Driftless Region Food & Farm Project

Way Back When Farmers Independent Grocery Store Consumers Independent Restaurant

Shipper Structure Shipper Grower

Shipper Diagram Grower Shipper Foodservice Distributors Wholesalers Grocery Stores with Warehouses and Distributors

Traditional and Direct-to-Consumer Local Food Sales 2012 $6.1 Billion in Local Food Sales 2014 $12 Billion in Local Food Sales

Market Breakdown 163,675 farms in U.S. (7.8 %) were marketing food locally 70% marketed direct-to-consumer 30% marketed through traditional market channels Source: USDA, 2012

Number of Farms 2008/ Direct to Consumer 114, ,304 Direct/Wholesale 21,201 25,756 Wholesale 11,036 22,615 Source: USDA—Trends in U.S. Local and Regional Food Systems

The demand for locally grown at grocery stores and foodservice outlets has grown faster than the number of farmers to supply them

Biggest Challenges There is inadequate access to inputs, labor, finance and storage, infrastructure, and lack of know how in scaling up production and market access.

Market Place Challenges Meeting buyer requirements for product volume, quality, consistency, variety, cold-chain management, certified food safety plans, insurance, extended availability, lack of distribution, processing and marketing infrastructure

Challenges  Traffic congestion and navigation of the city  High cost of multiple small quantity deliveries  Lack of understanding of true cost of transportation  Must meet orders and delivery deadlines  Volume and quality requirements

Challenges  May need standard sizes and grades, labeling, packaging, and PLU/UPC codes  Usually requires GAP certification, product liability insurance, and follow FSMA  Cold-chain management  Lack of distribution know-how  Regulatory

What are We Doing About It? Linking farmers up with buyers 600 farmers with over 75 buyers Bringing the know-how to Illinois to scale up Educating our farmers on how to develop micro-packing houses and pick-up points Linking with like kind

Know How Connections Maximize the return they receive for the goods they produce! Functions Transport Process Grade Add value Research Distribute Bargain Sell Marketing Farmer Products Farmer Benefits

Food Hub Diagram Grower Local Food Hub Restaurants Independent Food stores Schools & Universities Wholesalers, Grocery Stores, Foodservice Distributors

Since 2006, the number of food hubs has increased 288%

Aggregation and Distribution Warehouses Food hubs serve as a drop-off point for multiple farmers Serve as a pick-up point for market channel trucking Coordinates the aggregation, distribution and marketing of foods from multiple farmers to multiple markets Coordinating all aspects of local food supply chain logistics Identifying markets for farmers Coordinating transportation Managing the product location logistics Effectively matching supply with demand Determining pricing and processes invoicing Maintaining quality and food safety assurances

The Sorting, Grading and Packing Process Produce is delivered in picking containers Transported to a packing house (if not field packed) Receiving Cleaning Sorting Grading Sizing Packing Produce workers need to be knowledgeable regarding produce defects, grade, size requirements, and packing methods

Alternate uses for ROI What to do with the facility the rest of the year? Cross docking – other farm products – transportation companies – food products Storage space rental Create sales on seasonal items Create value added opportunities from same crop with alternating seasons

Group Gap Audits Some companies are paying or off setting the cost of group audits to assist several farmers that are willing to come together and work together

Cynthia Haskins Manager of Business Development and Compliance Illinois Farm Bureau