Across the United States, Food Hubs – single points of sale for a variety of aggregated local products – are changing the way people can eat locally, and West Virginia is no different. At the 2015 Small Farm Conference in Charleston, we partnered with numerous organizations to develop and present a Food Hub Track that highlighted the great potential for growth in this sector. Below, you will find materials from each of the workshops.
This presentation by Jill Young and Liberty Newberry-Fetty of the Value Chain Cluster Initiative introduced the basics of business planning for food hubs – how to start and how the pieces of the business plan fit together in a way that argues for the existence of the business.
Elizabeth Spellman, Executive Director of The West Virginia Food & Farm Coalition, unveiled the 2015 Food Hub mini-grant program which will fund capacity for up to three local food aggregators in West Virginia. In order to apply for the grant, an organization must complete the intake form.
I live in Rural Clay County – to do a market analysis… where do I go? There’s only a few farmers at the farmers markets – do I use them for my analysis? I’m totally lost in this section. What do I need to do?
This is an example of where connecting to resources and getting individualized assistance can become a huge advantage. The questions you ask during your market analysis can be better determined by envisioning what type of organization you want to become.
This presentation by Savanna Lyons of the Leopold Center broadly covered four components integral sound financial management of Food Hubs: 1) Paying attention to gross margins, 2) Setting up good record keeping & software, 3) Keeping cash flowing, and 4) Starting small but thinking big.
What’s your personal conclusion, what do you think is the most important piece of information for us to understand?
The most important piece is that it’s a really competitive industry — and that you shouldn’t be trying to price the same as these wholesaler distributors if you possibly can. You might have a policy to this extent – “try to stay above SYSCO prices by 10%” — and you may find out you have products you can price for less than SYSCO due to a variety of factors.
From the hubs that you’ve seen, have the more profitable companies been better at marketing, or logistics? Better sales people, or logistic people?
Good question. Red Tomato Food Hub in Boston realized that their people believed in farmers/local food marketing. They were spending all their time and energy on logistics which is not something they had training or cared about. They ended up trying to get rid of infrastructure and work with warehouses, organizations that already exist to remove their logistical burden. What they’re doing now is selling food as hard as they can and managing the information and not managing the trucks and warehouses. More Food Hubs can try to be moving in this direction by working with distribution partners like Rhineharts. Owning the infrastructure means you have to work really hard on the efficiency or your money will get sucked away.
Bill Woodrum of the Robert C Byrd Institute Initiative for Agricultural Innovation presented this workshop on “lean” agricultural processes and how applying these concepts can minimize waste, and maximize production and time. There are five principles in lean: 1) Identify value, 2) Map the value stream and remove waste, 3) Create flow, 4) Establish pull, and 5) Seek perfection by continuous improvements. RCBI has been partnering with The Wild Ramp to implement lean processes, and this report will be available here when it is ready.
Examples of processes that needed adjusting at The Wild Ramp?
Tracking vendors. Vendors are assigned vendor numbers. We have to make sure that we have the constant contact information – but there are so many different places where that has to go to – email, point of sale system in two different places, a vendor list in a google document – in some cases as many as 9 different locations for data.
What is the cost of working with RCBI’s Lean Program?
Currently the whole consulting process costs around $1,000, which also covers analysis and reporting. There are resources out there, online for example, to help you figure out your own lean processes, which could save money. But it does help to have an outside professional perspective
Tom Snyder of The Ohio Cooperative Development Center and Annie Stroud of Downstream Strategies presented on two intertwined topics. The first was the 2014 West Virginia Food Hub Feasibility Study, which collected data from 158 respondents on a variety of data including farm diversification, internet accessibility, # of employees & jobs, sales & income, season extension methods, and driving distance from most preferred market. The second topic was best practices for successful relationships between growers and food hubs, detailing the need for clear communication, moderating expectations, meeting your producer’s needs, and maybe even production planning with growers.
What is the biggest takeaway?
The biggest point that is most important is that successful Food Hub/Grower relationships result from good communication and fulfillment of expectations. Here’s a link to WVFMA’s Vendor Recruitment & Retention Toolkit – it’s a great resource! The main reasons why people leave markets include: insufficient sales (#1 consideration), interpersonal reasons, lack of product, lack of time, competition from other markets, and unclear/unenforced rules. In-person communication is really important (52% of producers have reliable internet, making email communication tricky). Many of the successful models incorporate phone sales, which involves talking to a real person versus only e-communication.
Is the OCDC Food Hub Support Network Just Cooperatives?
No. Lots of the groups we work with are informal and looking at what they want to be when they grow up. The know that they want to get into the Wholesale market – investigating that with people that are cooperatives. Some are LLCs, some are non-profits. It doesn’t make too much difference what the business structure is or will be, as long as they want to work together to do the Food Hub stuff.
At what point does the GAP certification matter to a hub? Are there any little hubs that have some GAP certified producers?
WVDA does offer third party certification and holds trainings. Third party certification certifies a farm and there are certain buyers that want to see the certification before they buy the product. If you want to enter those markets we need to develop systems to do these certifications cost effectively. Many people want to have better record keeping, safe food, work cooperatively with others, purchase port-a-potties to cut down cost; all of these are examples of things which can be done as a group. A hub may form for those purposes alone. Years later, when ready, they might be part of the group.
Moderated by Patti Miller of Farm to Table Restaurant Panorama At The Peak, this panel consisted of Gail Patton from The Wild Ramp and Leslie Schaller from ACENet discussing ways they have seen farmers generate wealth through interacting with Food Hubs. To date, The Wild Ramp has returned over $660,000 to producers that sell through its consignment model.
Who are Wild Ramp volunteers? How do you handle waste/tired produce?
Volunteers come from all walks of life, all ages and diverse ethnic backgrounds. They are people who are engaged in Create Huntington and other civic organizations. They are high school and Marshall students, professionals and their spouses, artists, gardeners, and small farmers.
We ask each producer how they would like us to handle their products that are on the edge of “going off”. Some want us to donate to the Food Bank, others want us to compost, and others want to pick up their waste. The compost is shared on a first-come, first-served basis.
How did you get volunteers before you were known?
We began on Facebook and all of our volunteers came from there. The market was a community effort by more than fifty actively involved people. We have had electricians, architects, contractors and others provide services. They receive community recognition in return.
What’s happening next for The Wild Ramp?
We are working to develop a regional food distribution network from Athens, Ohio to Huntington, WV to Abingdon Virginia. We have several partners who are working with us on this effort: Appalachian Center for Economic Networks (ACENet) in Athens; Rural Action in Athens County, Ohio; Appalachian Sustainable Development (ASD) in Abingdon, VA; and The Wild Ramp, Unlimited Future and The Robert C. Byrd Agricultural Innovations Program in Huntington.
This network will increase supply of locally produced food and help to keep us top of mind for consumers. We also think it will enable us to enlarge our farm to school and farm to institution sales.
Food Hubs are and will be an important part of the future of West Virginia’s local food economy, and the Aggregation & Distribution Working Group, along with other partners, has two ways coming up for interested organizations and individuals to engage:
Mini-grants: The West Virginia Food & Farm Coalition is offering three mini-grants of $3,000-$3500 each to organizations or businesses to support aggregation projects across the state. By the end of the grant period, grantees will receive business and production planning and will have authored a business plan. Grantees can use funding for a variety of projects, but funding must enhance the efforts and sustainability of aggregating local food. Specifically, funding can be used for startup aggregation/food hub projects or existing aggregators/food hubs for business coaching, addition of staff, equipment, marketing, or other tactics to become more sustainable and implement business and/or logistics plans. Find the RFP and required intake form here.
Heart & Hand Field Trip: On April 22, 2015, The Aggregation & Distribution Working Group will meet for a tour of Heart & Hand Garden Market in Phillippi, West Virginia. While the details for this tour are still being planned, it is highly recommended that mini-grant applicants attend this trip, which will dedicate time to a) business plan coaching, b) networking with others interested in West Virginia food hubs, and c) workshopping the intake form. For more information about this field trip, please email firstname.lastname@example.org.
Key partners on the Food Hub Track include the Aggregation & Distribution Working Group, The Ohio Cooperative Development Center, The Value Chain Cluster Initiative, Panorama At The Peak, Downstream Strategies, The Robert C Byrd Institute for Agricultural Innovation, The Wild Ramp, The West Virginia Office of Child Nutrition, and The West Virginia Department of Agriculture.
Food Hub Basics
BPlans (Can look at sample plans for free)