed in half the time and with half the problems that new food hubs typically face.

Food hubs are often considered as more than just aggregators and distributors of food. The good ones create a food chain that adds value to participants at every stage. Haile began the discussion with a situation that occurred at the beginning of Common’s Market’s formation. They were at an auction to purchase apples to be distributed to those who could not afford fresh, healthy food. They were thrilled that the auction price was only $4.50 for a bushel of apples and they bought a number of bushels that day. Afterward, they reflected that they may be helping those in need of healthy food, but it was at the expense of farmers who would not earn a living with those prices. They resolved that their non-profit would operate in a fashion that would help producers as well as consumers of all income levels.

From the beginning, Common Market’s market strategy was to sell primarily to the institutional sector, because they didn’t see the competition at that level with the small operations. The largest segment of their sales is to schools (90), hospitals (20), elder cares facilities and cooperatives. They buy from 85 farmers with a very diverse product line, including turkeys, eggs, yogurt, chicken, apples and vegetables. They do not process yet, though they plan to eventually.

They began with one leased truck and now own a fleet of five refrigerated box trucks. All their food is farmer identified. Seventy-five percent of the food comes from within 80 miles of their non-profit and all of it comes from within 200 miles. Meat and eggs are key components. They operate on a 30% blended mark-up. Three times a week they send out an email to farmers with changing prices. They do some speculative buying but 95% of all perishable product is pre-sold.

Screen Shot 2015-07-15 at 6.33.50 AMThey see advantages to technology but they also see the advantages to human interaction. Their buyers are able to gauge producers’ and distributors’ issues and concerns as they negotiate deals. Their truck drivers get to know both the farmers and the buyers so that they can monitor and build relationships.

A point that Haile came back to numerous times is that “Relationships are paramount across the food chain!”  That was a notion that resonated with attendees.

 

 

 

 

Working to expand opportunities for Maryland farmers

Working to expand opportunities for Maryland farmers

Screen Shot 2015-06-08 at 7.47.16 AM
Tracy Ward presenting plans for the new Chesapeake Harvest Food Hub

In the past six months, the Maryland Sustainable Growth Commission’s Rural Economies Workgroup has been exploring how Maryland can advance a wide variety of rural business ventures. On June 4th, the focus was on food production, aggregation and distribution.

The hope of many Maryland farmers is to gain more access to institutional, restaurant and retail markets. Members of the Food and Food Production subcommittee, including representatives of state departments, Maryland Farm Bureau, MARBIDCO and others, assembled at the Coastal Sunbelt facility in Savage Maryland to learn more about plans to scale up farm food aggregation and distribution. The discussion revolved around the nuts and bolts needed to turn the dream of a more complete local food movement into a reality.

Tracy Ward was the first speaker and she discussed the new Chesapeake Harvest food hub in development on the Eastern Shore, one of about a half-dozen in development around the state. She indicated that produce farmers wanted to grow food year round and that interested farmers are hoping to build 72 high tunnels to extend production beyond the regular growing season. The Food Hub is interested in contract purchasing to provide assurance that there would be markets for what is grown. Tracy outlined the opportunities and challenges for a local food hub.

Screen Shot 2015-06-08 at 8.28.51 AM
Overlooking a Coastal Sunbelt work area during the tour of the facility in Savage, MD

She was followed by Jason Lambros, Vice President of Purchasing at Coastal Sunbelt Produce. He said that his company aggregates a million cases of food regionally and he believes that there is a market demand for triple that number. He noted that his company runs 200 trucks and most come back empty. Most of their produce still comes from California. He would be happy to work with local food hubs to aggregate and distribute food to larger markets.

The Company is also processing a dozen types of salsa on site and food processing will be a  significant part of the new expanded facility to open next year.

Participants left with a clearer picture of the opportunities and challenges to increase food aggregation and distribution from local farms in Maryland. The Food and Food Production subcommittee is expected to forward its recommendations to the Rural Economies Workgroup this summer. Ultimately, the Maryland Sustainable Growth Commission will consider recommendations for legislation and policy changes to be forwarded to the General Assembly.

 

The Appalachia Region Gets it!

The Appalachia Region Gets it!

Md40At the Appalachia Grows Conference last weekend, I sensed a resolve to make the local food system work. Garrett County already has a food hub – the Garrett Growers Cooperative, Inc. It has been primarily selling to restaurants,but Extension Agent Willie Lantz said that they have been working with Frostburg State University to sell food to the cafeteria there too. At the evening dinner held for beginning farmers, attendees were treated to a tasty dinner of locally sourced food provided by the cafeteria.

A high tunnel vendor at a nearby table said that farmers in the Appalachia region, particularly West Virginia, were actively using the resources of the USDA NRCS Season High Tunnel Initiative to help them grow food in their region. Local food keeps the money in the local economy and it creates jobs, which the Appalachia Region sorely needs.

Willie Lantz featured in youtube video at https://www.youtube.com/watch?v=3v2twYri9P4
Willie Lantz featured in youtube video at https://www.youtube.com/watch?v=3v2twYri9P4

Frostburg Grows is a very cool project that won a 2014 Sustainability Growth Award from the Maryland Sustainable Growth Commission. They have taken deserted, mined land  and turned it into an “innovative 5-acre greenhouse and shade house complex designed to train community members for high quality jobs while producing local food and tree seedlings.” Solar panels provide the energy to pump rainwater collected off the high tunnels to water the plants inside the tunnels.

Between census years 2007 and 2012, the number of farmers under 35 grew by 20%. At the conference, there was a great deal of interest in marketing strategies to sell direct to the consumer and in ways to get access to more land, much of which is more affordable than in the rest of the state.

That quiet resolve to succeed was evident in the faces of the attendees. I look forward to a return of the Appalachia Grows Conference next year to see how they have progressed.

 

 

We want our food money back!

We want our food money back!

Screen Shot 2014-11-07 at 8.34.51 PM
Panelists: Micah Martin, Brett Grohsgal, Will Kreamer, Bernie Fowler, Jr, Doug Hill, and Jason Smith

By the middle of the 20th century, we had lost the capacity to feed ourselves. As the century progressed, we had become increasingly enamored with everything shiny and new. By the 1960s, people were even walking on the moon! Innovation seemed limitless. Everything new  and from the grocery store was better than “home grown,”  or so we thought. Grocery stores became our source of food and major corporations became our aggregators, processors and distributors.

Today, we’ve become like the little kids who went to school and the bullies stole our lunch money and gave us something barely edible to eat. . . .literally.

However, in the last twenty years, some consumers have begun to rebel, not liking the “freshness” and taste of store-purchased food, and not happy with the dozens of indecipherable ingredients on the labels of processed food. More recently, the desire for local food has emerged as the number one  trend in grocery stores and restaurants.

Agriculture still generates $8 billion for Maryland’s economy, but most local food that we grow here is processed out of state and sold by a third party. Without the ability to aggregate, distribute, process, and sell our own food, we give up freshness, taste, and economic benefit. On average, the USDA estimates that farmers only keep about 7% of the total food dollar.  That is beginning to change.

On November 5th, Southern Maryland Agricultural Development Commission hosted a Buyer Grower Workshop–Production and Sales to Retail/Wholesale Markets.

Growth in Direct sales has been steady in Maryland. Between 2007 and 2012 it grew 32%. In Southern Maryland, it grew 58%.
Growth in Direct Sales for Human Consumption has been steady in Maryland. Between 2007 and 2012 it grew 32%. In Southern Maryland, it grew 58%.

We invited attendees to discuss how to rebuild the local food system. Christine Bergmark, Executive Director, noted the incredible growth of direct sales to consumers in the region and in the state. However, she encouraged the audience to think beyond the direct sales from farm to consumer. The workshop began with a panel discussion including two buyers, two farmers, and two food hubs representatives:

  • Micah Martin – Woodberry Kitchen
  • Jason M. Smith – Wegmans
  • Brett Grohsgal – Even’ Star Organic Farm
  • Doug Hill – Cabin Creek Heritage Farm
  • William Kreamer – Chesapeake’s Bounty
  • Bernie Fowler, Jr. – Farming 4 Hunger

Each speaker was asked to respond to a series of questions about business practices and challenges. Afterward there was a Q and A from the audience.

The 50+ farmers, chefs, and fishermen peppered the panel members with questions and were eager to learn more about their operations. Discussions continued on into the break. Attendees seemed passionate about exploring the relationship between locally sourced food and a healthy community.

More to come on this topic in the next few months!

 

 

Food Hubs are sprouting up in Maryland!

Food Hubs are sprouting up in Maryland!

As reported earlier in this blog, direct sales of food for human consumption grew 32% in Maryland between 2007 and 2012. However, sales of local food to grocery stores and institutions in Maryland has not been as robust because the channels for local food aggregation and distribution are not yet well-formed. That may be changing.

Vermont's Intervale Food Hub
Vermont’s Intervale Food Hub

Vermont is the country’s leader in sourcing local food. According to the 2012 ag census, their consumers purchased twice as much food from farmers as the next highest state. And despite having only 11% of Maryland’s population, Vermont has 12 food hubs vs. three in Maryland, according to the USDA Food Compass Map. Those food hubs in Vermont aggregate and distribute food to grocery stores and institutions.

The National Good Food Network defines a regional food hub as “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.” In short, food hubs create the food chain between small and mid-scale farmers and secondary markets.

Food hubs foodvaluechainsMost food hubs provide many other services beside aggregation and distribution, merging good business principles and social mission objectives, such as good nutrition training, food for the hungry, etc. Quoting a 2013 USDA ERS publication, these services are creating “food value chains or business arrangements distinguished by their commitment to transparency, collaborative business planning and exchange of market intelligence and business know how among chain partners, and their interest in developing business strategies and solutions that yield tangible benefits to each participant in the system.”

foodhubfinances
from the 2013 Food Hub Survey

The National Good Food Network reports that over 400 food hubs have been formed in the U.S. and that most are making profits. They are also making a difference in their communities.

New food hubs are being actively pursued  in Howard County, Baltimore City and Easton, in addition to the Hub and Spoke project now operating in Southern Maryland. The Maryland Department of Housing and Community Development (DHCD) has been asked to coordinate efforts on behalf of the state.

I hope to be reporting on lots of news about Maryland’s new food hubs in the next year!

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