national convening of the good food network
DESCRIPTION
National Convening of the Good Food Network. Case Research of Food Value Chains Chicago IL November 20, 2008 ([email protected]). Percentage Change in US Farms by Sales Class, . 1997 - 2002. 10%. 5%. 0%. < $5,000. $5,000-. $25,000-. $50,000-. $1000,000-. $500,000-.TRANSCRIPT
National Convening of the Good Food Network
Case Research of Food Value ChainsChicago IL
November 20, 2008 ([email protected])
Percentage Change in US Farms by Sales Class, 1997 - 2002
-15%
-10%
-5%
0%
5%
10%
< $5,000 $5,000-$25,000
$25,000-$50,000
$50,000-$100,000
$1000,000-$500,000
$500,000-$1,000,000
<$1,000,000
AOTM Working Group Structure
Business & Marketing Options
Value-Added
Commodity
Very Small
Very Large
1. Direct Sellers
2. Cooperative Sellers
3.Low Margin/ High Volume
4. Troubled Zone
Farmers’ MarketsCSA’s
Internet Sales
Strategic Alliances&
Food Value Chains
Mid-scale CommodityProducers
Large-scalecommodity Producers
Tiers of the Food System
Tier 0 Personal Production of Food
Tier 1 Direct Producer to Consumer
Tier 2 Strategic Partners Embedded in Supply Chain Relationships (multiple scales)
Tier 3 Large Volume Aggregation and Distribution
Tier 4 Global Anonymous Aggregation and Distribution
Tier 0
Tier 1
Tier 2
Tier 3
Tier 4
Definition of Mid-tier Food Value Chains: Values-based strategic business partnerships Featuring mid-scale agri-food enterprises that Create and distribute responsibilities and
rewards equitably across the supply chain, and
Operate effectively at regional levels with Significant volumes of high-quality,
differentiated food products.
Case Studies
Country Natural Beef [www.oregoncountrybeef.com]
Shepherd’s Grain [www.shepherdsgrain.com] Organic Valley Family of Farms
[www.organicvalley.coop] Red Tomato [www.redtomato.org]
Key Characteristics of Mid-tier Food Value Chains: Engage value/values in products and
business relationships Emphasize organizational interdependence.
trust and transparency: shared support & shared reward
Achieve scale & volume through cooperation and aggregation of mid-scale producers
Enable mid-scale enterprises to be competitive
Farmers, Ranchers, and Fishermen: Are treated as strategic partners, not as
interchangeable input suppliers Negotiate prices based on production and
transaction costs, plus a reasonable margin Experience agreements/contracts as fair and
for appropriate time frames Control brand identity up the supply chain …
co-branding with strategic partners Participate fully in value chain decisions
Challenges and Opportunities:
Creating & Marketing Significant Volumes of Differentiated Food Products
Creating Effective Internal Organizational Forms
Selecting Value Chain Partners [Shared values, different competencies, and
complementary business models]
Challenges and Opportunities Cont. Developing Effective Supply Chain Logistics
Achieving Economic Sustainability [commitment to the economic welfare of all strategic partners;
supply management, stable pricing, and cost-of-production-based pricing]
Future Dynamics [engaging consumers as strategic partners and deeper
differentiations]
Big Themes:
Building Out a Middle Tier in the U.S. Food System
1) Develop, test, communicate, and proliferate a “new business logic”
2) Address key systemic issues
[The “Good Food” bundle & Michael Pollan’s list]
Big Themes Cont.
Value Chains Can Be Both “Smart” and “Right”
1) Smart Business: strategic partnerships (social capital) replace economic capital and expertise; nimbleness in the market; quality control efficiencies; food miles and food safety efficiencies; geographical identities
2) Ethical Business: equitable distributions;
participatory organizations and alliances; ethical differentiations
Other References
www.agofthemiddle.org
Thomas Lyson, G.W. Stevenson, and Rick Welsh, eds. 2008. Food and the Mid-Level Farm: Renewing an Agriculture of the Middle. The MIT Press, Cambridge MA.