building the supply of healthy foods: experiences and tools from
TRANSCRIPT
Building the Supply of
Healthy Foods: Experiences
and Tools from the Field
February 11, 2010
Hosted by Appalachian Sustainable
Development
Led by Anthony Flaccavento
February 11, 2010
Co-hosted by
Wallace Center’s National Good Food
Network and Central Appalachian Network
Research provided by Ford Foundation’s
Institute of International Education
And now a word about our
sponsors…
The Good Food Network supports and integrates nonprofit and for-profit work to build needed value chains, or relationships, systems, and infrastructure for bringing more good food to more people.
Appalachian Sustainable Development (ASD) is a nonprofit that focuses on developing healthy, ecologically sound economic opportunities through education and training, and the development of cooperative networks and marketing systems for value-added food and wood products.
CAN is a network of seven nonprofits across five Central Appalachian states working in partnership with communities, businesses, policy makers, and others to develop and deploy new economic strategies that create wealth and reduce poverty while restoring and conserving the region’s environment.
Value Chains
Value Chains
Supply Chains
Value Chains
Survey of Healthy Foods Value Chain
Groups
75 “value chain” groups received survey’s,
21 respondents;
Survey (email, with phone follow up in
some cases) undertaken fall, 2009
Seven questions, focused on building
supply
Survey Questions
1. Is your organization directly or indirectly involved in trying to build a supply of healthy local foods in the region? What types of healthy foods are you focused on? (organic produce?, local produce?, grass finished meats?, processed foods?, etc.)
2. Please briefly describe the ways in which you or the partners with whom you work attempt to build supply of healthy local foods.
3. How many years have you and/or your partners been attempting to build supply of healthy local foods?
4. What are the main challenges or obstacles you have faced (and the farmers and food entrepreneurs with whom you work) to building supply?
5. Are there specific things you have done – outreach methods, training methodologies, incentive programs, etc. – that seem to be effective in building supply?
6. From your experience, what additional resources or elements do you believe would make your efforts to build supply more effective? Why?
7. Any other insights regarding building supply of healthy local food?
1. Description of Survey Respondents
Location
Appalachian Region
(Virginia, Kentucky, Tennessee, West Virginia, Ohio and North Carolina)
66%
Outside of Region
(New York, Massachusetts and Missouri)
34%
Level of Involvement with Value Chains
Directly involved with value chain work 66%
Indirectly involved with value chain work 34%
Value Chain Product Focus
Produce – 71% 71%
Meats/eggs/dairy – 52% 52%
Value added foods – 19% 19%
Multiple product types – 43% 43%
Grains – 4% 4%
Emphasis on organic/sustainably produced foods 57%
2. Services provided (by responding organizations) to build value chains and supply
Marketing, market development
Direct marketing, sales or merchandizing of products 42%
Indirect marketing assistance 14%
Product testing and development 9%
Consumer outreach and education 9%
Processing, aggregation and distribution
Processing, aggregation or distribution 42%
Forming or managing farmer networks, co-ops 14%
Production support
Education, training and technical assistance 19%
Production research, trials 4%
3. Number of years experience in value chains
Direct value chain experience varied from 1 – 12
years;
Most respondents involved in “healthy
food/sustainable agr” for several years or more
4. Main challenges or obstacles faced in building supply
Market 70%
Prices too low, unstable or unpredictable (includes unfair competition
from “Big Ag” or global imports)
38%
Lower prices for wholesale/institutional compared with direct markets 9%
“Chicken or egg”: limited supply restrains market which deters additional
supply (includes building consistency of quality)
19%
Lack of consumer demand for differentiated products other than organic
(eg Fair Trade)
4%
4. Main challenges or obstacles faced in building supply
Infrastructure 56%
General lack of infrastructure or funds to build infrastructure,
including processing, aggregation
28%
Distribution/trucking challenges, lack of access 14%
Lack of cooperative networks of producers 14%
4. Main challenges or obstacles faced in building supply
Production 46%
Inadequate training/TA for farmers transitioning to new crops or
production methods
14%
Lack of funds for farmers to build hoop houses, other farm
infrastructure, or to take risks
14%
Limited access to or high cost of land 9%
General production challenges and poor economics of farming 9%
4. Main challenges or obstacles faced in building supply
Policy 28%
Regulatory hurdles that make small farming and processing
more difficult, expensive or risky
19%
Public subsidies that favor commodities, big ag over small
farmers and community infrastructure
9%
5. Tools, practices and incentives that have helped increase supply
Market 46%
Securing strong and predictable demand from buyers 19%
Securing good and stable prices from buyers 14%
Diversifying products for sale 9%
Presence of permanent farmers markets to build consumer
awareness and demand
4%
5. Tools, practices and incentives that have helped increase
supply
Infrastructure 32%
Providing aggregation and distribution to farmers 14%
Developing producer networks and value chains 14%
Ensuring good communication with farmers 4%
5. Tools, practices and incentives that have helped increase
supply
Production 33%
Practical workshops, training, research and TA 19%
Financial support, cost sharing for farmers 14%
5. Tools, practices and incentives that have helped increase
supply
Policy 18%
Incentives for institutions to buy local/regional 9%
Public financial support for cost sharing, farm
improvements
9%
What additional elements or resources are needed to build supply?
Market 61%
Better consumer (and buyer) understanding of the true costs, and
benefits of healthy local foods; willingness to pay more for these
38%
Making healthy foods available/affordable to lower income
people
14%
Securing partnerships, gaining leverage with larger buyers 9%
What additional elements or resources are needed to build supply?
Infrastructure 41%
Better, more accessible value chain infrastructure including processing,
aggregation, distribution
33%
Need for private sector models of above 4%
Stronger networks of producers 4%
What additional elements or resources are needed to build supply?
Production 32%
More training, TA and mentorship for farmers 19%
Training of trainers to increase local capacity 9%
Increased $ support for farmers to transition to new crops or production
practices
4%
What additional elements or resources are needed to build supply?
Public policy 23%
Public/institutional “buy local” policies 14%
Public policy that does not hurt small farmers 9%
Obstacles and Challenges to Building
Supply – Common Themes
Two most common challenges faced:
low or unpredictable prices for products
inadequate infrastructure for getting
products from farm to market.
Pricing Challenges
Relatively Low Prices:
Keep farmers from participating in value
chains, or reduce the “retention” of growers
Reduce operating margins for value chain
managers/facilitators
A “Good Price” is relative
Price and Volume
Inverse relationship between volume and pricing:
Institutional buyers, colleges, large retail expect “competitive pricing” but offer large demand
Smaller, more direct buyers offer better prices but lower volumes (or more work aggregating them)
*Some value chains better suited to smaller growers*
Grasshoppers Distribution, LLC, Louisville
CSA-based value chain with 100+ farmers and 400+ members
Goal of 800 members in 2010
Wholesale is small component; seeking to add hospitals and public schools
Changes in 2010: Requiring better grower pre-grading, eliminating pick-up from farms
Challenge: Finding the price point – Sufficient for producers, competitive for buyers, adequate to cover costs
Local Food Hub, Charlottesville
Challenge: Inadequate Infrastructure
All respondents who do not own, manage
or have ready access to infrastructure
cited it as a major challenge
Complexity, cost, and intensity of
managing infrastructure or facilitating
necessary links (e.g. among aggregator
and distributor) is common challenge
Appalachian Harvest Infrastructure
Effective Tools and Practices for
Building Supply
Not surprisingly, the two most oft-cited effective practices:
securing large, well paying and reliable markets for regionally produced foods;
creating or accessing infrastructure adequate to meet the needs of small farmers.
Additional Effective Practices
Policy: Procurement; and financial
support for farmers to transition
More and better training and TA
Policy success – Jubilee Project
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF
TENNESSEE:
(6)(A) Require each local school board to submit to the
commissioner a plan:
(B) Such plan for compliance shall:
(i) Require that availability of local agriculture
products, freshness and transportation cost be considered;
(ii) Allow flexible bidding processes to assist
farmers to bid competitively on portions of a given nutrition plan, rather than an entire nutrition plan.
Additional Elements or Resources
Needed to Build Supply
Most common - the need for better consumer (including buyer) understanding of the costs and benefits of local, sustainable foods, leading to a preference for them, including a willingness to pay more..
Other elements cited - improved and more accessible infrastructure, including farmernetworks that make participation in value chains feasible for small farmers;transitioning.
Communities of Practice:
Create informational hubs, a “multi-organizational Extension” responsive to producers’ needs
Catalyze information sharing, trust and peer learning among farmers/participants
Serve as magnets for funding
Scout new and cutting edge ideas
* Communities of Practice foster “coopetition” rather than competition among producers, in some cases leading to cooperative distribution, co-packing or co-branding, or other joint ventures.
Tools for Building Value
Chains & Supply
“ Values-based Food Supply Chains:
Strategies for Agri-Food Enterprises-of-
the-middle”
Steve Stevenson, Rich Pirog
www.agofthemiddle.org
Healthy Food Systems: A Toolkit for Building Value Chains
Healthy Food Systems:
A Toolkit for Building Value
Chains
Created by Anthony Flaccavento
Appalachian Sustainable DevelopmentWith support from the
Wallace Center at Winrock International’s National
Good Food Network
and the Ford Foundation
First Edition, December, 2009
Once you decide to embark on action learning to scan the potential for a
healthy food value chain, consider these questions to guide and organize
your investigation:
What is already here?
What are the major and minor crops or livestock that are being raised in
our area? Which of these are increasing (in acreage, $) and which are
stagnant or in decline?
Why are they increasing or declining? Is it falling prices, competition
and loss of market share, production problems, regulatory or PAD
barriers? Other factors?
Who are our farmers and food producers? Multi-generation or
newcomers? Conventional or sustainably minded? English speaking or
non-English speaking? What are their resources and limits, and what is
their capacity to handle risk?
What could be raised here – in terms of soils, climate, topography - or
once was, but is not now produced on a significant scale? What factors
have precluded current production of these things? Can they be profitably
and sustainably produced in our region?
What’s the market and where is it headed?
• In our region and surrounding areas, what are the most important direct
market outlets for healthy food: Farmers markets, CSAs, buying clubs,
produce stands, restaurants? What is being bought there? Are any foods
emerging in many or most of these markets that could be produced well in
our region? Who are the farmers already doing so?
Healthy Food Systems: A Toolkit for Building
Value Chains
Contact information Appalachian Sustainable Development (Denise Barrett, ED)
Healthy Food Systems: A Toolkit for Building Value
276-623-1121
Central Appalachian Network
Sarah Watling
859-671-0208
National Good Food Network
John Fisk
703-879-6556
Ford Foundation
Wayne Fawbush
SCALE
Anthony Flaccavento
276-628-4727
To order a copy of
Healthy Food Systems: A Toolkit for Building
Value Chains
Contact the ASD office at:
276-623-1121