Using USDA Local Foodsystems Toolkit to Assess and Implement the Best Cooperative Direct Marketing for an Existing Local Food Group to Increase Local Sales

In September of 2017, after the height of the growing season, our steering committee started to meet on a bi-weekly basis to work through the USDA Local Food System Toolkit. Our goal was to utilize the toolkit in our decision making process for moving forward with some kind of cooperative marketing model. After several weeks of reading through chapters and discussing as a group it became pretty apparent that we didn't have the economic research experience necessary to make use of existing secondary data for our community or to effectively design primary data collection methods. We then reached out to our networks and found Ken Meter, MPA and President of Crossroads Resource Center. Ken has a lot of experience working with rural communities on local food system projects, and he was one of the authors of the foodsystems toolkit which made him very qualified! We met with Ken and his advice was that for where our community is at in the process it doesn't make sense for us to go through a full economic impact assessment but instead to put our energy toward a few action items that we had already identified. 

Lake Pepin Local Food Group Steering Committee working through the USDA's "The Economics of Local Food Systems"

Ken graciously presented to our community his findings in February of 2018. In Ken Meter’s presentation he defined community based food system as systems of exchange which strive to bring food producers and food consumers into affinity with each other for the purpose of fostering community health, wealth, connection and capacity. Ken explained that the current system takes wealth out of our communities. His suggestion was to implement a marketing strategy. An example he gave was an “Eat 5, Buy $5” plan where we encourage each resident to eat 5 local fruits or vegetables a week and buy $5/per household member locally. This strategy alone in our small community would render $1.9 Million dollars!

One of our outcomes for this grant was to create a comparison chart for online sales platforms. Sara and Annelie reviewed over 25 online sales platforms and created a succinct, one-page comparison chart for the top contenders based on our research geared specifically for farmers looking to cooperatively market together through the platform (aggregation). Link to pdf of our comparison chart: Online-Platform-Comparison-Chart-

We also conducted interviews with 13 local restaurants and institutions using a survey that we created in collaboration with Ken Meter. 

Annelie of Good Turn Farm and Sara of D&S Gardens with Chef-Owner Chris LePoudre of the Homemade Cafe in Pepin, Wisconsin. 

Based on our group discussions and some of the preliminary data from our interviews, we moved forward with the use of an online sales platform, Local Orbit, for the 2018 growing season. It was hard to gauge how many farmers and restaurants would actually utilize the platform which of course had an impact on the overall success. Our hope was that the platform would make it more streamlined for local restaurants, institutions, and individuals to purchase produce from multiple local farms with one transaction and then be able to receive one delivery or go to one location for pick up. Ideally this would lower the bar for produce buyers to buy locally and therefore increase the amount of local product they were ordering. 

After choosing Local Orbit as our platform of choice, we conducted trainings with our farmers and buyers for the platform. We also conducted training on pack standards so that our farmers would understand what would be expected of them (since many of them were new to wholesale sales) as well as brief training on food safety.  

Farmer training that took place were very well attended by local farmers interested in learning more about the aggregation project. David Van Eeckhout, of The Good Acre is seen presenting at this training.  

Once our platform was chosen, we had to figure out a lot of logistics around the aggregation of the produce and how deliveries are to be conducted. We decided that Sara George had a close proximity to town, had a walk in cooler available and had a vehicle that was approved for making deliveries, and therefore we chose the aggregation site as her home. One of the benefits of using an online sales platform with the ability to aggregate produce from multiple farms was that it could act as a sort of "online food hub". By only aggregating product that had been pre-sold through the platform, we were able to utilize existing infrastructure like Sara's walk in cooler rather than needing a larger warehouse location for storing product to be sold like some traditional brick and mortar food hubs. 

With the platform chosen, the aggregation plans in place, and the training complete, we looked for liability insurance. We realized almost immediately that in order to get insurance as a group, we had to become a legal entity. We had to step away from the grant and do a bit of research on our own to determine the best course of action. The steering committee members chose to form a group LLC and we were able to push forward (in a more organized and informed manner too!). For any groups considering starting a similar aggregation, we would highly recommend tackling the issue of liability insurance and the potential need for forming a legal entity upfront. Although we didn't expect that we would have to form a legal entity as a group when we started this project, we all felt driven to see this project through.  

As the growing season in 2018 took off, farmers started to approached us with lots of questions about what they could sell online. Since we are aggregating vegetables, can we aggregate Honey? Maple Syrup? Flowers? What about canned goods like salsas and jam? Homemade breads? Meat? and Eggs? So, we went to the Department of Agriculture and began the conversation to make sure we were compliant with state law. This added another new level to the project that we didn't anticipate. We created a spreadsheet as we learned more about what was legal and what products would need an associated license for selling through the platform. 

Farmers started adding inventory to the sales platform. Those items included: fruits and vegetables, herbs and flowers, as well as flax and pizza crusts. Our first order came in July 1st, 2018 and we were so excited to see this cooperative marketing method up and running!

Not only did we begin aggregating produce for deliveries to local institutions (schools, hospitals and restaurants) we did so for 

individuals in our community. We also created a Market Share 

box (aggregated CSA box)! We started this with 17 individuals 

that wanted to subscribe, not huge numbers, but certainly a good start.

Judy Krohn assembling Market Share CSA boxes (aggregated CSA boxes!!) with Sara George (above left). We also created a new logo and a Lake Pepin Local Food Group Brochure.

While working on the aggregation side of things, we were also working to get the word out about this new opportunity to buy local within the community. Annelie was managing the Stockholm Farmers Market and we created a new farmers market in Pepin. She began developing marketing materials to allow participating restaurants & institutions something tangible that would allow them to share with their consumers that they are purchasing local produce.

Marketing local organic produce is reported as a major challenge by 40% and a challenge by 80% of small scale sustainable farmers². By collaborating with other local farmers, time spent educating the buyers, selling the produce, and delivering the produce can be shared among the participating farms. This increases quality of life for local farmers by profitably marketing with less time investment. By making organic, small-scale farming a more viable occupation in rural communities, we can increase the total amount of organic farming which will benefit the environment and enrich our community.

Images from our Lake Pepin Local community potluck in August of 2018

As a part of the marketing approach, we participated in a press tour potluck in our community.  We had many writers that attended and learned about our project.

What we found is that the more businesses that we talked to, the more participation we had. We began seeing more orders come through, many were small dollar amounts, testing the process. We were really excited to see this and began opening the ordering platform up to the general public as well. 

Unfortunately for us, in June of 2018, Sara George's farm, D & S Gardens, was hit with pesticide drift. Not only did this become a total loss for Sara, it was difficult for our aggregation project because she was one of our 3 main farms in the project. This removed her farm completely. The value of the online sales platform is that it makes it possible for buyers to buy from multiple farmers at one time. Without a lot of product from multiple farms, it might be easier to just order from one farm directly rather than use the platform. We are confident that there would have been more sales through the platform had her product been listed, but the project still moved forward.  

In the numbers, we had 11 unique customers including hospitals, restaurants, day cares, grocery stores, food shelves and local individuals that placed orders in 2018. They ordered a combined total of $3111.00 of sales, which may seem small in the grand scheme of things, but due to the late start in the year and the vast amount of infrastructure that this took to get into place and the loss of one of our main farms, we are feeling pretty good about this amount for our first year. We do know that change is challenging and that with time, and commitment, we will see that number increase. For those sales, we had a total of 7 unique farmers who added their product to Local Orbit over the course of the growing season.

Environmental benefits:

By increasing direct marketing of locally grown, sustainable produce in this area, we feel that we could increase demand for sustainable farming acreage. The increased acreage in sustainable/organic farming has environmental benefits in reduced erosion, increased pollinator habitat, and decreased pesticide usage. We are hoping that with more time and development of this project, we will see this to fruition over the next 3-5 years. At this time, we can't prove that we made a big impact, but Local Orbit promotes "how" farms grow (e.g. Organic, Naturally Grown, etc) to the buyers, which we believe will have a substantial effect on how they choose to grow their crops. Businesses are paying more attention to who grows their foods, how they are grown and where. Transparency is one big thing we liked about Local Orbit.   

Economic benefits:

The economic benefits of this project include an increase in the amount of food  dollars circulating in our local community rather than out into larger, neighboring communities (or California!). Upon surveying the farmers at the end of year 1, (2018) we noted that yes, most of the farmers who participated in the project did indeed see an increase in local sales. This means that we likely kept more dollars in our own community.  We are thrilled to see so many support locally.  

Social benefits:

Participation in the group and decision making process will increase strength and resilience of farmers in the area due to increased communication among farmers & local consumers. By creating a strong cooperative marketing system, this community can attract more young farmers to the area and decrease the amount of farm consolidation happening. We have discovered that working together on this as a group has proved to be challenging, while building trust within our group, but very valuable in the long run. Not only did we share marketing and advertising, we promoted each other to the community. We worked together sharing equipment when a young farmer was in need. Farm resources were shared as well. There were books that were passed back and forth and there were even trades that took place due to the grant.  It was incredible to build this bond in our community and we are excited to see that trust build and grow.