1. project background - pcrpc
TRANSCRIPT
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A. Purpose and Vision
The purpose of the ACEnet scope of
work was to assist the Portage
County Regional Planning
Commission, the project partners,
market partners, food and farm
entrepreneurs and community
stakeholders in the targeted counties
of Northeast Ohio to assess the
current assets, opportunities and
entrepreneurial eco-system to
implement a food hub in Portage
County.
This study took into account and builds on the November 2012
Planning for a Food Hub in Portage County study. The project
approach ensured the collaboration of current partners and purposefully
engendered greater participation among all stakeholders to test the
viability of a food hub facility. The public engagement approach
addressed the needs for entrepreneurship support, market and local
food value chain development and capital investment by both public and
private partners.
The local food economy and wholesale demand continues to grow
throughout Ohio. Although we see great economic promise re-
localizing our food systems, production and distribution remain the
largest challenge for farmers, food entrepreneurs, and non-profits
operating social enterprises to address these gaps in the supply chain. In
particular, agricultural producers do not generally set out with the goal
of becoming a wholesale distribution business and are not equipped
with the regulatory knowledge, financial assets or market expertise to
meet this new demand from institutional and wholesale buyers.
B. Food Hub Trends
Over the past decade a new model for the aggregation and distribution
of local/regional food has emerged in urban and rural centers.
Commonly referred to as Food Hubs these facilities have attempted to
connect local agricultural
supply to the growing demand
by wholesale buyers for local
food. The U.S. Department of
Agriculture’s (USDA) working
definition of a food hub is a
“business or 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” (USDA
James Barham et al. 2012, 4).
1. Project Background
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With strong support from the USDA for this model, recent economic
analysis identifies that there has been “a proliferation in the number and
recognition of ‘food hubs’ across the United States, as well as a
substantial increase in foundation and public funding to support their
development. In addition to generating economic value within a local
economy, funders and policy makers are also acutely attentive to the
impact of food hubs on local agricultural producers.”1
C. Opportunities and Benefits of Food Hubs
The USDA defines a food hub as “a centrally located facility with a
business management structure facilitating the aggregation, storage,
processing, distribution, and/or marketing of locally/regionally produced
food products.” By offering these services, food hubs allow smaller
farmers to access larger volume or wholesale markets that they may not
have been able to access on their own. Food Hubs focus on inserting
value into the supply chain. The value inserted is often referred to as the
1 Assessing the Economic Impacts of Regional Food Hubs: The Case of Regional Access Todd M. Schmit, Cornell University Becca B.R. Jablonski, Cornell University David Kay, Cornell University December 2013
“value chain” which focuses on the needs of producers and buyers who
are concerned with ideas of sustainability, concerns for public health,
social justice and supporting local farms and their economic benefits.
There are around 300 food hubs operating in the United States today
according to Counting Values, Food Hub Financial Benchmarking Study. This
study looked at the financials submitted by 48 food hub operations from
fiscal year 2013.
Within the study, hubs are geographically dispersed, varied in size, length
of operation and operating model. As the chart above depicts, 89.04% of
revenue comes from Net Product Sales while other revenue streams
make up the remaining 10.96% of revenue. Additional revenue streams
include Delivery and Brokering Fees, Grants and Contributions,
Membership Fees, Other Enterprise Income, and Miscellaneous Income,
which includes interest and dividends.
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Nationally, 33 percent of food hubs fit in the farm to business model
bringing local food into wholesale supply chain to serve groceries,
restaurant and institutional foodservice buyers. For many start-up food
hubs, to be viable they also augment their market channels with “food
bags” or CSA shares direct to consumers. Many hubs have partnered
with larger corporations to create health and wellness programs to
deliver a large volume of weekly food share to employees on corporate
campuses.
In Ohio, non-profit, private and social enterprise organizations such as
Fresh Fork Market, AZOTI, Lake to River Cooperative and Great River
Organic (GRO) have capitalized on the direct to consumer market
shares, either by operating aggregation hubs or through online logistic
services. Other hubs have focused on combining hub activities with
incubation, education and value-added
processing. Many non-profits such as
Common Wealth and ECDI in
Youngstown and Cleveland have
implemented promising models to
develop food entrepreneurship
capacity for the preparation,
processing, aggregation and
distribution of local/regional foods.
All of these projects and facilities
support farmers and food
entrepreneurs to develop new product
lines and distribute fresh and value-added foods to direct and wholesale
demand markets. Grocery stores, restaurants, corporate and
institutional buyers have worked with these champions to increase their
sourcing of local food through innovative CSA models, new wholesale
distribution systems and the development of market ready product lines
from private entrepreneurs selling into groceries and restaurants.
D. Portage County Scope of Work
ACEnet’s scope of work initially focused on four primary activities and
deliverables to design a Food Hub feasibility analysis and business plan
for a Portage County facility. The research and survey components
addressed the market viability of the model to the market channels; the
infrastructure environment and existing gaps; the optimum governance
model for the business sustainability; and the financial feasibility analysis
and business plan.
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Stakeholders engaged in 6 focus
group meetings from May 2016
through January 2017.
Agricultural producers were
convened into affinity groups
based on production and
product category. Consultants
and project partners did
extensive outreach to
agricultural producers via
traditional and social media.
Consultant, Lynn Gregor,
attended farmers markets, community gatherings and Northeast Ohio
Food Hub Network meetings to encourage producer and buyer input
throughout the process. Although the January 2017 meeting was the
best attended by agricultural producers and value-added processors, the
survey results have been limited and will be reviewed in Section 2 of the
Study Approach and Opportunities. By the middle of March 2017, we
compiled the final survey results.
Online and in-person interviews were conducted with wholesale market
partners, regulators and resource partners. Surveys were also
distributed to buyers, but most of the input was gathered through in-
person interviews and phone calls. The strongest buyer interest came
from other regional partners operating hubs, regional distribution, food
preparation, online markets and social enterprise retailers.
Public funders and grant-makers were also interviewed and invited to
public meetings to encourage their project buy-in and input. Section 8 of
the Funding Resources provides an extensive overview of possible
funding sources for next stage implementation. Ohio Rural Development
staff and OSU Cooperative Extension educators are interested in
providing resources to move the project forward.
Additional regional network partners: food hubs, food system educators
and resource providers have all expressed on-going interest in planning
and supply chain logistics. Many are willing to participate as trainers and
outreach partners to engage more support in the next steps of an
implementation process. Information on other northeast Ohio and
statewide programs and partners are profiled in Section 3 of the Market
Analysis and Section 4 of the Business Analysis and Recommendations.
E. Project Team
The consultant team comprised of ACEnet staff: Leslie Schaller and
Grace Kroeger and Portage County consultant, Lynn Gregor. The
Appalachian Center for Economic Networks consulting team draws
from over 30 years of experience in regional economic development,
small business incubation and shared-use facility design and management
of entrepreneurship networks. With 30 years of consulting experience,
Ms. Schaller contributed her experience working in Ohio and national
food hub networks. Ms. Kroeger assisted with the survey design and
collation, online outreach and communications and study research and
narrative development.
Ms. Gregor is an engaged stakeholder and a long-term steering
committee member contributing to the planning process. She acted as
the on-location researcher and interviewer for producers and buyers.
Ms. Gregor has worked in the wider food enterprise network, with over
twenty-five years’ experience in horticulture, specializing in urban
agriculture, local food systems, and education.
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A. Regional Agricultural Census Data
When beginning to think about the feasibility of a food hub, one of the
first broad questions to ask is: “How many farmers are in the area to
potentially provide supply?” To assess the agricultural landscape of
Portage County and surrounding counties 2012 Ag Census Data was
analyzed. Findings show that Ag Census Data does not indicate between
land in specialty crop vs. land in commodity crop production. When
determining the feasibility of a food hub, specialty crop producers are a
more likely market partner for food hub operations. It is likely that
commodity crop growers have outlets for their crops and typically will
not be a targeted group of producers to sell within the food hub model.
The 2012 Ag census data does indicate number of farms with “Land in
Berries” “Land in Orchards” and “Land Used for Vegetables Harvested
for Sale”. Looking at these three data sets, we can start to understand
how much land is being used for specialty crop production. The chart
below indicates the number of farms within each of the data sets. Data is
collected for Portage County and surrounding counties of Geauga,
Mahoning, Portage, Stark, Summit and Trumbull.
The graph above estimates the number of farms producing specialty
crops compared to the total number of farms using the “Land in
Berries” “Land in Orchards” and “Land Used for Vegetables Harvest for
Sale” data sets as the specialty crop indicators. Data is combined from
43
1420
2419
222327 29 28
22 20
95
4650
66
4448
Geauga Mahoning Portage Stark Summit Trumbull
Land Use in Number of Farms to Determine Idea of Specialty Crop Farmland Available to Sell into a Food Hub.
Land inBerries
Land inOrchards
2. Study Approach and Opportunities
4.744640
0 1000 2000 3000 4000 5000
"Specialty Crop" Land in Farms Compared with Total
Number of Farms
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the six counties of Geauga, Mahoning, Portage, Stark, Summit and
Trumbull. The total amount of farms indicated by census data for the six
county data set is 4,744 farms and 640 of that total is predicted to be
specialty crop farms, only a 7.4% capture of agricultural production.
The Market Value of Ag Products Sold Chart shows the value of Portage
County sales. The chart also shows that Stark County has the largest
market value of products sold within this six county dataset by nearly
double of Mahoning County value, which is the second highest market
value within this dataset.
The 2012 Ag Census Data Ohio County Report details the percent of
total farms selling into different market streams. The three market
streams detailed are Direct to Retail, Community Supported Agriculture
programs and Value Added Commodities. The bar graph below shows
that Produced and Sold Value Added Products is the largest market
stream option for each county studied. Direct to Retail is the second
largest market stream and CSA’s are the smallest. CSA programs are a
growing subset of farm businesses and another way to aggregate and
distribute products.
2012 Agricultural Census Data sets of “years operating a farm” shows a
total of 75 beginning farmers as defined by the USDA. USDA defines
beginning farmers and ranchers as those who have operated a farm or
ranch for 10 years or less either as a sole operator or with others who
have operated a farm or ranch for 10 years or less. Data sets include “2
years or less” “3 or 4 years” “5-9 years”.
Beginning Farmer Landscape
2012 Agricultural Census Data sets of “years operating a farm” shows a
total of 75 beginning farmers as defined by the USDA. USDA defines
beginning farmers and ranchers as those who have operated a farm or
ranch for 10 years or less either as a sole operator or with others who
have operated a farm or ranch for 10 years or less. Data sets include “2
years or less” “3 or 4 years” “5-9 years”.
Geauga
39,799
Mahoning
63,632
Portage
40,769Stark
128,979
Summit
10,186
Trumbull
59,352
MARKET VALUE OF AG PRODUCTS SOLD
INCLUDES DIRECT SALES
TOTAL SALES ($1,000)
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Beginning Farmer Landscape
6%
4% 4% 4%
7%
2%2%
1% 1% 1% 1% 1%
11%
7%
8%
7%
12%
5%
Geauga Mahoning Portage Stark Summit Trumbull
Percent of Total Farms Selling Product into Different Market Streams
Value Added Commodities are most used sales outlet compared with products
marketed directly to retail outlets and products sold through CSA.
Marketed Products Directly
to Retail Outlets (farms)
Marketed Products
Through Community
Supported Agriculture
(CSA)
Produced and Sold Value-
Added Commodities
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A. Producer Interest
Surveys were created by consultants from the Appalachian Center of
Economic Networks. Surveys were adapted from a multitude of food
hub feasibility studies and from the consultant’s previous work on food
hub feasibility studies.
Surveys were created in paper copies for distribution at “Producer
Meetings” hosted with the project team in Portage County. A format of
the survey was also input into Google Forms. The online version of the
survey allowed for distribution and outreach throughout social media
outlets and listservs that reach producer populations within Portage
County like the local extension agency and the Ohio Ecological Food
and Farming Association.
As surveys were distributed throughout the growing season, the
consultant team saw a lack in response and producer meeting turnout.
When conducting a food hub feasibility study or engaging with
agricultural producers on any types of projects it is advantageous to
interact with producers in the off season throughout late November to
early February.
Producer Surveys
A total of 35 producers completed the producer survey. Tables below
report survey responses. Numbers in parentheses indicate the number
of responses for each option unless otherwise indicated. In most cases,
respondents could choose more than one answer option. A few
questions were left open ended as to not restrict responses from
producers and in some cases producers left answers blank.
Demographics
The respondents make up a variety of producers including fruit and
vegetable farmers, bakers, meat and dairy and value-added products.
Table 1.01 indicates responses to primary and secondary commodities.
Table 1.01
What is your primary and secondary commodity?
(Respondents could chose multiple options, numbers
demonstrate amount of responses)
Vegetables (20) Meat (9)
Value – Added Products (6) Fruit (6)
Baked Goods (2) Maple Syrup (1)
Honey (1) Dairy (1)
Grains (2) Eggs (1)
Other (7)
For the viability of the food hub, it would be important to identify
additional producers that could diversify the offerings of products
beyond the primary commodity of vegetables. Value-added products,
maple syrup, baked goods, grains, frozen meats and shelf stable dairy
products will help to keep buying options throughout the winter.
Additional producers must also be determined to fulfill the large amount
of demand that a food hub will have to fulfill in order to remain viable.
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Table 1.02 identifies the geographic locations of markets that surveyed
producers are operating within.
Table 1.02
Where are your current direct or wholesale markets?
Ohio (5) NE Ohio (25)
Portage County (2) Pittsburg (2)
Summit County (1) Stark county (1)
Other (4)
The information detailed in Table 1.03 indicates that 23 producers in
the survey group are considered Beginning Farmers by USDA standards.
The USDA defines beginning farmers and ranchers as those who have
operated a farm or ranch for 10 years or less either as a sole operator
or with others who have operated a farm or ranch for 10 years or less.
Beginning Farmers face additional burdens to operating a business
compared to well establish farmers. Young farmers who chose to attend
college have student loan debt which inhibits them from borrowing to
buy land.
Additional resources may need to be in place within the food hub
structure or management team to work with beginning farmers, to train
them and help them understand the benefits of working with a food hub
facility. There are increasing amounts of resources in place to provide
assistance to beginning farmers. US Ag Census Data shows the average
age of farmers to be 58.3 years old, the realization that farm operators
are nearing the age of retirement is spurring the new investment in
beginning farmer programs.
Table 1.03
How long have you been an agricultural producer?
0-5 years (13)
6-10 (10)
11-20 (3)
21-30 (2)
31-50 (3)
50+ (3)
Operational Data
Of the 35 producers surveyed, 32 survey respondents participated in
direct sales. Respondents could choose more than one answer for this
question. Further work may be needed to determine percentage of
direct sales vs. other outlets like CSA or wholesale. Direct Sales get
farmers a higher price and cut out the middle man. Finding the right
farmers to sell in to a food hub is critical. Many farmers use direct sales
at farmers markets or farm stands to step off the farm and interact with
the community.
Identifying farmers that want to sell large
quantities of wholesale will be an important factor
for food hub viability.
A CSA concept for the food hub can be an option to explore as an
additional revenue stream for the food hub facility. CSA stands for
10
Community Supported Agriculture. This model of operation for small
farmers is increasingly in popularity.
Aggregating a variety of products from area farms, packaging them into a
CSA Box or Share for customers will allow farms to focus on
production rather than coordination of sales and marketing. Many CSA
farms pay an employee to be the CSA coordinator. The food hub
stepping into the coordination role could potentially alleviate stress for
some farms. Further research into CSA models and conversations with
currently operating CSA Farms within Portage County would be
suggested before venturing in to this model. An understanding on
whether or not farmers want the food hub to aggregate their products
potentially with other farm products is important to address. In this
model there is potential for a shared brand under the food hub
operation. Explaining the benefits of shared brand and marketing
strategy will be an important message to convey to farmers.
There is potential for a shared brand under the food
hub operation.
Table 1.04
What is your current sales model?
Direct sales (32)
Wholesale (10)
CSA (7)
Regional Distributor (3)
Social Enterprise (2)
Other (4)
Further learning on why there is a lack of farmers working with a
regional distributor may also be important to the success of a food hub.
Are there issues with supply that are limiting regional distributors from
picking up from local farms? Would the food hub run their own
distribution route? If so, perhaps being more sensitive to picking up
smaller loads from individual farms will help more farmers to begin
working with a distributor. Distribution logistics will come in to play,
maximizing route pick up and drop off locations and potential
backhauling options are ways to eliminate some of the burdens
associated with picking up smaller load. Further information on
distribution is included in Table 1.15 and Table 1.16.
Of the sales models listed, only direct sales was listed as the sole sales
model of surveyed producers. The wholesale sales model was always
accompanied by at least one other model. This may indicate that the
potential food hub facility will have difficulty finding producers that want
to work entirely through wholesale to the food hub. Further research
may need to be done on what amount of wholesale volume would make
selling into the food hub at wholesale prices a viable options for
producers in the area.
Table 1.05
Are you interested in expanding your direct or wholesale
customer base?
Yes (28)
No (6)
Possibly (1)
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80% of producer survey respondents are interested in expanding their
direct or wholesale customer base. To further understand the landscape
of this question, more exploration should be done to determine which
market outlet is preferential to producers: direct, wholesale or both. The
willingness of producers to expand shows potential for the supply side
of the food hub feasibility. If resources are put in place to expand supply,
demand must also be paid attention to at the same time. A balancing act
of supply and demand is key to food hub success. Producers will not
come back to the food hub if demand is promised for their product,
while buyers will not return if supply promised does not come through
to them.
80% of producer survey respondents are interested
in expanding their direct or wholesale customer
base
One respondent interested in expanding their customer base indicated
that they would like help starting up a lamb cooperative. The
cooperative model, where farmers and producers have say and buy in to
the operations of the food hub may be one model of food hub
operations to further explore. A cooperative could be housed within the
food hub while a variety of other business activities take place within the
food hub model as well.
Table 1.06
Would you like to diversify your farm in order
to increase production?
Yes (17)
No (14)
Possibly (1)
Season Extension
Season Extension questions were added to the producer survey in
order to assess food hub viability throughout 12 months of the year.
Season Extension Practices increase on farm revenue for farmers and
help farm operations keep employees beyond seasonal labor. Survey
responses for seasonal operations were nearly half and half seasonal and
not seasonal, with 17 producers operating seasonal businesses and 18
operating businesses that are not seasonal operations. Encouraging
season extension investment would increase long term viability for food
hub operations.
Partnerships to further explore season extension opportunities are
listed in the recommendations section of this study.
Table 1.07
Is your business seasonal?
Yes (17)
No (18)
12
In order to assess seasonality further respondents were asked to
choose a statement that best describes their business. Respondents
could choose multiple options for this question. Table 1.08 describes the
current season extension landscape and the interest for more
investment.
Four respondents have extension already and are interested in
developing more practices (these 4 respondents chose options “I have
season extension” and “Interested in developing”). One respondent who
indicated they did not have season extension equipment in place also
indicted that they would be interested in developing. Five respondents
did not respond to this particular question, 5 left answer blank and 2
indicated that this option was not applicable. A further look into the
respondents that did not answer show that two respondents are bakery
owners therefore season extension does not apply to their operation.
Table 1.08
Which of the following statements best describes you?
I have some produce grown in season extension structures
(15)
I am interested in developing seasonal extension practices
to increase production (8)
I do not use seasonal extension to lengthen the growing
season on my farm (6)
Table 1.11
If demand were identified, would you invest
(or further invest) in farm equipment or
structures to extend the growing season?
Yes (12)
Possibly (2)
In the Process (3)
No (7)
NA (2)
Again the season extension data set is nearly split in half. Of the 35
survey respondents, 19 responded by either leaving the answer blank,
N/A or No they are not interested in investing in season extension
practices. Of those 19 no or non-answers, only 8 of those producers
indicated fruit and vegetables as their primary or secondary commodity.
The other 11 respondents not interested in season extension are mainly
meat producers along with value added and grain producers.
3 respondents are already in the process of / or have built season
extension equipment or structures in order to meet demand. 12
Respondents said yes they are interested in investment. One respondent
answered they are possibly interested. Only 4 of 12 producers using
season extension answered that they harvested year round from their
season extension structures. This means that if farmers have season
extension infrastructure and practices on their operation that does not
necessarily mean they will get a yearlong continual harvest.
More work needs to be completed to determine why the farmers with
season extension are not harvesting all year. Potential outcomes may be
that farmers need help with crop planning, labor through the winter for
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harvesting, or other outcomes that once identified could be addressed
through workshops in Portage County with partners like non-profit
organizations, peer-peer training opportunities or Agriculture Extension
Agencies.
Limitations
Table 1.12
What are your limitations to expansion?
Labor (24)
Financing (19)
Connections to wholesale markets (10)
Infrastructure (8)
Lack of Demand (6)
Land (2)
Distribution and Food Safety
Training farmers to meet distribution qualifications can sometimes
become a barrier. The food hub will have to think about if they want to
run their own distribution operation or conduct further research to see
if there is a possibility to work with regional distributors.
Regional Distributors often require food safety certifications like GAP,
traceability, on farm food safety plans and liability insurance.
Currently there are 3 survey respondents working with a distributor.
The rest of the producer respondents are self-distributing. This means
that the food hub facility will have to train up producers to meet
standards of working with larger wholesale buyers and distributors.
There are resources and partnerships available to help with this training.
Distribution companies offer trainings or toolkits to help producers to
meet their standards. Group GAP trainings are also available to certify
multiple farmers in GAP training at one time.
Table 1.15
What is your current distribution system?
Self-distribute (33)
Work with a distributor (3)
Working with a food hub could potentially alleviate some barriers to
farmers so that they can focus more on the farming or business
operations rather than spending a day distributing or paying an
employee to make deliveries. Interestingly enough, the large amount of
self-distributing producers do not own refrigerated trucks. Only 2
respondent own a refrigerated truck.
Table 1.16
Do you own or rent refrigerated
trucks to deliver you agricultural
products?
I do not own a refrigerated truck (28)
I own a refrigerated truck (1)
14
57.5% of the self-distributing respondents would deliver their produce
to a food hub. Only 18.2% of self-distributing producers would replace
their current distribution plan for a central distribution plan out of the
food hub.
These responses show that the food hub should take caution and
complete further assessment before investing in trucking equipment and
staffing. Trucking equipment may only be needed to distribute aggregated
product from the food hub facility to demand partners. Staffing
personnel may be needed to coordinate drop offs and orders with
farmers if they are more interested in self-distributing to the food hub
facility.
The producer survey asked respondents what barriers they have
experienced in distributing their agricultural products. For this question,
respondents could fill in any answer rather than choose from a set of
pre-determined answers. For this question the consultant team did not
want to limit the answers so the question was left open-ended. A variety
of answers followed. Nine producers chose to leave the question blank.
The following chart details the answers that were provided, duplicate or
similar answers were combined.
Producers worry that customers do not understand the products they
are selling, family farms have the burden of raising children while
operating a business or only having a small amount of family members as
employees and are unable to pay extra labor.
One producer needs help with production planning in order to ensure
selling fresh product to market, vehicle size can be a barrier along with
other logistics like the miles traveled and cost, it may not be worth it for
a producer to drive many miles to deliver to only one wholesale
account.
Table 1.17
Would you deliver your produce to a regional
food hub?
Yes (19)
No (9)
Possibly (2)
Table 1.18
Would you replace your current distribution
system for one central distribution plan out of a
regional food hub?
Yes (6)
No (20)
Possibly (4)
A variety of distribution barriers are detailed in Table 1.19. This
question was left open-ended as to not put any limitations on answers
provided by producer respondents.
15
Table 1.20
Do you have storage capacity for all of your
agricultural products?
Yes (18)
No (6)
Some (2)
Working on it (2)
Table 1.21
Do you have a packing house for washing and
packing of your produce?
Yes (10)
No (18)
20 producers indicated in Table 1.01 that their primary or secondary
commodity is vegetables. Only 10 respondents answered that they have
a packing house for washing their produce. This gap in infrastructure
indicates that the food hub facility may be able to fulfill a role in
processing and packing of fresh cut and or frozen produce. Preparing
fresh cut and frozen products is a great way to create products for
institutional buyers. Food Hub Operators must work with potential
buyers to indicate their product specifications so that buyers are getting
a product they want and that is convenient for their operation. Branding
and communication with customers is very important, especially now
with more consumers shifting their buying patterns and focusing on local
and sustainably produced products. Branding and Marketing will be an
important part of the potential food hub business plan.
Table 1.24
Do you use your own farm label or other branding
collaborations when your product is packed for delivery?
Yes (17)
No (11)
In the Process (1)
N/A (2)
What barriers have you experienced in distributing your
agricultural products?
Cost
Communication with buyers/customers
Time
Labor
Infrastructure (refrigeration, docks)
Logistics
Distance to Markets
Managing Supply and Demand
No barriers
16
The following 4 tables identify surveyed producers experience with food
safety. As previously mentioned distributors often require different
certifications. Identifying distributors’ conditions and then working with
producers selling into the food hub to make sure they have the
appropriate trainings or certification will help create stronger
connections between supply and demand outlets.
Table 1.22
Are you familiar with standard safe handling, washing and
packing protocols?
Yes (30)
No (2)
Table 1.23
Are you familiar with USDA grading
standards?
Yes (15)
No (13)
Somewhat (1)
When asked about food safety certifications, 20 respondents out of 35
total respondents left this questions blank. This is by far the most
amount of blanks for this survey. Respondents could choose from GAP,
HACCP, GHP, Certified Organic or type in alternative certifications. It is
unclear as to whether respondents were confused by the nature of the
question or if they left the answer blank because they do not have food
safety certifications. According the AMS Organic Integrity Database,
which compiles a large range of organic certifiers, only 4 farming
operations are certified organic in Portage County. 3 respondents here
have identified that they are certified organic. Food safety and organic
certifications will allow producers to work with a larger variety of
customers. Organic Certifications help producers get a premium for
their product.
Table 1.25
Do you have any food safety certifications?
Certified Organic (3)
GAP (4)
ODA (1)
HACCP (1)
Producers selling into the food hub may have to be trained to work with
market partners. The producer group surveyed here shows strong
interest in receiving trainings if they were made available.
17
Table 1.26
Three respondents said they grow on contract, those same three
respondents were asked what percentage of their total output is grown
on contract and they answered 0-10%. This shows that there is not
much contracted buying happening with farmers. The food hub would
have to determine if they wanted to provide contracts to farmers. 11
farmers indicated in Table 1.28 that they are currently conducting pre-
season crop planning with their customers.
Pre-season crop planning can be an important factor in food hub
planning so that producer partners are growing a variety of crops which
will work to diversify offerings of the food hub to their buyer partners.
A food hub facility can act as a middle man and identify demand from
buyers and then plan with farmers to meet that demand in the next
season.
This planning can be a way to balance supply and demand which is most
often a tricky aspect of food hub operations. 20 producers indicated that
they would be willing to work on pre-season crop planning if they were
to be connected with market partners willing to buy their products
(Table 1.29).
Table 1.27
Do you currently grow on contract?
Yes (3)
No (27)
N/A (1)
Table 1.28
Do you conduct pre-season crop planning with any
of your current customers?
Yes (11)
No (14)
N/A (2)
Table 1.29
Would you be willing to work on pre-season crop
planning if we connected you with a distributor
interested in selling your products?
Yes (17)
No (8)
Would you be willing to receive training to expand your
market or work with a wholesale distributor?
Yes (26)
No (7)
Maybe (1)
18
Pre-season crop planning may not always come with a contract. As
indicated in Table 1.30 growers are only slightly interest in entering
contracts with the food hub facility. If contracts are not in place in the
startup stages of the food hub facility, they could be an option later on in
the business plan when producers have a stronger trust in the ability of
the food hub to secure demand partners and sell the producer partners
produce at a competitive price point.
Table 1.30
Which of the following statements best describes you?
I would prefer to grow on contract with the ability to sell
additional produce to the food hub without a contract (8)
I would like to grow for the packing house but not on
contract (9)
Not Sure (3)
Interest in Food Hub
Food Hubs are new and emerging trends. Producers were asked about
their familiarity with and interest in food hubs to assess the feasibility of
a potential food hub within Portage County. Surveys that were
conducted at the scheduled Producer Meetings created more familiarity
about food hubs for producers. These meetings had project team
members available to present on food hub capabilities and opportunities.
The more producers learn about the potential of a food hub, the more
they may be willing to participate. 62% of respondents are familiar with
the concept of a food hub (Table 1.13). While 69% of respondents
would be interested in selling their produce to a food hub facility*
(Table 1.14).
Table 1.13
Are you familiar with the concept of a food hub?
Yes (18)
No (8)
Unsure (3)
Table 1.14
How would you describe your level of interest into
selling wholesale produce into a food hub facility?
Not at all Interested (4)
Not Very Interested (3)
Somewhat Interested (13)
Very Interested (5)
Extremely Interested (6)
Need to Know More (3)
*Includes answers of somewhat interested, very interested, and extremely
interested.
Producers were asked what would make them likely to participate in a
food hub operation. Results varied as the question was left open ended.
Price was the most occurring theme. Producers want profit margins on
their produce. Wholesale prices alone will not support most farmers,
retail prices are higher than wholesale prices and having a mix of retail
and wholesale partners can help farmers get better prices on their
19
product. Moving enough volume through the food hub will also be a
way to make sure money is getting back into the hands of the producers.
Choosing the geographic location of the food hub facility is also
critical. If farmers are delivering their produce to the facility, is the facility
in a location that farmers will deliver too? Will the facility be in a
position that distributors will be able to access or incorporate the stop
into their pre-existing routes? An appropriate geographic location will
help with the convenience factor of working with a food hub facility.
Producers will want to know the business plan, invoicing system,
payment terms, product specification and further details to ensure a
partnership that is convenient for their business operation.
Table 1.31
What would make you more likely to participate in a food
hub operation?
Price*
Geographic Location
Need to Know More Information
Marketing and Distribution Plans in Place Before Opening
Ease of Access/Convenience
Volume Assurances
Access to a Shared-Use Kitchen
A Market for Surplus Crops
Ability to Differentiate Products
Not interested
* Close to retail prices; Getting a good price for my produce; Earning a
reasonable profit margin/higher volume; if the space is affordable; Strong
business model that is financially sustainable
Work and more in-depth communication will be needed with producer
partners if moving forward with a food hub operation. Producer
relationships are key to the success of a food hub operation. Without
producer input and buy-in the food hub has no supply to fulfill demand.
Table 1.32 and Table 1.34 indicate that the majority of the already
identified producers would be interested in future discussions and
information sessions on the potential of the food hub.
One producer did mention that the spring and summer are very tough
times for producers to leave the farm and take time for additional
meetings. The project team recommends meeting with producer
partners in the off season when duties on the farm are less. The project
team also recommends that identifying a larger amount of producers
and with a range of products to offer for sale into the food hub facility.
Table 1.32
Would you participate in future food hub
information sessions scheduled this spring and
summer?
Yes (16)
No (7)
Possibly (7)
20
Table 1.34
Can we contact you about the food hub?
Yes (26)
No (5)
B. Buyer Interest
Restaurants
A limited number of locally owned restaurants and food trucks are
interested in sourcing from local producers. A few purchase from local
suppliers and Sirna & Sons distributors. They also shop seasonally at
farmers markets and farm stores. Those attending focus groups were
interested in connecting with more producers and suggested a database
for contact information and seasonal availability from producers.
None of the buyers were familiar with Ohio Market Maker or other
existing online platforms. Buyers said they would be interested in
platforms similar to the Lake to River Coop online marketplace if order
was easy and delivery was reliable.
They described themselves as relationship based buyers --- more
interested in quality, reliability and price considerations – as opposed to
GAP compliances. Most of the restaurant buyers expressed interest in
buyer and seller forums, where they could meet producers during the
winter months and engage in joint planning.
Farm to College
Kent State University (KSU) and Hiram College would be ideal
future partners for an aggregation and distribution hub model.
Although given these market channels would be best served by a
growth stage hub in existence for 2 to 3 years operated by 30 to
40 small to mid-size farmers. The facility would need to carry
group GAP and each of the individual farms would need to be 3 rd
party GAP certified.
21
Hiram College is currently served AVI Foodsystems which has a
track record of sourcing from local and regional food distributors.
In the interim, technical support could be provided to agricultural
producers at a scale to sell to AVI.
Kent Natural Foods Cooperative
The Kent Natural Foods Coop is completing a
renovation to their store and expect to have increased
ability to source local produce and other refrigerated
value-added products.
The expansion will include a new walk-in cooler for cold storage.
Currently they source from individual agricultural producers and are
open to purchase from an aggregator or eventual food hub. Management
expressed similar concerns to other foodservice buyers about reliability,
price, seasonal availability and quality assurances.
Lake to River Cooperative
The managers of the Lake to River Coop are
definitely interested in partnering with producers
in Portage County. They are open to assisting with
future coordination between northeast Ohio
food hubs and would be interested in possible
collaborations that could lead to Farm to School
and Farm to College market channels. They also expressed a potential
interest in providing support and training to producers who would want
to join their coop prior to the formation of a Portage County hub.
Processors
Owner Tom Lane of
Innovation Foods
attended all of the food
hub meetings and focus groups and spoke to his interest in working with
Portage County agricultural producers to source ingredients for his
prepared meals.
Innovation Foods mission is based on the belief that everyone deserves
access to nutritious meals daily. The company operates from Twinsburg
in a new facility creating prepared meals for childcare centers, schools,
businesses and senior living facilities throughout Northeast Ohio.
Innovation Foods employs both a full-time Executive Chef and a full time
registered dietitian who work hand-in-hand to create innovative,
flavorful, and nutritious meals. Mr. Lane and his executive chef have begun
working with producers over the winter to begin sourcing more local
ingredients for their recipes and product lines.
22
Sirna & Sons
Sirna & Sons Produce is a fourth-generation,
family-owned wholesale food distributor. The
has three locations and is headquartered in
Ravenna. Sirna & Sons purchase from larger
produce growers across the nation and Ohio.
The distributor’s market channels include
healthcare facilities, restaurants, hotels, country
clubs, and institutions throughout Ohio, western and central
Pennsylvania, northern West Virginia, northern Kentucky, and eastern
Indiana. According to their website Sirna & Sons relies on a dedicated
network of local Ohio farms and participates in the Ohio Proud brand
program.
Initially active on the food hub steering committee, they are still
interested in the project, although recognize that they need to source
from larger producer throughout northeast and central Ohio. Their
commitment to local sourcing is rooted their companies values. But as la
large regional distributor they have specific requirements on volume,
price, licensing and quality assurances that many current Portage County
producers cannot meet. If a food hub begins to aggregate produce they
would consider future partnerships if their stipulations could be met by
the hub.
Other hubs throughout northeast Ohio are interested in coordinating
with any future model developed in Portage County. Many of the
existing food hubs and those still in the early stages of development
want to stay connected through the Northeast Ohio Food Hub
Network.
23
A. Food Hub Models
Defining Food Hubs: Over the past decade a new model for the
aggregation and distribution of local/regional food has emerged in urban
and rural centers. Commonly referred to as Food Hubs these facilities
have attempted to connect local agricultural supply to the growing
demand by wholesale buyers for local food. The U.S. Department of
Agriculture’s (USDA) working definition of a food hub is a “business or
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” (USDA James Barham et al. 2012, 4).
With strong support from the USDA for this model recent economic
analysis identifies that there has “a proliferation in the number and
recognition of ‘food hubs’ across the United States, as well as a
substantial increase in foundation and public funding to support their
development. In addition to generating economic value within a local
economy, funders and policy makers are also acutely attentive to the
impact of food hubs on local agricultural producers.”2
Portage County could easily replicate a number of hub models in
targeted neighborhoods. But for food hubs to be financially viable they
need to serve mid-size farm operators, as well as small producers or
beginning farmers. An urban hub can encourage aggregation that
2 Assessing the Economic Impacts of Regional Food Hubs: the Case of Regional Access Todd M. Schmit, Cornell University Becca B.R. Jablonski, Cornell University David Kay, Cornell University December 2013
combines produce and processed food lines sourced from urban
farmers and specialty food processors, as well as rural producers to
reach the scale necessary to be sustainable. Distribution, processing and
marketing services would add to the number of new business starts and
job creations within targeted neighborhoods.
Food hubs as business models are derived from a variety of goals. The
characteristics of the model directly relate to the November 2012
PCRPC Plan for a Food Hub in Portage County. The objectives include:
Economic Development to Stimulate Underserved Communities: As the
demand for local foo grows, recent studies indicate that food income
spent at a local level creates a multiplier effect. Some professionals
conclude that by keeping food dollars local can have a multiplier impact
up to 1.4 to 2.6 times within a local economy over food coming from
greater distances.
Job Creation: Food hubs create jobs for food and farm producers along
the supply chain from seasonal production, to packaging, marketing and
distribution. For agricultural producers, hubs encourage smaller farmers
or direct marketers to expand acreage for product, transition from
commodity crops and invest in more food workers to harvest specialty
crops. According to a recent University of WI-Madison study, 2.2 jobs
are created for every $100,000 in local food sales.
3. Market Analysis: Understanding the Food Hub Model
24
Sustainable Livelihoods for Agricultural Producers: Small farmers and
direct market growers could benefit from the significantly higher market
value of fresh market crops by converting acreage from commodity
crops. Sales per acre for fresh market vegetables range from $5,000–
10,000 vs. $200–1,100 for commodity crops. Food hubs can also help
farmers market value-added products produced on the farm or in
licensed facilities operated as kitchen incubators or by co-packers.
Increased Healthy Food Access: The increased production of specialty
crops can address food insecurity in underserved areas of a county.
Easier access to fresh produce can offset community health issues of
residents to combat obesity, hypertension and many other diet-related
health issues and diseases.
Environmental Impact: On average, each fruit or vegetable purchased in
the Midwest travels 1,500 miles from farm to plate. The previous study
confirmed the available land in Portage County that could be utilized for
agricultural production. Creating new outlets and distribution systems
for local and regional food could preserve farmland and decrease the
carbon footprint of food being truck into the county
From the analysis and focus group input, in the next 10 years Portage
County could benefit from the development of 3 to 4 types of food hub
and shared-use processing facilities. These could include:
1. Privately owned food hubs owned and operated by urban
growers and rural farm operators aggregating and distributing a
range of produce, shelf stable product lines, meat and dairy
products under one food hub marketed brand. A facility of this
size could range between 4,000 to 10,000 square feet and serve
10 to 40 farmers through collective ownership. Food hub staff
can constitute 3 to 4 full-time equivalents and would most likely
need $500,000 to $1,000,000 in annual sales by year 3 to reach
financial sustainability.
This model is most often driven by the desire of agricultural
producers to band together to diversify into wholesale market
opportunities.
2. Social Enterprise food hubs managed by non-profits or multi-
stakeholder cooperatives. Many of these models may primarily
focus on produce, meat and dairy, but also includes micro-
processing capabilities for fresh cut, vacuum packed and frozen
food production. These types of facilities can range in size from
10,000 to 100,000 square feet, and can serve a larger mix of
farmers and processors and usually create 5 to 8 full time
equivalent jobs to manage the operations and financial
management.
Many agencies serving developmentally disabled individuals have
designed social enterprise hubs to create employment programs
and respond to healthy food access issues in underserved
neighborhoods. There are a number of these types of hubs in
Ohio in metro areas.
3. Private or publicly held shared-use processing and distribution
hubs are emerging as growth firms graduating from kitchen
incubators are co-locating in shared facilities. These models are
very early stage and are dependent on successful kitchen
incubator programs that need the next level of infrastructure
for graduating tenants. In general each tenant or partner has
25
dedicated processing rooms for their operations and to comply
with licensing requirements.
To increase financial viability the co-locating partners will share
centralized packaging, shipping, distribution and warehousing
infrastructure. These facilities may also share office, accounting
and marketing staff and office equipment as well to reduce
overhead for the individual processors. The hope is that these
models will impact higher job creation and retention impacts as
the growth businesses generally can create 10 to 20 jobs in their
individual operations and the facility may have additional shared
staff to manage the facility and office operations. Many economic
development professional view this model as having the greatest
impact
4. Food Innovation Hubs are often affiliated with larger
partnerships and often championed by land grant universities to
create larger scale facilities that focus on entrepreneurship
pipelines, introduction of new technology for processing
innovations to meet new market demand and create workforce
interventions to accelerate job growth and new business
development in the food sector.
These models are typically held by universities or regional
economic development partnerships as strategic interventions
for economic impacts in neighborhoods, development districts
and rural sub-regions. In size and impact they are similar to the
private or publicly held models, and have significant investments
from grant programs and workforce development funding.
The analysis recommends that a thorough understanding of the
conditions, opportunities and obstacles of infrastructure development
and a targeted site selection to situate these facilities in underserved
neighborhoods could have both social well-being and economic impacts
to the county through job creation, new business development and tax
revenue. It would be advisable to over time develop a diverse
infrastructure of hub models to have the desired economic impacts.
The challenge of the past year is to come up with a roadmap and
timeline for hub development that builds on prioritized interventions
and staged investment and market opportunity.
To more deeply understand the models this section will review a few of
the long standing models of success nationally and then turn to short
competitive analysis of established or start-up hub models in northeast
Ohio.
B. Food Hub and Distribution Logistics Models
Case Study: Regional Access, LLC in Upstate New York
The 2013 study: Assessing the Economic
Impacts of Regional Food Hubs: the
Case of Regional Access lead by a small
interdisciplinary team at Cornell (Todd
Schmit, Dyson School of Applied Economics
and Management; Becca Jablonski,
Department of City and Regional Planning;
26
and David Kay, Department of Development Sociology/the Community
and Regional Development Institute), utilized funding from an
Agricultural Marketing Services Cooperative Agreement to design a
best-practice methodology to evaluate the economic contributions of
food hubs on their local economies and the mid-scale farms aggregating
through hubs.
The framework developed was utilized to create a case study analysis of
a food hub located in Upstate New York, Regional Access, LLC. “A
community-oriented, grassroots company, Regional Access was built on a
vision of providing ecologically responsible, locally grown food in
Upstate New York. From humble beginnings in founder Gary Redmond’s
3 http://regionalaccess.net/history-of-regional-access/
garage to their current spacious modern warehouse, the company has
flourished over the last 24 years, helping to redefine regional food
systems and pave the way for a myriad array of new businesses and
social efforts focused on improving and developing more sustainable
food connections.”3
A mature food hub committed to sourcing from local farmers, Regional
Access was established in 1989 and by 2011, operates with $6 million
in annual revenue. During the case study review, Regional Access
employed 32 full-time equivalents, operated 9 vehicles and a 25,000
square foot warehouse, delivering over 3,400 product listings to buyers
in New York State. The food hub sells to over 600 customers, including:
residential households, restaurants, institutions, other distributors,
fraternities and sororities, buying clubs, retailers, manufacturers, and
bakeries. Regional Access purchases products directly from 96 farm
vendors, the majority in New York State and 65 specialty processors, as
well as from conventional supply chain sources.
By applying the methodological framework the study authors found that
food hubs have the greatest impact of increasing market access for
farms. Interviews were conducted with 30 food hub farm operators,
representing 35% of all farms selling to the food hub located in the state
and selling more than $100 of products in 2011. Of the 30 farms
interviewed 37% were classified as ‘small’ ($1,000-$249,999 in gross
sales), 43% were classified as ‘large’ ($250,000-$999,999 in gross sales),
and 20% were classified as ‘very large’ ($1 million or more in gross
sales). The distribution of farms by primary commodity category was
37% meat and livestock, 30% fruit and vegetable, and 33% value added
products (including cheese, butter, yogurt, honey, maple syrup, wine and
juice).
27
Additionally, the study authors found a gross output multiplier of 1.82,
indicating that for every additional dollar of final demand for food hub
products, an additional $0.82 is generated in related industrial sectors.
Case Study: Great River Organics Columbus, Ohio
Great River Organics (GRO),
started in 2014 is a farmer-owned, non-
profit cooperative comprised of
growers committed to expanding the
footprint of local, certified organic
products in the central Ohio
marketplace. According to their website “GRO was born of our
growers’ passion for providing central Ohio consumers with a diverse
range of locally and organically grown produce of the highest flavor,
nutrition and quality—while honoring both the farmer and the
environment.”4 Although the farmer-owners are situated in the rural
outskirts of Columbus the aggregation facility is at 4561 East F5th
Avenue adjacent to Port Columbus International Airport. Farmer coops
or other farmer-owned distribution companies will often locate facilities
in urban centers to be closer to markets.
The food hub value proposition is to grow regional farm businesses,
preserve central Ohio farmland and provide a larger-scale, local option
for customers to select organic produce. Each of the farm members are
certified organic and combined have 60 years of farming
experience. That commitment to organic is at the core of their mission
and takes advantage of the growing demand for both local and organic
4 http://www.greatriverfarms.org/
produce produced grounded in GRO’s values of sustainability,
transparency and ethical growing practices
Still in the early stages of hub development, GRO as a farmer coop is
connecting with larger market partners such as the Whole Foods store
in Upper Arlington and other grocery chains in central Ohio and
Portage County, as well as Green BEAN Delivery. Featured last summer
on the cover of Edible Portage County magazine, their brand continues
to attract customers and larger buyers who are motivated to buy local
and organic.
To increase the financial viability of the hub, GRO also sells directly to
Columbus area customers through Great River Market Bag, a multi-farm
CSA share of Ohio’s best certified organic produce. Their marketing
message reflects GRO’s competitive positioning in the marketplace:
“Great River Organics is a farmer-owned, non-profit cooperative. That
means there’s no middle man. Your CSA share always comes directly
from our fields to your table. We're not a for-profit business. We're not a
software company. We're a group of highly skilled and experienced
farmers, joining together to bring the highest-quality certified organic
produce to you and your family.”
28
Case Study: Red Tomato--Boston, Massachusetts
Another long standing model is Red Tomato
outside of Boston, Massachusetts that has
shifted from a pure food hub to a supply chain
logistics business. In Red Tomato’s early days,
the company managed their own delivery
trucks and warehouse. They picked up the
product from the network of farms,
aggregated the product, managed the
warehousing and did all the distribution to their various market
channels. “After several years of trying to do it all, our team realized
that the resulting wear and tear was actually limiting our growth. In
2005, the team decided to divest of our warehouse and trucks. Instead,
our distribution plan now relies on farmers with storage capacity to
5 http://www.redtomato.org/logistics/
aggregate product, and farmers, distributors or third party logistics
companies to move the product to its final destination.”5
The shift to a logistic base model has allowed the company to grow,
both in revenue, sales and profitability, allowing the staff to focus on
what they believe they do best: customer service, marketing and
product development. In consequence they have also brought better
income results to their farmers and increased the affordability of fresh,
local food to their customers, many in underserved urban markets.
29
Study: Azoti Local Food Solutions—Columbus, Ohio
A more local, logistics model is
Azoti.com Local Food Solutions. The
company’s goal is to provide value to
everyone in the food supply chain so large
buyers can justify local food price
premiums. Opened in in the spring of
2012, in Columbus they have spent the
past four years identifying and working
with small agricultural producers.
Primarily working as software-as-a-service platform consists of two key
modules: Demand Planning and Just in Time Inventory that allows
large buyers and distributors to engage with small local producers
through a centralized ordering and delivery platform. Azoti focuses on
the marketing benefits of local food. By working with corporate buyers
they bring a hybrid CSA model to a base of local food customers
conveniently to their workplaces.
In Central Ohio, Azoti works with about 30 local farms and makers of
artisanal food such as baked goods, honey and cheese. It has about 500
subscribers who get deliveries through 35 employers, churches and
schools. Local distributors are Columbus-based DNO Inc. for produce
and Johnstown-based Oink Moo Cluck Farms for meat.
Consumers get custom orders of fresh local meat and produce, farmers
get a stable subscriber base, distributors get new local suppliers and
customers, and participating HR managers get to look like heroes for
providing a convenient way to take home healthy food.
30
For the owners of Azoti, “Local food has always been about value for health, soil and the environment; now you can get that same value plus tangible ROI for all
participants”1 according to their marketing messages. They diagram their leverage point as the development of a supply chain that captures value for all the
stakeholders in the local food value chain.
31
C. Retail Market Model
Case Study: Celebrate Local—Columbus, Ohio
Local stores such as Celebrate Local, started as an initiative of the
Economic & Community Development Institute (ECDI) have
demonstrated the demand for local and regional food products. In
recent years the Celebrate Local has become a separate social
enterprise as the retail home to more than 300 Ohio artisans, small
businesses and agricultural producers.
Their first location opened in Easton Town Center with 60 local
producers and after 2 years expanded to a larger storefront in January
2013 to accommodate the growing demand of customers and new
vendors.
In 2015, Celebrate Local opened their second retail store at Liberty
Center serving customers from the Dayton and Cincinnati area. A new
online marketplace brings hundreds of Ohio-made products to
customers all across the nation.
Many central Ohio specialty food processors, craft beverage makers,
farmers and makers have not only benefited from expanded market
access, but also receive small business support services to grow their
individual businesses from market partners like Celebrate Local, Whole
Foods and the Hills Market. Columbus is experiencing a renaissance, like
many urban places, in the artisanal food sector. Having integrated
infrastructure that supports these types of businesses in the city or
targeted neighborhoods can accelerate job growth through ownership
and microenterprise sector development.
32
Case Study: The Wild Ramp—Huntington, West Virginia
When the Wild Ramp market
was launched in the summer
of 2012, Huntington did not
have a year-round farmers
market.
The Wild Ramp began as the Capstone project of three Marshall
University students, Christa Galvin, Kelly Cox and Lauren Kemp. Almost
5 years later Lauren continues as a Wild Ramp board member and staff
of Unlimited Future Incorporated which played a key role in supporting
the development of the market model.
The first meeting dedicated to the concept of a local foods market was
held in January 2012. A core group of citizens quickly came together and
some of those citizens visited, Local Roots Market & Cafe, a local foods
store located in Wooster, OH. Tri-State Local Foods, a non-profit
organization, was formed and the search for a location began.
The entrepreneurial spirit at Heritage Station seemed like a perfect fit
for a local foods market. A lease was signed and renovations began.
Meanwhile public calls were put out to local farmers and producers and
interest meetings were held. A blog was started to document the
process and promote the concept of local foods and seasonal eating. The
Wild Ramp opened for business on July 12, 2012. Those first few days
The Wild Ramp was an open-air market as we awaited our final
renovations and occupancy permits.
In 2014, the Wild Ramp moved to their current location in Old Central
City, in the west end of Huntington. This location has provided the space
and customer support for significant growth. In 2016 the Wild Ramp
installed a commercial kitchen for additional food entrepreneurs to
operate from and provide prepared foods and beverages.
In 2016, the Wild Ramp hit a new milestone. According to their annual
report the Wild Ramp has returned over $1.2 million to local producers
and artisans since opening in 2012, The Wild Ramp was open 357 days
during 2016, closed only for Sundays, holidays, weather days, and 3 days
for power outages and maintenance. That translates into 2,785 hours
that producers' goods were available to consumers and the producers
could be on their farms or in their studios, producing and creating more
goods in order to grow their businesses. In 2016, The Wild Ramp had
123 registered farmers and 35 registered artisans, for a total 158
producers; 124 had sales throughout the year. Of the $358,900 in sales,
$276,873 were returned to producers.
33
D. Northeast Ohio Food Hub Models
Lake to River Cooperative Online Market
Lake-To-River Food Cooperative is
a member-owned, multi-level
cooperative of food producers,
processors, and institutional and
retail buyers who grow, add value
to, market and prepare agricultural
products in the Mahoning Valley and
throughout northeast Ohio.
Comprised of 22 farmers and
value-added food entrepreneurs,
L2R provides marketing, sales,
aggregation and delivery of products including fruit, vegetables, grassfed
and conventionally raised meats, eggs, locally produced cheese, granola,
peanut butter and much more.
Established in 2011, L2R has succeeded in growing its sales more than
300% in its first two years. The Co-op’s uniqueness lies in its multi-level
stakeholder structure putting producers and workers at all levels of the
food value chain into a cooperative, rather than competitive production
and delivery system. Capturing value for others within the co-op
through marketing, distribution and value-adding helps all members
retain value; this retained value can be passed up and down the value
chain to help strengthen sustainable and profitable ways to get more
fresh, whole, locally grown food directly to consumers and retain more
wealth for producers.
Rather than seeking the cheapest food possible (locally, paying the
“Bottom Dollar” or seeking “everyday low prices”) consumers see their
purchases as investment in preserving and growing local and regional
food capacity. The Cooperative structure, which has members at all
stages of the value chain, makes more people available to educate our
region about the worth of agriculture and locally grown food in building
community and increasing opportunity for farmers and food
entrepreneurs.
L2R conducts outreach and establishes relationships with numerous
faith-based groups resulting in regular, monthly sales of farm products to
local churches for fundraising events. One remarkable example of
success is at St. Patrick Church, Youngstown which purchases more than
125 lbs of locally raised ground beef from River Bend Farm, a L2R
member, for its monthly fundraising spaghetti dinner. Fr. Ed Noga, pastor
of the church in this economically hard-hit southside neighborhood
points out to the entire Mahoning Valley at every opportunity the
importance of “keeping it local to help grow our communities. It takes a
little bit more effort, but it makes a difference.”
L2R has initiated, promoted and manages a farmers market inside St.
Elizabeth Health Center Main Campus which attracts physicians, nursing
and administrative staff and the public. In collaboration with HMHP, L2R
administers the Fruit and Vegetable Rx program which furnishes a
monthly voucher for $25 in local produce to patients with a medical
condition affected by diet. The considerable efforts of L2R and HMHP
help this successful program bring $20,000 in sales to farmers in
Mahoning, Trumbull and Ashtabula counties annually and healthier food
to the more than 180 patients who benefit directly.
34
Recently, L2R Cooperative identified the need to simplify inventory, and
order-taking and make products more accessible to customers. L2R
Online Market is now used by schools, restaurants and individual
customers to quickly identify the range of products available and
conveniently purchase them; different databases for different price
structures, promotes producers and processors throughout the region
and provides valuable information about buying habits to aid in future
planning for crops, staff and infrastructure.
The e-commerce site’s functionality and processes provide a convenient,
fully integrated platform to buy, sell and distribute local food. L2R has
gathered feedback from a variety of stakeholders and identified new
opportunities through previous work.
6http://www.cleveland.com/metro/index.ssf/2014/11/hattie_larlham_to_open_food_hu.html
Hattie Larlham Food Hub
Hattie’s Food Hub officially opened
its doors to Akron residents in June
of 2016. As community members
gathered for the grand opening
celebration, Dotty Grexa vice
president of vocational services at
Hattie Larlham shared “Today is the
result of an ongoing and positive
conversation with our neighbors and
the greater Akron community,” said “We are honored to be a part of
this community. We hope to serve our neighbors for years to come.”
Hattie Larlham is a non-profit that works with people with disabilities,
will open the North East Ohio Food Hub and Workforce
Development Center. The organization was allocated $250,000 in
state funds this year to create the Food Hub, which houses a
produce-processing kitchen, community space and a market. An
innovative food-processing hub, operated by people with
developmental disabilities, will open in Akron and serve four
counties.6
Sitting on a once-vacant lot Hattie’s Food Hub provides a new corner
market in the Cedar-Douglas neighborhood. The neighborhood will
benefits from access to fresh, locally grown produce. Hattie’s Food Hub
is a strong addition to Northeast Ohio’s farm-to-table movement.
Working with local growers and small start-up businesses, Hattie’s Food
Hub supports the local food economy while changing the way the
community eats. To encourage healthy eating and support better dietary
35
choices, Hattie’s Food Hub hosts cooking demonstrations and events
free of charge.
“Access to fresh, local food is vital to the health and well-being of our
community,” said Zac Rheinberger director of food operations at Hattie
Larlham. “At Hattie’s Food Hub, we foresee a community which eats
well, is well and treats each other well. We’re cultivating a community
where everyone has a place at the table.”
Hattie’s Food Hub is open Monday – Saturday, 10 a.m. – 7 p.m. The
store of the food hub accepts cash, check and MasterCard, Visa and
Discover credit cards and debit cards. EBT and WIC will be accepted
soon.
Hattie’s Food Hub also acts a workforce training program. It creates 8-
12 Akron employment opportunities for people with and without
intellectual and developmental disabilities. Working with guidance from
job coaches, Hattie’s Food Hub employees develop the technical and
social skills needed for competitive community employment.
Oberlin Food Hub
The Oberlin Food Hub is a local food aggregation and distribution
center, sourcing local goods from local farms for sale to local wholesale
buyers.
The Oberlin food hub works with established farms like The George
Jones Farm and Green Field Farm to coordinate produce delivery. The
Hub seeks to support producers in Lorain and six surrounding counties:
Ashland, Cuyahoga, Erie, Huron, Medina, and Wayne. The Oberlin
Food Hub also works with a collaborative of other projects such as the
Lorain Incubator Kitchen, Farm Fare and the New Agrarian Center to
fosters network coordination of local food systems.
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Lorain Incubator Kitchen Cooperative
The Lorain Incubator Kitchen Cooperative (LIKC) was incorporated in
2013 in response to the need for infrastructure in Lorain County,
OhioH to support food-based entrepreneurs. LIKC is led by Dr.
Chester Bowling, who recently retired from The Ohio State University's
Cooperative Extension Center, where he helped build organizations
that enable community and economic development through agriculture.
LIKC pursued development of an incubator kitchen in Lorain, Lorain
County's largest and most economically depressed city, orchestrating an
opportunity to acquire donated equipment from a closing hospital and
re-purpose it into a commercial kitchen for the Lorain's Boys and Girls
Club of Lorain County. LIKC is pleased to bring their incubator kitchen
expertise to an Oberlin-based incubator kitchen that is co-located with
a wholesale aggregation and distribution.
New Agrarian Center
The New Agrarian Center (NAC) has created and promoted healthy,
sustainable, and equitable local foods systems in northeast Ohio since
2001. An independent non-profit located on land leased from Oberlin
College on a long-term basis, its goal is to make healthy, sustainably
grown food available to everyone, regardless of income, and to act as a
workforce development center for those interested in choosing
sustainable farming as a career path. NAC does this through two key
programs: the George Jones Farm and City Fresh.
n 2005, Brad Masi and Maurice Small, employees of the non-profit
organization now known as New Agrarian Center, along with a crew of
farmers, volunteers, and OSU educators, organized the first Community
Supported Agriculture (CSA) distribution location in the Clark-Metro
neighborhood in Cleveland. A year later, the mission expanded to
include 3 distribution locations, or “fresh stops”. Soon after, the
program now known as City Fresh expanded to include more than 15
fresh stops throughout Cuyahoga and Lorain counties. Since 2006, City
Fresh and its army of volunteers have helped move more than 1.5
million pounds of fresh, naturally-grown, local produce into our urban
core.
Ashtabula Food Hub
The Ashtabula Local Food Council
focuses on three distinct areas of
local food work: Community,
Growers, and Policy. In 2015, the
council worked primarily to “get off
the ground”. Every food system has a series of vital parts, and the
Ashtabula Local Food Council consider it our highest priority to focus
on the growers that produce our food and the communities they
serve. Ashtabula County has a proud heritage of food and agricultural
traditions.
The first project established an online Local Food Guide for Ashtabula
County, since then they have hosted a Growers Summit, and have
recently begun a Food Hub Feasibility study, started Geneva Farmers
Market, held a Local Food fundraising event, hosted a summer film series,
and held a canning workshop for Ashtabula County Community Action
Agency’s My Neighborhood.
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In 2016, the council emphasized community education efforts, took
further steps to increase food access in Ashtabula County, cooperatively
marketed area farmers markets, and hosted a series of farm tours.
Since the inception of Ashtabula Local Food Council, has made a series
of small steps with the ultimate goal of forming a food hub in Ashtabula
County. Currently a site has been secured to house the hub and the
council is holding our stakeholder meetings with agricultural producers.
Fresh Fork Market
Fresh Fork Market is a Farm Buying Club —
providing members with a weekly subscription
service to fresh and local foods. Fresh Fork
operates year round providing a Summer and a
Winter seasonal shares that include produce, meat,
eggs, dairy, breads, canned goods, pastries, granolas
and more. Every week, members meet one of our
refrigerated trucks in their community and pick
up their grocery grab-bag filled with local food.
Fresh Fork sources from over 100 farmers and producers to bring
together our weekly share of high-quality food for to sell to 3,000+
families. From Amish farmers to local kombucha brewers. A few of
our suppliers are a little farther away, such as Snowville Creamery and
Shagbark, b Seed and Mill in the Athens area. Lucky Penny of Portage
County sells through Fresh Fork Market
Fresh Fork has more than 20 weekly pickup locations around Northeast
Ohio. At the beginning of the season customers choose their primary
stop, and you can also pick up at any location if you need to.
C. Food Safety and Regulatory Implications
The regulatory environment surrounding food involves many players;
each assigned to work with a specific process or product. Currently, the
FDA regulates most food handling, using a uniform food code enforced
by local or county health departments. The USDA also oversees most
of the meat and poultry slaughter and processing in the U.S. The recent
2011 Food Safety Modernization Act (FSMA) expanded the FDA’s
power to regulate farm and local food production and handling.
Operations that have less than $500,000 in annual sales are generally
exempt from this legislation, unless there is a specific food safety
38
incident or recall whereby the operation is subject to FDA and local or
county health department inspections.
In 2002, the Bioterrorism Act mandated all food facilities—not including
restaurants, retail stores, farmers markets and farms—register with the
FDA. Farms that are conducting their own post-harvest handling are
exempt from registering with the FDA, but if they are providing these
services for products from other farms, they must register. Because
food hubs aggregate product from multiple farms and most do not
operate as a retail store, it is suggested that food hubs register
themselves with the FDA. This process can be done by fax, mail, or
online: www.fda.gov/ Food/GuidanceComplianceRegulatoryInformation/
RegistrationofFoodFacilities/OnlineRegistration/ default.htm
Besides registering a facility with the FDA, food hubs are not currently
government-mandated to have certain food safety certifications,
although this is now changing. Many customers, however, have specific
requirements for the food they purchase, making it in the food hub’s
best interest to comply with the needs of their customers. This practice
will also keep the food hub current with food safety regulations should
they later be mandated, and transfer knowledge to growers. Planning and
building the facility to meet these regulations will reduce the likelihood
of needing structural retrofitting later.
Essential Definitions
3rd Party GAP: GAPs are any agricultural mgt. practice or
operational procedures that reduce the contamination of fruits
& vegetables on the farm or the packing house. More buyers
require that either the farmer has received GAP training or
has been certified.
GHP: Good Handling Practices examine the post harvest
handling of produce. Basics steps include: written
documentation, contaminant protection during transport &
facility handling, wash/pack lines meet EPA microbial
requirements and worker health & hygiene policies are in
place.
HACCP: Hazard Analysis Critical Control Point plans are the
benchmark for food safety throughout the whole supply chain
that assure food is safe for human consumption. Plans identify
the risk and preventive measures in place.
The National Good Agricultural Practices (GAPs) Program
was established in 1999, funded by CSREES-USDA and US-FDA, and
based at Cornell University. The GAPs Program
has collaborators in 34 states throughout the nation and has created
many educational materials to help implement good agricultural
practices on the farm.
Good Agricultural Practices (GAP) and Good Handling Practices (GHP)
are voluntary audits that verify that fruits and vegetables are produced,
packed, handled, and stored as safely as possible to minimize risks of
microbial food safety hazards. GAP & GHP audits verify adherence to
the recommendations made in the U.S. Food and Drug
Administration’s Guide to Minimize Microbial Food Safety Hazards for
Fresh Fruits and Vegetables (pdf) and industry recognized food safety
practices. In 2015, The USDA Audit Program performed audits in 50
states, Puerto Rico, and Canada, covering over 90 commodities.
The traditional GAP approach is to audit individual farms. This makes each
farm responsible for the full administrative and financial burden of
compliance. The GroupGAP approach provides an umbrella of support, with
39
the central entity and participating producers addressing food safety
compliance cooperatively.
Group GAP:
Distributes the administrative load by clearly defining
food safety roles and responsibilities
Supports the development, communication, and constant improvement of best
practices within the system
Allows producers to access a high level of food safety
training and expertise
Improves product traceability, facilitating faster
corrective action
Provides a trusted framework for articulating compliance
to buyers
Creates transparency in every level of the operation,
building confidence in customers, managers, and
producers
GAP & GHP Audit Services Include:
Produce GAPs Harmonized Audit
USDA GAP&GHP Audit
GroupGAP
Tomato Food Safety Audit Protocol
Mushroom GAP
California LGMA
Arizona LGMA
How to Request a GAP & GHP Audit
Determine what type of audit you need. For example, your
customers may require a Harmonized GAP audit or, if you grow
mushrooms, you might need a Mushroom GAP (MGAP) audit. (see
list above)
Complete the Request for Audit Service Form FV-237A
Next select the office closest to the facility that needs to be audited,
from the list of Local Specialty Crops Inspection Division audit
offices. For non-domestic audits, please contact the national office
using the information below, under “Contact Information
Email or fax your completed Audit Request Form to the office that
you selected.
The office will contact you and confirm the receipt of your request,
give you more information about the program procedures, and
schedule your audit.
Complete an Agreement for Participation in Audit Services form FV-
651 and submit it to your auditor or to the contact below, via email
or fax.
GAP & GHP Program Logo
GAP program participants that maintain compliance with program
requirements may apply to use the GAP & GHP program
logo. Participants must submit a written request using FV-652 form,
Logo Use Request for Audit Programs. and submit supporting
documents as identified in the FV-652 form and the Instructions for the
Use of the GAP & GHP Logo.
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Contact Information
Telephone: (202) 720-5021
Fax: (202) 260-8927
Email: [email protected]
The Ohio Produce Growers & Marketers Association (OPGMA) is an
organization whose goal is to encourage and support the production of
exceptional crops, improve the business intelligence of its members, and
expand the consumption of Ohio-grown fruits and vegetables through
improved marketing and retail operations. OPGMA provides educational
and business development opportunities to any businesses associated
with the production and marketing of Ohio’s fresh produce.
Volunteers who are engaged in production and retail govern OPGMA. It
is for the industry and by the industry. A member-centric organization,
you can expect to feel like you’re a part of the OPGMA family when you
join us as a member.
Protecting the well being of our
customers should be your number
priority. It has been one of OPGMA’s
critical issues for several years.
Throughout the year, we offer articles
and other learning opportunities on this
topic.
Ohio Produce Marketing Agreement
OPGMA established the Ohio Produce Marketing Agreement (OPMA)
in 2009 to formally address the increasing fears about biological
contamination in our fresh food products. OPMA is a state-wide
voluntary program that provides a framework for food safety strategies
on your farm and inspections for those farms that require it. It is
officially approved by the Ohio Department of Agriculture.
OPMA is governed by a separate board of directors and is currently
affiliated with OPMGA through management services only.
Cannery Regulations
Ohio Revised Code Chapter 913
Definitions
Cannery - a place or building where fruits, vegetables, or specialty
products are packed in hermetically sealed containers and thermally
sterilized and the products of which are placed on the market for
general consumption as human food, regardless of where the product is
sold in commerce.
Low-acid foods - any foods, other than alcoholic beverages, with an
equilibrium pH greater than 4.6 and a water activity greater than 0.85,
except that tomatoes and tomato products having a finished equilibrium
pH less than 4.7 are not low-acid foods.
Acidified foods - either: (1) Foods that have a natural pH of 4.6 or
below; (2) Low-acid foods to which acid or other acid foods are added
and that have a finished equilibrium pH of 4.6 or below and a water
activity greater than 0.85.
Acidified foods does not include foods that are stored,
distributed, or retailed under refrigeration.
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Specialty products - food products other than fruits, vegetables, and
meats that by their natural characteristics have a potential to produce
botulism. "Specialty products" include, but are not limited to, puddings,
gravies, sauces, and fish.
Cannery Licensing
License- the document issued by the licensor that authorizes a person
to operate a food service operation or retail food establishment.
License holder- the entity that:
Is legally responsible for the operation of the food
service operation or retail food establishment such as
the owner, the owner's agent, or other person; and
Possesses a valid license to operate a food service
operation or retail food establishment.
Licensor means one of the following:
A board of health or the authority having the duties of a
board of health approved under section 3717.11 of the
Revised Code;
The director of agriculture acting under section 3717.11
of the Revised Code or 3717.111 of the Revised Code
with respect to licensing retail food establishments; or
The director of health acting under section 3717.11 of
the Revised Code or 3717.111 of the Revised Code
with respect to licensing food service operations.
Any person, firm, or corporation engaging in the business of operating a
cannery must obtain a license for the operation of each cannery from
the director of agriculture.
Obtaining a license requires submitting an application along with a $200
fee. Licenses are issued on the 30th of June and expire on that date each
year unless renewed. Licenses must be renewed each year. Renewal is
accompanied by a fee as well.
Canneries operating under a license are subject to inspection during any
normal business hours. Failure to comply with regulations may cause
licenses to be suspended, revoked or violations may have to be
corrected to continue carrying a license.
In 2015 the Food Safety Modernization Act effected ODA licensing and
regulations with regard to Cannery and Bakery licenses.
Prospective processors interested in developing thermally processed
products not exempt under the Ohio Cottage Food Law should
schedule time to meet with their regional ODA-FDA inspector
Kitchen incubators and other shared-use facilities can no longer allow
tenants or users to operate under one facility license for FDA
processing. Each producer must apply for their own license and be an
authorized processor.
Agricultural Districts
Ohio Revised Code Chapter 929
Definitions
Agricultural production - means commercial aquaculture, algaculture
meaning the farming of algae, apiculture, animal husbandry, or poultry
husbandry; the production for a commercial purpose of timber, field
crops, tobacco, fruits, vegetables, nursery stock, ornamental shrubs,
ornamental trees, flowers, or sod; the growth of timber for a
noncommercial purpose if the land on which the timber is grown is
contiguous to or part of a parcel of land under common ownership that
42
is otherwise devoted exclusively to agricultural use; or any combination
of such husbandry, production, or growth; and includes the processing,
drying, storage, and marketing of agricultural products when those
activities are conducted in conjunction with such husbandry, production,
or growth.
Agricultural production includes conservation practices,
provided that the tracts, lots, or parcels of land or
portions thereof that are used for conservation
practices comprise not more than twenty-five per cent
of tracts, lots, or parcels of land that are otherwise
devoted exclusively to agricultural use and for which an
application is filed under section 929.02 of the Revised
Code.
Withdrawal from an agricultural district - includes the explicit
removal of land from an agricultural district, conversion of land in an
agricultural district to use for purposes other than agricultural
production, and withdrawal of land from a land retirement or
conservation program to use for purposes other than agricultural
production. Withdrawal from an agricultural district does not include
land described in division (A)(4) of section 5713.30 of the Revised
Code.
Conservation practice - has the same meaning as in section 5713.30
of the Revised Code.
Application to become an Agricultural District
Any person who owns agricultural land may file an application with the
county auditor to place the land in an agricultural district for five years if,
during the three calendar years prior to the year in which that person
files the application, the land has been devoted exclusively to agricultural
production or devoted to and qualified for payments or other
compensation under a land retirement or conservation program under
an agreement with an agency of the federal government and if:
The land is composed of tracts, lots, or parcels that total not less than
ten acres; or
The activities conducted on the land produced an average yearly gross
income of at least twenty-five hundred dollars during that three-year
period or the owner has evidence of an anticipated gross income of that
amount from those activities. The owner shall submit with the application
proof that the owner's land meets the requirements established under
this division. If the county auditor determines that the application does
not meet the requirements of this section, the county auditor shall deny
the application and notify the applicant by certified mail, return receipt
requested, within thirty days of the filing of the application. The applicant
may appeal the denial of the application to the court of common pleas of
the county in which the application was filed within thirty days of the
receipt of the notice. If the county auditor determines that the application
meets the requirements of this section, the county auditor shall approve
the application and notify the applicant within thirty days of the filing of
the application. An application that is not denied shall be deemed to be
approved. The county auditor shall provide an applicant with a copy of an
approved application within thirty days of the filing of the application. An
application that is approved is effective upon the date of the filing of the
application.
Farm Markets
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What types of foods may the farm market offer for sale and
still be exempt from the Retail Food Establishment (RFE)
license?
Retail food establishment means a premises or part of a premises
where food is stored, processed, prepared, manufactured, or otherwise
held or handled for retail sale. Except when expressly provided
otherwise, "retail food establishment" includes a mobile retail food
establishment, seasonal retail food establishment, and temporary retail
food establishment.
A farm market that only offers for sale the following types of food items
is exempt from the RFE license:
Fresh unprocessed fruits or vegetables;
Maple syrup, sorghum, or honey [properly labeled];
Properly labeled products of a cottage food production
operation;
Cider and other juices manufactured on site at the farm market
[properly labeled];
Eggs on the condition that the farm market operator is
selling eggs from his own flock of five hundred or fewer birds;
Poultry on the condition that the farm market operator offering
to sell the poultry annually slaughters one thousand or fewer
chickens of his own raising;
Non-amenable meats (rabbit, bison, etc.) on the condition that
the non-amenable meats that farm market operator is offering
to sell are raised by him; and
Commercially prepackaged food that is not potentially
hazardous, on the condition that the food is contained in
displays, the total space of which equals less than one hundred
cubic feet on the premises where the person conducts business
at the farm market.
Federal Food Production Standards
“The FDA Food Safety Modernization Act (FSMA), the most sweeping
reform of our food safety laws in more than 70 years, was signed into
law by President Obama on January 4, 2011. It aims to ensure the U.S.
food supply is safe by shifting the focus from responding to
contamination to preventing it.”
The Standards for the Growing, Harvesting, Packing, and Holding of
Produce for Human Consumption outlines science-based minimum
standards for the safe growing, harvesting, packing, and holding of
produce on farms.
Produce Safety
The FDA Food Safety Modernization Act (FSMA), signed into law by
President Obama on Jan. 4, 2011, enables FDA to better protect public
health by strengthening the food safety system. It enables FDA to focus
more on preventing food safety problems rather than relying primarily
on reacting to problems after they occur.
As a key element of this preventive approach, FDA was mandated under
FSMA to establish science-based, minimum standards for the safe
growing, harvesting, packing, and holding of produce on farms to
minimize contamination that could cause serious adverse health
consequences or death.
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Key Requirements for the Produce Safety Final Ruling
Water quality criteria based on eliminating potential e.
coli contamination
Soil amendment rulings to minimize contact of
produce with manure or compost contaminants during
and after application
Sprout regulations on testing seeds, growing location,
and water sources to prevent contamination and food
borne illness
Measures to prevent contamination from wild or
domesticated animals
Worker Training and Health and Hygiene
requirements that will prevent possible contamination
Appropriate storage, maintenance and cleaning of
Equipment and Tools
See Table Below for information on EXEMPTIONS to any of
these rulings
http://www.fda.gov/downloads/Food/GuidanceRegulation/FSMA/UCM47
2499.pdf
45
Compliance Dates
Compliance dates for covered activities, except for those involving
sprouts, after the effective date of the final rule are:
Very small businesses, those with more than $25,000 but no more
than $250,000 in average annual produce sales during the previous
three year period : four years
Small businesses, those with more than $250,000 but no more than
$500,000 in average annual produce sales during the previous three
year period: three years
All other farms: two years
The compliance dates for certain aspects of the water quality
standards, and related testing and recordkeeping provisions, allow an
additional two years beyond each of these compliance dates for the
rest of the final rule
Compliance dates for modified requirements for farms eligible for a
qualified exemption are:
For labeling requirement (if applicable): January 1, 2020
For retention of records supporting eligibility for a qualified
exemption: Effective date of the final rule
For all other modified requirements:
o Very small businesses, four years after the effective date of the
final rule
o Small businesses, three years after the effective date of the final
rule
Labeling and Packaging
Packaging Definitions
Reduced oxygen packaging - the reduction of the amount of oxygen
in a package by removing oxygen; displacing oxygen and replacing it with
another gas or combination of gases; or otherwise controlling the
oxygen content to a level below that normally found in the surrounding
atmosphere, which is approximately twenty-one per cent at sea level and
includes
Vacuum packaging in which air is removed from a package of
food and the package is hermetically sealed so that a vacuum
remains inside the package
Modified atmosphere packaging in which the atmosphere of a
package of food is modified so that its composition is different from
air but the atmosphere may change over time due to the
permeability of the packaging material or the respiration of the food.
Modified atmosphere packaging includes: reduction in the
proportion of oxygen, total replacement of oxygen, or an increase in
the proportion of other gases such as carbon dioxide or nitrogen
Controlled atmosphere packaging in which the atmosphere of
a package of food is modified so that until the package is opened, its
composition is different from air, and continuous control of that
atmosphere is maintained, such as by using oxygen scavengers or a
combination of total replacement of oxygen, nonrespiring food, and
impermeable packaging material
Cook chill packaging in which cooked food is hot filled into
impermeable bags which have the air expelled and are then sealed
or crimped closed. The bagged food is rapidly chilled and
refrigerated at temperatures that inhibit the growth of
psychrotrophic pathogens
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Sous vide packaging in which raw or partially cooked food is
place in a hermetically sealed, impermeable bag, cooked in the bag,
rapidly chilled, and refrigerated at temperatures that inhibit the
growth of psychrotrophic pathogens.
Labels
Labels may be submitted to the Ohio Department of Agriculture for
review and approval to the:
Ohio Department of Agriculture
Division of Food Safety
8995 E. Main Street
Reynoldsburg, Ohio 43068
Email: [email protected]
The Ohio Department of Agriculture staff can review the labels for
compliance before a product goes to market. If labels and packaging are
not in compliance with food safety regulations, inspectors can issue a
violation. Inspectors routinely visit farmers market to ensure label
compliance.
Resources to help with the labeling process
Ohio Department of Agriculture and the Farmers
Market Management Network have online training
materials available for labeling and packaging
requirements.
OSU Direct Marketing team and food system
practitioners provide extensive training on all aspects of
licensing, labeling and food safety changes.
Area kitchen incubators can also provide assistance at
many levels for home-based producers and agricultural
producers interested in going to the next level with
value-added products not under the Ohio Cottage Food
Law requirements.
BASIC REQUIRED FOOD LABELING COMPONENTS
Foods labeled in accordance with these standards are acceptable food
products that a retail food establishment or food service operation
licensed under Chapter 3717. of the Revised Code may offer for sale or
use in preparing and serving food.
A. Ingredient List – Ingredients shall be listed by common or usual
name in descending order of predominance by weight. Meaning, the
ingredient that weighs the most is listed first, followed by the next
heaviest ingredient, with the ingredient that weighs the least listed last.
Any ingredient that is composed of two or more ingredients (sub-
ingredients) shall be declared in the Ingredient List. Sub-ingredients shall
be designated in the Ingredient List by declaring the established common
or usual name of the ingredient, followed by a parenthetical listing of all
the ingredients contained therein in descending order of predominance.
Ref: CFR 21, Part 101.4
B. Statement of Identity – The Statement of Identity is the name of
the food. The name shall be the common or usual name of the food,
and shall accurately identify or describe the basic nature of the food or
its characterizing properties or ingredients. Ref: CFR 21, Part 101.3
C. Statement of Responsibility - Shall include the: Business Name,
Street Address, City, State, Zip Code
All information in the Statement of Responsibility shall be continuous. If
the business name is listed in the local telephone directory, the street
47
address may be omitted. If the business name is listed in the local
telephone directory, a Post Office Box may be used in place of the
street address. Telephone numbers, web-site addresses, and e-mail
addresses are permitted, but not required. This type of extra
information shall not be placed between the Ingredient List and the
Statement of Responsibility.
Ref: CFR 21, Part 101.5
D. Net Quantity of Contents – Ref: CFR 21, Part 101.105 Ref: FLPA,
Title 15 – Chapter 39, 1453(a)
The term “NET WEIGHT” - or an appropriate
abbreviation - shall be used when stating the Net
Quantity of Contents in terms of weight.
The Net Quantity of Contents shall be declared in both
the U.S. Customary System and the SI (metric system).
The second declaration shall be stated parenthetically.
The quantity of contents shall be placed on the principal
display panel. It shall be within the bottom 30 percent of
the area of the label panel in lines that are generally
parallel to the bottom of the package as it is designed to
be displayed.
Note: Labeling requirements for Net Quantity of
Contents is under the purview of the ODA Division of
Weights and Measures. Local enforcement is provided
by Weights and Measures programs administered by the
county Auditors’ throughout the State of Ohio.
E. Cottage Food Declaration – Food products that are
manufactured in compliance with Ohio’s Cottage Food Rules, must bear
the statement, “This product is home produced.” The statement
means that the food product was produced in a private home that is not
subject to inspection by a food regulatory authority. Ref: ORC 3715.023
F. Artwork – To draw consumer attention to the product, artwork is
frequently used on food labels. Artwork is permitted as long as it does
not misrepresent the product or renders required information difficult
to read. Artwork may not be placed between the Ingredient List and the
Statement of Responsibility. Ref: 21 CFR, Part 101.2
Cottage Food Rules
All cottage food products are subject to food sampling conducted by the
director of agriculture, or representative the director authorizes, to
determine if a food product is misbranded or adulterated. A component
of the food sampling conducted under this section may include the
performance of sample analyses
Cottage food products may not be packed using reduced oxygen
packaging.
48
Except for products obtained from a home bakery registered by the
Ohio department of agriculture, products from cottage food production
operations, and maple syrup, honey, or sorghum products produced as
provided in section 3715.021 of the Revised Code; food prepared in a
private home may not be used or offered for human consumption in a
food service operation or retail food establishment.
Definitions
"Adulterated" has the meaning stated in section 3715.59 of the Revised
Code.
CFR - Code of Federal Regulations
Cottage food production operation has the same meaning stated in
section 3715.01 of the Revised Code
Director means the director of the Ohio department of agriculture.
Misbranded has the meaning stated in section 3715.60 of the Revised
Code.
Allowable cottage food products
Non-potentially hazardous bakery products
Jams
Jellies
Candy, not including fresh fruit dipped, covered, or otherwise
incorporated with candy
Flavored honey which has been produced by a beekeeper
exempt under section 3715.021(A) of the Revised code
Fruit chutneys
Fruit butters
Granola, granola bars, granola bars dipped in candy, if fruit is
used in any of these products it must be commercially dried
Maple sugar produced by a maple syrup producer exempt under
section 3715.021(A) of the revised code
Popcorn, flavored popcorn, kettle corn, popcorn balls, caramel
corn, not including popping corn
Unfilled baked donuts
Waffle cones and waffle cones dipped in candy
Pizzelles
Dry cereal and nut snack mixes with seasonings
Roasted coffee, whole beans or ground
Dry baking mixes in a jar, including cookie mix in a jar;
Dry herbs and herb blends;
Dry soup mixes containing commercially dried vegetables, beans,
grains, and seasonings;
Dry seasoning blends
Dry tea blends.
A cottage food operation may not do any of the following
Process potentially hazardous foods
Process acidified and low acid canned food
Offer for sale adulterated or misbranded food
Refuse the taking of samples as authorized by rule 901:3-20-03
of the Administrative Code
Produce food items not expressly listed in paragraph (A) of rule
901:3-20-04 of the Administrative Code
Sell cottage food products outside the state of Ohio
Home Bakery License
A Home Bakery is defined in Chapter 911 of the Ohio Revised Code
to mean, "Any person who owns or operates a home bakery with only
49
one oven, in a stove of ordinary home kitchen design and located in a
home, used for baking of baked goods to be sold."
“Home” means the primary residence occupied by the residence's
owner, on the condition that the residence contains only one stove or
oven used for cooking, which may be a double oven, designed for
common residence usage and not for a commercial usage, and that the
stove or oven be operated in an ordinary kitchen within the residence.
Permitted Foods
Non-potentially hazardous bakery products
Cookies breads, brownies, cakes, fruit pies, etc
Potentially hazardous bakery products
cheese cakes, cream pies, custard pies, pumpkin pies, etc
Potentially hazardous foods are permitted but require refrigeration.
These foods require temperature control because it is in a form capable
of supporting the rapid and progressive growth of infectious or toxigenic
microorganisms.
Distribution
Properly labeled Home Bakery products may be sold from your Home
Bakery. Commercially produced foods may be sold through grocery
stores, convenience stores, farm markets, farmer's markets, and other
retail outlets.
Retail outlets are subject to all applicable rules and regulations
administered by local health departments, local zoning, and other
agencies.
Home Bakery products may also be served as a food item offered by
restaurants.
Home Bakeries may distribute their products outside of the state of
Ohio.
Accessing Information
Ohio Department of Agriculture web portal for licenses
http://www.agri.ohio.gov/apps/odalicensing/odalicensing.aspx
Food Processing Establishments –Current draft
http://www.ohioagriculture.gov/public_docs/ProposedRules/201
5.10.16%20-%20AMR%20-%20Food%20Processing%20Establish
ment%20Fees.pdf
Regulatory Intent - Ohio Revised Code 3715.041 requires that
individuals who operate a food processing establishment
register with the Ohio Department of Agriculture
(Department). The rule outlines the cost of the registration
which is based on the size of the establishment.
Common Sense Initiative – Business Impact Analysis
http://www.agri.ohio.gov/public_docs/ProposedRules/2015.10.19
%20-%20BIA%20-%20Food%20Processing%20Establishments.pdf
Standards for the Growing, Harvesting, Packing and
Holding of Produce for Human Consumption --- Final
Rule
http://www.fda.gov/Food/GuidanceRegulation/FSMA/uc
m334114.htm
50
A. Aggregation and Distribution Food Hub
Most food hubs are designed to fill the gaps between wholesale demand
for local food and small and mid-size farms. To be financially viable, these
new hub models need to offer a different set of services and products to
compete with regional and national produce distributors. They assist
farmers entering these wholesale market channels to address their
challenges of scaling up production, quality assurances and licensing,
while maintaining and promoting the inherent values of local and
regional foods. Hubs need to meet the volume demand, at the same time
meet the desires of increasingly discriminating customers for local or
organic produce and other locally sourced items in dairy, meat, egg and
farm value-added products.
As more produce food hubs open across the U.S. they need to be
responsive to customers and wholesale buyer’s desire for transparency,
taste quality, taste, FSMA compliances and marketing collateral.
Although specialty crop producers have been in the lead to organize and
own food hub, many of these new generation produce distribution
systems have struggled to create financial viability. Many have started
undercapitalized and have experienced a steep learning curve to master
their operational logistics and financial management. In turn, they are
also in competition with conventional produce distributors and cannot
undercut their pricing structures.
With the growing trend for local food from institutional buyer and the
expediential growth of farmers markets, specialty crop farmers have
been encouraged to the food hub model allowed farmers to band
together to reinvent local aggregation and distribution hubs to meet the
perceived consumer interest. According to Building Successful Food
Hubs: A Business Planning Guide for Aggregating and Processing Local Food
in Illinois, “agricultural producers formed hubs to overcome the following
obstacles:
Quantity, consistency, and variety of produce grown are often
insufficient to motivate a buyer to purchase from a single farm;
Investments in the certifications, cooling, and storage
infrastructure, liability insurance, and safety protocols needed
for selling wholesale are extensive; and
Many growers do not have the time, interest, or skill set to
successfully manage a wholesale sales and marketing strategy.”
All of these issues were reflected in the recent Portage County
producer surveys. By mid-March 2017, 35 producers had completed the
food hub surveys and another dozen farmers not completing surveys
had attended meetings and focus groups. Although the surveys
confirmed interest in moving forward on a food hub project, there was
not strong evidence that agricultural producers were ready to
commitment to a producer owned hub models.
First and foremost before moving forward on any of the hub models,
funding resources and partner coordination need to be utilized for
agricultural producer planning. The following recommendations can be
implemented in stages over the next 12 to 18 months.
4. Business Analysis and Model Recommendations
51
Recommendation: Partner with Portage County Extension Agent,
Robin Christensen, OSU Direct Marketing staff and ACEnet to
schedule Introduction to Market Ready Workshop and day long
Wholesale Ready training.
Recommendation: Partner with Hattie Larlham Food Hub and Lake
to River Coop to present their hub models: governance, operations,
supply chain logistics and financial management.
Recommendation: Host a half-day workshop with market partners
to address their licensing, FSMA compliances, procurement
procedures and quality assurance policies.
The core services offered by a food hub differ by business model. A
packing house typically will provide a complete range of services that
cause a product to move from the field to the customer. Some packing
houses may even offer harvesting services. Aggregation facilities and
web-based aggregators do not handle the product to the same degree,
but common to all models is aggregation, sales and marketing, and
distribution (although this may be outsourced).
B. On-line Market Model
Many food hubs get started by offering hybridized Community
Supported Agriculture (CSA) subscriptions. CSA shares draw local
customer investment and aggregation can also be accomplished without
a central facility. Although if the model offers a shares/bags that
aggregates produce from multiple farms a space for packing and
distribution is still needed. This is space that could be provided by an
agency or charitable partner free of charge.
An online marketplaces utilize technology solutions that benefit the
producers, but producers need to be willing to use the digital interface
on a daily to weekly basis. These models can be producer driven where a
single grower or a group of growers post their available products in a
given week and buyers can place direct orders, or can be run by a social
enterprise or for-profit entrepreneur outside the grower community.
Online models are competitively positioned to focus on customer
service. This model can allow the customer to pick items from a number
of different product line, fresh and value-added, allowing for weekly
choice from a number of different producers. It also creates an up to
date solution for producers and processors to only offer what is
available or in season during that week.
Many of these models combine both direct customers sales to serve
smaller wholesale buyers such as restaurants and food carts. A central
aggregation site or larger producer can either regularly drop off a
delivery to a remote collection point managed by volunteers or partners
or provide direct delivery services. Creating an online marketplace could
be a financial and operational first step toward creating a brick-and-
mortar Aggregation/Distribution Food Hub or Market Model.
Recommendation: Coordinate technical assistance support from
Melissa Miller at Lake to River Cooperative or other resource
partners to review on-line market components.
Recommendation: Identify partners willing to provide a site for
aggregation and customer pick-up.
Recommendation: Secure phase 1 funding to create
implementation plan for on-line marketplace.
52
C. Store Market Model The market model food hub has emerged in the past 5 to 7 years as
another viable opportunity for agricultural producers to partners with a
committed local customer base. The market models discussed
previously: Local Roots and the Wild Ramp have demonstrated success
because of an extraordinary commitment from volunteers who serve on
the governance boards, provide education and events activities and
volunteer labor hours to the day to day retail operations of the market.
The Wild Ramp in Huntington, West Virginia harnesses 500 hours a
month in volunteer labor to augment 4 paid staff positions.
These models often were only able to start because of affordable or no
cost space to operate from. In Wooster the Wayne County
Commissioners made an empty storefront available to the cooperative
during the start-up phase. Local Roots Wooster now operates their hub
and processing kitchen from two storefronts that serve as leverage for
public and private investment.
In Huntington the Wild Ramp started in a low-cost storefront in
downtown at Heritage Station. Leasehold improvements, building
renovations by volunteers and equipment donations and a kickstarter
campaign allowed the start-ups Board and volunteers to launch the
model on a shoe-string budget.
After two years of success in 2014, The Wild Ramp moved to their
current location in Old Central City, located in a low-income
neighborhood in the west end of Huntington. The Wild Ramp was
chosen as the beneficiary of Huntington’s “River to Rail” initiative. The
initiative secured them a new location in the town’s historic Central
City Market building with subsidized rent and $43,000 per year for five
years from the City of Huntington and the West Virginia Department of
53
Agriculture. The current facility provides nearly three times the space
and the ability to have a small commercial kitchen that generates tenant
income and food demo capacity.
Recommendation: Research partnerships and potential storefronts
in Ravenna to launch a prototype market model.
Recommendation: Identify agricultural producers, regional
processors and artisans interested in forming a planning
committee to start a producer-owned market.
Recommendation: Secure funding through USDA grant programs,
Ohio Finance Fund programs and customer capital campaign to
hire a project manager and consultants to devise business plan
and implementation model.
D. Distribution Partnerships
Although Portage County might not be ready to invest in a “bricks and
mortar” distribution food hub, on-going investment in distribution
project management could still immediately allow specialty crop and
other agricultural producers connect with current regional hubs, social
enterprises or private aggregators. Some producers are already selling
through the Lake to River Coop, Fresh Fork and Hattie Larlham Food
Hub. Tom Lane of Innovation Foods began meeting with Portage County
producers as an outcome of the meetings. It is likely that Innovation
Foods will begin sourcing from 4 to 6 farmers starting in the 2017. Mr.
Lane is also determining whether to add aggregation and distribution
services to his existing business model of prepared foods. He is actively
reviewing potential properties in the county for his expansion. Assisting
private entrepreneurs with site selection and governmental resources
could foster future co-location of a multi-stakeholder cooperative hub
model.
If an online and/or market model are implemented in the 1 to 2 years, it
could also be gradually built onto with coordinated delivery and
distribution services. It could begin simply by renting a truck daily and
using a cell phone to communicate with the paid staff driver.
As more producers go to scale a can meet FSMA compliances and
quality assurance standards, a market model site could with a larger
specialty manufacturer like Innovation Foods or regional licensed
distributor like Sirna and Sons.
A Portage County model may allow producers and processors to
generate a large amount of inventory, steady sales, and seasonal
extension products. This could also entail making arrangements with
food hub members, agencies or other nonprofit business entities for
low-cost storage and cooling facilities or transportation equipment.
Transportation and delivery expenses are frequently the main costs for
operating a food hub. Through partnerships that offset the purchasing or
leasing trucks, paying commercial drivers and the distribution logistics of
pick-ups from producers and deliveries to customers to regional
distributors—can provide a “win-win” scenario for each party. The
market model can recruit, prepare and select producers/processors
ready to go to scale. They can also identify for the regional distributor
new market partners and possible niche product lines not currently
served by the distributor.
54
Recommendation: Assist private entrepreneurs to access support
and governmental programs to develop private enterprises that
source from agricultural producers in Portage County.
Recommendation: Coordinate GAP certified agricultural producers
to connect with wholesale buyers and regional distributors with
the assistance of OSU Cooperative Extension Services.
E. Benchmarking Best Practices
As Food Hubs models become more established it is critical that start-ups or
expansions attract diverse sets of investment. Champions and owners need to
become comfortable speaking about their models in the lexicon of investment.
And be thoroughly conversant in how their business plan model stacks up with
national benchmarking.
Although benchmarking for financial success is at a relatively early stage, some
industry standards are emerging and should be considered in each of the
models.
With regard to produce hubs focused on aggregation Counting Values: Food
Hub Financial Benchmarking Study does the best review of financial metrics.
Food hub surveys were sent to more than 100 hubs in spring 2014. From these
invitations, full data submissions were received from 48 hubs. A review of 48
hubs that submitted data in 2014 focused on financial data from fiscal year 2013.
The data included Income Statements, Balance Sheets, Cash Flow Analysis,
Customer Channels, Governance Model and Operations.
7 http://www.ngfn.org/resources/ngfn-
database/knowledge/Food%20Hub%20Benchmarking%20Study.pdf
The largest challenges which reflect the Portage County’s obstacles include:
adequate and consistent supply, access to investment, access to expansion farm
labor and dependence on start-up subsidies.
Legal Status
According to the study many food hubs organizes as 501 (c) 3 operations. The
not for profit models legal formation comprised one third of the study
respondents. 7
Not for Profit Formation 38%
Ownership of Product 72%
Sales from Hub Processing 1%
Membership Fees Paid
Vendors 28%
Customer 15%
Customers
The study demonstrated that 39% of products were sold through customer
sales (shares, CSA bags/boxes) as direct market channels. Wholesale grocery
channels accounted for 28% of revenues. And restaurant foodservice buyers
accounted for 15%. Institutional buyers such as schools and healthcare facilities
accounted for 2.8%. In many ways demonstrating the challenges of Farm to
School initiatives. And Distributors accounted for almost 14%, illustrating the
growing opportunity for partnerships. 8
8 http://www.ngfn.org/resources/ngfn-
database/knowledge/Food%20Hub%20Benchmarking%20Study.pdf
55
Grocery & Small Retail 27.6%
Restaurants/caterers 14.9%
Other Distributors 13.6%
Direct Marketing to Customers 38.2%
Institutional Buyers 2.8%
Food Processors 1.9%
Scope of Operations
The study respondents were a mix of established and start-up food hubs.
Age of Hub 7 years
Total Revenue $2.83 million
Product Sales $2.53 million
Enterprise Income can include delivery charges,
brokerage & membership fees & equipment rentals
$108,241.00
Annual Operating Days 276
Facility Specs 1.9%
Square footage 6,936 sq. ft.
Mileage Driven 40,315
Number of Loading Docks 2
9 http://www.ngfn.org/resources/ngfn-
database/knowledge/Food%20Hub%20Benchmarking%20Study.pdf
Financial Viability
Food Hub profit or net margin is probably the most important finding in the
study. Due to investment in infrastructure and equipment, the typical food hub’s
depreciation expense amounts to 2 percent of sales. Depreciation is an
unavoidable overhead cost as assets wear out or become obsolete, regardless
of the amount of sales generated. While things may wear out faster with more
use, most depreciation, or decline in value, is related to aging. The typical food
hub, then, runs at a break-even level before depreciation, which means it can
usually pay its operational expenses.
Even hubs operating at break even or minimal profitability struggle to manage
expansion or even re-investment. There is often no room for debt service and
new investment from members or other community stakeholders. 9
Sales 100% 100%
(Less) Cost of Goods Sold 71.95% (69.41%
(Less) Cost of Sales 13.56% 14.51%
=Gross Margin 14.49% 16.09%
(Less) Overhead costs 16.28% 12.32%
= Net Operating Margin aka
Profit
-1.79% 3.76%
(Less) Income Taxes 0.52% 0.66%
+ Grants/Contributions 6.45% 0.07%
=Overall Excess 4.13% 3.18% 4.13% 3.18%
56
= Net Operating Margin aka Profit -1.79% 3.76% (Less) Income Taxes 0.52%
0.66% + Grants/Contributions 6.45% 0.07% =Overall Excess 4.13% 3.18%.
The following charts illustrate these challenges from the 2013 benchmarking
study.10
Averages: Income Statement Costs and Expenses
10http://www.ngfn.org/resources/ngfn-
database/knowledge/Food%20Hub%20Benchmarking%20Study.pdf
Income Statement Benchmarks by Sales Volume
Income Statement Benchmarks by Seasonality
57
Many of the food hubs respondent to the 2013 study were not
profitable. Many of these hub were incorporating interim strategies of
volunteer labor, partnerships and grant subsidies to remain operational.
Most have remained solvent by obtaining outside funds, whether in the
form of donations, grants, foundation funding, or by being subsidized by a
larger agency or non-profit with overlapping social missions.
While a few hubs plan for outside funding to be a regular part of their
operations for the foreseeable future, most believe that grants and other
sources of short-term funding were necessary for launch and phase one
of operations. The vast majority of food hubs aspired to cover
operational costs internally by increasing and diversifying revenues.
With regard to rural or small city food hub development it is pertinent
to note that these hubs were much more dependent on grant subsidies
than those in metro areas. According to the September 2013 FINDINGS
OF THE 2013 NATIONAL FOOD HUB SURVEY: “There was no statistically
significant relationship between the type of county in which a food hub
was located and the hub’s reported reliance on grant funding to carry
out operations. However, the proportion of a region’s food hubs that
reported being “highly dependent” on grant funding was much higher
for the regions that included nine food hubs reporting a location in
nonmetropolitan counties and not adjacent to a metro area (33%) than
for the average region (17%).
This suggests that proximity to a highly populated area may be
important for the financial success of food hubs.”11 If a hub were located
in Portage County, its market channels would most likely need to serve
11 http://foodsystems.msu.edu/uploads/files/2013-food-hub-survey.pdf
northeast Ohio metro centers such as Cleveland, Akron and Canton to
be financially viable.
58
F. Ownership & Leveraged Investment F. Ownership & Leveraged Investment
For any of the food hubs models to emerge in Portage County, a clear ownership structure will need to evolve. Typical start-up investment can come
from a variety of formal and informal sources. Typically equity, start-up capital and term debt can come from the beneficiary investors through member
fees, donation of infrastructure and equipment, in-kind labor, crowdsourcing investments and debt from low-income loan programs, commercial banks or
private lenders. To start an aggregation and distribution food hub model would take the largest combination of start-up investment. But the chart below
could be a guidepost for any of the suggested models described earlier to identify the spectrum of capital for either a start-up or expansive phase.
Foundations
Government Grants
Impact & Program
Related Investment
CDFI & RLF
Commercial Lenders
Venture Capital
Angel Investors &
Slow Money Loans
Crowdsourcing
Membership Fees
Friends & Family
59
G. Start-up Business Model Investment
Each of the models can be started with modest entrepreneurial, coop or social enterprise investment. But it is essential to understand the phases of
development and to adequately forecast the market channel revenues, sources and uses budget and initial “worst case” cash/flow analysis. The vast
majority of food hubs have taken 5 years to reach break-even. That scenario requires significant subsidies along the past to viability which can mean
significant fundraising, grant writing and harnessing of considerable volunteer labor. Multi-stakeholder cooperatives can have the advantage of diversifying
equity and attracting impact investors. Healthcare institutions are emerging as equity investors for hubs in their service area that meet healthy food
access needs low-income neighborhoods and food deserts. The chart below suggest some possible strategies for phase one financing.
Line of Credit Working capital Interest only & balloon
payment Short-term liability
One year or less/can
have renewals
Short-term Loan
Construction/equipment/wor
king capital Balloon payment
Short-term liability Short (1 year) or
project lifespan
Credit Card Financing
Operational expenses Monthly payment
Short-term liability 1 month to 1 year
Term Debt Purchase of long-term
assets
Monthly principle &
interest payment Long-term liability
3 to 7 year term
Real estate could have
longer term mortgage
CDFI/RLF Debt Purchase short & long tern
assets
Monthly payment of
principle, can sometimes
defer payment or defer
interest over specified
term
Long-term liability
Typically 3 to 5 year
term
Capital Lease
Purchase short to mid-
term equipment or
property
Monthly payment
Long-term liability 3 to 7 year term
Operating Lease Purchase assets and/or
maintenance contracts Monthly payment Operating expense Useable life of asset
60
H. Start-up & Expansion Stages of Development
All food hubs will have different stage of development as part of their lifecycle. The chart below identifies a number of the opportunities and obstacles
during each of these development stages.
Viable Business Plan Cash Liquidity Scale & Diversify
Revenue
New Market
Analysis
On-going Market
Analysis
Market Channels Defined
Customer & Revenue
Secured
Diversify Channels &
Customer Satisfaction
New Products &
Geographic Reach
On-going Product
Diversification &
Manage Geographic
Channels
Ownership Structure
Designed
Governance Policies Manage Investment &
Decision-making
Diversify
Leadership &
Ownership
Diversify Leadership &
Ownership
Management Structure
Defined
Appropriate
Management
Strengthen
Professional
Management
Expand
Management Staff
Innovate Management
to Keep Pace
Funding & Investment Market Entry
Demonstrate
Competitive Position
for Growth Funding
Manage
Competitive
Market Position
Manage Competitive
Market Position
Financial Management
Financial Systems
Advance Financial
Mgt. Capabilities
Advance Financial
Mgt. Capabilities
Continuous
Improvement of
Financial Mgt.
61
I. Balance Sheet and Income Statements
Sample Food Hub Balance Sheet
Chart of Accounts
ASSETS
Current Assets
Cash on Hand
Cash in Checking/Savings
Accounts Receivable
Inventory (should match the sales/COGS categories)
Bakery
Beverages
Dairy
Prepared Foods (ready to eat)
Value-Added/Grocery
Meat and Poultry
Produce
Packing & packaging Inventory
Inventory Change
Prepaid (Maintenance Agreements
Other Current Assets
Total Current Assets
Intermediate Assets
Machinery & Equipment
Fixtures
Vehicles
Office Equipment/Furnishings
Other Intermediate Assets
Accumulated Depreciation
Total Intermediate Assets
Long-Term (aka Fixed) Assets
Buildings
Leasehold Improvements
Greenhouses
Real Estate/Land
Land Improvements
Other Fixed Assets
Accumulated Depreciation
Total Fixed Assets
Total Assets
62
Current Liabilities
Accounts Payable
Payroll Taxes Payable
Accrued Expenses
Income Taxes Payable
Short-term Liabilities (under 1 year)
Line of Credit
Credit Cards
Slow Money Loans under 1 year
Intermediate Loans (under 10 years)
Term Debt
Deferred Loans
Long Term Loans (over 10 years)
Long-term Loans
Property Mortgage
Total Liabilities
Equity
Owners’ Equity -- Membership
Owners’ Equity -- Deferred Patronage
Retained Earnings
Total Equity
Total Liabilities & Equity
INCOME STATEMENT
Product Sales
Bakery
Beverages
Dairy
Prepared Foods (ready to eat)
Value-Added/Grocery
Meat and Poultry
Produce
Fruit
Vegetables
Greens
Other
Total Product Sales
Processing Income
Miscellaneous Income
Delivery Fees/Trucking Income
Brokering Fees
Membership Fees
Total Business Receipts
Coupons/Incentives
63
Returns
Net Sales (Gross Less Discounts/Returns)
Variable Costs (aka Cost of Goods Sold/Cost of
Production)
Purchases for Resale/Cost of Production
Bakery
Beverages
Dairy
Prepared Foods (ready to eat)
Value-Added/Grocery
Meat and Poultry
Produce
Fruit
Vegetables
Greens
Other
Shrink
Donated Food
Processing Costs
Labor Costs (Production Labor)
Wages/Salaries/Guaranteed Payments
Contract employees
Health insurance
Payroll Taxes
Workman's Compensation
Total Labor Costs
Packaging
Credit card processing/Merchant account fees
Other Misc. Selling Costs
Delivery Costs
Delivery labor and related costs
Gas/Fuel/Oil
Parking/Tolls
Total Variable Costs
Gross Margin
Overhead / Administration Costs
Depreciation
Insurance
Fire/Liability
Auto
Interest
Labor: Admin
Wages/Salaries/Guaranteed Payments
64
Contract Employees
Health insurance
Payroll Taxes
Workman's Compensation
Marketing/Advertising/Promotion
Office Expense
Professional Fees
Property Taxes
Rent or Lease
Facility
Equipment/Vehicles
Repairs
Facility
Equipment/Vehicles
Trash & Maintenance
Utilities
Electricity
Heat
Phone/Internet
Other Expenses
Licenses/Permits/Inspections
Bank Fees
Dues/Subscriptions
Total Overhead Costs
Net Operating Margin
Other Income
Grants
Contributions
Other Enterprise Income
Other Expenses
Program Support Expense
Business Income Taxes
Other Enterprise Expenses
Net Margin
65
A. Ownership Structure
Though hubs share many features, they operate using a wide diversity of
business models. Some sell exclusively wholesale to businesses, others
only directly to consumers (retail), yet others are becoming hybrid
models. Some operate more as brokers or logistics systems, others have
significant infrastructure, some operate packing lines, while others
require producers to pack and grade their own product.
Many non-profit models are significantly “producer-led.” But producer
models, especially ones owned and governed by producers need
extensive technical assistance and start-up subsidies and can take many
years to reach break-even.
One distinguishing characteristic of a food hub compared with a
conventional produce wholesaler is the value proposition. By design,
many food hubs have a mission to strengthen local producers’ capacity
and increase their access to markets. In turn, this means the food hub
needs to be rooted in the needs of the agricultural assets and identified
needs of the producers.
From the response received through focus groups and surveys, both
Portage County producers and buyers are concerned with supporting
“Good Food Values” for underserved communities. Those interests
range from concerns for public health and social justice to demand for
local economic and farmer friendly impacts.
The ownership and governance of hubs is typically driven by the goals
and values of its formation. A producer-owned and operated hub will
focus on the viability and expected profitability for small and mid-size
farmers. Other hubs might be operated by agencies or non-profits that
have a social mission. For instance an agency serving developmentally
disabled individuals may focus on job creation and skill building for their
customer base. A low-income neighborhood organization might focus on
healthy food access for food insecure neighborhoods. In many ways the
goals and constituencies served by the food hub ultimately guides the
legal ownership and preferred governance policies.
The challenge at this stage in Portage County plan resides in a lack of a
committed agency, association or organization prepared to step forward
to take on the project or facility ownership. This section will outline a
number of possible ownership structures that could work for a variety
of food hub models: online market, retail store model and produce
aggregation and distribution facility.
Exposing producers and partners to educational resources through
webinars and workshops should be included in the steering committees’
follow-up activities. Abundant training resources are available in Ohio to
review the advantages of each governance structure. Workshops that
assemble of diversity of stakeholders can hopefully move the next level
of ownership decision-making forward.
5. Business Structures & Recommendations
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A. Producer Cooperatives
Many established food hub models were formed by agricultural
producers as agricultural cooperatives. Farmers have histories,
sometimes both good and bad, operating in coops. This governance
structure can be off-putting for some long-term farmers because of past
dissatisfaction in larger coops.
The strength of the cooperative structure is grounded in the “buy-in”
producers have in operating the cooperatively owned business. Coops
elect their own board of directors, hiring and overseeing management.
All decisions are made democratically based on their By-laws and other
operational procedures. Profit shares are determined by the governance
rules and are typically distributed annually based on membership usage.
Producer owned and democratically controlled
organizations that serve their members through cooperative
marketing, support, and/or purchasing
Allow members who produce the same or similar products
to cooperatively market and sell their products
Can be made up of multiple producers working in different
types
of enterprises (livestock, produce, etc.) but still market
collectively
Owned and democratically controlled by “producer
owners”
Conventional wisdom in food hub development believes that producer
cooperatives form the most resiliency and long-term financial viability.
Producers are invested in making the business model work through
their mutual self-interest. In most case, producers are investing in the
capital needed to launch and expand the hub. When producers are
committed, seasonal supply and pricing agreements are more likely to
stabilize the hub’s performance and meet customer demand.
On the down side, cooperatives can sometimes get mired down in
democratic decision-making and a shared willingness to reinvest in the
food hub’s on-going capital needs. Profit-sharing and reinvestment can be
a delicate balance. Producer-run food hubs need professional
management to operate successfully to balance the collective business
model and still provide a return on investment to the agricultural
producers.
Although the recent round of surveys and the previous round of 10
tabulated from the November 2012 study does not definitively
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demonstrate producer willingness to from a cooperatively owned hub,
the study recommends holding additional producer gatherings to outline
the producer cooperative model.
In Ohio, Hannah Scott is the Manager of the Ohio Cooperative
Development Center at the Ohio State University South Centers and
can assist with the formation of producer cooperatives. Ms. Scott is also
the convener of the Ohio and West Virginia Food Hub Network and has
extensive experience working with start-up and existing hubs in both
states.
The Ohio Cooperative Development Center (OCDC) at The Ohio
State University South Centers is leading an effort to cooperatively
develop local and regional food systems by working with new and
emerging food hubs and incubator training farms. The two-state Ohio
and West Virginia Food Hub Network brings together food hub
stakeholders and technical assistance providers in a peer exchange
network to experience educational programming and peer learning.
The network was developed in 2014 out of the Non Profit Local Foods
Network, Inc., which was formed in
2010. On-going connections to the
network could provide linkages to other
hubs in Northeast Ohio and acquaint
Portage County stakeholders to resources
and networking opportunities with
incubator training farms that may be
interested in NE Ohio food hub formation.
As stated on their website: “Great River
Organics (GRO), a farmer-owned, non-
profit cooperative comprised of growers
committed to expanding the footprint of local, certified organic
products in the central Ohio marketplace. We’ve built a network of
member farms who share a common set of values based on the craft of
organic farming, a sense of place unique to Ohio, and the
superior taste and quality of the products produced here.”
The Lake to River Coop currently purchases from some Portage
County agricultural producers, in the short-term a clear referral system
could encourage producers to ramp up production with greater market
access through this coop and the Hattie Larlham Food Hub in Summit
County.
Recommendation: Contact Hannah Scott to schedule a workshop on
cooperative models in the spring of 2017.
Recommendation: Contact Michael Jones of Great River Organics
for a possible tour of their cooperative and hub in Columbus,
Ohio.
Recommendation: Contact Melissa Miller of the Lake to River
Cooperative to determine collaborative opportunities, tour their
new retail operation and receive training on their online market
model.
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B. Worker Owned Cooperatives
In some cases food hubs can also be formed as worker-owned
cooperatives. They operate similarly to producer coops, focusing on the
following governance principles:
Voluntary and Open Membership
Cooperatives are voluntary organizations, open to all persons able to
use their services and willing to accept the responsibilities of
membership, without gender, social, racial, political or religious
discrimination.
Democratic Member Control
Cooperatives are democratic organizations controlled by their
members, who actively participate in setting their policies and making
decisions. Men and women serving as elected representatives are
accountable to the membership. In primary cooperatives members have
equal voting rights (one member, one vote) and cooperatives at other
levels are also organized in a democratic manner.
Member Economic Participation
Members contribute equitably to, and democratically control, the capital
of their cooperative. At least part of that capital is usually the common
property of the cooperative. Members usually receive limited
compensation, if any, on capital subscribed as a condition of
membership. Members allocate surpluses for any or all of the following
purposes: developing their cooperative, possibly by setting up reserves,
part of which at least would be indivisible; benefiting members in
proportion to their transactions with the cooperative; and supporting
other activities approved by the membership.
Autonomy and Independence
Cooperatives are autonomous, self-help organizations controlled by
their members. If they enter to agreements with other organizations,
including governments, or raise capital from external sources, they do
so on terms that ensure democratic control by their members and
maintain their cooperative autonomy.
Education, Training and Information
Cooperatives provide education and training for their members, elected
representatives, managers, and employees so they can contribute
effectively to the development of their cooperatives. They inform the
general public – particularly young people and opinion leaders – about
the nature and benefits of cooperation.
Cooperation among Cooperatives
Cooperatives serve their members most effectively and strengthen the
cooperative movement by working together through local, national,
regional and international structures.
Concern for Community
Cooperatives work for the sustainable development of their
communities through policies approved by their members.
A unique model in southwestern
Ohio is Our Harvest Food Hub,
a union worker-owned hub in
Cincinnati. Our Harvest
Cooperative, was formed in
2012 by the Cincinnati Union
Coop Initiative. The Cincinnati
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Union Coop Initiative, began in 2009 as a collaboration between Spain’s
Mondragon Worker-Owned Cooperatives and the United Steelworkers.
Our Harvest was launched first as a food hub to ensure healthy food
access to under-served populations. Rapidly it expanded to include
farming and farmer training as well. According to Our Harvest’s Food
Hub Manager Kristin Gangwer, the organization’s primary goals are to
produce sustainably-grown local produce, build a food hub to strengthen
the local food system, increase access to healthy food, create family-
sustaining jobs in Greater Cincinnati, and to sustain these efforts by
training new farmers.
Recommendation: Contact Our Harvest to learn more about their
food hub model regarding social investment and workforce
partnerships.
C. Multi-stakeholder Cooperatives
In Ohio, multi-stakeholder coops tend to outline their stakeholder
groups in their bylaws. So looking at their legal entity filings do not
always identify them as a multi-stakeholders cooperative. Lake to River
Cooperative may formally outline multiple stakeholder groups with
different rights and responsibilities.
Generally multiple stakeholder coops abide by similar cooperative
principles and follow these guidelines:
Businesses that are owned and democratically controlled by
multiple stakeholders
Multiple stakeholders can include workers, consumers,
producers, and/or community members
Represents more than one typical ownership group (producers,
consumers, workers)
Typically have a more diverse membership base rather than
forming around a single class of members.
Long standing example: Weaver Street Market, North Carolina
http://www.weaverstreetmarket.coop/behind-the-scenes/we-
own-it/
Local Roots in Wooster includes producer and consumer members,
although it doesn’t appear that they treat them as two separate groups
of members. Article Three of Membership Section 1. Qualifications of
the Wooster Local Foods Cooperative, Inc. as “Any person, family, firm,
partnership, LLC, corporation or association, who or which agrees to
sign and abide by a membership agreement with the Association, and
meets such other conditions as may be prescribed by the board of
directors, may become a member of the Association. Membership
becomes effective upon signing the membership agreement provided
that all membership requirements are met.”
Recommendation: Contact Board members of Local Roots for a
review of their formation with a focus on multiple stakeholder
interests.
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The other essential local resource is the Ohio Employee Ownership
Center at Kent State University. They have worked with numerous
local food system organizations to assist with the formation of
cooperatives. Staff of the OEOC can assist with market analysis,
business plans, financing and governance formation. In the region they
have assisted in the creation and operations of the Lake to River
Cooperative, as well as the ongoing planning and creation of an
additional 5 regional “food hubs” around the state of Ohio.
Recommendation: Coordinate with steering committee member a
Multi-stakeholder Cooperative workshop to gauge cooperative
formation interest between Portage County producers, processors,
consumers and wholesale buyers.
D. Social Enterprise
Within local food system development, more economic and social non-
profit practitioners are identifying their models as social enterprises.
Social enterprises are defined as revenue-generating businesses
grounded in social impacts and community based values. Whether
operated by a non-profit organization or by a for-profit company, a
social enterprise has two goals: to achieve social, cultural, community
economic and/or environmental outcomes; and, to generate revenue to
ensure long-term viability to fulfill the social mission.
“On the surface, many social enterprises look, feel, and even operate like
traditional businesses. But looking more deeply, one discovers the
defining characteristics of the social enterprise: mission is at the center
of business, with income generation playing an important supporting
role.” (from The Centre for Community Enterprise)
A number of social enterprises are developed to serve specific
constituencies or to generate revenue for the overall mission of a non-
profit organization. The common attributes of social enterprises include:
An organization that applies commercial strategies to maximize
improvements in human and environmental well-being. This may
include maximizing social impact alongside profits for external
shareholders
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A revenue generating business with primarily social objectives
whose surpluses are reinvested for that purpose in the business or
in the community, rather than being driven by the need to deliver
profit to shareholders and owners
Example: Hot Chicken Takeover – Columbus, OH
http://hotchickentakeover.com/our-story/our-mission/
The social enterprise description can contain many of the previous legal
formations, and can include for-profit models that identify as a benefit
corporation under some state law designations. What differentiates the
for-profit models are their adherence to a core of social as a vehicle for
profit. In Northeast Ohio, the Hattie Larlham Food Hub is a regional
example of a social enterprise food hub. As described in section 3,
E. Private LLC
With the growing popularity of food hubs, more privately held hubs and
processing facilities are springing up. Many of these models are started
by an entrepreneur or group of investors identifying the growing
demand by natural and conventional grocery and institutional buyers for
local food. Many of the start-up entrepreneurs already have experience
in in agriculture or grocery supply chain management. Most of these
models have been centered in urban centers with greater access to
market and with established market partnerships by the lead
entrepreneur. The LLC structure can allow for a group of entrepreneurs
that includes producers and logistics managers to attract capital and
cover risk with the following attributes:
Business structure that combines the pass through taxation of a
partnership or sole proprietorship with the limited liability of a
corporation
Primary function is to generate profit for stakeholders
Limited Liability Companies are partnerships in which partners
are personally shielded from company obligations; shareholders
do not
risk losing personal assets in this structure but certain
restrictions are placed on the selling/trading of shares.
This model can be attractive to farmers and food processors not ready
to commit to the formation of a cooperative. Professional management
and partial ownership in the legal entity can provide additional
assurances to farmers that their risk to increase production will have
legitimate and consistent wholesale channels.
Tom Lane of Innovation Foods has attended all of the meetings and
focus groups as a for-profit, interested party looking at future
opportunities to incorporate food hub practices into his business model.
F. Other Facility and Ownership Models
Although customer demand for local food is expanding, we believe that
a critical obstacle facing both rural and urban agricultural producers is
the inadequate regional infrastructure for processing, storage,
aggregation and distribution. Energetic entrepreneurs on both the
demand and supply sides are trying to bridge this gap and have
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embraced the food hub model to accelerate shared infrastructure
development. But aside from standard produce food hub models, other
municipal, regional and institutional models exist to promote local
agriculture and healthy food access. Among the infrastructure
innovations that can provide greater capital and technical support for
agricultural entrepreneurs are the following types of facilities:
Kitchen Incubators
Kitchen Incubators take a comprehensive approach to preparing
entrepreneurs for market. The facilities should be licensable for food
manufacturing, food-service, food handing and aggregation with
dedicated space for processing, packaging, mixed-use operations, and
warehousing. Local food entrepreneurs in an incubator setting need
comprehensive technical assistance to comprehend the alphabet soup of
FDA regulations: GAP (Good Agricultural Practices), GMP (Good
Manufacturing Practices) and HACCP (Hazardous Analysis Critical
Control Points). They also need to be sufficiently trained to operate
commercial equipment and follow safe food handling practices.
Portage County producers have easy access to the Common Wealth
Kitchen Incubator in Youngstown.
Shared-Use Licensed Kitchens
For-profit, shared-use facilities provide another model of easy entry for
new food entrepreneurs. These kitchens target start-up entrepreneurs
needing licensed commercial kitchens, with designated areas for
preparing, packaging, catering and baking. Many of the for-profit facilities
run cooking classes, nutritional training programs, and “pop-up”
restaurants to attract aspiring food entrepreneurs.
University Food Innovation Centers
Food Innovation Centers harness the research and industry resources
to assist food processors in business development, market research,
product and process innovation, food science, workforce development
and training, regulations and compliance support, and quality assurance
and food safety systems.
Farm Incubators
Over the past five years the number of farm incubation programs has
increased nationally. Incubator farms are a fairly new model developing
across North America to address barriers to beginning farmers,
including access to land, capital, and credit, and opportunities to learn
and develop skills in farm business planning. The number of incubator
farms is increasing nationally. A sub-sample of existing incubator farm
programs are described and compared side by side, providing evidence
of the variation in program design. Extension may serve alternative roles,
beyond the educator, in design and development of these programs.
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Shared-Use Facility Collaborations
In every community, public and privately held food-processing facilities
exist, but local food entrepreneurs are unable to access these
commercial kitchens. This model serves entrepreneurs unable to meet
co-pack minimum runs, local food brand programs, or producer
cooperatives in need of centralized warehousing. Partners can explore
the legal and governance structures necessary for local food and farm
entrepreneurs to access private or publicly held commercial processing
and distribution facilities; or to develop new leasing/co-packing services
with privately held enterprises.
In recent developments, more food hub are beginning to couple their
operations with education, incubation and processing to diversify
revenue streams and serve their stakeholder base. Again, Local Roots, a
community kitchen that allows farmers and entrepreneurs to create
licensed value-added products and commercial prepared food, is a
strong regional model that stakeholders in Portage County could review.
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Based on a small response from agricultural producers throughout the
project period, it is recommended that next stage funding be secured to
provide training, technical assistance and planning support to farmers.
Farmers interested in expanding their operations to wholesale markets
will need significant support and training to participate in any
aggregation model. New farmers or hobby farmers interested in
generating more income can also augment the mix of producers in a
food hub model. A secondary strategy should also focus on the
identification and recruitment of beginning farmers in Portage County.
The following programs could both provide direct funding to farmers
looking at expansion opportunities. Ohio Rural Development, OSU
Cooperative Extension, NCRS and Farm Services Agency staff could be
contacted and coordinated to deliver trainings and their assistance
services at workshops throughout the county. The focus groups and
surveys illustrate farmers’ interest in learning more about accessing
these programs, services and potential grants or loans.
Farm Loans: Microloan Program
The Microloan Program is for the financing needs of small or beginning farmers
and niche or non-traditional farming operations such truck farms, farms selling
direct to consumer, and farms using either hydroponic, aquaponics, organic and
vertical growing methods.
Direct Farm Ownership Microloans
These types of loans can be used to:
• Make a Down Payment on a Farm
• Build, Repair, or Improve farm buildings, service buildings, farm
dwelling
• Soil and Water Conservation Projects
• May be used as a Down payment Farm Ownership Loan
• May be used in Joint Financing
Direct Farm Operating Loans cover
• Essential tools
• Fencing and trellising
• Hoop houses
• Bees and bee equipment
• Milking and pasteurization equipment
• Maple sugar shack and processing equipment
6. Funding Resources
Funding Opportunities for Agricultural Producers
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• GAP (Good Agricultural Practices), GHP (Good Handling
Practices), and Organic certification costs
• Irrigation
• Livestock, seed, fertilizer, utilities, land rents, family living
expenses, and other materials essential to the operation
• Marketing and distribution costs, including those associated with
selling through Farmers’ Markets and Community Supported
Agriculture operations
• Pay for qualifying OSHA compliance standards (Federal or State)
Funding Available
There is no minimum amount for loan, but the maximum amount is
$50,000.
How to Apply
Loan applications should be filed in the administrative FSA county office
that maintains the farm’s records.
These loans must be approved by the local FSA state or county
committee before any site preparation and/or construction can be
started.
https://www.fsa.usda.gov/programs-and-services/farm-loan-
programs/microloans/index
Farm Storage Facility Loan Program
Farm Storage Facility Loan Program provides low-interest financing for
producers to build or upgrade commodity storage facilities.
Eligible commodities include: Grains, Oilseeds, Peanuts, Pulse crops, Hay,
Honey, Renewable biomass commodities, Fruits and vegetables,
Floriculture, Hops, Maple sap, Milk, Cheese, Yogurt, Butter, Eggs,
Meat/poultry (unprocessed), Rye, Aquaculture
Eligible facility types include:
Grain bins
Hay barns
Bulk tanks
Facilities for cold storage
Drying and handling and storage equipment is also eligible,
including storage and handling trucks. Eligible facilities and
equipment may be new or used, permanently affixed or
portable.
How to Apply
Loan applications for either Direct Farm Ownership or Storage Facility
Loans should be filed in the administrative FSA county office that
maintains the farm’s records. These loans must be approved by the local
FSA state or county committee before any site preparation and/or
construction can be started. https://www.fsa.usda.gov/programs-and-
services/price-support/facility-loans/farm-storage/index
FSA SERVICE CENTER OFFICE
PORTAGE-SUMMIT COUNTY FARM
SERVICE AGENCY
6970 STATE ROUTE 88
RAVENNA, OH 44266-9130
David Echols
County Executive Director
(330) 297-7633
(855) 842-4856 fax
JACK W BARTHELS
Farm Loan Manager
(330) 297-7633 x 107
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Natural Resources Conservation
Service (NRCS) Programs
For Ohio Specific NRCS Programs view the following link:
https://www.nrcs.usda.gov/wps/portal/nrcs/main/oh/programs/
EQIP
High Tunnel System Initiative
Extend the growing season
Improve plant quality and soil quality
Reduce nutrient and pesticide transportation
Improve air quality through reduced transportation inputs
Reduce energy use by providing consumers with a local source
of fresh produce
Producers must submit a complete program application and other
documentation to support eligibility to be considered for financial
assistance through EQIP. NRCS accepts and processes EQIP applications
on a continuous basis. However, each state may establish deadlines for
one or more application periods in which to consider eligible
applications for funding.
Eligible applicants include individuals, legal entities, Indian Tribes, or joint
operations engaged in agricultural production. In addition, organic
producers who grow agricultural commodities on eligible land and have
natural resource concerns which may be addressed by a seasonal high
tunnel may participate in EQIP.
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Conservation Stewardship Program (CSP)
CSP offers enhancements to conservation stewardship practices.
For example, if you have been practicing prescribed grazing, CSP would
give you options to enhance that practice with activities such as grazing
management to improve plants for wildlife, or grazing management to
reduce soil compaction, or grazing management to improve riparian
function, just to name a few.
Program offers:
• One-on-one consultation with you to evaluate your current
management system and the natural resources on your land.
• CSP enhancement alternatives for you to consider implementing
on your land, based on existing conservation practices.
• Annual incentive payments for installing these practices on your
land.
• CSP also offers bundles where you can select a suite of
enhancements to implement and receive an even higher
payment rate.
How to Apply
Applications must include all agricultural or private forest land in your
operation that you will have control of for the 5 year term of the
CSP contract. Farm records must be established with the Farm
Service Agency for these lands for your application to be evaluated. You
should be prepared to provide maps or identify all land in your
operation on maps with an NRCS representative. The maps will help
you and NRCS determine the land that is eligible for enrollment,
payment, and if you have one or more operations to offer for
enrollment.
Applications are accepted throughout the year. Specific deadlines are set
for ranking and funding opportunities. The last application deadline
for funding consideration was February 3, 2017.
Ohio NRCS Conservation Program Contacts
https://www.nrcs.usda.gov/wps/portal/nrcs/main/oh/programs/
John Wilson, Assistant State Conservationist for Programs
200 N. High St., Room 522, Columbus, OH 43215, (614) 255-2480
Barbara Baker, Assistant State Conservationist for Natural Resources
(Easements)200 N. High St., Room 522, Columbus, OH 43215, (614)
255-2502
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USDA Agricultural Marketing
Services Programs
National Organic Certification Cost Share Program
Beginning March 20, 2017, organic producers and handlers can visit over
2,100 USDA Farm Service Agency (FSA) offices to apply for federal
reimbursement to assist with the cost of receiving and maintaining
organic or transitional certification. Available in all 50 states.
The maximum per certification scope (crops, livestock, wild crops and
handling) is $750. Funds are only available to certified organic or
certified transitional producers and handlers.
Eligible costs include application fees, inspection costs, fees related to
equivalency agreement/ arrangement requirements, travel/per diem for
inspectors, user fees, sales assessments and postage. Ineligible costs
include equipment, materials, supplies, late fees, and inspections
necessary to address National Organic Program regulatory violations.
Whole Farm Revenue Protection Program – part of Risk Management
Agency.
For additional support on organic transition contact OEFFA. The Ohio
Ecological Food and Farm Association (OEFFA) is a non-profit
organization founded in 1979 by farmers, gardeners, and conscientious
eaters who committed to work together to create and promote a
sustainable and healthful food and farming system. For more
information, go to www.oeffa.org.
Organic Certification--One of the oldest, largest, and most respected
programs in the nation, OEFFA's Certification program ensures that
organic crop and livestock producers meet the high standards
established for organically grown food. The process of documentation
and monitoring, strict production standards, and on-site inspections sets
organic products apart from all others. These standards protect farmers,
distributors, consumers, and the environment.
In Ohio Organic farmers and processors in Ohio can access the
reimbursement application from OEFFA’s website
at http://certification.oeffa.org/costshare or by calling (614) 262-2022.
Certified organic producers and handlers outside of Ohio can find the
contact information for their administrating agencies
at www.ams.usda.gov/NOPCostSharing
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Rural Development Programs
Value Added Producer Grants
The VAPG program helps agricultural producers enter into value-added
activities related to the processing and/or marketing of value-added
products. Generating new products, creating and expanding marketing
opportunities, and increasing producer income are the goals of this
program. You may receive priority if you are a beginning farmer or
rancher, a socially-disadvantaged farmer or rancher, a small or medium-
sized farm or ranch structured as a family farm, a farmer or rancher
cooperative, or are proposing a mid-tier value chain. Grants are awarded
through a national competition. Each fiscal year, applications are
requested through a notice published in the Federal Register and
through an announcement posted on Grants.gov.
Provides funding to farmers and groups of farmers to create or
develop value-added producer-owned businesses.
Helps agricultural producers enter into value-added activities
related to the processing and/or marketing of value-added
products.
Encourages generating new products, creating and expanding
marketing opportunities, and increasing producer income
Grant and matching funds can be used for planning activities or for
working capital expenses related to producing and marketing a value-
added agricultural product. Examples of planning activities include
conducting feasibility studies and developing business plans for
processing and marketing the proposed value-added product.
Examples of working capital expenses include:
Processing costs
Marketing and advertising expenses
Some inventory and salary expenses
Deadline and Award Amount info not currently available
Website: https://www.rd.usda.gov/programs-services/value-
added-producer-grants
Ohio Contact: Debbie Rausch - (614) 255-2425 -
This program was utilized very successfully in southeastern Ohio to
catalyze grape growers and vineyards to expand their products and
direct marketing strategies. Since the funding ended 5 additional wineries
and meadaries have open in Athens and surrounding counties.
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The Village Bakery & Café Solar System through REAP
In southern Ohio farmers and local food retailers have used REAP awards and
USDA loan programs to install solar arrays, geothermal systems and conduct
energy efficiency assessments. The funding assists farmers to lower utility costs
for production and packing capabilities.
Rural Energy for America Program
Provides guaranteed loan financing and grant funding to agricultural
producers and rural small businesses for renewable energy systems or
to make energy efficiency improvements.
Funds may be used for renewable energy system and for the purchase,
installation and construction of energy efficiency improvements, such as:
Deadlines
• Grants of $20,000 or less: October 31, 2016 and March 31, 2017
• Unrestricted Grants (up to $500,000): March 31, 2017
• Loan Guarantees are competed continuously throughout the
year.
Funding Available
• Loan guarantees on loans up to 75% of total eligible project
costs
• Grants for up to 25% of total eligible project costs
• Combined grant and loan guarantee funding up to 75% of total
eligible project costs
Website: https://www.rd.usda.gov/programs-services/rural-
energy-america-program-renewable-energy-systems-energy-
efficiency
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Following the completion of the USDA Local Foods Promotion Program
grant, Portage County stakeholders are positioned to seek project
management funding that could provide the technical assistance to
producers to implement a food hub model. The following programs
could be utilized for both project planning and implementation to fund a
management staff position at the Portage County Regional Planning
Commission or in another non-profit or agency partner.
Rural Microentrepreneur Assistance Program
Program supports the development and ongoing success of rural
microentrepreneurs and microenterprises. Funding is available in the
form of loans or grants. Loans support capital improvements. Grants
may be used for technical assistance activities to rural
microentreprenuers to prepare them for self-employment or increase
capacity in a technical aspect of their business. Authorized activities
include feasibility studies, business planning, construction, land lease or
purchase, equipment purchase and training and technical assistance.
Funding Available
Minimum funding is $50,000 and maximum $500,000 for a single loan.
Technical Assistance only grants will be made competitively and shall not
exceed 10% of the total amount of TA funding available.
How to Apply
Contact local Rural Development Office
Ohio
Beth Huhn, Acting State Director
Federal Building, Room 507
200 North High Street
Columbus, OH 43215-2418
Voice: (614) 255-2400
Fax: (614) 255-2563
www.rd.usda.gov/oh
Food Safety Funding
On Farm Food Safety Project – FamilyFarmed
The organization FamilyFarmed provides technical assistance to small
and mid-sized farmers who are selling into wholesale markets. A project
of this organization, The On-Farm Food Safety Project (OFFS, helps
farmers learn about food safety, create personalized on-farm food safety
plan, and become food safety certified.
Their website: http://onfarmfoodsafety.org/ provides educational
resources on food safety issues and a free to use resource that
generates an on farm food safety plan specific to your operation.
The resources provided here will help generate a food safety plan to be
used in daily operations. Information on topics such as produce
traceback, worker health and hygiene training materials, and
packinghouse standard operating procedures for cleaning and sanitation
are also available to your operation. The food safety plan tool utilizes a
number of decision trees that help you assess and address areas of food
safety risk. This tool can also help prepare you for a food safety audit
B. Project Management Funding
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should you decide to pursue GAP certification. View their website to
begin creating your plan. http://onfarmfoodsafety.org/create-a-food-
safety-manual/
USDA Risk Management Education and Outreach
Partnership Cooperative Agreements Program
This program, administered by the USDA Risk Management Agency,
funds risk management strategies related to crop production, marketing,
legal, human, and financial issues. Funds can address risk management
training related to production practices, or funds may be used to train
and assist disadvantaged producers and create producer awareness of
other risk management tools and strategies.
Funding Available Ranges from $20,000 - $100,000
Contact: Lana Cusik: [email protected]
http://www.rma.usda.gov/aboutrma/agreements/
Beginning Farmer & Rancher Development Program
(BFRDP)
The Beginning Farmer and Rancher Development Program provides
grants to organizations for education, mentoring, and technical
assistance initiatives for beginning farmers or ranchers. There are two
types of awards with different funding amounts awarded for each type as
indicated below:
Standard Grants- Maximum Award: $200,000 per year for up to three
(3) years for large standard grants; $100,000 per year for up to three
years for small standard grants.
Educational Enhancement Team Awards - Maximum Award:
$200,000 per year for up to three (3) years
Website: https://nifa.usda.gov/program/beginning-farmer-and-
rancher-development-program-bfrdp
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Farmers Market Promotion Program (FMPP)
Farmers Market Promotion Programs have the purpose is to increase
domestic consumption of, and access to, locally and regionally produced
agricultural products, and to develop new market opportunities for farm
and ranch operations serving local markets by developing, improving,
expanding, and providing outreach, training, and technical assistance to,
or assisting in the development, improvement, and expansion of,
domestic farmers markets, roadside stands, community-supported
agriculture programs, agritourism activities, and other direct producer-
to-consumer market opportunities.
Amounts available range from Capacity Building Grants of $50K to
$250K and Community Development, Training, and Technical Assistance
grants from $250K to $500K.
Website: https://www.ams.usda.gov/services/grants/fmpp
Commonwealth, Local Roots and Lake to River Coop have effectively
utilized FMPP and LFPP awards to expand their models.
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Ohio Specialty Crop Block Grant
Specialty Crops are defined as “fruits and vegetables, tree nuts, dried
fruits, horticulture, and nursery crops (including floriculture).” The
purpose of this program is to enhance the competitiveness of specialty
crops.
Program funding is offered on a state by state basis. Applications are not
available in Ohio for 2017 your state department of agriculture will have
information on future opportunities when they are available.
Website:
https://www.ams.usda.gov/services/grants/scbgp/specialty-crop
Ohio contact: Lori Panda
Farm to School Grants Program
The purpose of the USDA Farm to School Grant Program is to assist
eligible entities in implementing farm to school programs that improve
access to local foods in eligible schools. On an annual basis, USDA
awards up to $5 million in competitive grants for training, supporting
operations, planning, purchasing equipment, developing school gardens,
developing partnerships, and implementing farm to school programs.
Planning grant awards will range from $20,000 - $45,000 and
implementation grants and support service grant awards will from
$65,000 - $100,000. Funding for training grants is expected to range
from $15,000-$50,000, and will be funded at the following levels: state
focused project awards will range from $15,000 to $25,000; and
regionally / nationally focused project awards will range from $25,000 to
$50,000.
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Website: https://www.fns.usda.gov/farmtoschool/farm-school-grant-
program
Community Food Projects (CFP)
The primary goals of the CFP are to: Meet the food needs of low-
income individuals through food distribution, community outreach to
assist in participation in Federally assisted nutrition programs, or
improving access to food as part of a comprehensive service; Increase
the self-reliance of communities in providing for the food needs of the
communities; Promote comprehensive responses to local food access,
farm, and nutrition issues; and Meet specific state, local or neighborhood
food and agricultural needs including needs relating to: Equipment
necessary for the efficient operation of a project; Planning for long-term
solutions; or The creation of innovative marketing activities that mutually
benefit agricultural producers and low-income consumers.
CFP projects cannot exceed $125,000 in any single year or more than
$400,000 over four years. Planning Projects (PP) cannot exceed $35,000
for the total project period. The maximum PP award period shall not
exceed three years since it is for planning purposes.
Website: https://nifa.usda.gov/funding-opportunity/community-food-
projects-cfp-competitive-grants-program
This program is useful for planning, implementation and capital needs.
ACEnet has utilized this funding many times to develop specific
marketing and training programs. Other partners have been able to
combine both programming and capital needs to expand existing
services to farmers and specialty food processors.
Roots Urban Farm
In 2011, Youngstown Neighborhood Development Corporation (YNDC)
acquired land that would be converted into a working farm - the Iron
Roots Urban Farm (IRUF) - to institutionalize food economy
development in low-income neighborhoods of Youngstown.
YNDC received a Community Food Project grant of $296,816 in to
train and encourage residents from neighborhoods across the city to
start new food-based businesses and market gardens on vacant land
through intensive production and marketing techniques. Successful food
business development and expansion employs low-income residents,
develop sustainable business opportunities over the long term, and
become fresh food sources. The Iron Roots Urban Farm has been
developed into a high-level training facility, including greenhouses, hoop
houses, high-value production fields, and a production center.
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Ohio Healthy Food Financing Initiative
In 2014, Finance Fund Capital Corporation (FCAP) with support from
the Ohio Regional Convergence Partnership, the United Way of Central
Ohio and the United Way of Greater Cleveland commissioned The Food
Trust to conduct a statewide quantitative research study to identify
Ohio communities that lack access to healthy food options.
Healthy Food For Ohio: This program provides loans, forgivable loans,
and grants to food retailers developing new or renovating existing fresh
food retail in underserved communities throughout Ohio. Funds may be
used for costs associated with land acquisition, predevelopment,
construction, equipment, infrastructure, and related expenses. Financing
can be used for capital projects to build new markets or expand existing
facilities. Applications are evaluated and approved on a rolling basis while
funds remain available. FCAP is also reviewing eligible healthy food
projects that are seeking funding. Those with projects or referrals should
contact Credit Officer Kelly Cook at [email protected] for details
on how to apply.
The application is a two-step process: 1) To determine whether a project
is eligible under the program guidelines, applicants must complete a Pre-
Application. 2) To apply for funding, eligible applicants must complete a
full Application for Financing.
Website: http://www.financefund.org/support/healthy-food-financing-
initiative
C. Capital Funding
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W.K. Kellogg Foundation
The Kellogg Foundation grantmaking supports thriving children, working
families and equitable communities.
Thriving Children: We support a healthy start and quality
learning experiences for all children.
Working Families: We invest in efforts to help families obtain
stable, high-quality jobs.
Equitable Communities: We want all communities to be
vibrant, engaged and equitable.
Embedded within all that we do is our commitment
to racial equity, to developing leaders and
to engaging communities in solving their own
problems. The foundation works nationally across the
United States.
Surdna Foundation
Sustainable Environments Program
The Sustainable Environments Program supports efforts to restore
regional aggregation and distribution of food that will strengthen urban
and rural connections and provide environmental, economic, and
community benefits. The first step for funding is to submit a Letter of
Inquiry. Follow the link to access the LOI portal:
http://www.surdna.org/grants/how-to-apply.html
Projects funded:
Create pilot projects or expand promising projects to spur the
growth of regional food infrastructure (e.g., food hubs, vertical food
supply chains, regional food shed planning initiatives linked to
regional transportation and economic development). In addition, we
want to support best practices on regional food supply business
models and innovative regional, state and local policies. We’re also
looking to highlight and help replicate food supply programs that
contribute to anti-poverty strategies and build strong local
economies.
Support the development of innovative financing strategies for
regional food infrastructure development.
Develop incentives and remove barriers to creating shorter food
supply routes. These activities might include advocacy at the federal,
state and local levels around food storage, processing, land-use
restrictions, etc.
Build capacity and collaboration among planners, economic
development officials, investors, community based organizations and
other key community leaders to integrate local food supply into
regional land use and economic decisions, projects and practices, and
to better understand the drivers for regional food system change.
D. Foundation Funding
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Ben and Jerry’s Foundation
The mission of the Ben & Jerry's
Foundation is to
engage Ben & Jerry's employees
in philanthropy and social change
work; to give back to our
Vermont communities; and to support grassroots activism and
community organizing for social and environmental justice around the
country.
Funding Available
The Foundation awards about $1.8 million annually to eligible
organizations across the country.
How to Apply
The foundation only consider proposals from grassroots, constituent-led
organizations that are using community-organizing and base-building
strategies to accomplish their goals.
Priority Strategies must include: Community & ally outreach, Leadership
development, Constituent empowerment & decision-making, Popular
education, Root cause analysis, Power analysis, Campaign development,
Mobilizing constituents & allies, Coalition building, Direct action
http://benandjerrysfoundation.org/the-grassroots-organizing-for-social-
change-program/
The Kresge Foundation
The Kresge Foundation awards operating
support, project grants and planning grants.
They also utilize a full complement of
program related investments, including loans,
deposits, equity and guarantees.
In collaboration with grantees and partners,
the foundation seeks to use grantmaking and
investing tools to help people improve life circumstances and the
economic mainstream. Six grant programs work to complete these goals.
Funding Available
Kresge awards between $120 million and $150 million in grants each
year.
How to Apply
Some programs accept applications on an ongoing basis. Others
proactively invite or solicit applications from individual organization. And,
on occasion, a program may make a national call for applications for
specific efforts through a request-for-proposal process.
http://kresge.org/opportunities
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Farm Aid Programs
Farm Aid is a nonprofit organization whose mission is to keep family
farmers on the land. Since 1985, Farm Aid has raised more than $50
million to promote a strong and resilient family farm system of
agriculture.
Farmer Resource Network
Farm Aid’s Farmer Resource Network offers many ways to connect
farmers with helpful services, resources and opportunities specific to
individual needs
Opportunities include:
Connect with an organization
Explore our resources
Talk with Farm Aid
Become a Farm Advocate
Website: https://www.farmaid.org/our-work/resources-for-farmers/
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Aggregation – The consolidation of products sourced from multiple
growers or producers to generate volumes to meet demands of a larger
market, a key ingredient for scaling up local and regional food systems.
The collection of agricultural products from a number of area farms at a
central hub. Delivery to customers from an aggregation hub can be
more efficient than point-to-point distribution from farms to customers.
Business Model – The manner in which a company or organization
conducts economic activity. This encompasses many aspects of the
business: products and services (offering), how they are delivered
(operations), the means through which they are sold (revenue model),
and how the company is structured (business entity). The Business
Model sections in this guide discuss offerings and operations, and
additional detail is provided in separate sections titled Business Services,
Revenue Models, and Business Entities.
Commercial Kitchen – A kitchen outfitted, certified, and inspected
by a health authority for the production or preparation of food for sale
to the public.
Community Kitchen – A commercial kitchen made available to local
users on a contract or time-share basis.
Consumer Cooperatives- Businesses owned and run by the
customers themselves with the goal being improved service rather than
improved profits. Members govern the cooperative, usually through a
democratic process. Profits generated by the cooperative are returned
to the members based upon their use of the cooperative's services.
Co-Packer – Outsourced production by an external party that
provides the labor, materials, and sometimes the raw ingredients for a
food product. It may be further defined as contract packaging that is the
assembly of food products, or contract packing and manufacturing (co-
pack, co-man) that is the processing of food products.
Distribution -- The methods of moving food to markets such as
restaurants, grocery stores, and institutions. Scales of distribution range
from on-site direct sales to wholesale transactions.
7. Glossary and Best Practices
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Food Hub – USDA defines a food hub as “a business or organization
that is actively coordinating the aggregation, distribution, and marketing
of source-identified locally or regionally grown food products from
primarily small to mid-sized producers.” A food hub may provide the
core services of a packing house (see below) and/or aggregate and
distribute farm-packed product.
Food Innovation Center -- Food Innovation Centers harness the
research and industry resources to assist food processors in business
development, market research, product and process innovation, food
science, workforce development and training, regulations and
compliance support, and quality assurance and food safety systems.
These centers are often housed or affiliated with a land grant University.
GAPS and GHP -- Good Agricultural Practices (GAP) and Good
Handling Practices (GHP) are voluntary audits program offered by the
USDA. These verify that fruits and vegetables are produced, packed,
handled, and stored as safely as possible to minimize risks of microbial
food safety hazards. Producers can use the Produce GAPs Harmonized
Food Safety Standard to structure operations in order to ensure
compliance with GAP standards.
HACCP - Hazard Analysis and Critical Control Points is a preventative
food safety system in which every step in the manufacture, storage and
distribution of a food product is scientifically analyzed for
microbiological, physical and chemical hazards.
Kitchen Incubator – Kitchen Incubators are licensed commercial
kitchens where food business startups can prepare their products using
shared space and equipment. Kitchen Incubators need to take a
comprehensive approach to preparing entrepreneurs for market. The
facilities should be licensable for food manufacturing, food-service, food
handing and aggregation with dedicated space for processing, packaging,
mixed-use operations, and warehousing. Local food entrepreneurs in an
incubator setting need comprehensive technical assistance to
comprehend the alphabet soup of FDA regulations: GAP (Good
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Agricultural Practices), GMP (Good Manufacturing Practices) and
HACCP (Hazardous Analysis Critical Control Points). They also need to
be sufficiently trained to operate commercial equipment and follow safe
food handling practices.
Local – Food that is grown within a limited radius from where it is
purchased. Definitions of local differ by customers and consumers, with
typical ranges beginning within 100 miles and extending to 300 miles or
more for regional food systems. In this report local refers to Wisconsin
grown.
Organic Certification -- While the USDA is responsible for Organic
Certification standards, it is not a food-safety issue. Organic certification
is essentially a branding initiative to guarantee product standards for
consumers who prefer to buy organic. “Organic certification verifies that
your farm or handling facility located anywhere in the world complies
with the USDA organic regulations and allows you to sell, label, and
represent your products as organic. These regulations describe the
specific standards required for you to use the word “organic” or the
USDA organic seal on food, feed, or fiber products. The USDA National
Organic Program administers these regulations, with substantial input
from its citizen advisory board and the public.”
Packing House – A facility that handles raw produce immediately after
harvest and prepares it for delivery to customers. The core services of
a packing house include cooling, washing, grading, packing, and storage.
Additional services may include harvesting, farm pickup, customer
delivery, sales, and marketing.
Processing – A post-harvest method of converting raw food into a
value-added product for consumption, cooking, or storage.
Altering fresh produce from its raw state by changing its form (e.g.
chopping, pureeing), through cooking or baking, or through
preservation techniques such as canning, freezing, pickling, and curing.
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Seasonal Extension Structure – Semi-permanent or permanent
housing for the production of fruits and vegetables during cold weather
seasons. Types of structures include hoop houses, greenhouses,
glasshouses and indoor warehouses. These structures and innovative
heating technologies can extend the growing season of some crops to
10 or more months per year.
Shared-use Kitchens -- For-profit, shared-use facilities provide
another model of easy entry for new food entrepreneurs. These
kitchens target start-up entrepreneurs needing licensed commercial
kitchens, with designated areas for preparing, packaging, catering and
baking. Many of the for-profit facilities run cooking classes, nutritional
training programs, and “pop-up” restaurants to attract aspiring food
entrepreneurs.
Social Entrepreneurship- Entrepreneurial approaches to organize,
create, and manage ventures to address social problems and make social
change. Social entrepreneurship focuses on creating social capital, but
need not be incompatible with making a profit.
Storage -- A post-harvest method of extending the life of products and
increasing the availability of produce and perishable food products.
Value-added Products -- Defined by the USDA as: A change in the
physical state or form of the product (such as milling wheat into flour or
making strawberries into jam). The production of a product in a manner
that enhances its value, as demonstrated through a business plan (such
as organically produced products). The physical segregation of an
agricultural commodity or product in a manner that results in the
enhancement of the value of that commodity or product (such as an
identity preserved marketing system).
Wholesale – A distribution channel between producers and consumers
comprised of intermediaries, which purchase goods to be sold to other
wholesalers or at retail outlets. These intermediaries include
distributors, processors, institutions, supermarkets, restaurants, and food
service companies. Wholesale is differentiated from direct-to-consumer
distribution channels such as farmers markets, community-supported
agriculture (CSA) programs, and farm stands where the customer pays
the farmer directly.
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The Wild Ramp began as the Capstone project of three Marshall
University students, Christa Galvin, Kelly Cox and Lauren Kemp. Almost
5 years later Lauren continues as a Wild Ramp board member and staff
of Unlimited Future Incorporated which played a key role in supporting
the development of the market model. The first meeting dedicated to
the concept of a local foods market was held in January 2012. A core
group of citizens quickly came together and some of those citizens
visited, Local Roots Market & Cafe, a local foods store located in
Wooster, OH. Tri-State Local Foods, a non-profit organization, was
formed and the search for a location began.
The entrepreneurial spirit at Heritage Station seemed like a perfect fit
for a local foods market. A lease was signed and renovations began.
Meanwhile public calls were put out to local farmers and producers and
interest meetings were held. A blog was started to document the
process and promote the concept of local foods and seasonal eating. The
Wild Ramp opened for business on July 12, 2012. Those first few days
The Wild Ramp was an open-air market as we awaited our final
renovations and occupancy permits.
In 2014, the Wild Ramp moved to their current location in Old Central
City, in the west end of Huntington. This location has provided the space
and customer support for significant growth. In 2016 the Wild Ramp
installed a commercial kitchen for additional food entrepreneurs to
operate from and provide prepared foods and beverages. The following
guidelines provide a detailed approach to their rules, fees and policies.
The Wild Ramp Market Model in Huntington West Virginia
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Wild Ramp Market Rules, Procedures & Guidelines
Please direct all questions to [email protected] or 304.523.7267
The mission of the Tri-State Local Foods, Inc. (dba The Wild Ramp- a
local food market) is:
“To operate a year-round community-supported market that provides
a viable economic outlet for local food producers while providing
consumers access to locally grown agricultural products.”
The Wild Ramp (hereafter TWR) Board and Market Manager reserve
the right to review the producer guidelines on a regular basis and to
make changes as needed. Revised guidelines will be announced and
made available to producers. Producers are expected to remain current
with the revised guidelines. The market management reserves the right
to make exceptions to these rules and guidelines at its discretion.
Guidelines prior to applying to be a producer. If your product does not
meet our guidelines, but you feel it still supports the mission of TWR,
you may petition the market manager for a waiver. These requests will
be reviewed and decided on a case by case basis. Entry of new products
is dependent on the needs of the market and is up to the discretion of
the Market Manager.
General Producer Rules
Locally Sourced: Producers of all products sold through TWR must be
based either within a 250 mile radius from Huntington, WV, or within
the state of West Virginia. Closer to home is better.
No Reselling: Producers may only sell products they themselves have
grown or processed. Producers may not buy wholesale from someone
else and then retail through TWR. Value must be added to processed
food products by the producer; simply repackaging the ingredients is
not adding value. Co-operative members that grow/raise an agricultural
product as a group of farms cannot sell products through TWR as a
private individual.
Compliance with Health, Safety and Related Laws: All products must
comply with federal, state and local health regulations, licensing and
labeling requirements. Producers are expected to inform themselves on
issues governing the production, display, distribution, sampling and sale
of their products. Anyone wishing to sell through TWR should research
the rules and regulations regarding the products they are wishing to sell
prior to applying as a producer. See
http://smallfarmcenter.ext.wvu.edu/r/download/36641 (WV Farmers
Market Vendor Guide) for more information.
Application and Membership
Prospective producers wishing to sell should confirm that their product
is legal and compliant with all market guidelines before applying, and
then must submit a completed Producer Application for review by
market management to ensure that their products are eligible for sale.
All producers must provide the market manager with copies of all
relevant documents, including but not limited to, WV Egg Distributors
License, Proof of Product Liability Insurance, and Kitchen Certification,
and Registrations as required by product line.
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Producers wishing to use the term “organic” must submit a copy of
their certification with their application.
In-Market Prioritization
In-market retail space is limited. The amount of space given to each
producer is at the discretion of the market staff and will be based on
product mix and set up to provide the best overall experience for the
shopper. If at any time the market becomes too crowded (overall or
with any one type of product) the market staff may assign in-market
priority to certain vendors based on the following criteria:
1) Geographical proximity
2) Years as a producer
3) Local content of processed products (homegrown or otherwise
sourced locally)
4) Additional sustainable practices, including but not limited to: Small-
scale family operations, limited use of chemical inputs (pesticides,
fertilizers), and use of pasture production when seasonally available.
While TWR does not offer exclusive shelf space or rights to any one
producer to sell any one product, if the market manager believes the
number of producers offering the same or similar products within the
physical market is excessive, duplicate products may be rejected and
placed on a waiting list..
Payments and Fees
Anyone wishing to sell products is required to pay an annual fee of $50.
After the first year, the fee will be automatically billed in December by
TWR.
TWR will retain 20% of all consignment sales to put toward equipment
& renovations as well as to cover daily operating costs such as rent,
utilities, marketing, and other member benefits.
Producers will be paid for the items sold (minus 20% of all sales)
monthly. The sales period runs from the1st of the month to the last day
of the month. Direct deposit is available and encouraged. Check
payments are also available. Producer monthly sales reports are
available each month upon request. This report will include a list of the
items sold. Monthly payment statements will also be available after the
10th of the month, at the market.
Disclosure of Production Practices
Full disclosure of all production practices is required for all producers.
Buying local gives shoppers the benefit of knowing where their food
comes from, and how it was grown. TWR’s disclosure practice sets it
apart from other food grocers, giving local producers a marketing edge.
All products, including wild-crafted or foraged products should be
obtained in a way that does not deplete or endanger the species
collected and that insures a sustainable harvest for future generations.
To help shoppers and volunteers, the market will keep on file the
producer application to refer to when shoppers have questions that
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floor display information does not cover. If a shopper has questions that
are not answered by the information in the store, the manager will
request further information from the producer.
TWR reserves the right to visit and inspect the farm or business of any
producer. Visits will be made with prior notification when possible, and
farm visits/inspections will only be conducted with the producer
present. Failure to allow farm visits could result in termination or
suspension of the producer agreement.
We will consider false statements on a producer’s application about the
origin or production standards of products listed to constitute fraud. To
protect the integrity of our marketing system, The Wild Ramp reserves
the right to verify the claims of everything sold through our
marketplace.
Product Labeling and Barcodes
TWR tracks producer sales through the use of a point of sale
management system, cash register, and product labels. To ensure
producers are paid for their sales, each item must be properly labeled.
TWR provides barcode labels which must be used if the product does
not already have a UPC/barcode.
The producer is responsible for:
-providing basic labels that meet the county, state, and federal rules.
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-applying TWR barcode labels to all products. The producer may
choose to apply the barcode to a wand, which will then be placed in the
same basket as the product (for produce only).
-making sure the item is properly labeled before placing the product on
display, or storing in back stock as agreed upon by the market manager.
-requesting labels 24 hours in advance to dropping off product.
Items that are not properly labeled and barcoded will not be put on the
sales floor. Producers must email barcode label requests 24 hours in
advance to [email protected], or may call the store directly.
Labels will be filed in the producer’s individual file for pick up upon
arrival. TWR may also mail barcode labels to the producer if prior
arrangements have been made.
Product Delivery and Packaging
Producers are welcome to deliver products to the market during store
hours; however, producers should recognize that the first priority of
the market staff and volunteers is the customer. Producers needing
special assistance should call ahead. Monday and Tuesday are the
slowest day in the market and an ideal time to bring product.
Producers may leave additional product at the market for the staff and
volunteers to periodically restock, with approval from the market
manager. All products should be clearly labeled and put in the stock
area/cooler.
Producers may package products at their discretion; however, TWR
recommends against using units that can be easily altered or
misconstrued at the register and suggests selling items individually or by
weight.
TWR provides plastic produce bags and scales for items to be sold in
bulk (by the pound). Barcode labels for the item to be sold should be
clearly displayed with the product for the customer to take with them
to the register.
Eggs
All eggs will be delivered to the “backroom” for inventory and
acceptance, then placed in storage.
Producers will no longer stock the coolers directly. The staff will ensure
that an equal presentation is made of eggs from all producers.
Egg Cartons must be labeled in accordance with the WV Department of
Agriculture regulations, including the words “ungraded eggs” in ⅝ inch
font on each package. Failure to comply with labeling requirements will
result in eggs being removed from sale.
Eggs that are 30 days or more from the Packed On Date will be
removed from the display case. Producers have the choice of allowing
the eggs to be donated, disposed of, or held for pick up. Eggs will be
held no longer than 7 days.
Empty egg cartons that have been returned to TWR will be held for
producer pick up. Cartons will be held for a limited time, based on
availability of space. These cartons should be picked up weekly.
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Signage
TWR encourages all producers to create and display information about
their operation and products.
Producers should take care to not block other producer’s displays or
items. Offensive or distracting displays may be removed. Producers are
encouraged to post a personal biography with their products, including
details about their operation and production practices in the producer
Scrapbook. Keep in mind that shoppers may not have a lot of time to
read a lengthy full page to get the information they need.
Producers who wish to use their own display equipment should contact
the market management. Use of display equipment will be decided on a
case by case basis.
Inventory and Insurance
Beginning August 1, 2016, all producers will be required to provide an
invoice or inventory list of product being stocked at TWR for sale. The
invoice/inventory list must include the producer name, the item name,
quantity, sales price, and instructions for items pulled from display, such
as throw away or hold for pick up. All items pulled will be logged and
available for review by producers.
TWR works to track and protect all products while they are at the
market. However, ultimately products are left in the market at the
producer’s own risk. Discrepancies in inventory may be taken up with
market management and will be handled on a case by case basis.
TWR is not responsible for any loss, theft, or damage incurred by
producer’s products in the market. In the event of a lawsuit, the
market’s insurance will cover the market. However, individuals are not
covered under this policy. It is up to each producer to insure
themselves to the level they feel appropriate. TWR strongly encourages
producers to obtain their own personal liability insurance and product
liability insurance.
Customer and Producer Satisfaction
TWR strives to maintain fresh, appealing products for the customer.
Any unsuitable, spoiled or damaged product will be immediately
removed from the market and disposed of. Materials used for displaying
product, transporting product or product packaging itself, must be clean
and sanitary. Failure to do so will result in product being pulled from
sales floor. The goal of TWR is 100% customer satisfaction. Therefore,
we will accept customer returns on food items for refund or
replacement. Producers will be notified of nature of customer
complaint. TWR will accept returns on non-food (art/craft) items within
14 days with tag or receipt, and in original condition. The returned
amount will be deducted from producer’s future sales.
Complaints or problems should be directed to the market management
in a timely manner that is not disruptive to the market. Producers who
have concerns regarding product representation should inform market
management. Additional concerns may be submitted in writing. Each
submission will be reviewed by the market manager and/or TWR board
when appropriate. A producer may appeal any decision of the market
manager within 30 days. An appeal must be presented in writing to
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TWR board. A decision by the board shall be issued within 30 days of
receipt and constitute a final and binding decision of any further appeal.
Code of Conduct
All producers, vendors, staff, volunteers, and customers are bound by
the Wild Ramp Code of Conduct.
The market is a community space that will maintain a safe environment
for all. No violence, threats, harassment, or other inappropriate
behavior will be tolerated by anyone. Any instance of physical violence,
threatening behavior, or harassment will result in immediate suspension
from the market.
Additionally, no illegal activities will be tolerated in or around the
market.
Sales Tax
TWR will collect and pay the sales tax on all taxable items. The tax
amount will be automatically added at the cash register. The producer
does not need to include this amount in the selling price.
Wholesale Producer
At the discretion of the board, TWR will purchase items from
producers at wholesale for the overall good of the market, and to fill
gaps in product availability. Priority will always be given to producers
operating on consignment with TWR. TWR will pay the published
wholesale price with a minimum of 30 days net terms. Wholesale
producers must meet the following criteria:
-They have an established wholesale business.
-They can show proven availability of products.
- Meet the geographical guidelines stated above.
The use of a distributor is allowed upon producer request. TWR’s
primary relationship is with the producer. Distributors must offer a
minimum of 30 day net terms.
Please direct all questions to [email protected] or 304-523- 7267
Wild Ramp Artisan Guidelines
Artisan Products
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An artisan product is a hand-made craft or original work of art. The
Wild Ramp seeks to support the use of original designs using
agricultural products. We also welcome products made from materials
found in nature (stone, wood, glass, natural fibers, clay, beads from
natural minerals, dried or live plant materials) and reclaimed/recycled
functional products. For an artisan to be eligible to exhibit creations at
The Wild
Ramp the following guidelines must be met:
1. Each artist or artisan group must become a current producer of The
Wild Ramp.
2. Each art/craft product must be of locally produced agricultural
products, local origin and/or hand-made by the applicant. Joint projects
must be identified as such.
3. The work must support the mission of The Wild Ramp:
“To operate a year-round community-supported market that provides a
viable economic outlet for local food producers while providing
consumers access to locally grown agricultural products.”
Work exhibited at The Wild Ramp should fall within one of the
following categories: Art from agricultural products, art from
recycled/reclaimed materials, 2 dimensional art, cards, clothing,
decorative art, fiber, functional items, jewelry, plant/natural art, and
seasonal art.
The Wild Ramp will not accept:
Crafts made from kits
Crafts that appear as if they are made from kits
Arrangements of mass-produced dried or silk flowers
Exhibiting at The Wild Ramp
- Each artisan must be accepted through the evaluation process.
- Each artisan accepted by the evaluation process must pay the vendor
fee of $50 per year
- 12% of an artisan’s consignment sales are retained by The Wild Ramp.
The Wild Ramp Artisan Selection Process
All applications and products will be evaluated by the Artisan
Committee. The committee will meet quarterly to consider new
submissions. The jury will consist of the Market Operations Committee
and at least one artisan.
The number of individuals selected for display will be based on the
availability of space in the market and the “mix” of products for sale in
the artisan area. If an existing producer would like to bring in new items
to sell, those items must also be juried by the Artisan Committee.
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Members of the Artisan Committee will independently rate a
producer’s items giving a numerical value in each of these categories:
1. Quality
2. Uniqueness
3. Support of mission
4. Market fit
5. Prioritization (see below)
6. Ability to meet customer demand
Those submissions with the highest scores will be selected for display in
the space available. Artisans will be notified by the committee of their
decision.
Prioritization
The Wild Ramp’s primary mission is to showcase local agricultural
products; therefore the following items will be used to prioritize
selection of artisan products.
1. Use of local agricultural products (ie. items made of local fibers would
have priority over items made of fibers accessed from outside the 250
mile radius from Huntington, WV or the state of West Virginia.)
2. Use of non-agricultural products in art created closest to The Wild
Ramp market.
3. Use of materials found in nature that are obtained within a 250 mile
radius from Huntington, WV or within the state of WV. (i.e.: items
made of wood, glass, or clay obtained locally would have priority over
items made of materials purchased outside West Virginia or the 250
mile radius from Huntington.)
4. Use of local reclaimed or recycled materials to create art by local
artists.
Displays
Space will vary by season. You will not have a specific permanent display
space or area. Your spot may be changed, and these changes will be
based on the needs of the market, fluctuations with other
artisans/producers and may reflect the desire to maintain a fluid look of
the storefront.
Artisans’ products may be rotated throughout the market for special
promotions or seasonal displays.
Sometimes promotional events occur offsite and products may be taken
to sell or be included in special displays showcasing samples of products
from the market.
Artisan works will be reviewed every 90 days while on display in the
market. The jury will make determinations on retention and removal of
items, based on sales, space available, and seasonal requirements.
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Application Procedures
Applications appear at www.wildramp.org, copies of the application are
also available at The Wild Ramp market. All applications and products
will be evaluated by the Artisan Committee and the artisan will be
notified if their work has been accepted or rejected.
Fees
Anyone wishing to sell products is required to pay an annual fee of $50.
After the first year, the fee will be automatically billed by TWR in
December for the following year.
TWR will retain 20% of all sales to put toward equipment &
renovations as well as to cover daily operating costs such as rent,
utilities, marketing, and other member benefits.
Producers will be paid for the items sold minus consignment fees. The
sales period runs from the 1st of the month to the last day of the
month. Direct deposit is available and encouraged. Check payments are
also available. Producer monthly sales reports are available each month.
This report will include a list of the items sold. Other reports are
available by request.
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Local Roots was established in 2009 by volunteers who, with
community support, turned an empty building into a vibrant
marketplace showcasing local food and handmade gifts.
Local Roots mission is: "To establish a year-round market place for the
purpose of connecting consumers and producers of locally grown foods and
other agricultural products. Our goals are to encourage healthy eating, expand
local economic development, and promote community involvement and
sustainable living."
The founders of Local Roots believed that improving access to food that
was grown close to home, by people who cared for the land, meant a
stronger community and a healthier, more sustainable world.
We have learned a lot about the emerging business of local food since
our beginning in 2009. As a cooperative, and part of the local food
movement, we consider sharing our successes, failures, finances and
plans with others essential to our mission.
Shoppers can browse our market of seasonal produce, frozen meat,
fresh baked goods and a large variety of beautiful artisan creations...
most sold directly from our network of over 150 Ohio
producers. The Café serves a daily lunch that highlights the good things
coming from local farms. An on-site commercial kitchen allows food
entrepreneurs to start and grow their businesses.
The Commercial Processing Kitchen at Local Roots was opened in 2014
as the final piece of the original vision for the Local Roots Market and
Café project. The Kitchen gives farmers and food entrepreneurs a place
to process, preserve, and add value to products to start or expand an
existing food business. The 2000 sq. ft. onsite facility houses the
equipment and licensing needed to make food products for sale at Local
Roots Markets…or around the country!
LOCAL ROOTS COMMUNITY/COMMERICAL PROCESSING KITCHEN
The Local Roots Commercial Processing Kitchen is a shared-use, fully
licensed, commercial kitchen facility. It provides kitchen space for local
farmers and food entrepreneurs to explore new food business ideas
with minimum capital investment, allows farmers to add value to their
raw agricultural products, and existing food businesses to sustain and
scale-up.
Under our current licensing with the ODA (Ohio Department of
Agriculture), processors can produce many items, such as fresh packed
pre-cut produce, prepared dips like humus, salsa (not canned), frozen
food items, and baked goods. Items made in this facility are legally
LOCAL ROOTS Market Model in Wooster & Ashland, Ohio
105
allowed to be sold at Local Roots or anywhere in the USA! Local Roots
does not currently have a canning and bottling license, however
processors with their own licenses may be able to process these
products in our kitchen. We will consider adding equipment and
licensing as demand grows. Please contact
[email protected] to discuss your ideas.
Renting the Kitchen for Commercial Processing
Commercial Processors rent the kitchen to process their own products
that will be sold under their name. Once product and process is
approved, the producer is fully responsible for all aspects of production
and sale. Producers must provide proof of ServSafe certification and
insurance.
Cooperative processing under Local Roots name/license
As a co-op, Local Roots feels that it is important to support small, new,
and trial products and producers. To help the kitchen fit into the
business goals and budget considerations of even the smallest
producers, Local Roots also offers the option for producers to process
products under the Local Roots name and license. At this time, this
arrangement is only available for things like ready to eat foods or frozen
produce for off season sale. Other items may be considered, please
discuss your ideas with co-op management! These products are the
property of Local Roots, must be stored/sold only at Local Roots
(Wooster and Ashland), and will be labeled as a Local Roots product.
However, each product will also be sub-identified with the producer
information. Local Roots will track products through the bar code
system so that the producer can be paid upon sale. Local Roots makes
no guarantee of sale. Those wishing to preserve fruits/veggies for winter
sale may learn to process the products themselves, attend group
“processing parties”, or give product to another Local Roots volunteer
for processing (if one is available).
Local Roots has freezer bags and labels available for use. All products
must be packaged and labeled for individual sale by the producer, follow
co-op guidelines, and health safety rules. In addition, Ready-to-eat foods
must be labeled with a sell by date of 1 week (per Health Department
rules) and be approved by café staff so as not to conflict with café menu.
Producers will need to provide all ingredients, packaging, and labels.
Some of each product must be taken offsite to our Ashland market
facility for sale to comply with ODA regulations. Local Roots volunteers
will provide pick up & delivery of product to the Ashland store. This
arrangement allows the producer to preserve or “test the waters” with
no additional upfront cost (rent, insurance, etc) and is designed for
smaller quantities, seasonal products, and trial runs. Each producer will
need to work closely with, and under the supervision of, Local Roots
management or trained volunteers. Processing Options for Producers
Commercial Processing (as Individual) Cooperative Processing (as
Local Roots) Types of Products
Any approved product Ready to eat foods to be served on site or
preserved (frozen) produce with no additives Sell anywhere Sell only at
Local Roots (Wooster & Ashland)
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1. Membership All users must be current members ($50 per
year)
2. Food Safety & ServSafe Producer must provide proof of
ServSafe Level 1 Certification (Food Handler) Producer must
provide proof of ServSafe Level 1 Certification (Food Handler)
or work with ServSafe certified person onsite
3. Cleaning Deposit $50 $50 for individual users No fee for
group uses 4. Insurance Producer must have $1M product
general liability insurance, naming LR as additional insured N/A
5. Costs $10-$30/hr depending on equipment (see table below)
Commission to producer upon sale: 80% commission for fresh/ready to
eat foods, 75% for frozen foods If producer provides product to a LR
volunteer for processing: 50% commission upon sale
LOCAL ROOTS GENERAL RULES
1. Membership All processors must have an up to date membership of
the Wooster Local Foods Cooperative, Inc before using the commercial
kitchen. Cost of Membership is $50 or 10 hours of volunteer time
annually.
2. Food Safety of the product and processor is the top priority of Local
Roots. There must be a certified person onsite whenever processing is
taking place. Anyone wishing to use the kitchen for processing must
have completed Level 1ServSafe (Food Handler) training and provide
certificate of completion to be kept on file or schedule time to work
with a certified individual. A ServSafe certified member of co-op
management who is familiar with the kitchen will be present during the
initial use of the kitchen for training and to review and document
processes.
3. Cleaning Deposit All processors will be required to pay an upfront
deposit of $50 for extra cleaning time. In the event that the kitchen
requires extra cleaning after the processor leaves, all or a portion of the
deposit may be withheld. This deduction will be made at the discretion
of the Co-op Management after their inspection. The processor will be
required to re-pay the deposit upon scheduling the next visit.
ADDITIONAL RULES FOR INDIVIUAL COMMERCIAL PROCESSING
4. Insurance
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All tenants must provide proof of a $1M general liability insurance,
naming Local Roots as additionally insured, to be kept on file. Products
may be covered under the processors home/farm insurance. Processors
should contact their insurance agent and add Local Roots as an
additional insurer.
Kitchen Rental Rates Type of Kitchen Use Per Hour Cost Kitchen
Space/Small Equipment (prep tables, sinks, scales, vacuum sealer, etc)
$10 Large Equipment (stove, ovens, mixer, etc) $15 Whole Kitchen
Scheduled (all equipment, no sharing with other renters) $30 Fees are
negotiable based on agreement with each individual tenant.
Tenants who rent a set amount of time per week/month and pay in
advance are entitled to a discount. Reserving Kitchen Space Processor
should schedule kitchen use in advance to avoid conflicts. Set up and
cleaning time should also be considered. All rental fees must be prepaid.
Prioritization of Kitchen Use It is the goal of Local Roots to promote
locally sourced products as well as those that will be sold through the
Local Roots Market. If space becomes limited; LR will give these
processors priority. All efforts will be made to ensure the most efficient
use of the kitchen facility at all times.
OTHER INFO
Equipment/Tools LR provides basic equipment and consumables (gloves,
hairnets, aprons) as well as basic cleaning equipment (dish soap).
Everything else needed for processing must be supplied by the
processor such as chopping boards, tongs, tasting spoons, whisks,
mixing bowls, “hot” gloves/mitts, towels, and parchment
paper/foil/plastic wrap.
Processor should ID what will be needed to process prior to use.
Processor may bring their own small appliances for use. All appliances
must be inspected and approved by Kitchen Manger prior to use.
Processors may make agreements to borrow/rent equipment from each
other.
All agreements should be made in writing and submitted to the co-op
management. LR assumes no responsibility for such agreements or any
issues that may arise. Use of another renter’s personal equipment or
ingredients without consent may result in removal from the kitchen and
forfeit of any pre-paid fees.
Labeling is the responsibility of the processor to insure that all products
are labeled in accordance with the ODA requirements including:
statement of responsibility (name/address), ingredients and all sub-
ingredients, weights. Current labeling regulations do not include a
requirement for shelf life or freshness date (Best Before or Use By)
dates on labels. These may be voluntarily included as a way to
encourage retailers to rotate products and let consumers know when
the time is up for highest product quality.
(http://www.foodlabels.com/faq.htm) Products may qualify for Small
Business Nutrition Labeling Exemption. See
http://www.fda.gov/Food/GuidanceRegulation/GuidanceDocumentsRegul
atoryInformation/LabelingNutrition/ucm200686 7.htm for details.
Storage Space Processors wishing to leave, tools, equipment, or
ingredients on site must rent storage space. Processors must provide
tubs/boxes that can be closed and clearly labeled with the owner’s
name. Perishable contents must be labeled and dated. All other personal
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items must be removed upon leaving the facility. At this time, storage
space is available for those using the kitchen for processing at no charge.
Charges may be added as space becomes limited. Renters will be given
plenty of advanced notice.
Selling Products at Local Roots Market
Processors who would like to sell product through Local Roots must
follow the Market’s application procedure found at
http://localrootswooster.com/producers.
Production in the Commercial Processing Kitchen does not guarantee
sales opportunity in the market. Cooperation sharing a kitchen space
requires cooperation on the part of everyone involved! All users should
work to be understanding, flexible, and have an open cooperative
attitude to working with co-op management and other users.
All questions regarding operations should be directed to
[email protected] or call 330-263-5336.
By-Laws of Local Roots Wooster Cooperative, Inc.
Article One
Mission
To establish a year-round market place for the purpose of connecting
consumers and producers of locally grown foods and other agricultural
products. Our goals are to encourage healthy eating, expand local
economic development, promote community involvement, and
sustainable living
Article Two
Stock
This cooperative shall be a non-stock cooperative.
Article Three
Membership
Section 1. Qualifications Any person, family, firm, partnership, LLC,
corporation or association, who or which agrees to sign and abide by a
membership agreement with the Association, and meets such other
conditions as may be prescribed by the board of directors, may become
a member of the Association. Membership becomes effective upon
signing the membership agreement provided that all membership
requirements are met.
Section 2. Suspension or Termination In the event the board of
directors of the Association shall find that any member has ceased to be
an eligible member under Section 1, above, the board shall give the
member written notice of the violation and allow thirty (30) days to
cure the violation. If the violation is not cured, the board shall set a
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hearing date within sixty (60) days of the mailing notice. Following the
hearing, the board shall determine whether the member is eligible to
retain membership or whether a suspension or termination is required
in the best interests of the Association. If an affirmative vote of a
majority of the directors casting votes finds for suspension or
termination, the subject matter shall be suspended or terminated as the
case may be.
Written notice may be given using any of the following methods; by
mail, by electronic or telephonic transmittal. If mailed, the notice is
given when it is deposited in the U.S. Mail, with postage prepaid,
addressed to the person at the person’s address as it appears on the
records of the Association.
If notice is sent by electronic or telephonic transmittal, notice is given
when an electronic or telephonic confirmation of delivery is received by
the Association. A suspended or terminated member shall have no
rights or privileges, nor vote or voice in the management or affairs of
the Association other than the right to participate in accordance with
law in the event of dissolution.
Article Four
Meetings of Members
Section 1. Annual Meeting The annual meeting of the members of this
Association shall be held in the State of Ohio, during the month of
September or on such date as the board of directors may determine.
The board shall designate the time and place of meetings.
Section 2. Special Meetings Special meetings of the members of the
Association may be called at any time by order of the board of directors
and shall be called by the directors upon receipt of a written petition
signed by at least Fifty-One (51%) of the members entitled to vote. The
petition must state the specific business to be brought before the
Association and demand a special meeting at any time for consideration
of such business. The directors shall designate the time and place for a
special meeting.
Section 3. Notice of Meetings Written notice of every regular and
special meeting of members shall be prepared and mailed to the last
known post office address of each member at least ten (10) days before
such meetings. Notice is given when it is deposited in the U.S. mail. The
meeting notice may also be delivered by electronic means. Such notice
shall state the nature of the business expected to be conducted and the
time and place of the meeting. No business shall be transacted at any
special meeting other than that referred to in the notice.
Section 4. Voting Unless otherwise stated in the Articles of
Incorporation, or these Bylaws, or required by applicable law, all
questions shall be decided by a vote of a majority of the members voting
on the question. Each member shall be entitled to only one vote. Voting
shall be permitted by mail, e-mail, or in person. Proxy voting shall be
allowed. Each proxy shall be in writing, signed by the voting member
and no members shall vote more than one proxy. If a membership is
held by a household, partnership, LLC, or other legal entity, the
member shall designate in writing the person who shall vote on behalf of
the member. That designation shall remain in effect until written notice
of a properly authorized change in the designated voter shall be
received by the Association.
Section 5. Quorum Fifty percent (50%) of membership shall constitute
a quorum at any properly called annual or special membership meeting.
110
Article Five
Directors and Officers
Section 1. Number and Qualifications of Directors The Association
shall have a board of directors of between five and twelve members;
provided, however, if the Association has fewer than five members, the
number of directors shall equal the number of members. Each director
shall be a designated voting member of this Association in good
standing. If a majority of the board of directors of the Association finds
at any time that any director or officer is so engaged or affiliated and has
failed to follow the provisions set forth in Article 14 of these Bylaws
dealing with conflicts of interest, the procedure for Removal of
Directors and Officers as set forth in Article Five, Section 10 shall be
followed, with the board requesting removal in the place of the member
petition.
Section 2. Election of Directors At the annual meeting of the
members of the Association, directors shall be elected to succeed the
incorporating directors. An approximately equal number of directors
shall be elected for one (1) year; two (2) year and three (3) year terms.
At each annual meeting thereafter, new directors shall be elected, for a
term of three (3) years each, to succeed those directors whose terms
are expiring. However, if the number of members of the Association is
five or fewer, all members shall serve as directors until the next annual
meeting held after membership has increased to more than five
members. 3 All directors shall be elected by secret ballot, and the
nominee(s) receiving the greatest number of votes shall be elected.
Voting shall be non-cumulative.
Section 3. Election of Officers The board of directors shall meet
within seven (7) days after the first election and within seven (7) days
after each annual election and shall elect by ballot a president, vice
president, secretary, and treasurer, each of whom shall hold office until
the election and qualification of a successor, unless earlier removed by
death, resignation, or for cause. The president and vice president shall
be members of the board of directors. The secretary and treasurer
need not be directors or members of the Association. The Secretary
and treasurer offices may be held by the same person, but no officer
shall execute or acknowledge any instrument in more than one capacity
if the instrument is required by law or by the Articles of Incorporation
or the Bylaws to be executed, acknowledged, or verified by two or
more officers.
Section 4. Vacancies Whenever a vacancy occurs in the board of
directors, other than from the expiration of a term of office, the
remaining directors, by majority vote, shall appoint a member to fill the
vacancy for the remainder of the term. If one or more officer positions
become vacant, such offices shall be filled by the board of directors,
through election by ballot, at either a regular or special meeting of the
board.
Section 5. Regular Board Meetings In addition to the meetings
mentioned above, regular meetings of the board of directors shall be
held monthly, or at such times and at such places as the board may
determine.
Section 6. Special Board Meetings A special meeting of the board of
directors shall be held whenever called by the president or a majority of
the directors. Only the business specified in the written notice shall be
transacted at a special meeting. Each call for a special meeting shall be in
111
writing or electronic and delivered to the secretary, and shall state the
time and place of such meeting.
Section 7. Notice of Board Meetings Oral, written, or electronic notice of
each meeting of the board of directors shall be given each director by,
or under the supervision of, the secretary of the Association prior to
the time of meeting. But such notice may be waived by any director, and
their appearance at a meeting shall constitute a waiver of notice.
Section 8. Quorum A majority of the board of directors shall constitute
a quorum at any meeting of the board.
Section 9. Reimbursement and Compensation The Association may
reimburse directors for all reasonable expenses incurred in carrying out
their duties and responsibilities. The compensation, if any, of the
members of the board of directors shall be determined by the members
of the Association at any annual or special meeting of the Association.
No director of the Association, during the term of his office, shall be a
party to a contract for profit with the Association differing in any way
from the business relations accorded regular members.
Section 10. Removal of Directors and Officers Whenever any
director shall fail to meet qualifications as described in Section 1 of this
Article, or fails to attend three (3) consecutive board meetings either
regular or special without just cause and provided that notice of such
meetings has been given in accordance with these bylaws, then it shall
be the duty of the board to remove said director and to fill the vacancy
in accordance with Section 4 of this Article. Any member of the
Association may bring charges against an officer or director of the
Association by filing them in writing with the secretary of the
Association, together with a petition, signed by twenty percent (20%) of
the members, requesting the removal of the officer or director in
question. The removal shall be voted upon at the next regular or 4
special meeting of the Association and, by a majority of the members
voting, the Association may remove the officer or director and fill the
vacancy. The director or officer against whom such charges are brought
shall be informed in writing of the charges previous to the meeting and
shall have an opportunity at the meeting to be heard in person or by
counsel and to present witnesses, and the person bringing the charges
against him shall have the same opportunity.
Article Six
Duties of Directors
Section 1. Management of Business The board of directors shall have
general supervision and control of the business and the affairs of the
Association and shall make all rules and regulations not addressed by
law, the articles of incorporation, or bylaws for the management of the
business and the guidance of the members, officers, employees, and
agents of the Association.
Section 2. Bonds and Insurance The board of directors may require
the manager and all other officers agents and employees charged by the
Association with responsibility for the custody of any of the funds,
negotiable instruments, or other property of or for the Association to
give adequate bonds. Such bonds, unless cash security is given, shall be
furnished by a responsible company and approved by the board of
directors, and the cost shall be paid by the Association. The board of
directors shall provide for the adequate insurance of the property of the
Association, or property which may be in the possession of the
Association, or stored by it, and not otherwise adequately insured, and,
in addition adequate insurance covering liability for accidents to all
employees and the public.
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Section 3. Accounting System and Audits The board of directors shall
have installed an accounting system which shall be adequate to meet the
requirements of the business and shall require proper records to be
kept of all business transactions. At least once in each year the board of
directors shall secure the services of a competent and disinterested
qualified third party, who shall make a careful reconciliation of the
books and accounts of the Association and render a report in writing,
which report shall be submitted to the directors and the manager of the
Association, and an operating statement for the fiscal period under
review.
Section 4. Depository The board of directors shall select one or more
banks to act as depositories of the funds. The board of directors shall
also determine the manner of receiving, depositing, and disbursing the
funds, form of checks and the person or persons with signing authority
for such checks and accounts.
Section 5. Committees. The board may, at its discretion, appoint from
its own membership an executive committee of three (3) members, and
determine their tenure of office and their powers and duties. The board
may delegate to the executive committee all or any stated portion of
the functions and powers of the board, subject to the general direction,
approval, and control of the board. Copies of the minutes of any
meeting of the executive committee shall be available to all directors
within seven (7) days following such meeting. The board of directors
may, at its discretion, appoint such other committees as it deems
appropriate.
Article Seven
Duties of Officers
Section 1. President. The president shall (1) preside over all meetings
of the Association and of the board of directors; (2) call special
meetings of the board of directors; (3) appoint such committees as the
board of directors may deem advisable for the proper conduct of the
Association; and (4) perform all acts and duties usually performed by a
presiding officer. 5
Section 2. Vice President. In the absence or disability of the president,
the vice president shall perform the duties of the president; provided,
however, that in case of death, resignation, or disability of the president,
the board of directors may declare the office vacant and elect any
eligible person president.
Section 3. Duties of Secretary. The secretary shall keep a complete
record of all meetings of the Association and of the board of directors
and shall have general charge and supervision of the books and records
of the Association. The secretary shall sign papers pertaining to the
Association as authorized or directed by the board of directors. The
secretary shall serve all notices required by law and by these bylaws and
shall make a full report of all matters and business pertaining to the
office to the members at the annual meeting. The secretary shall
perform such other duties as may be required by the Association or the
board of directors. Upon the election of a successor, the secretary shall
turn over all books and other property belonging to the Association to
the successor.
Section 4. Duties of Treasurer. The treasurer shall be responsible for
the keeping and disbursing of all monies of the Association, and shall
provide for keeping accurate books of accounts of all transactions of the
Association. The treasurer shall perform such duties with respect to the
finances of the Association as may be prescribed by the board of
directors. At the expiration of the term of office, the treasurer shall
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promptly turn over to the successor all monies, property, books,
records, and documents pertaining to the office or belonging to the
Association.
Article Eight
Patrons and Patrons’ Net Margins
Section 1. Operation at Cost. The Association shall at all times be
operated on a cooperative service-at-cost basis for the mutual benefit of
its member patrons. The term “Patron” as used in these Bylaws and in
the Articles of Incorporation shall mean members doing business with
this Association. Each transaction conducted on a cooperative basis
between this Association and each Patron shall be a “patronage
transaction” and shall include as part of its terms each provision of the
Articles of Incorporation and Bylaws of this Association, whether or not
referred to in the transaction. Each Patron shall be entitled to a portion
of Patrons’ Net Margins (patronage refunds), as provided in these
Bylaws.
Section 2. Computation of Net Margins. The Net Margins shall be
computed on a tax basis as of the end of each fiscal year as follows:
Section 2.1 Gross Receipts. Proceeds of sales of products marketed
for Patrons, plus amounts received for supplies and services provided to
Patrons, plus amounts received from any other source, shall be “gross
receipts.”
Section 2.2 Net Margins. This Association shall deduct from gross
receipts the sum of all costs and expenses and other charges that are
excludable or deductible from this Association’s gross income for the
purpose of determining federal income or related taxes payable by this
Association, except the amount of such taxes, the amount of non-
qualified allocations redeemed, and the amount of the Patrons’ Net
Margins, as defined in 6.3 of these Bylaws. The gross receipts that
remain after the foregoing deductions shall be called “Net Margins.”
Section 3. Allocation.
Section 3.1 Association Net Margins. From the Net Margins, the
Association shall set aside “Association Net Margins” to be applied to
the Association’s federal income or related taxes. The funds to pay
taxes shall first come from Net Margins attributable to sources other
than patronage transactions (“non-patronage source margins”) to the
extent allocable under federal income tax law. Any non-patronage
source margins not so applied shall be set aside in the Capital Reserve.
The Association Net Margins shall also be applied to the dividends paid,
if any, on preferred stock.
Section 3.2 Patrons’ Net Margins. The balance of Net Margins after
deduction of the Association Net Margins shall be the Patrons’ Net
Margins. The Patrons’ Net Margins shall belong to the Patrons on the
basis of their respective patronage transactions and may be allocated on
the basis of their respective patronage of the Association and the Net
Margins that resulted from the operations of the Association.
Section 4. Distribution of Patrons’ Net Margins.
Section 4.1 Written Notice of Allocation. The Association shall
distribute Patrons’ Net Margins within eight and one-half (8 ½) months
after the end of each fiscal year by written notice of the allocation. The
written notice shall show the manner and amount of distribution, and
the exact amount distributed in cash, or in Capital Credits (or any
combination of the two). The Board of Directors may establish a plan
for financing the Association that relates Patron investment to
patronage transactions. Such plan may provide for the periodic
adjustment of Patron investment by the application of a Patron’s
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patronage refunds to additional investment requirements prescribed by
the plan.
Section 4.2 Events of Forfeiture of Refund. If the Association
distributes a patronage refund to a Patron who (a) does not consent to
include the patronage refund in income as provided in the Consent
Bylaw; or (b) is unable to receive distribution; or (c) cannot be located
for redemption of such patronage refunds, such patronage refunds shall
forfeit to this Association and be added to the Capital Reserve.
Patronage refunds of less than Ten Dollars ($10) shall be treated as
non-distributable Net Margins and added to the Capital Reserve.
Section 5. Capital Reserve. The Association shall maintain a Capital
Reserve for the purpose of providing a reserve against which it may
charge losses and other charges that could be charged against the
surplus of a business corporation for profit.
Section 6. Loss or Losses. If the Association incurs a net loss in any
fiscal year, such net loss may be charged against the Capital Reserve. If
the loss exceeds the Capital Reserve or, in any event, if the Board so
elects, the loss may be recovered from prior or subsequent years’ Net
Margins. The Board shall have no authority to make assessment for net
losses against Members. This section shall not be construed to deprive
the Association of the right to carry back or carry forward net
operating losses in accordance with the Internal Revenue Code or Ohio
taxing statutes.
Section 7. Consent Bylaw. Each person (including individuals,
partnerships, corporations, limited liability companies) who is accepted
to Membership in this Association and each Member of this Association
on the effective date of this Bylaw who continues as a Member shall, by
such act alone, consent to include in gross income (for federal income
tax purposes) the amount of any written notice of allocation (as defined
in 26 U.S.C. Section 1388, the Internal Revenue Code) received from
this Association with respect to his or her patronage transactions as
provided in 26 U.S.C. Section 1385.
Section 8. Records and Documentation. The books and records of
the Association shall be set up and kept in such a manner that at the
end of each fiscal year, the amount of capital, if any, so furnished by each
member is clearly reflected and credited in an appropriate record to the
capital account of each member.
Section 9. Fiscal Year. The fiscal year of this Association shall
commence on the first day of July and end on the last day of June.
Article Nine
Equity Redemption
Section 1. Regular Redemption. If at any time the board of directors
determines that the financial condition of the Association will not be
impaired by a redemption, capital credited to members’ accounts may
be redeemed in full or in part. Any such redemption of capital 7 shall be
made in order of priority according to the year in which the capital was
furnished and credited, the capital first received by the Association
being the first redeemed.
Section 2. Discretionary Special Redemptions. Notwithstanding any
other provision of these bylaws, the board, at its absolute discretion,
shall have the power to retire any capital credited to members’
accounts on such terms and conditions as may be agreed upon by the
parties in any instance in which the interests of the Association and its
members are deemed to be furthered thereby and funds are
determined by the board to be available for such purposes.
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Article Ten
Nonmember Business
This Association may conduct business with nonmembers on either a
patronage or non-patronage basis. However, this Association shall not
market the products of nonmembers in an amount the value of which
exceeds the value of the products marketed for members. It shall not
purchase supplies and equipment for nonmembers in an amount the
value of which exceeds the value of the supplies and equipment
purchased for members.
Article Eleven
Dissolution and Property Interest of Members
Section 1. Voluntary Dissolution. At any member meeting held for the
purpose of dissolving the Association, the members may adopt a
resolution of dissolution by the affirmative vote of sixty percent (60%)
of the members votes cast on the proposal. Notice of the meeting shall
be given to all members, whether or not entitled to vote.
Section 2. Involuntary Dissolution. The board of directors may adopt
a resolution of dissolution in the following cases:
Section 2.1 When the Association has been adjudged bankrupt or has
made a general assignment for the benefit of creditors:
Section 2.2 By leave of the court, when a receiver has been appointed
in a general creditors’ suit or in any suit in which the affairs of the
Association are to be wound up:
Section 2.3 When the Articles of Incorporation have been canceled for
failing to file annual franchise or excise tax returns or to pay franchise
and excise taxes and the Association has not been nor desires to be
reinstated: or
Section 2.4 When substantially all of the assets have been sold at
judicial sale or otherwise. The board of directors shall be responsible
for seeing the appropriate state filings are made and notices given
pursuant to Chapter 1729.
Section 3. Disbursement of Assets. Upon dissolution, the board of
directors shall disburse the Association’s assets in the following order;
first, to pay the Association’s debts and liabilities; second, to retire all
capital furnished through patronage (member capital accounts) without
priority on a pro rata basis; and third, to distribute the remaining
property and assets of the Association among the members and former
members in the proportion in which the aggregate patronage of each
member bears to the total patronage of all such members insofar as
practical, unless otherwise provided by law.
Article Twelve
Indemnification
The Association shall indemnify its officers, directors, employees, and
agents to the fullest extent possible under the provisions of the Ohio
Revised Code 1729, as it may be amended from time to time. The
Association may purchase liability insurance coverage for any person
serving as an officer, director, employee or agent to the extent
permitted by applicable Ohio law. The directors of the Association shall
be liable only as members of the Association, unless otherwise provided
by law.
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Article Thirteen
Amendment
If notice of the character of the amendment proposed has been given in
the notice of meeting, these Bylaws may be altered or amended at any
regular or special meeting of the members by the affirmative vote of the
majority of the member votes cast. Article Fourteen Conflict of Interest
Section 1. General policy. Recognizing that directors and officers have
a duty to loyalty and fidelity to the Association and must govern the
Association’s affairs honestly and economically, while exercising their
best care, skill and judgment for the benefit of the Association, to avoid
even the appearance of impropriety, the directors and officers of the
Association shall:
Section 1.1 Disclose to the Board any situation wherein the director or
officer has a conflicting or duality of interest that could possibly cause
that person to act in other than the best interest of the Association; and
Section 1.2 Follow the procedures stated in Section 2, below, governing
the participation on behalf of the Association in any transaction in which
the person has, or may have, a conflict of interest.
Section 2. Procedure. Any director or officer having a known duality of
interest or possible conflict of interest on any matter shall make a
disclosure of such conflict to the other directors. Such director shall not
vote or use his or her personal influence on the matter, but such
director may be counted in determining the quorum for the meeting.
The minutes of the meeting shall reflect the making of the disclosure,
the abstention from voting and the quorum situation. Any officer having
a known duality of interest or possible conflict of interest on any matter
before such officer for administrative action shall report the conflict to
the president or, in the case of the president, to the vice president.
Such officer shall abstain from taking any administrative action on the
matter. The requirements in this Section 2 shall not be construed as
preventing any director or officer from briefly stating his or her position
in the matter, nor from answering pertinent questions of the board or
other officers.
Adopted by the Board of Directors on June 24th, 2009.
Revised January 2011