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Mid-Scale Food Value Chains

Mid-Scale Food Value Chains. Food Distribution Research Society Conference Broomfield, CO November 3, 2009 Steve Stevenson (gwsteven@wisc.edu) . Business & Marketing Options. Value- Added. 1. Direct Marketing. Opportunity Area. Strategic Alliances & Food Value Chains.

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Mid-Scale Food Value Chains

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  1. Mid-Scale Food Value Chains Food Distribution Research Society Conference Broomfield, CO November 3, 2009 Steve Stevenson (gwsteven@wisc.edu)

  2. Business & Marketing Options Value- Added 1. Direct Marketing • Opportunity Area Strategic Alliances & Food Value Chains Farmers’ Markets CSA’s Internet Sales Very Small Very Large 3. Commodity Marketing 4. Troubled Zone Mid-scale Commodity Producers Large-scale commodity Producers Commodity

  3. Strategies for “The Middle” Value- Added 1. Direct Marketing 2. Opportunity Area • Differentiate with Value-added Attributes • Aggregate for necessary volume • New kinds of business rules Very Small Very Large 3. Commodity Marketing 4. Troubled Zone Mid-scale Commodity Producers Commodity

  4. Mid-Scale Food Value Chains are Strategic Business Alliances that: • Deal in significant volumes of high-quality, differentiated food products; • Treat farmers as strategic partners, not as interchangeable input suppliers; • Distribute rewards and responsibilities equitably across the supply chain; • Emphasize strategic interests in the well-being of all partners; • Build value beyond the product to include the story of the people and the business practices; and • Operate effectively at regional levels.

  5. Agreements Among Value Chain Partners Ensure that: • Prices are negotiated on the basis of production and transaction costs; • Agreements are fair and for appropriate time frames; • Opportunities exist for farmers and ranchers to own and/or control their brand identity up the supply chain; and • Co-branding with supply chain partners is a strategic option.

  6. Case Studies • Country Natural Beef [www.oregoncountrybeef.com] • Shepherd’s Grain [www.shepherdsgrain.com] • Organic Valley Family of Farms [www.organicvalley.coop] • Red Tomato [www.redtomato.org]

  7. Big Theme • Value Chains Can Be Both “Smart” and “Right” 1) Smart Business: strategic partnerships (social capital) replace economic capital and expertise; nimbleness in the market; quality control efficiencies; food miles and food safety efficiencies; geographical identities 2) Ethical Business: equitable distributions; participatory organizations and alliances; ethical differentiations

  8. Other References • www.agofthemiddle.org • Thomas Lyson, G.W. Stevenson, and Rick Welsh, eds. 2008. Food and the Mid-Level Farm: Renewing an Agriculture of the Middle. The MIT Press: Cambridge MA.

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