Key Take Aways… Although the farm to institution movement and local foods provide and promote much important social good—such as: • Increased access to healthy foods • Childhood nutrition education • Supporting and building local economies • Reduced fossil fuel emissions • Support of small sustainable family farms and increased food security The core function of buying and selling food products is a business. In order for any business to thrive and continue to achieve its social purpose, it must remain profitable.
Aubrey Relf To determine viability of a project in terms of grants for healthy foods, an organization must demonstrate viability by identifying all of the activities necessary for success are: •
Understanding the Concept of bringing healthy foods to a community
•
Approaches to this system
•
Models of distribution, and
•
Basic information about a community’s capacity to support a strategy
Food Supply Chain Producer
Processor
Distributor
• Agricultural land use
• Food processors purchase fruits, vegetables, meat, dairy products, and other raw foods • manufactured to add a specific value; for instance, canning or freezing • Distributors buy food directly from farmers or processors and then sell the food to grocery stores, restaurants, hospitals, food banks, and schools.
Non Profit Driven Model Recommendations
Maricopa County Viable Food System November 2011
If nonprofits want to foster the creation of new food distributors that promote local purchasing and sustainably grown foods, it is critical they: inventory the existing assets of potential value chain partners that could be used for distribution purposes. For example, if farmers have trucking capacity, storage space, or family labor that could be used for product grading, aggregation, and distribution, this should be considered first before seeking funding to purchase or lease trucks, lease warehouse space, or hire new employees. Not only does such an approach reduce upfront capital
Retail and Consumption
• Food that is sold at a retail price, directly to the consumer. • Includes food sold at grocery stores, restaurants, or in institutional settings.
requirements, it also may lead to more economic benefits accruing to those ostensibly intended to benefit from the enterprise in the first place. Matchmaker – Connect key stakeholders, public interest broker, bring unlikely partners together.
Facilitator – Involved in building long term relationships among food value chain actors.
Third-party certification: Establish program whereby producers receive independent verification of their adherence to a certain set of standards. Educator – Provide marketing and educational support. Branding that “tells a story.”
Catalyst/innovator – Test out innovative business models Through grants and donations might take greater risks than for-profits.
Resource prospector: Identify and pursue resources—grants, loans, and service providers—to support value chain collaborators as the develop enterprise.
Report Compiled by Aubrey Relf
Assessment of a Viable Strategy to Improve Access to Affordable Healthy Foods in Maryvale Food Chain Supply
Four Components to Consider in terms of Viability
Value chain business models place emphasis on both the values associated with
Defining the Relevant Product
Demand
• Healthy Nutritious Food
the food and the values associated with the business relationships within the food
Supply
• Income and Price • Affordability • Availability
supply chain.
The Market
• Input costs • Labor, Land, Capital, Transportation, Wholesale Product
Food Service
• Firms and consumers meet to exchange goods for money
Barriers to Direct to food service approaches Producer
Processor
Distributor
Retailer
Consumer
Suggested Distribution models to Overcome Barriers • Local School Food - Designed exclusively to market local foods to institutions and school food service directors.
•
•
• •
Women Infant & Children (WIC)local food Line- Food product line would be carried by produce firms designed and exclusively to market local foods to WIC -only stores Farmers Market/ Farmers Market Association - Optimize structure of farmers market as gathering point. Develop wholesale marketing through single hub market Farmers Collaborative - Develop capacity to collectively market, process and distribute their own foods Farm Direct Distribution Model, CSA in the Classroom - CSA relationship between a local farm and school with schools utilizing CSA boxes of local foods for classroom instruction and taste tests.
Institutional Barriers
Farm Barriers
• • • • • •
•
• • • • • • • •
Inadequate kitchen facilities Limited cooking skills High labor costs Limited labor availability Inadequate storage facilities High minimum orders required from produce firms Limited outlets for local food Unrealistic institutional quality controls High price points Binding food contracts Geographic isolation Managing multiple farm accounts Rapid payment collection
• • • • • • • • • • •
Inadequate or no packing and onfarm storage facilities Insufficient packing materials
Demonstration of Viability (Grant Funding) • Activities necessary for Success of the Project consistent with project’s scope, scale, and projected outcomes • Demonstrate the staffing, facilities, equipment and supplies, and funding necessary for the project • Identify competing activities that might reduce the availability of resources for this project. • Ability to manage funds
Community’s experience in direct sales (Figure 1) • Labor: The food system assessment five sectors of the food system: production, processing, distribution, retail, and consumption (Figure 2) • The community’s economic base (Figure 3) Location Quotient • The location quotient is very useful for describing the parts of the local economic base where there is a strong concentration of employment and economic activity. It is the ratio of the area concentration of occupational employment to the national average concentration. A location quotient greater than one indicates the occupation has a higher share of employment than average, and a location quotient less than one indicates the occupation is less prevalent in the area than average.
Limited or no access to valueadded processing facilities Limited or no means of transporting foods
Figure 1. Maricopa County Experience in Direct to Sales Approaches
Figure 2.
Limited knowledge of institutional markets Lack of capital investment Limited or inconsistent food supply Geographic isolation Unrealistic institutional quality controls or food safety standards Low price points Competition with rebate incentives Competition from other businesses
cycles
Maricopa
Reliance on rebates and incentives from processed food providers
Approaches to Improve access to healthy foods in communities
Direct to Consumer
Small farms (less than $50,000 in total farm sales) usually sell direct-to-consumer food markets such as farmers’ markets. Many mid-sized farmers (total farm sales of 50,000 to 499,999) are engaging in an array of alternative strategies for wholesale food aggregation and distribution.
Community Supported Agriculture (CSA)
Direct to Food Service/Retail
• •
Farm to School
• Direct relationship between farmers and eaters A group of people buy shares for a portion of the expected harvest of a farm.
Farmers Market • Common facility / area where several farmers / growers gather on regular basis. Sell variety of fresh fruits and vegetables, other locally grown farm products directly to consumer
• The National Farm to School Network defines farm to school as: “A program that connects (K-12) and local farms with the objectives of serving healthy meals in school cafeterias, improving student nutrition, providing agriculture, health, and nutrition education opportunities, and supporting local and regional farmers
Food Hub • Drop-off point for farmers and a pickup location for distributors and customers. It permits the purchase of source-identified local and regional food, coordinates supply-chain logistics, It is a facility for food to be stored, lightly processed, and packaged so that it can be sold under the hub’s regional label. It contributes to the expansion of local and regional food markets.
Packing House • Aggregation facility that receives and prepares raw fruits and vegetables from farmers to then sell fresh and in some cases frozen to wholesale customers. Packing house roles vary from facility to facility and can offer such services as washing, cooling, sorting, grading, packaging, labeling, and sales, marketing and distribution
Figure 3. Supply: Types of Jobs needed to operate various strategies by title, salary, and location quotient Total Employment
Hourly Mean (salary)
Annual Mean (salary)
Location Quotient
380 2150 1470 3480 90 4310
40.95 48.69 33.83 25.85 27.23 27
85170 101280 70360 53780 56640 56150
** ** 1.021 1.237 0.689
4460 149170 2650 7330 22410
34.66 10.53 11.81 10.93 29.03
72100 21900 24570 22740 60390
3770 140
9.8 19.03
20370 39570
Agricultural Inspectors Graders and Sorters, Agricultural Products Agricultural Equipment Operators Farmworkers and Laborers, Crop, Nursery, and Greenhouse
90 330 ** 2740
20.12 11.25 9.99 8.63
41840 23400 20780 17950
Farmworkers, Farm, Ranch, and Aquacultural Animals Butchers and Meat Cutters Meat, Poultry, and Fish Cutters and Trimmers
** 1470 840
9.51 16.43 13.09
19780 34170 27230
Occupation Title in Maricopa – MSA Advertising and Promotions Managers Marketing Managers Transportation, Storage, and Distribution Managers Food Service Managers Buyers and Purchasing Agents, Farm Products Purchasing Agents, Except Wholesale, Retail, and Farm Products Market Research Analysts and Marketing Specialists* Food Preparation and Serving Related Occupations Cooks, Institution and Cafeteria Food Preparation Workers Sales Representatives, Wholesale and Manufacturing, Except Technical and Scientific Products Farming, Fishing, and Forestry Occupations First-Line Supervisors of Farming, Fishing, and Forestry Workers
1.287 1.195 0.698 1.405 0.906 0.515 0.985 1.225 0.884 0.388 0.887 0.64 0.533 0.669 0.497