Local Food Systems Economics

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Business case development within an emerging local food system in the North and South Linden neighborhoods of Columbus, OH

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Local Food Systems Economics

  1. 1. Local Food System Economics October 2009
  2. 2. Ag-Bio Cluster Economics Business ModelAlex Osterwalder 2006, from Slideshare.com slide 2http://business-model-design.blogspot.com/2006/11/business-model-template-designing-your.html
  3. 3. Ag-Bio Cluster Economics Business Case• A business case captures the reasoning for initiating a project or task.• It is often presented in a well-structured written document, but may also sometimes come in the form of a short verbal argumentation.
  4. 4. Ag-Bio Cluster Economics Business CaseA Business Case Contains:• Reference - Project name/reference, Origins/background/current state• Context - Business objectives/opportunities, Business strategic alignment (priority)• Value Proposition - Desired business outcomes, Outcomes roadmap, Business benefits (by outcome), Quantified benefits value, Costs/ROI Financial scenarios, Risks/costs of not proceeding, Project risks (to project, benefits and business)• Focus - Problem/solution scope, Assumptions/constraints, Options identified/evaluated, Size, scale and complexity assessment• Deliverables - Outcomes, deliverables and benefits planned, Organizational areas impacted (internally and externally), Key stakeholders, Dependencies• Workload - Approach, Phase/stage definitions (Project (change) activities, Technical delivery activities, Workload estimate/breakdown, Project plan and schedule, Critical path)• Required Resources - Project leadership team, Project governance team, Team resources, Funding• Commitments (required) - Project controls, Reporting processes, Deliverables schedule, Financial budget/schedule
  5. 5. Today, You Will Spend $10 on Food; Do You Know Where It Goes? Everything Else: $5 Consumers Spend $10 Food Preparation: $1.50 Food Production $2 Food Processing: $1.50 Distribution, Storage, Packaging, Labeling, Inspection, Certification, Wholesaling, Retailing, Marketing, Advertising
  6. 6. $4 of That $10 Is for Labor Consumers Spend $10 Labor $4
  7. 7. 2%, or 20¢, Will Be Spent on Locally Sourced Food (within 100 Miles)Everything Else: 3¢ – 7¢ (15% – 35%) Consumers Spend 20¢ Food Production 5¢ (25%) Food Processing – 4¢ (20%) 0¢ – 4¢ (0% – 20%) more food for the money
  8. 8. 40%, or 8¢, of That 20¢ Is for Labor Consumers Spend 20¢ Labor 8¢
  9. 9. The Differences Are Crucial! Food PreparationSubsidized Food Production Food Processing Food Consumption Global Food SystemSustainable Food Production Food Processing Local Food System
  10. 10. Global vis-à-vis Local Sourcing of Food Food Preparation Food Production98% Food Processing Food Consumption $147M / year Global Food System Spent by 40,000 Linden Residents2% Local Food System $3M / year Spent by 40,000 Linden Residents Local Food System .9 Employed / 1000 residents = 36 Jobs @ $30K / year
  11. 11. What if you choose more locally-sourced food? Food Preparation Food Production 75% Food Processing $112.5M / year Food Consumption Global Food System Spent by 40,000 Linden Residents Food Production Food Processing Food Production Local Food System Food Processing Local Food System Food Production Food Processing Food Production Food Processing Local Food System Local Food System Food Production Food Processing Local Food System Food Production Food Processing Food Production Local Food System Food Processing Local Food System Food Production Food Production Food Processing Food Processing Local Food System Local Food System 25% $37.5M / year Spent by 40,000 Linden Residents Food Production Local Food System Food Processing Food Production Food Production Food Processing Food Processing Local Food System Local Food System Food Production Food Processing Local Food System .9 Employed / 1000 residents = 450 Jobs @ $30K / year
  12. 12. If sourced locally, 20% of the calories you consume each day come from Vegetables and Fruits which are seasonal and expensive 400 / 2000 Calories
  13. 13. What if you choose more locally-sourced food? + + Wider Variety of Food Products with More Calories Season Extension and Year-Round Food Production Integrated Processing and Preparation
  14. 14. New Harvest Financial Overview
  15. 15. Local Food Systems Economics—Jobs• Today, 40,000 people in North and South Linden  Spend $3M / year on locally sourced food (2%)  $1.2M / year for labor (90% outside the community)• What if you brought what’s outside, inside?  $1.2M / year for labor (90% INSIDE the community)  36 MORE jobs paying $30K / year (livable wage)• What if you spent $6M / year (4%)?  $2.4M / year for labor (90% INSIDE the community)  36 MORE jobs paying $30K / year (livable wage)
  16. 16. Spend more on food locally sourced from the North and South Linden community and MORE Vacant, abandoned, and underutilized Jobs are properties are putinto food production created Food processing and preparation operations are established People are Money is spent, captured, and reinvested in the community healthier and happier!Multiplier effect occurs spurring business growth in green energy and distributed manufacturing
  17. 17. Getting Involved in Local Food Systems— The Curriculum • Introduction to Food Production in a Local Food System • Soil Production • Business Planning in a Local Food System • Seasonal and Extended Season Food Production • Branding / Reputation / Food Safety Standards / Compliance • Food Processing Incubation • Mobile Kitchen / Food Cart Operations • Year-Round Food Production Under Glass and Underground • Aquaculture: Tilapia, Yellow Perch, Freshwater Prawns Get Ready for Business in 2010! Workshops Begin in November 2009 Enroll at the New Harvest Urban Arts Center

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