Southern SSAWG ASD Food Hub

The mission of Appalachian Sustainable Development is to create, promote and expand economically viable, environmentally sound and socially responsible opportunities to help improve the lives and the health of our local communities and ecosystems.
Food Hubs:
Moving Higher Volumes of Good Food
To Local Markets

A network of certified organic family farmers who provide locally grown organic produce to regional food markets

Our Appalachian Region
Temperate climate with good rainfall
Strong, independent rural culture
“Tri-Cities” area population around 500,000
Largest city has around 55,000 residents
20% average poverty rate over the region
Most residents in scattered rural towns
Agriculture built on beef cattle and tobacco

How ASD Stepped in
1995 ASD was established and launched cooperative local marketing efforts with interested growers (focusing on organic production)
Sold to restaurants and through a CSA
In 2001 we captured the interest of a relatively large-scale grower (12 acres) and realized that local markets were too limited to handle this potential increase in production
2001 launched Appalachian Harvest with a local supermarket partner, Food City.
Retro-fitted a bay in a grower’s tobacco barn in Stickleyville, VA into a small, but workable packinghouse (using funds from the Virginia Tobacco Commission)
Hired a marketer and a agriculture manager to facilitate sales and coordinate production schedules and provide organic training.
Almost $98,000 in sales in 2001

Appalachian Harvest
Slowly grew the business over several years, adding bays and two additions onto the barn.
Added buyers, went through several marketers
Slowly grew the number of farmers and acres in organic production
In 2007, a spring fire destroyed the barn and packinghouse and we worked out of a rented space in nearby Gate City, VA
Constructed a new facility for packing and grading produce on purchased land in Duffield, VA with support from the Virginia Tobacco Commission (and insurance funds).
Working with over 8 buyers – shipping to Maryland, Georgia, North Carolina and Virginia
2008 produce sales approaching $600,000

Elements of a Food Hub
Location
Production
Marketing
Infrastructure
Management
Evaluation and Making Adjustments
All of these elements are of equal (or nearly equal) importance – an issue with any of them will impact the success of the effort.

Location
Is the location accessible for producers?
Is it close to your markets?
To easily travelled roads?
Is it easily accessible for a variety of vehicles?
Are there already producers there or nearby?
What is the potential for growth?

Production
Are there experienced producers in the area?
Wholesale production is a different animal than home gardening or even direct marketing
Do you have a plan for training/educating producers?
Be prepared to plan planting dates and varieties to meet the needs of your buyers

Marketing
This is a relationship business – communication and straight talk are key.
Fresh product is a seasonal product – maintaining relationships in off times is essential (or working towards a year-round presence in the market)
Buyers want the best deal they can negotiate, producers want the highest price you can negotiate – this can be a tough juggling act!
Quality and reliability are key to maintaining relationships
When you make a mistake (and you will), take responsibility and make it right

Marketing
Forecasting and meeting orders are important – buyers do not want extra work or problems.
Sell more than a product – healthy, local, organic, super-sonic.....
In-store promotions can help build customer support for your product
This is a tough, competitive business, a marketer with some industry experience can be a real plus.

Infrastructure
Buildings, trucks, packing lines, coolers, truck repairs, computers, certifications, utilities, boxes, stickers, promotional materials, office supplies, coolers, construction, and a host of other stuff are EXPENSIVE!!
Grant funds can help with these things, but
Do your homework to make sure you are investing in things that you need and that will do the job correctly and efficiently
Plan for expansion....

Management - Producers
Growers need to have access to the knowledge, tools and materials they need to succeed
They also need to work cooperatively in order to meet the needs of buyers over as long a season as possible.
This takes active coordination of planting dates, varieties and expected harvest dates and amounts
Growers must buy into planting schedules to avoid gluts (which can bring down prices)

Management - Packinghouse
Labor is expensive – it is vital to operate as efficiently as possible
Invest in good tools to do the job correctly
Develop procedures to simplify everyday tasks and improve efficiency and time management
Work towards higher volumes of produce – changing gears frequently costs time
Look for other ways to improve efficiency – backhauling, brokering other products, sharing truck space, etc.
Work towards year-round activity of some sort

Evaluation
The closer you can track your expenses and income, the better able you will be to initiate changes that will strengthen the business
Time and energy spent grading, #1’s vs #2’s (and trash), distribution costs, time spent planning, training, dealing with problems, etc.
Be honest in your evaluations
Real, constructive change demands good, well organized records.

Determining Success
Appalachian Harvest was developed with two main goals (which at times contradict each other):
Provide a solid, expanded market for producers of sustainably grown produce in Appalachia
Develop a stand-alone socially responsible business.

How to Measure Success?
Business-wise, Appalachian Harvest is still largely grant dependent, although we made some big strides towards profitability in 2011
Efforts to broker local, conventionally grown produce have made our truck runs more profitable (by filling trucks) and have widened the reach of Appalachian Harvest’s benefit to the local farming community (and engaged Cooperative Extension in our work in a much more active way). These sales enabled Appalachian Harvest to break $1 million in sales in 2011!
Several of these conventional growers are planning to add certified organic acreage in 2012.

How to Measure Success?
In 10 years, Appalachian Harvest has generated over $4 million in fresh produce sales!
Over the past 6 years, Appalachian farmers have netted over 72% of the sale price of Appalachian Harvest produce (the balance covering marketing, boxes, labels and transportation of produce)

Please Feel Free to Contact ASD for More Information:
Appalachian Sustainable Development
P.O. Box 791, Abingdon, VA 24212
276-623-1121
www.asdevelop.org
Tom Peterson; Agriculture Education Coordinator
[email_address]

Southern SSAWG ASD Food Hub

by ASDSSAWGpresentation on Jan 30, 2012

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Southern SSAWG ASD Food Hub — Presentation Transcript