Written by Mary ZumBrunnen, Director of Talent & New Market Initiatives at Prima Civitas
Typically triple bottom line businesses, food hubs are an increasingly economically viable piece of the supply chain puzzle as size-appropriate connections in local food systems.
Co-chair of the Michigan Food Hub Network and Senior Associate Director of the Michigan State University (MSU) Center for Regional Food Systems (CRFS), Rich Pirog can often be heard repeating, “Once you’ve seen one food hub, you’ve seen one food hub”. The topic of this month’s blog post, food hubs may take the form of a physical space, such as a warehouse or even a virtual site – no one size fits all – and act as aggregation, distribution and marketing platforms for source-identified food. Over the last ten years, these unique operating models encompassing non-profit, business, cooperative and publicly owned ventures are gaining a lot of press as integral access points for regional populations’ local food procurement. Often compared to farmers markets, hubs are unique and separate in that they offer the opportunity to aggregate local food at wholesale volumes.
While a patron may buy a specific item at a grocery store or farm market, food hubs stand out by making it efficient for institutional purchase and distributor pick-up of larger volumes of local food.
Across the country there are about 350 food hubs with a conservative estimate of total revenues of half a billion dollars. This estimate is extrapolated from data available in the 2015 National Food Hub Survey conducted by the MSU CRFS in partnership with the Wallace Center at Winrock International. Of the hubs surveyed, 98% are expected to increase demand for local food products in the next two years. With the rise of local food sales, this consumer trend has grown from $9 billion in sales in 2013 to $12 billion in 2014 (AT Kearney). In many cases, food hubs act as the gateway that allows small and mid-sized farmers to access institutional markets and turn their side business into a full-time job. While keeping the local dollar circulating and reducing the carbon foot print of non-seasonal procurement, food hubs help connect traditional “good food” and “good business” between community and the for-profit sector.
Spurring food hub development across the country, the Wallace Center at Winrock International launched the National Good Food Network to help move “good food” or food that is healthy, green, fair and affordable, into larger scale markets so that more producers, local economies and local communities would benefit in late 2007. With a goal of building connection, knowledge and community, the Wallace Center also launched its “Food Hub Collaboration”, a national partnership to ensure that “good food” is accessible where community typically shops and eats. Through these partnerships resource sharing, education and communication are nurtured and, in Michigan for example, influenced development of the statewide MI Food Hub Network with leadership from the Michigan Department of Agriculture and Rural Development, MSU CRFS, Morse Marketing Connections, LLC and several food hubs in 2011.
Within Michigan, there are about nine food hubs in operation and several more in development and start-up phases ranging from the Upper Peninsula to Grand Rapids and Saginaw over to Ann Arbor and Detroit. Each is unique in its operating model and many are offering additional services such as incubator kitchens, cooking classes and health screenings. Some of these organizations have gone from community assets to anchors that empower community ownership, food democracy and participatory engagement while affecting economic impact. They not only facilitate local dollar circulation, but support fair wage jobs creation whether hub associated, on-farm or indirectly.
In Lansing, Michigan, Allen Market Place Manager, Rita O’Brien says, “In addition to aggregation and distribution, we offer farmers and food producers access to incubator kitchens, dry and cold storage, vending at our year-round farmers market, cross-promotional materials, farmer networking opportunities, as well as educational resources such as workshops and mentoring services to help them sell to commercial buyers.”
In the upper peninsula the U.P. Food Exchange (UPFE), a nontraditional food hub collaborative effort led by the Marquette Food Co-op and MSU Extension in conjunction with the Western U.P. Health Department to support local food activities, has formed a food policy committee to encourage local food as a priority for municipal government. Neal Curran, UPFE Local Food Projects Coordinator, says:
“The Policy Committee advocates for language that is inclusive of local food systems development in local municipal ordinances and provides guidance on best practices. Members of the UP Food Exchange supported the County of Marquette’s successful application for a Strategic Growth Initiative grant through Michigan Department of Agriculture and Rural Development. The funding will be used to conduct a feasibility study for a new multi-species meat processing facility in the UP.”
While there is not yet Michigan-specific economic data, the Wallace Center and MSU CRFS have tabulated hub numbers nationally three times since 2011. The number of hubs are growing and of those survey respondents nationally, about 2,100 directly related food hub jobs are supported. Within the north central region of the U.S. (including Michigan) about 27 hubs are represented. These entities supply fresh produce, meat and poultry, value-added products, milk/dairy, grains and starches, baked goods and more. The majority are operating on foundation grants or federal, state and local government funding and working to diversify into sustainable revenue streams. While building their business components, many are also assisting producers and suppliers to develop or review food safety plans and incorporating social missions such as promoting animal welfare and improving human health. Many also prioritize non-revenue generating charitable activities such as food donations to local food pantries/banks.
“One of things we are realizing is that while each food hub might be locally unique, our real strength lies in understanding the collaborative advantage that is provided as we begin to think more regionally about our foodshed. The impact of a late frost can be mitigated when there is a connected network of hubs across a region where products and information can freely flow between like-minded neighbors.” Evan Smith, CEO, Cherry Capital
Food hubs are increasingly demonstrating viable social and economic impact with strong opportunity for growth in scalability and support of new farmers entering the market. As their track records continue to be developed, food hubs will still benefit from investment and more effective deployment of capital, but are well positioned in Michigan by regional support infrastructures. As this is further explored – in particular expansion into K-12 and college purchasing supply chains, trust and quality is of top priority. Food safety policy and procedure are front and center on many producers and consumers minds. Check back next month to learn more about how small and mid-sized farmers are accessing markets through cost saving measures and sharing risk to get food on your plate.
*For more information on Michigan food hubs please visit the Michigan Food Hub Network website at: http://foodsystems.msu.edu/activity/info/michigan_food_hub_learning_and_innovation_network.
About the author: Mary ZumBrunnen is the Director of Talent & New Market Initiatives at Prima Civitas, a statewide economic development non-profit catalyzing Michigan. She holds a BS in agriculture and natural resource communications from Michigan State University (MSU) and an MS in community, agriculture, recreation and resource studies, also from MSU. Currently she is pursuing a master of business administration. A small business owner and backyard farmer, Mary energetically works to facilitate sustainable development through citizen engagement. Connect with Mary on Twitter @Mary_ZumBrunnen and learn about other development projects onwww.primacivitas.org today.