480 likes | 718 Views
Aggregation and Food Distribution: Examining Different Models in Virginia . Eric S. Bendfeldt Extension Specialist, Community Viability Spencer Penn Centre Spencer, Virginia October 13, 2011 . Local farm and food commerce. Jobs Business development and expansion
E N D
Aggregation and Food Distribution: Examining Different Models in Virginia Eric S. Bendfeldt Extension Specialist, Community Viability Spencer Penn Centre Spencer, Virginia October 13, 2011
Local farm and food commerce • Jobs • Business development and expansion • Access to healthy food products • Farmer development and profitability • Community vitality and resilience
Good food is… • Healthy • Green • Fair • Affordable • Culturally appropriate Adopted from W.K. Kellogg Foundation and the C.S. Mott Group
Position? Leverage? Michael Porter, 1979. How Competitive Forces Shape Strategy
Strategic Alliances and Co-opetition • Benefit of cooperation and competition in working together • Complementary relationships and networks • Shared values-based value chains • Long-term view of market and competition
Competitive Advantage • Low cost-price supplier • Value-added differentiated product • “Food with a face and story.” • “ Memory and romance.” • Leverage • Position
Keys to scaling up to meet the demand for local food • Aggregation • Controlling product quality and consistency • Seasonality • Matching supply and demand • Food identity and product differentiation • Supply chain infrastructure • Capital • Capacity and beginning farmer development • Information flow and transparency UW-Madison Center for Integrated Agricultural Systems, 2009.
41% 20% Today, in 2011, less than 12 cents of every consumer dollar spent on food actually goes to the farmer. Source ERS; chart by Ken Meter, 2007
What is a Value Chain? Market Farmer Farmer Market Farmer Market Farmer Farmer Moving food with value and values
Models of Aggregation and Distribution • Virginia’s history of cooperatives • Appalachian Sustainable Development • Shenandoah Valley Produce Auction • Local Food Hub • Runner Bean • Good Food, Good People • Fall Line Farms/Coastal Farms • Sustain Floyd • LexRocks Grows • SW Virginia Farmers Market
Identifying Your Market? • Direct to Consumer • Farmers markets • Community Supported Agriculture (CSAs) • Restaurants and others • Wholesale • Locally-owned independent retailers • Supermarkets • Food service • Institutions
Why aggregate farmers and farm products? • Retain more of the food dollar for the farmer • Address issues of scale and access • Gain leverage and position in a larger market • Facilitate processing and distribution • Foster a community food enterprise • Provide market development services • Promotion, buyer recruitment, invoicing, billing
Survey your supply • What are the major and minor crops? • What are the growth trends? Increasing or declining? • What are the reasons for those trends? • What type of farmers exist? • What can be raised in the area?
Developing farmers and the supply • Many farmers are not marketers. • Most buyers do not have time to go to the farm • Consistent reliable year-round supply • Quality, quality, and quality • Address issues of seasonality • Reducing risks and liability • Individual and/or umbrella insurance coverage • Good Agricultural Practices (GAP) • Tracking more of an issue
Survey your market • What are the direct-to consumer markets? • What are the wholesale and institutional markets? • Are there farmers already scaling up? • Is there significant demand for some products that lacks adequate supply? • What is needed to increase supply to meet the demand?
What are buyers looking for and expecting? • Quality – taste and freshness • Local • Organic • Sustainably raised • Niche specialty • Low spray or no spray • Price point or range • Payment schedule • Delivery times, places, and requirements • Volume and packaging needs • Labeling and tracking standards • Insurance and liability requirements • GAP or other certification requirements • USDA • Food Alliance
Price Point • Can you as an aggregator and distributor live with the buyer’s price point? • More importantly, can your farmers and suppliers live with the price point? • Again, the importance of knowing your market and customer base • Moving food with value and values for the long-term • Always low price syndrome and caveat
What aggregation and distribution infrastructure exists? • Are farmers already doing some grading, cooling, packaging, and processing? • Are there existing facilities in the region? • Are there existing distributors that can fill this need and demand? • Can you get by without owning and maintaining trucks?
Local Food Hub video Local Food Hub video 2
Local Food Hub • Non-profit organization working with farmers, eaters, and the community • “One number to call.” • Addressing 3 major issues • Distribution, supply and access • Work with 50 to 60 farmers within 100 miles of Charlottesville • Distribute to more than 100 locations • Public schools, hospitals, institutions, restaurants and other markets
Local Food Hub offers • One-stop shopping • Refrigerated delivery • Pre-season planning • Liability and traceability coverage • $3 million insurance policy and guarantee • Marketing materials about the farmers and their farms
Local Food Hub offers • Outreach • Workshops for training and technical assistance • Farm apprenticeships • High school internships • Networking opportunities • Community advocates • Access to larger markets
Knowing your community’s context and assets • 300 to 400 Old Order Mennonite families in Rockingham County • Their simple plain ethos is typified by non-conformity, non-resistance, horse-drawn buggies, and a strong sense of faith and community
What is a Produce Auction? • A way to wholesale market fresh vegetables, fruit, bedded plants, flowers, nursery crops, baked goods, and other farm fresh products. • Buyers include owners of roadside stands, greenhouses, nurseries, farmers market, local and regional grocery chains, local restaurants, and some institutions. • Presently, 50 produce auctions in the U.S. predominantly within Amish, Mennonite, or “Plain” communities
Key Ingredients to a Produce Auction “A lot of enthusiasm will not fill a produce bin or an auction with high quality, reputable produce,” … a local produce grower. • Grower Commitment and Loyalty, Cohesion, Location, Quality, Quantity, Variety, Service, Consistency, Communication, and Fortitude • Commitment to a seasonal average price point rather than returns from one sale
Attributes of a Produce Auction • Central site for growers and aggregating product • Buyer recruitment • Sales and billing services • Order-buyer service • Balance between seller’s and buyer’s needs • Product volume and product mix • Farm tours, workshops, and outreach • Market reports • Occasional gluts • Relies on a good manager and auctioneer
Shenandoah Valley Produce Auction • One model for aggregating farmers and farm products • Began in 2005 with 39 growers. • In 2011, more than 350 growers participate, along with 350 buyers of various scales. That represents over 700 independent locally-owned businesses and enterprises that have been expanded because of collaboration, partnership, and some seed money for educational programming.
Infrastructure and Associated Businesses • Roadside stands • Greenhouses • High tunnels • Fertilizer and seed dealerships • Produce Suppliers • Equipment dealers • Custom applicators
Other Aggregating Models • Online farmers markets and cooperatives • Modified Community Supported Agriculture(CSAs) • Providing convenience • Place and method for aggregating farmers and farm products • Some internet sales • Mostly retail and direct-to-consumer sales, but some institutional • Modified from one farm and multiple subscriptions to multiple farms, multiple subscriptions, and multiple pick-up locations
Other Models of Aggregation and Alliances of Interest • Good Natured Family Farms • www.goodnatured.net • Penn’s Corner Farmer Alliance • www.pennscorner.com • La Montanita Co-op • www.lamontanita.coop • Tuscarora Organic Growers Cooperative • www.tog.coop
New Cooperatives and Alliances Friendly City Food Co-op SV Beef Co-operative
Community Food Enterprises • Hard work • Innovation • Local delivery • Aggregation • Vertical integration, but more cooperation and “co-opetition” • Shareholder loyalty • Speed • Better access • Better taste • Better story • Better stewardship • Better service • Revitalizing local economies • More community spirit • More social change The Wallace Center and the Business Alliance for Local Living Economies
“If you want to go quickly – go it alone, if you want to go far – go together.” ~ African Proverb
Eric S. Bendfeldt Phone: 540-432-6029 Email: ebendfel@vt.edu