Food Hubs: Connecting Farmers with Consumers

When most people think of locally sourced, healthy, organic food, they think of young, urban professionals and trendy restaurants or expensive grocery stores. Think again.

Regional food hubs are making this type of food — organic and non-organic — available to everyone by connecting local farmers to eaters through farmers' markets, grocery stores and more. Defined by the USDA, a food hub is as an organization that actively manages the aggregation, distribution and marketing of source-identified food products primarily from local and regional producers to strengthen their ability to satisfy wholesale, retail and institutional demand. There are about 350 food hubs in the United States, and that number is rising.

"Food hubs solve the problem that a lot of businesses, retailers and institutions have," says Jeff Farbman, senior program associate of Wallace Center at Winrock International and the National Good Food Network. "There is increasing demand for healthy, local food, but many of the small to mid-sized farmers don't have the capacity to organize deliveries to a bunch of different companies. Food hubs are the third part that levels out the process for the buyer and seller."

The National Good Food Network (NGFN) started work "helping to get the Farmers Market Coalition up and running. That part is booming now," says Farbman.

"But, that's not where most people get their food. They get it from restaurants, supermarkets, schools, hospitals, colleges and other institutions, so that's the focus of the NGFN, aggregating, distributing and marketing the local, value-based food."

According to Nick Mabe, food hub coordinator for the Iowa Food Hub in West Union, Iowa, "It's easy to sell grain, corn, soybeans and hogs on the commodities market. But, it's more difficult to have a mid-sized operation in dairy, produce or custom meats. The Iowa Food Hub helps to increase food access and help smaller beginning and established farmers run a sustainable business," he says.

Economic I​mpact

More than just serving as a connection between farms and eaters, food hubs "provide opportunities for more local food procurement at a larger scale, which can create jobs, generate business taxes, and increase earnings throughout the region as production increases locally," according to the USDA's Regional Food Hub Resource Guide.

Various studies have examined the local economic impacts of shifting food purchases to local food. A study conducted in Northeast Ohio found that if the 16-county Northeast Ohio Region were to meet 25 percent of its need for food with local production, it would result in 27,664 new jobs, providing jobs for 1 in 8 unemployed residents, as well as increase annual regional output by $4.2 billion and increase state and local tax collections by $126 million.

And, according to the USDA guide, "food hubs demonstrate innovative business models that can be financially viable and also make a difference in their respective communities. Economically, they are showing impressive sales performance and helping to retain and create new jobs in the food and agricultural sectors. Socially, food hubs are providing significant production-related, marketing, and enterprise development support to new and existing producers in an effort to build the next generation of farmers and ranchers. In addition, many food hubs make a concerted effort to expand their market reach into underserved areas where there is lack of healthy, fresh food."

No one knows that better than Jesse Rye, co-executive director of Farm Fresh Rhode Island in Pawtucket, R.I. "Farm Fresh started 10 years ago, born from a student project at Brown University," he says. Now, Farm Fresh's Market Mobile Program handles aggregation and distribution for over 60 farms and producers and connects them with more than 200 consumers every week. "Last year, we moved about $2.1 million worth of food on behalf of farmers."

The group also raises funds and secured a grant that incentivizes Supplemental Nutrition Assistance Program (SNAP) users so they can buy fruit and vegetables at the local market. "SNAP users get an additional $2 on top of every $5 they spend. That means lower income consumers get the benefits of fresh produce, and the community gets more money invested into the local economy and small, local business rather than the national chain stories," says Rye.

In addition, Farm Fresh has a culinary education apprenticeship program, called Harvest Kitchen, where local, at-risk youth in the criminal justice system can learn culinary and life skills. "They create product lines, including applesauce, pickled products, frozen soups and more," says Rye. The products are sold at the local farmers' market and are available wholesale.

For the Iowa Food Hub, farmers are able to increase production because they are accessing new, larger markets without the cost burden of marketing and distribution. "On the consumer side, we're focused on increasing the consumption of local food in underserved communities. That is done by getting the food to schools in poorer areas," says Mabe. Unlike many other food hubs, the Iowa Food Hub is located in a rural area of the state. West Union has a population of about 3,000. "We're bringing jobs and opportunities back into the rural downtowns."

Mabe finds that much of the local food is exported to large, urban areas; however, one goal of the Iowa Food Hub is to increase the rural sales in Northeast Iowa. "In theory, we can sell everything here, but we need to create the systems and interest to get to that point."

Caroline Heine, co-founder and project director of Seed Capital KY in Louisville, Ky., agrees. She's working on getting the West Louisville FoodPort up and running. "We're trying to increase the volume of distribution. Research published in 2012 identified a significant demand in Jefferson County for local food. What the West Louisville FoodPort can do is complement the other efforts already underway, such as farmers' markets and locally-sourced food restaurants. We have significant unmet demand," she says. "We're a public-private partnership. We wouldn't be having this conversation if not for the leadership of Louisville Mayor Greg Fischer."

For Farm Fresh Rhode Island, its winter farmers' market brings in 2,000 to 3,000 people every week between November and May. "It's the biggest in New England and those visitors bring money into our local economy," says Rye.

Revitalizing Blighted Areas

Heine sees food hubs as a way to revitalize communities in not just rural, but urban downtowns as well. The West Louisville FoodPort is more than just a food hub, it's a combination of distribution, processing, retail, indoor and outdoor farming, restaurants and coffee shops, a food market and community space. "There are companies coming together in our project that already do the things food hubs do. We're bringing those businesses into our project alongside other businesses that represent the entire food chain," she says.

While still in the planning stages, the 24-acre, local food business park expects to break ground in early summer 2016. "We're developing it in an area of West Louisville that has five times the unemployment rate and less than half the per capita income of other areas," she says. "We want to make this an economic driver for the neighborhood. Our hiring strategy is to hire the people who live in this area. But, we're looking at more than just jobs; we want to support and develop wealth-creating opportunities in this neighborhood, allow the residents to start small businesses and own the property itself. Those are the kinds of ideas we're working on," says Heine.

Farm Fresh Rhode Island is also in an area targeted for revitalization. "We have our farmers' market in a renovated mill building that is 16,000 square feet. Now, other businesses are springing up in the mill building, including light industrial work spaces, art galleries, fitness studios and small food businesses," says Rye. The mill space is in a part of Rhode Island that is filled with abandoned mill buildings and residential areas that need attention.

Helping Farmers Grow​​ the Local Economy

Other than providing farmers a way to distribute and market products, food hubs also serve to help them get desired certifications that make it easier to distribute to institutional and retail buyers. There is a push throughout the United States for safer food. "There is a voluntary agricultural USDA certification that more and more buyers are looking for but many growers can't afford to apply for," says Mabe. His area food hub, along with others through a pilot program with the NGFN and the USDA, are able to help mitigate the cost of certification. "The food is already safe, but the paperwork and certifications are expensive. This allows them to get certified and access other markets."

According to Farbman, another pilot program through the NGFN and ALBA, (Agriculture & Land-Based Training Association) offers several incubator training hubs. "There are many immigrant farm workers who are skillful farmers but forced to take lowwage jobs as farmhands. ALBA trains these farm workers in organic farming," he says. ALBA runs a food hub where all the food produced by the farming students is sold at different markets.

Challe​nges

A challenge for many food hubs is investing in growth while supporting their broader social missions, such as supporting small and mid-sized producers and helping to improve food access to the underserved, according to the USDA guide. While many food hubs are well positioned to be economically viable businesses that can carry out the core functions without external subsidies, says the USDA, they recognize that they need further support/ partnerships if they are to offer a variety of complementary producer and community services.

No matter what the challenges, the good outweighs them all. Even if the hip trend of eating organic and locally sourced food withers, food hubs are here to stay based on the good they do for the communities in which they are located or serve.

Tracey C. Velt is a real estate writer and editor based in Lake Mary, Fla.