Food Hub Development in the Rural Midwest

Final report for FNC17-1093

Project Type: Farmer/Rancher
Funds awarded in 2017: $22,493.00
Projected End Date: 01/30/2019
Grant Recipient: Fresh Farm HQ Cooperative Association
Region: North Central
State: Kansas
Project Coordinator:
Katie Nixon
Fresh Farm HQ dba Kansas City Food Hub
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Project Information

Description of operation:

Fresh Farm HQ Cooperative Association increases the economic viability of small and medium sized farms, bringing farmers and buyers together in a community that benefits producers, businesses and institutions, and ultimately consumers. FFHQ provides a fresh, high quality and readily available agricultural product for sale and distribution to buyers throughout the year.

The core function for FFHQ is a high-quality marketing, sales, aggregation network and distribution service that effectively and efficiently provides product to buyers. In 2017, FFHQ offered 45 different local products to corporate food service companies, grocery stores, institutions, and restaurants throughout the Kansas City metro area. FFHQ sold only whole produce for its first two years, and currently operates out of two "sub hub" locations in Olathe, Kansas and Holden, Missouri.

Fresh Farm HQ Cooperative Association is currently owned and led by ten local farmers with more than 160 years of combined growing experience and more than 90 years of experience operating farm businesses. Members are located in Kansas and Missouri, within 120 miles of Kansas City. KCFH members have more than 180 acres in vegetable production and 35 high tunnels and greenhouses that extend the growing season. Half of our members diversify their farm operations with livestock, hay, or grain production.

Summary:

At the beginning of this project, Fresh Farm HQ (FFHQ) Cooperative Association was entering its second year of business. The business was owned by 8 members and needed to establish a brand presence in a complex market with more than 18 produce distribution companies already operating in the Kansas City Region. FFHQ was created to provide access for small and medium sized farmers to wholesale markets, establishing fair prices for farmers and building the regional production capacity of small and medium sized farms to meet $125M in annual unmet demand for local produce in Kansas City.

Founding farmer members are committed to the business because they strongly believe that small to medium sized farmers need a business like FFHQ to  provide a viable, dependable and value-based market for growers wanting to scale-up.  We are strengthening the middle market in the Kansas City region for these growers. We deliberately chose a cooperative structure, even though it is not common in our region, so that farmer members would always be able to trust that the food hub was working for them.  In our first two years of operations, our governance structure and membership established a working collaboration that, just like our aggregation network, makes us resilient. Our progress is informed by multiple perspectives and a deep well of expertise in our membership and partners that are demonstrating the viability of our cooperative approach. 

Through this project, we focused on three objectives to help us establish our operations and a known presence in the regional market: brand building, food safety, and traceability. 

We achieved a part of all of these goals, but still have a distance to go in some of these areas.

Project Objectives:

Food Safety:  Now that the Food Safety Modernization Act (FSMA) is law, requirements from buyers for food safety certification have increased. This has limited FFHQ’s market.  We also know that food safety is not only important for FFHQ, but is also important for each individual farm.  Every farmer that is part of FFHQ has other markets they sell to and are feeling pressure to have food safety certification.  Most of our farmer owners have completed some sort of food safety workshop or training and have parts of or complete food safety plans.  However we needed to have a more credible and organized system to prove to buyers we take food safety seriously and are following the rules of FSMA.  

Though this project, we pursued training and technical assistance partnerships that educated growers on Food Safety requirements and assisted them in preparing for GAP certification. Initially considering Group GAP as a strategy, members decided to pursue individual GAP certification due to cost savings. 

Traceability: Because of cost and logistics, FFHQ has not operated a central aggregation facility.  For our first two years we operated through two sub-hubs, where product is aggregated from multiple farms, picked up and delivered directly to buyers.  We need to have a much better system in place to keep track of where the products are in the supply chain.  

Through this project, we implemented traceability protocol through the use of Local Food Marketplace (LFM).  We purchased additional software through LFM that helped us in creating a label that can be printed which traces back the products to the farm they came from.  We also established a recall procedure and developed plans for a central aggregation facility and new inventory management system that will increase efficiency. Unfortunately this plan has been significantly altered due to a collapse of one of our community partners that was going to host us at a central facility.  We will be regrouping and adjusting our plans to reflect our current situation, which is still operating our of sub-hubs that are on member farms. 

Building our Brand: because we are a new business, it takes a lot of time and effort to find new buyers and for our brand to be recognized. Not only recognition, but also to stand out from the 18+ produce distribution companies serving KC.  We are the only farmer owned cooperative company providing local food.  We believe buyers and consumers will value this, but we need a targeted marketing plan to ensure our brand carries this very important identity with it.   

Through this project, FFHQ launched a website and produced materials that would introduce us to the regional market. We realized through our initial marketing strategy that the brand needed refinement to clarify what differentiates us in the market. Adapting quickly, we adjusted our strategy, and voted on a "new" name that our region has been familiar with since our inception - the Kansas City Food Hub and to develop a more effective web platform and brand presence.

Cooperators

Click linked name(s) to expand
  • Cal Jamerson (Educator)

Research

Materials and methods:

FFHQ is governed by a Board of Directors made up of member farms. They meet monthly to advise FFHQ's staff on operational decisions. These regular meetings were used as opportunities to come together from dispersed locations to build relationships, make progress on grant objectives, engage consultants and partners, and make adjustments as lessons were learned. Ongoing communication amongst our large group was key in our ability to be agile and make changes as we learned. 

Research results and discussion:

No research conducted, but many lessons were learned through project objectives.

Participation Summary
10 Farmers participating in research

Educational & Outreach Activities

15 Consultations
1 Curricula, factsheets or educational tools
1 Published press articles, newsletters
3 Workshop field days

Participation Summary:

15 Farmers
2 Ag professionals participated
Education/outreach description:

Presented at the Great Plains Growers conference in January 2018, updating regional growers on food hub progress.  The panel included FFHQ director and three owner members. 

After the re-brand from FFHQ to the Kansas City Food Hub, we developed a social media page and have over 450 likes.  We also created a new website.  

The Kansas City Food Hub displayed at the 2019 Great Plains Growers Conference and talked to over 50 farmers about FFHQ. 

The KC Food Hub Sales director will be presenting about this project at the Sustainable Agriculture conference in Grand Lakes, NE in the first part of February 2019.

We also developed a MailChimp account that we can use to communicate with the Cooperative members and supporters.  This has been a great help in organizing our contacts, getting out the word, and keeping track of what campaigns are effective as MailChip tracks the "open rates" AND its free to use.  

Learning Outcomes

15 Farmers reported changes in knowledge, attitudes, skills and/or awareness as a result of their participation
Lessons Learned:

Food Safety and Tracability:  The complexity of figuring out how to navigate the food safety environment should not be underestimated.  This continues to be a challenge for the farmers that sell through the KC Food Hub.  Many of our farmers are beginning market farmers so not only are they trying to expand their operations to scale-up, they are also trying to learn the food safety rules and implement best practices.  It is overwhelming.  I would recommend that a grower needs at least two full seasons to adapt to the new style of growing required to be a successful wholesale grower before they can start thinking about getting GAP certified.  However, they should know the rules and implement then as they are developing their new wholesale operation.

When we wrote the grant, we thought Group GAP was a solution for helping our growers  This turned out not to be the case.  First of all, 10 growers is not enough to make it a financially viable idea.  It would take 20 or more growers for it to make sense.  Perhaps when the KC Food Hub is a little bigger we can attempt it again. Secondly, our growers were not ready.  Despite many of them having food safety plans and attending food safety workshops in the past few years, they were still lacking confidence in passing their inspections.  If we were to pursue Group GAP, all the growers would need to be ready at the same time.  

Marketing/Branding: We knew this piece was important, which is why it was a big part of the project.  We did not realize how disastrous our previous name was until we adopted the new brand: KC Food Hub. It made such a difference to buyers, they just got the concept of a farmer owned business better when the explanation was followed by this more public friendly name. 

Project Outcomes

15 Farmers changed or adopted a practice
2 Grants received that built upon this project
1 New working collaboration
Success stories:

Project Objective: Food Safety

Upon application, FFHQ (from here forward will be refereed to as the KC Food Hub) faced limited wholesale markets with a lack of proper food safety certifications in place.  In February 2017, we hosted a food safety planning workshop, in which each of ten member farms created a food safety plan. In June of 2017, we established a food safety policy. In the fall of 2017 we formed a partnership with KState's Olathe campus, and are currently scheduling a three-step technical assistance process that will support multiple member farms in becoming GAP certified in 2019. Members received a pre-assessment visit, attended a group workshop, and received a mock-audit prior to certification. 

These visits helped boost the confidence of the 15 farmers that sell through the KC Food Hub.  While only one farm is GAP certified at this point, two KC Food Hub farmers plan to get certified in 2019.  The KC Food Hub has not had too much pressure to provide GAP certified food as of yet, but as we look to expand the market for the farmers product we are hearing more requests of this kind. 

 

Project Objective: Traceability

In 2017, the KC Food Hub implemented a 2-hour recall procedure that allows us to identify the lot of origin for each product and quickly trace the source of any product quality issue that may arise. The KC Food Hub staff and members communicate by text, phone, email and fax to optimize and provide flexibility in communications. Each product container is labeled with a sticker from the farm of origin, detailing origin and packing date and identifying the farm. An KC Food Hub label unifies the products with a single brand while promoting the brand of each farm.  

The KC Food Hub has become a core partner in the Kansas City Food Security Warehouse Collaborative, and will move into a central aggregation facility in the spring of 2019 that will significantly expand cold storage, aggregation, and distribution capacity.  SARE funds are supported the development of our new Local Food Marketplace web platform that will, when finally up and running, streamline product traceability and manage inventory throughout our aggregation network. The web platform and central aggregation facility are scheduled to launch in April 201. 

 

Project Objective: Building our Brand

In February 2017, the cooperative association hired a marketing consultant to create a name, logo, marketing collateral, and a webpage for the food hub. The business adopted the Name Fresh Farm HQ Cooperative Association, and focused our marketing efforts on social media and networking. After several months on the market, we learned that the brand did not provide the market presence we sought, nor did it clearly communicate our identity or purpose.  We met with multiple brand and marketing consultants who provided in-kind consultation and recommendations for a rename and re-brand that would permanently establish the cooperative association in the Kansas City region. 

In December 2017, FFHQ members voted to change our name to the nickname we've held since early conversations among the community coalition who've guided our development. Now called the Kansas City Food Hub, we are maintaining our cooperative structure. SARE funds supported the development of a new website, social media sites,  and logo that was launched in the spring of 2018. The new name and professional material that was developed out of this effort has raised the profile of the organization.  When the project started we had 10 members of the Cooperative, we now have 15 member, with three pending to sell through the 2019 season.  

The two grants we received were (in conjunction with the Osage Farmer Alliance) a Missouri Department of Agriculture Specialty Crop Block Grant and we are a Subawardee and partner on a USDA Beginning Farmer Rancher Development Program grant that was awarded to West Central Missouri Community Action Agency. 

 

Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.