Center to provide space to aggregate, distribute locally grown foods
By Hal Walter
Imagine a place where local farmers can bring their goods for storage, distribution, and even processing and cooking.
Where restaurant chefs and institutional food-service providers would have access to the freshest local foods.
Where food-buying clubs can pick up and organize their orders.
Where the general public can buy locally raised produce, eggs and meats.
It’s like a farmers market with regular store hours, and a roof — and storage space, coolers and freezers.
It’s a regional food hub.
According to the National Food Hub Collaboration, “a regional food hub is 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.”
The United States Department of Agriculture has identified regional food hubs as an increasingly economically viable solution to the problems of distribution and processing facing small- to medium-sized farms. In fact, 40 percent — the largest sector — of U.S. food hubs in operation are privately owned businesses.
In addition, a survey of economic studies by the USDA indicates regional food hubs could provide significant economic growth in terms of job creation, increased farm income, and positive influence on the creation and success of new businesses.
One such study conducted on a 16-county area of Northeast Ohio determined that meeting 25 percent of food needs locally would generate more than 27,000 new jobs in the area, employ one in eight unemployed residents, generate $4.2 billion in revenues and $126 million in state and local taxes.
A group of farmers in Southeastern Colorado is leading the effort to bring some of those same benefits to area farms and the local economy. The agricultural development organization NewFarms is in the process of exploring a farm service center, with plans to open in 2013. The center would be operated by Arkansas Valley Organic Growers.
The proposed agricultural and culinary center will be a food hub dedicated to aggregating and distributing locally produced food. It will also provide a commercial kitchen, community facilities, training and education for small- and medium-sized farms and food businesses in Southeastern Colorado.
Avondale farmer Dan Hobbs, a spokesman for NewFarms, says small ag interests have been focusing on improving production, marketing and distribution of local and chemical-free foods from small area farms and ranches for more than a decade.
“A lot of skills, knowledge and capacity have been built, but there is virtually no supporting infrastructure for non-generational and small farms,” he says. “The vision of our center is to provide cooperative managed facilities that will help famers and other food-based businesses become and remain viable.
The center will include cold storage, frozen storage, dry storage, access to packaging materials, custom seed-cleaning services, chile roasters and a commercial kitchen. The goal is basically to save individual farmers from having to make these kinds of capital investments independently, extend the shelf life of their products, provide new opportunities through adding value to their products and collaborate with others to build economies of scale, Hobbs says.
“Food hubs are set up in a wide variety of ways. We are hoping to figure out the right business model for Southeastern Colorado that may also serve as a model for other communities in the arid West that face similar challenges and opportunities as us,” he says.
To this end, NewFarms has hired Santa Fe, N.M.-based business-management consultant Darien Cabral to help map out a business plan for the new center. Cabral says Arkansas Valley Organic Growers are positioned well to develop a successful food hub in Southeastern Colorado with the local food movement gaining momentum nationwide, including along the Front Range of Colorado.
In his analysis, Cabral notes that the Arkansas River Valley encompasses some of the best farm land in the state, and that AVOG represents a committed group of small family farmers supplying a wonderful variety of fresh local produce.
“The food hub will allow the growers to more efficiently meet the demand of consumers and food institutions in Colorado’s main population centers — providing better product to end-users while helping to support sustainable agriculture and the local economy,” Cabral says.
Defining Characteristics of a Regional Food Hub
Regional food hubs are defined less by a particular business or legal structure, and more by how their functions and outcomes affect producers and the wider communities they serve. Defining characteristics of a regional food hub include:
Carries out or coordinates the aggregation, distribution and marketing of primarily locally/regionally produced foods from multiple producers to multiple markets.
• Considers producers as valued business partners instead of interchangeable suppliers and is committed to buying from small- to mid-sized local producers whenever possible.
• Works closely with producers, particularly small-scale operations, to ensure they can meet buyer requirements by either providing technical assistance or finding partners that can provide this technical assistance.
• Uses product differentiation strategies to ensure that producers get a good price for their products. Examples of product differentiation strategies include identity preservation (knowing who produced it and where it comes from), group branding, specialty product attributes (such as heirloom or unusual varieties), and sustainable production practices (such as certified organic, minimum pesticides, or “naturally” grown or raised).
• Aims to be financially viable while also having positive economic, social and environmental impacts within their communities, as demonstrated by carrying out certain production, community or environmental services and activities.
Source: USDA Regional Food Hub Resource Guide