Why are Argentinian Pears in my Seattle Grocery Store?
The food distribution system in this country is broken. The supply chain bringing your farm products to market is only cost-effective for big enterprises. While semi-trailers, cargo ships and airplanes move produce and meat all over the planet – the small farmer is often relegated to driving small trucks to get products to local markets. They don’t get to play with the big boys.
On a recent visit to Whole Foods, I had my pick of pears from Argentina, California and Washington…in the middle of our State’s harvest season. Why? Why do I need to choose between a pear that has traveled over 6,000 miles to Seattle or one grown an hour from here? It makes no sense.
Food Hubs = A Good Start
Food Hubs are not a new concept. However, they are picking up steam consumers are increasingly demanding local product and as small farmers look for ways to get their products to market – without sacrificing profit margins through heavy transportation costs and middle-men.
In a press release from USDA Secretary Tom Vilsack in May 2013, he stated “Skyrocketing consumer demand for local and regional food is an economic opportunity for America’s farmers and ranchers. Food hubs facilitate access to these markets by offering critical aggregation, marketing, distribution and other services to farmers and ranchers. By serving as a link between the farm or ranch and regional buyers, food hubs keep more of the retail food dollar circulating in the local economy.”
Putting their money where their mouths are – the USDA recently announced a plan to fund a $52 million program to support local and regional food systems like farmers’ markets and food hubs and to spur research on organic farming. The Feds are seemingly in support of an expanding local, sustainable food system. Or at least they are putting on a good show.
Small Farmers Unite – The Puget Sound Food Hub is created
A few years ago, a bunch of farmers and buyers convened under an overpass in Skagit County to transact their business. This seemingly clandestine operation was the start of what has now become the Puget Sound Food Hub (PSFH) as of 2013. Lucy Norris, Director of the PSFH and Marketing Director for the Northwest Agriculture Business Center (NABC), helped to create this marketplace. She worked with NABC to get a value-added producer grant from the USDA to start a formal food hub in partnership with 21 Acres – a Woodinville-based nonprofit learning center focusing on organic agriculture, sustainable living and green building technologies.
Working with Robin Crowder, Marketing and Development Director at 21 Acres, they expanded the marketplace to support farmers from Whatcom, Skagit, Snohomish, King and Island counties over the past 3 years. They have now gone from being open for 11 weeks a year to near year-round operation.
I spoke with Robin about the drivers behind the advent of the Hub. She stated, “Farmers were already seeing the market for local was changing and demand for local food was improving. We were hearing from farmers that they didn’t know about how to reach people outside of farmers markets and that every restaurant account had 10 other farmers competing with them.”
So, Norris and Crowder went to work on building a better business model. Their goal was simple in concept – make it easier for farmers and buyers to connect so that buyers will always know their farmers and where they are getting their food from; all while improving the overall Puget Sound economy. Who can argue with that?
Partner #1 – Hospitals
As they learned about the marketplace, Norris had the idea to broaden the market outside of traditional consumers and restaurants. So they developed a relationship United General Hospital in Seedro Wooley which had an internal initiative called ‘healthy food and health care’. They wanted to increase their local food budget and the Food Hub was a perfect partner.
Norris said, “We had talked to several buyers and they were weary of the hassles of reaching out to lots of farms, writing dozens of checks, cutting PO’s, etc. Many customers didn’t want to go through that hassle and were ordering through a distributor hoping what they were getting was local.”
The Puget Sound Food Hub has expanded their relationships with hospitals and institutions over the past few years. One of their biggest clients is UW Medical Center in Seattle. I spoke with Chuck Zielinski, Director of Food and Nutrition, about the Center’s work with the Puget Sound Food Hub. His own Department questioned their role as part of the Center’s mission to improve the health of their patients, staff and community. Zielinski stated that the Center wanted to, “create partnerships with farmers which gives their programs credibility while rewarding small farmers for going the extra mile in growing organic produce – a win-win for both of us.”
The Center has also gone through a major initiative to use only antibiotic free meats – which they’ve nearly achieved. Zielinksi noted, “70% of all antibiotics consumed on the planet are given to animals. We strongly feel that this initiative gave us the best benefit of anything we could do – while impacting the marketplace in a positive way.”
2014 – A Year of Evolution for the Food Hub
This year has brought major change to the operations of the food hub. A new eCommerce platform was implemented earlier this year making it easier for both farmers to offer their goods and customers to one-stop-shop online – a huge benefit to both Farmers and customers. In addition, the Hub recently established a partnership with Cloud Mountain Farm Center in Everson, WA to facilitate aggregation and distribution for Whatcom and Skagit Counties.
Harley and Susan Soltes, owners of Bow Hill Blueberry Farm in Bow, WA, have been key supporters of the Hub operation since 2013. They are not only suppliers to the Hub, but they also provide facilities for aggregation and delivery three days a week plus they manage the eCommerce platform. When I asked Farmer Harley about his experience working with farmers using the Hub told me that, “Drive time savings is amazing due to shared transportation. Farmers are appreciative of newly opened markets with big corporate and institutional customers who wouldn’t order from smaller farms but are now able to through the Puget Sound Food Hub.”
Why Farmers Use it – Better Economics and Distribution
The Hub wants to make sure that farmers get the highest return they can while diversifying the customer base they are able to reach – allowing them to spend more time farming.
One of the primary reasons that Farmers use the Food Hub are the economics of the operation. The farmer determines their prices – the Hub has nothing to do with it. They pay 10% of the sale price to the Hub plus 3% for credit card processing fees. For 13% of the sale price – the farmer eliminates significant costs in marketing, sales and distribution while reaching a broader marketplace. Grants and private foundation donor offset the balance of operational costs for the Hub with an additional 10% contribution.
Farmers looking at their current marketing mix they are giving the Food Hub strong consideration. Norris said, ‘Maybe they’ve done a CSA program and are seeing a decrease in subscriptions. Maybe some farmers markets haven’t done so well. That’s where we help to enable them to meet the needs of customers that they wouldn’t otherwise have.”
Supply chain efficiency is another obvious benefit. Ethan Schaffer is the Executive Director at Viva Farms incubator in Mt. Vernon which helps new farmers learn how to farm and experienced farm workers set up their own business. I asked him about the benefits of using the Hub and he pointed out both the supply chain and online capabilities. Schaffer said, “It makes sense for the food hub to run the supply chain and to pass this aspect of business off to someone who’s focused on logistics.” He added, “The use of online platforms is very new in the produce world. Even with big distributors, most sales are still done over the phone or person to person. The Puget Sound Food Hub adds that ability for us.”
Why Customers Use It
Customers of the Hub run the gamut from hospitals to businesses like Microsoft to childcare centers to restaurants to the City of Seattle (which made a grant to support childcare centers in purchasing from the food hub). One major client is Bon Appetit food service which orders in bulk for the The Hutch, Amazon, Seattle University and the Gates Foundation.
Currently, there are 37 producers registered to sell and 285 registered buyers with ~40 ordering regularly. Norris also added that, “Customers wanted to order from multiple farms, pay one invoice and pick up or delivered in a single site. We saved one chef about 4 hours every week.” Hub staff works also with customers and farmers to share feedback and information about farming practices.
Cheryl Dillon, owner of Mother Nature’s Organic Farms in Lake Stevens, WA has seen the benefits first hand. In a classic example of farmers helping farmers, not only does she sell through the Puget Sound Food Hub, she’s also a buyer using the Hub to supplement CSA orders if she didn’t grow enough of a particular item to complete orders. She’s now planning to increase production next year to accommodate increasing demand from Hub customers.
I asked Crowder about plans for expansion and she replied, “Now that we have the Cloud Mountain partnership, the next step will be to talk to folks in Pierce and Island counties.” Farmers and customers alike will be happy to see more south Sound meat and produce coming to market.
Eating locally is both a choice and a necessity if we are to both support small-scale, sustainable agriculture as well as improve the local supply chain. If money is the language business listens to then consumers must vote with their dollars to effect change. If demand for local meat, dairy and produce increases, the system will change to support it. Capitalist businesses always follow the money…
*Portions of this story originally appeared in Seattle Weekly