Can you grow your local food economy by building a food hub?
Many communities around Oregon have been exploring food hubs as a way to get more locally grown food into local markets, including wholesale outlets like grocery stores, schools, and hospitals – by providing aggregation, storage, processing, distribution, and marketing services. The challenge is moving enough food through the hub to pay for all the infrastructure, systems, and people needed for it to work. So how can you make it work?
To answer these questions, we started by learning about 10 different food hub projects around the state – some that are currently operating, some still in the planning stages, and some that were never built or are no longer operating. We also offered a session at this year’s OSU Small Farms Conference, featuring current, former, and future food hub operators around Oregon. They shared their experiences and lessons learned, along with guidance for others thinking about starting a hub.
In our initial research on the 10 hubs, we observed that food hub proposals tend to come out of community food assessments and other food system assessments. Hub studies and projects have been started by a wide variety of people and organizations, including government agencies and nonprofit groups and also farmers and food entrepreneurs. Grant funding has played a big role for research and development, but it hasn’t helped with hub operation.
Other challenges include a lack of agreement among those planning the hub about what it should actually do; overly rushed studies that result in crucial data not being collected; and a loss of momentum and slow progress after a study is completed; and not knowing who will actually run the hub.
In our Small Farms Conference session, Matt Buck provided a national overview of food hubs, including their range of goals, services, and products, success factors, and challenges (see box). We then heard about four hub projects from project leaders themselves.
The speakers in our food hub session – combined with the additional projects we are learning about around the state
– demonstrate a wide variety of reasons that agencies, organizations, farmers, and food businesses are motivated to start a food hub. They also demonstrate some of the significant challenges associated with different models.
The Center for Small Farms & Community Food Systems, in partnership with the Oregon Community Food Systems Network is launching a peer learning community designed to support sustainable local and regional food system development in Oregon. For more information, contact Lauren Gwin.
Central Oregon Food Hub
Janel Ruehl, Community and Economic Development Program Coordinator with Central Oregon Intergovernmental Council, and Liz Weigand, owner of Agricultural Connections, a local distribution company, described their multi-year planning process and how their hub concept has evolved over time.
From a 2010 community food needs assessment, COIC and partners saw that their growing regional population was increasing demand for local food, but local food suppliers needed support to scale up and serve those markets. In particular, they identified a lack of infrastructure for small- to mid-size producers to get their products to wholesale buyers. This led to a Central Oregon Food Hub Feasibility Study in 2012, a Central Oregon Food Hub Operating Plan in 2014, and a local food economic impact study, with OSU, in 2017.
COIC led the planning process but could not itself run a hub so decided to partner with an existing private local food distribution business, Agricultural Connections. Liz Weigand, owner of Agricultural Connections, serves wholesale buyers and sellers of local farm/food products with an aggregation site, a farm pickup service, post-harvest handling with limited processing, storage, access to distribution, education for producers on post-harvest handling and packaging, and marketing services. Through partnership with COIC, they will raise new funding to add a sales manager and another driver, additional equipment, transition to re-useable packing bins to reduce waste, and ramp up collaborative marketing in the region.
Fry Family Farm Food Hub, Medford
Amber Fry, Manager of Fry Family Farm Food Hub, moved back to her family’s farm from San Francisco to launch and manage the food hub. Her parents started Fry Family Farm 27 years ago, and the farm has grown to 100 acres of certified organic row crop vegetables, including 10 acres of organic cut flowers, and some berry production for local markets and their CSA. She and her father envisioned a hub not only as a way to keep their farm growing and sustainable but as a way to address infrastructure and distribution challenges for other farms in their community.
They raised $1.2 million for the project, half of it from private and public grant sources, and completed it in 2017. The facility includes a produce-washing and sorting line, a commercial kitchen; cold, frozen and dry storage; a loading dock to support aggregation and distribution, and a retail farm store.
From the outset, the Frys planned the hub so that even if no other farmers decided to use it, they could cover the operating expenses themselves. This decision was critical to the sustainability of the hub, now in its 3rd season. The on-farm retail store and commercial kitchen are creating value for them and other local farms. But the original “hub” idea has been a struggle. “Processing, aggregation, and distribution of organic, local foods has been the hardest part to move forward,” Amber said. She pointed to declining wholesale prices and the increasingly tight labor market as the two main reasons. Farms have such tight margins that they cannot afford to outsource anything. “We’ve had to learn to be flexible and innovative and figure out different ways to make it work and be profitable.”
The Redd, Portland
We then heard from Maia Hardy, Agriculture of the Middle Program Manager at Ecotrust, about The Redd, in Portland, which operates at a very different scale. The Redd, she said, “is a manifestation of our commitment to helping producers reach wholesale markets,” in Portland. Ecotrust’s research on regional food infrastructure laid the groundwork for the project.
The $25 million investment, funded by many layers of capital, is a 2-block campus designed to help businesses transition from small
to mid-sized, and to scale the local food economy. It includes a commercial kitchen and work/office spaces with access to warehousing, cold storage, distribution, and business development support. The primary tenant is B-Line, a last-mile logistics, distribution, and warehousing/cold storage company known for its innovative delivery trikes. Soup Cycle and New Foods Kitchen are there as well.
One side of the campus, Redd East, will also include an event center, managed by Ecotrust, to generate revenue that will subside the space and services the rest of The Redd provides. So far, Maia said, 109 value-added companies, eight produce farms, nine grain companies, ten ranches, and one forest products company are all sending products through The Redd, into the Portland Metro market.
Adelante Mujeres: Sustainable Agriculture Distributor and CSA
Our final speaker was Silvia Cuesta, Farm Business and Distributor Manager at Adelante Mujeres, based in Forest Grove. “Our farmers are almost all very tiny in scale. They are farming in community gardens and their own backyards.” Despite their small scale, their team of farmers supplied a 200 member CSA and nine wholesale buyers at their peak in 2017.
Adelante Mujeres is “building a more just society by empowering Latinas to lead.” Their sustainable agriculture program provides beginning and experienced Latino farmers with the training and skills to farm using sustainable methods and successfully market their products.
“We didn’t start out saying, ‘we want to create a food hub,’” Silvia said. “It just started. We saw a need, and we did it.” The distribution hub and CSA began in 2012, as a way to sell excess produce. They started with 10 wholesale buyers, and, in 2013, a 30-member CSA. By 2017, the CSA had grown to 200 members but this success was unsustainable. They cut back again in 2018, but it was still too much.
“Our farmers did not have the capacity to supply all 200 boxes,” Silvia said, especially without their own dedicated farmland. Also, many farmers had full-time jobs and did not think they could earn enough from farming to grow and sell more. Adelante Mujeres, as a grant-funded nonprofit, also needed more capacity: more staff, more packing and delivery skills, and better space and infrastructure. After an extensive evaluation of the 2018 season, they halved their CSA membership for 2019 and will provide wholesale market access to farmers who want to continue. Two of these, Mata’s Family Farm and Reyes Family Farm, are the “success stories,” Silvia says, and one may eventually take over the distribution operation and the CSA.
Food Hub National Trends
A food hub is centrally located facility with a business management structure facilitating the aggregation, storage, processing, distribution, and/or marketing of locally and regionally produced food products. As of 2017, there were more than 360 active food hubs in the U.S.
Food hub goals include farm profitability, local economic development, and increasing access to fresh, healthy food. 89% of hubs buying from farms and ranches are supporting mostly or exclusively small or mid-sized producers.
Success factors: start with a business plan, strong financial footing, and expert staff; focus on your strengths and find partners for the rest; know your customers and markets; understand the food production process.
Challenges include balancing supply and demand, e.g., not enough product, seasonality constraints, not enough consistent customers who understand seasonality and using multiple suppliers; managing growth; negotiating prices; and access to capital.
Sources: 2017 National Food Hub Survey: MSU CRFS/Wallace Center at Winrock, USDA Rural Development.