Final report for GS20-231
In response to the economic, environmental, and social concerns associated with the current mainstream and industrialized food system, there has been a growing preference for alternative and local food systems. Current alternative and local marketing channels are predominantly direct-to-consumer marketing channels such as farmers markets, which still account for a very small portion of total food sales in the US. They cannot supply the necessary volumes required for meeting the increased demand of local foods. A major obstacle to meeting the demands of increased localization is the lack of economic, organizational, and physical structures of the appropriate scale. There has been an increased research interest to explore upscaled local food supply chains as efficient market channels to supply food sourced from local growers to wholesale buyers such as restaurants, schools, and hospitals. Our hypothesis was that this can be achieved through the establishment of food hubs. With the rising popularity, a food hub is a dynamic and evolving concept and can be defined on the basis of purpose and stakeholders served. The main objective of our study was to propose a conceptual value added food hub business model and evaluate differing needs and expectations of stakeholders for a food hub in North Central Florida. We also aimed to evaluate specific opportunities and challenges for potential food hub establishment in North Central Florida. The needs assessment survey studies of small and medium sized producers as well as school districts in North Central Florida were conducted. It was found that while significant opportunities exist for food hubs in North Central Florida, it is equally challenging for food hubs to meet the expectations of all stakeholders. Food hubs should strive to remain financially viable while meeting their social and community objectives.
To conduct a conceptual review of the food hub concept, explore different challenges faced by food hubs and propose an ideal and conceptual value-added food hub business model
To evaluate the differing needs and expectations of stakeholders when evaluating food hub development in North Central Florida
To evaluate specific opportunities and challenges for potential food hub establishment in North Central Florida
Small and medium-sized producers in the ten-county region of North-central Florida were contacted through UF/IFAS extension county agents and farmers’ market visits. Information was solicited through a producer needs assessment questionnaire. The questionnaire was designed to assess specialty crop production and current marketing channels adopted by growers. Furthermore, producer needs from a locational, functional and infrastructure perspective as well as their willingness to participate in a food hub were also assessed.
A copy of the survey instrument was first developed using Microsoft Office Word and approved as exempt by UF IRB (ID # 202001998). The questions were then entered into the Qualtrics® survey software, which was distributed to respondents as either an email link or a QR code. Using Qualtrics® survey software was efficient and helpful for the collection, coding, and cleaning of data. Before administering the survey to participants in North Central Florida, the instrument was pilot tested with 45 producers outside the study region in March 2021. A detailed email with instructions on how to complete the pilot test was sent to all participants. At the end of survey, a set 6 critique questions regarding the survey design, timing, wording, readability, functionality, and understanding were included, to identify weaknesses in the survey and clarify unclear, confusing, or misleading questions. All the critique questions included were open-ended questions and producers were encouraged to comment freely about their experience of taking the survey and their feedback proved very valuable. Critiques were read thoroughly, and adjustments to the survey instrument were made before sending it out to participants in North Central Florida.
The final survey version included a total of 39 questions, including 6 demographic questions at the end of the survey. An informed consent statement was included at the beginning of the survey, wherein each producer was informed of the nature of the survey, including the objective, time required, potential risks and voluntary participation. Qualtrics® estimated the time for completion of the survey at 15-20 minutes. The survey instrument was a mix of free response, multiple choice, matrix, and Likert-type four-point (very important, important, somewhat important, and not at all important), five-point (very significant, significant, neutral, somewhat significant, and not at all significant) and six-point (extremely satisfied, moderately satisfied, slightly satisfied, slightly dissatisfied, moderately dissatisfies and extremely dissatisfied) questions. Skip-logic questions were included at many points in the survey to save the respondents’ time and remove unnecessary steps. For instance, if the producers answered “No” to the question “Do you deliver or transport your own produce”, they were automatically directed to the next appropriate question and did not have to answer any follow-up question related to the delivery or transportation of their produce.
The survey was finally deployed on April 14, 2021. Contact of producers through UF/IFAS county extension agents and farmers’ market visits were selected as the best methods for data collection, given available time and resources. County extension agents were contacted via email, with detailed information about the purpose of the survey and were provided an online link to distribute the survey in their network. An informational survey flyer was also included. County extension agents maintain strong networks of growers in their respective areas and directly interact with them on a regular basis; therefore, they are a reliable means of contacting growers that fit our target population. Secondly, we decided to visit all major farmers’ markets in the ten-county study region to collect survey responses. Farmers’ markets are an ideal place to connect to small and medium-sized growers. A list of farmers’ markets in the ten-county study region was compiled and a weekly data collection plan was developed based on the time and day of operation. The information regarding various farmers’ markets in North Central Florida was obtained from the website of Florida Department of Agriculture and Consumer Services (https://www.fdacs.gov/Consumer-Resources/Buy-Fresh-From-Florida/Community-Farmers-Markets) and Florida Farm Bureau (https://www.floridafarmbureau.org/florida-farms-selling-direct-to-consumers/).
Data collection at farmers’ markets was done using the following two methods:
- Tablet Computer: The Qualtrics survey was downloaded on the tablet computer using an app, “Offline Surveys”. This allowed the survey to be taken offline by the growers during the farmers market visit and the responses were later uploaded to Qualtrics from the app.
- QR Code: For the growers who did not have time to complete the survey at the farmers’ market, an envelope containing the consent agreement, survey flyer and completion instructions with a QR code were handed out. The QR code could simply be scanned with a phone camera for the survey to be taken later.
The results of the survey were analyzed using SPSS Statistics 27. The data was first analyzed using descriptive statistics to describe the basic features of the survey. Pearson correlations of different variables were performed with the dependent variable (i.e., overall interest in a food hub) and predictor variables with the largest correlation coefficient and lowest p-values were selected. Selected predictors were then used to fit an ordinal logistic regression model. Ordinal logistic regression was used to predict an ordinal variable, where values exist in an order and a scale. It measures the proportional log odds of the dependent variable moving to the next higher category with each unit increase in predictor variable.
Wholesale institutional buyers in the region of North Central Florida were identified as the target population for the buyer survey. Since we sought to evaluate a food hub as an effective distribution facility to meet institutional demand of local food, we included schools and universities, hospitals, restaurants, and prisons as a focus in our study. It was decided to exclude grocery stores, supermarkets, and chain restaurants because they are mostly vertically integrated and have their own pre-contracted distributors and suppliers. Furthermore, although some grocery stores are locally owned and operated, many are regional or national chains; therefore, it would be difficult to acquire information on local procurement practices from these buyers. Information was solicited through a buyer survey questionnaire developed with the purpose of identifying needs and concerns of wholesale institutional buyers that prevent them from purchasing local food in bulk and to evaluate their willingness to purchase fresh local produce through a food hub. The buyer needs from a locational, functional and infrastructure perspective as well as their willingness to participate in a food hub were assessed.
A copy of the survey instrument was first developed using Microsoft Office Word and approved as exempt from UF IRB (ID # 202001998). The questions were then entered into the Qualtrics® survey software, which was used as a final version to be given to respondents as either an email link or a QR code to take the survey.
The buyer survey was also reviewed before administering to the participants. Since we had no formal or informal contact with any potential buyer outside the study region, the survey was sent to a group of five reviewers at University of Florida all of whom had experience in developing surveys. The survey was also reviewed by Anna Prizzia, UF Field and Fork program director and campus food systems coordinator. An email invitation to review was sent out on April 28, 2021. The reviewers were asked to comment freely about survey design, timing, wording, readability, functionality, and understanding, so that any survey weaknesses can be addressed. Respondent feedback was evaluated thoroughly, and adjustments were made before deploying the final survey document.
The final survey version included a total of 34 questions. An informed consent statement was included at the beginning of the survey, wherein each participant was informed of the nature of the survey, including the objective, time required, potential risks and voluntary participation. The Qualtrics® estimated time for completion of the survey was 10-15 minutes. Just like the producer survey, the survey instrument was a mix of free response, multiple choice, matrix, and Likert-type four-point (very important, important, somewhat important, and not at all important) and five point (very significant, significant, neutral, somewhat significant, and not at all significant) questions. Like the producer survey, skip logic questions were included at various points in the survey to save respondents’ time in answering any irrelevant questions.
The survey was deployed on May 7, 2021. For schools, hospitals, and prisons, telephone inquiries followed by emails was chosen as the best possible method for data collection. For schools, there was a single point of contact for all the schools in each county, namely the county food service director. Thus, the contact information for all the ten county food service directors was obtained from the internet. After an initial phone call, a detailed email containing information about the study, survey link and an informational flyer was sent. The same method was adopted for hospitals and prisons. It is worth mentioning that Food Systems Coalition of Greater Gainesville, a network of voluntary stakeholders passionate about improving the local food system in the community, assisted in distributing the survey to Alachua County prison, UF Gator Dining and hospitals in the area.
For restaurants, data collection was done by physically mailing out survey materials. The names of all cities and townships in Alachua, Bradford, Clay, Columbia, Gilchrist, Levy, Marion, Putnam, Suwanee, and Union counties were identified and collected. G-Business Extractor v6.1.0 was used to identify all restaurants in each county to find contact information. The tool searches business from Google Maps and extracts key information including names, physical addresses, phone numbers, websites, email addresses, coordinates, etc. Using “restaurants” as a keyword, the names of recognized cities and townships in each county were added to a location field. Once entered, the software was initialized to search and scrape all key information and once completed, the information exported into an Excel spreadsheet. The data was then aggregated, cleaned and duplicate addresses were removed. For each county, a fixed percentage (71%) of restaurants were randomly sampled from the total number of restaurants in that county and selected for data collection. Envelopes containing a survey flyer, consent agreement, an invitation letter to participate in the survey and an instructions document with a QR code (Appendix G) to take the survey, were mailed to a total of 1000 restaurants in the ten-county study region.
Producer Survey Results
The target population included small and medium-sized specialty crop growers in the ten-county region of North Central Florida. The sample included a total of 58 producer respondents from all the counties except Bradford. Attempts to make contacts with producers in Bradford County were unsuccessful. There was no response from producers in this county through extension emails. We also discovered that the only farmers’ market located in this county was not operational. We were able to get a contact number of one of the producers, who was contacted by phone and then sent the survey by email, but that individual did not take the survey. Out of 58, we received 43 completed surveys from small and medium sized specialty crop producers in the region. Emails and farmers’ market visits were major sources of data collection for producer survey.
Producers were asked to provide an approximate value of their annual gross farm income, which represents sales before deducting expenses. As per USDA’s guidance for classifying diverse farms structures, farms with gross cash farm income (GCFI) of less than $350,000 are classified as small farms, where medium sized farms have GCFI between $350,000-$1,000,000 and large sized farms have GCFI of more than $1,000,000. 70% of the respondents accounted for small and medium-sized producers, while 2% as large sized farm operators. 27% of the respondents “preferred not to answer” about their GCFI. When asked about farm ownership, 77% described their farm as independent family owned and 21% as filed as a corporation. 2% of the respondents declined to provide the information on the type of their farm ownership.
Respondents identified themselves as Caucasian (71%), Hispanic (10%), African American (7%), Native American (2%) and other (5%). Five percent of the respondents “preferred not to answer” when asked to self-identify. As per the USDA census data, 36% of the farmers in the US are female (USDA NASS, 2019). However, in our study, a higher percentage of respondents (46%) than the national average identified as female. Fifty-one percent of the respondents identified as male. Three percent of the respondents declined to identify their gender. Most of the survey respondents were 50 or more years of age (62%), which closely aligns with the national average of 58.3 years. Thirty-six percent of the producers were between the ages of 25 and 49. Two percent of the respondents declined to specify their age.
To identify the seasonality of the production in the region of North Central Florida, producers were asked to identify their farming operation as either seasonal or year-round. Seventy-three percent of producers stated their operations as year-round compared to 27% that indicated they were seasonal farm operators. Respondents were also asked to determine the county in which their farming operation is located. Six percent of the respondents indicated that their farming operations were in more than one county. The “other” counties included Duval, Sumter, Pasco, Nassau, and Hillsborough. While every effort was made to focus on responses from our study region, a few responses were recorded from neighboring counties such as Duval, Nassau, and Sumter. Since extension agents oversee other counties in addition to the study region, email surveys sent by extension agents to growers in their contact list resulted in some responses from the neighboring counties.
To identify the specialty crops produced in the region, producers were provided with a list of fruit and vegetable crops and asked to select the crops that they currently grow and if they have the interest or capacity to grow more. The purpose in asking this question was to determine supply potential.
Fruits and vegetables that producers grow or have the interest/capacity to grow more include nectarines, pecans, watermelon, zucchini squash, cucumber, kale, green beans, green cabbage, yellow squash, romaine, beets, red radish, cauliflower, red onions, red cabbage, and sweet potato. It is worth mentioning that respondents identified several other fruits and vegetables not included in the list, that they grow or would like to grow more. This included blackberries, elderberries, microgreens, satsumas, spinach, brussels sprouts, eggplant, okra, loquats, passionfruit, persimmons, radicchio, fig, pears, and turmeric. Most producers indicated that their farm operates year-round (76%). This reflects the ability of the warm climate and unique topography of the region of North Central Florida to supply a diverse range of fresh produce throughout the year. However, most of the farms in the study region of North Central Florida are family owned and relatively small as indicated in the demographic responses. This is consistent with Cerame (2013) who indicated that the average farm size in the study region was somewhere between 10-49 acres. Most of these growers currently use direct-to-consumer marketing channels, selling their produce in small and retail quantities. Thus, while some of the growers might be land limited, some keep their lands fallow, as was indicated by some of the growers that they had the interest/capacity to grow more. Hence, it would be challenging for a new food hub to convince growers to increase their cultivation potential to supply food products in large quantities and wholesale prices. A potential food hub would need to have an efficient inventory, fulfillment, and delivery platform in place to have a committed group of producers willing to increase their cultivation potential and supply consistent quantities of local produce to a robust network of buyers.
Distribution and Marketing:
Producers were asked to determine if they currently transport or deliver their produce to their consumers and how far, on average, they drive one way to deliver their produce. This information was used to determine whether they would be willing to deliver to a food hub in the future if one were available. Only 9% of respondents indicated they do not deliver their produce, whereas 70% indicated they deliver and 21% indicated they “sometimes” deliver their produce. This is important with respect to produce distribution to a potential food hub, since majority of producers already deliver their produce, it is likely they would be willing to deliver to a food hub if certain conditions applied.
Eighty-four percent of the respondents indicated they drive somewhere between 1 and 50 miles to deliver their produce. Of these, 13% drive between 1-5 miles and 16% drive between 6-10 miles. A significant percentage of producers indicated they drive between 11 and 50 miles, where 29% drive between 11-20 miles and 26% between 21-50 miles. Only 16% drive more than 50 miles one way to deliver their produce. This indicates that majority of the producers in the region travel one-way up to 50 miles to deliver their produce to their buyers. This was also used as a basis further in the survey to know the distance respondents would be willing to travel to deliver to a potential food hub. When asked if they perform any post-harvest activities on their farm, at least 30% of the producers indicated performing one or more of the post-harvest activities such as washing, grading, cooling, packaging, labelling and other value-added activities such as cutting, freezing, canning etc., with packing, sorting, and cooling all done by more than 50% of farmers. When asked if they have the ability/infrastructure to perform additional value-added activities other than their own, 70% of the respondents indicated that they do not have the ability/infrastructure to perform any additional value-added activities. Thus, while growers perform certain post-harvest activities on their farm before selling their produce at predominantly retail outlets, they lack the infrastructure to perform these activities at a larger scale for supplying produce to large wholesale buyers.
To identify the extent of current producer participation in wholesale institutional markets, producers were also asked to identify any or all distribution or marketing channels they currently use. Eighty-six percent of the respondents indicated they currently use direct-to-consumer channels such as farmers markets, u-pick, CSA, roadside stands, etc. However, 42% of the respondents indicated they currently deliver to restaurants. Local restaurants sometimes have close relationships with the local growers, and thus often source produce from them as part of their produce purchase. Delivery to institutions such as schools, colleges, hospitals, and religious institutions was the marketing channel that had the lowest report frequency amongst producers (16%). This is likely because small and medium sized producers do not have enough quantity to supply at the scale of institutional demand, while also being unable to fulfill the food safety requirements. Thus, food service contractors at these institutions tend to source their food supply from large scale distributors that can ensure a consistent supply of food products year-round.
Forty-nine percent of the producers indicated that they were willing to increase their participation in wholesale markets, whereas 35% indicated that they were willing only if certain conditions were met or barriers removed. For instance, this might involve assisting them with getting food safety certifications to supply institutional buyers or getting a guaranteed sales contract to supply a wholesale buyer, including the product pricing and specifications. Small and medium-sized producers currently using direct-to-consumer marketing channels often find it a hassle or a difficulty in obtaining food safety certifications or other requirements such as an insurance/liability coverage required for accessing wholesale markets. Only 16% indicated they were unwilling to participate in wholesale markets. Thus, majority of the producers are interested and willing to explore alternative and wholesale market options, provided they are assisted in meeting certain requirements and specifications from wholesale buyers. However, depending upon the costs involved for overcoming such barriers or available capital, it might be challenging for a food hub to assist the growers, especially in its initial stages of growth.
Issues and concerns:
Producers were asked to indicate their level of concern for various business and financial activities in their operation, with 1 being most concerned and 5 being least concerned. Cost of doing business was indicated as the most important concern by majority of the growers. Around 67% of the respondents indicated that they were extremely concerned about the cost of doing business. Costs of doing business includes input, infrastructure, transportation, and labor costs for growers. Most of the small and medium sized growers do not get the same federal benefits as large growers, such as subsidized transport which is available only above a certain quantity of food product (Cerame, 2013). Additionally, the cost of doing business for small- and medium-sized growers may change drastically because there are no fixed sale prices received at various direct-to-consumer outlets (e.g., CSAs, farmers’ markets, and u-pick) while input, transportation and labor costs may vary significantly over time. Participants identified laws and regulations as the second most concerning factor when selling to a food hub. This involves issues such as getting food safety certifications for selling to certain buyers such as restaurants, schools, or hospitals. Producers were less concerned about other activities such as business planning, regulatory issues and record keeping.
Respondents were provided with the definition of a food hub and then were asked questions pertaining to their overall interest, attitude, and willingness to use food hub services and market their produce through a food hub. They were also asked about their preferred food hub facilitating services and type of ownership.
Prior to any other food hub questions, we wanted to determine what percentage of producers that currently participate or sell through a food hub or related organizations. Ninety-five percent of the respondents indicated they do not currently sell through a food hub. This is unsurprising due to the absence of a food hub in the region of North Central Florida to effectively aggregate the local produce and supply to wholesale institutional buyers. Currently, there is no USDA registered food hubs in the region of North Central Florida. However, some non-profits such as Working Food in Gainesville (https://workingfood.org/) work closely with local government and stakeholders to provide business development and infrastructure support.
Producers were asked to indicate their preference for various food hub services that they would like to avail from a potential food hub. Producers indicated relatively equal importance for all other food hub services except for the ability to connect to new local buyers, which was the primary service indicated. Eighty-two percent of the respondents indicated that connecting to new local buyers was a “very important” or “important” food hub service to them. It is important to note that while producers indicated interest for several services offered at a food hub, it would not be a financially viable option for a food hub to provide all these services. As discussed in Chapter 2, a food hub can only fulfill its objectives if it remains financially viable. Thus, it is important that in the initial stages, a food hub focuses on a few primary and essential objectives and identify the most important services required by stakeholders. As it becomes more financially independent with significant profit margins and overall profitability, it can slowly expand to include other services such as skill training and food safety certifications.
When asked about their preferred food hub ownership in the following question, more than 70% of the producers indicated they would be “very likely or likely” to sell through a food hub if the food hub was grower owned, a grower-owned cooperative, or owned by residents. As we are exploring the possibility of a producer-centric food hub model, it makes sense for it to be producer led as growers would prefer food hub owners to have similar interests or a vested stake in the community. As a grower-owned or grower-owned cooperative food hub model, there is shared financial responsibility and producers are likely to perceive this model has having lower financial risk. However, they are less likely to participate if the food hub is a non-profit or if they are offered to invest or become a part-owner (sharing ownership with other stakeholders) of the food hub. This indicates a certain degree of risk and uncertainty among growers for a food hub. It is likely that growers would want to explore other types of food hub ownership once the overall food hub business model is successful in the region.
Wholesale institutional buyers such as schools, hospitals, and restaurants buy food from large scale distributors and often require their vendors to have food safety certifications. When asked if they would be willing to obtain food safety certifications, only 10% stated they already have the certifications and 9% refused to have certifications. Eighty-two percent of the producers stated their willingness to obtain food safety certifications for selling to a food hub. Of those willing, 49% are willing if there are no costs involved, 21% if the costs are less than $500, another 9% are willing if the costs are less than $1000 and only 2% are willing to obtain certifications if costs are less than $5000. Cost of food certifications is an important factor for small and medium sized growers, but it can also be challenging for a food hub in helping or sharing the cost of expensive food safety certifications. For instance, obtaining GAP certification can cost between $37 - $54 per acre for an average grower (Becot et al., 2012). Additionally, obtaining GAP certification involves creating a farm-food safety plan, requesting an audit, having an inspector perform an audit and finally receiving a certification. Thus, not only can having a certification prove to be expensive, but it is also time consuming for a small- or medium-sized growers. Growers can use certain certification programs by USDA, such as GroupGAP where a group of producers can come together and agree to be audited as group rather than independently. Group members share resources and work together under a common farm food safety plan and a quality management system. Thus, growers supplying to a food hub can come together and use such services such as GroupGAP to lower costs and decrease time spent obtaining certification. However, a food hub’s decision to help with food safety certifications should also be taken considering the hub’s own financial condition and the potential financial risks.
Producers were then asked about their concerns for participating in a food hub. Producers were most concerned about low prices followed by the risk of increasing production without a guaranteed sales contract. As seen previously about 86% of the respondents currently use direct-to-consumer marketing channels and are selling at retail prices. Since the food hub would primarily supply wholesale markets, price would need to be lower than direct-to-consumer channels; however, producers would not spend as much time on marketing activities as they would be moving larger volumes through wholesale channels. This presents producers with an opportunity to grow more and sell the produce in bulk as respondents indicated their interest and capacity to grow more of certain fruits and vegetables. Secondly, utilizing post-harvest handling, storage, and value-added activities and services at the food hub such as canning, cutting, freezing etc. can provide producers the opportunity to sell their produce at higher prices over an extended periods of time as value-added products. Producer concern about increasing production for the food hub without having a guaranteed sales contract is valid. This can be addressed by having a pre-season planning consultation with the producers and providing contracts to those interested. The respondents indicated less concern about not having enough production for a food hub since they indicated their willingness to explore wholesale markets and majority of them are willing to aggregate their produce. They also seemed less concerned about a food hub being in competition with their existing market channels. A food hub serving wholesale institutional buyers and current direct-to-consumer sales through farmers’ markets, u-pick, CSAs etc. are two distinct market channels, suggesting there is low to no overlap since most of the growers are currently utilizing only direct-to-consumer marketing channels.
Producers were asked to determine their overall interest and attitude for participating in a food hub. Sixty-seven percent of producers were “extremely interested” to “moderately interested”. Nineteen percent stated they were slightly interested and only 14% were not at all interested in selling to a food hub. Although most were interested, the varying degrees of interest may suggest uncertainty among the growers. A potential food hub in North Central Florida is a new business model and a market channel for small and medium sized growers, hence the perceived level of interest among growers is likely to be varied. Additionally, producers have varied perceptions of various complexities involved with a food hub operation such as contracts, food safety requirements, prices, and type of ownership. Thus, when asked about their overall interest in a food hub business model, perceived level of interest varies at an individual level.
Buyer Survey: Preliminary Findings from Schools
Although we received 28 completed responses, we are only reporting results provided by school food authorities. There is a single food service director in charge of food procurement, service decisions, and administration for all schools in that county. We sent out surveys to all the 10 food service directors for each county and received 5 responses. While the number of respondents for school districts might seem low, each respondent represents all the schools in that county. Overall, the survey response rate for schools was quite high (50%, as 5 out of 10 food service directors responded to the survey). The school respondents were from Alachua, Clay, Columbia, Suwannee, and Union counties. All the respondents indicated that they were self-operated, i.e., not operated by a contractor or a food service management company.
Response rates for restaurants, prisons and hospitals were too low to draw meaningful inferences and report findings. We sent out mail surveys to around 1000 randomly sampled restaurants in all the ten counties and received only 17 responses. There were two responses received for prisons and one response for hospitals. Hence, the data from these buyers is low to develop any significant insights or conclusions.
When asked about the type of produce they currently purchase, all the respondents (100%, n=5) indicated that they purchase fresh unprocessed and processed foods, processed frozen foods, and processed canned or jarred foods. Schools use a variety of different prepackaged/prepared foods because they often times do not have the facilities or equipment to prepare them themselves.
Additionally, 80% of the respondents indicated that they purchase produce less than three times per week and only 20% indicated purchasing more than 5 times per week. All school district respondents indicated that they use forward contracting for their produce purchases with an average length of their contract period being 1 year. School districts are public institutions operating under a set of guidelines; hence they would most likely require having contracts with a potential food hub as well. Long-term contractual agreements do have their own benefits and limitations. While it might be good in terms of stability of produce supply and market demand, it may be disadvantageous when price fluctuations occur that are favorable for buyers. It might also be challenging from the supplier or producer point of view, as some producers might not prefer a contract and instead would want to supply to a food hub without one.
When asked whether they require any food safety certifications, 40% of buyers indicated that they require Good Agricultural Practices (GAP) certification, 60% indicated Hazard Analysis Critical Control Point (HACCP) and 20% indicated others such as Farm to School checklist and inspection used in farm to school programs. Sixty percent of the buyers indicated that they require their vendors to carry insurance, in the amounts ranging from less than one million dollars to more than 5 million. The cost of obtaining insurance will likely be a significant expense for a food hub and while insurance requirements may be flexible for certain institutional buyers (e.g., restaurants), a food hub will likely require a policy that includes coverage for several hazards (i.e., occurrences, product liability, auto insurance).
Buyers were asked about various attributes of fresh produce and their importance in influencing their purchase decisions. Most buyers indicated greater importance for local food, farm ownership, and sustainable practices. Eighty percent of the buyers indicated that produce being “local” was “very important” or “important” to them when making purchase decisions. Local is an important attribute, particularly with Florida Farm to School Program where schools partner with local farms to supply fresh fruits and vegetables in school cafeterias (Watson et al., 2018). Sixty percent of buyers indicated farm ownership and sustainable agricultural practices as “very important” or “important” when making produce purchase decisions.
Before proceeding with any other questions related to local foods, buyers were asked to specify their perceived definition for local foods. There is no universal definition for local foods, but for the purpose of this study, we adopted the local foods definition of Farm Act, 2008, which states that:
“The total distance that a product can be transported and still be considered a locally or regionally produced agricultural food product is less than 400 miles from its origin, or within the state in which it is produced”.
Forty percent of the respondents determined ‘local’ as product grown within the state of Florida, aligning with the above definition. Another 40% indicated that a product could be considered local if it was grown within 300-400 miles of consumption. Twenty percent defined local as product grown within 100-200 miles of consumption. All definitions of local food selected by respondents fall within the description of our study region of North Central Florida. Respondents were then asked if they purchase local foods. It was interesting to see that while 80% of the respondents indicated ‘local’ as an important attribute in their fresh produce purchase decisions, 60% of the respondents indicated they currently do not purchase local foods while 40% indicated making local food purchases. Of those purchasing local foods, 20% indicated their monthly costs for local foods to be less than 25% while another 20% respondents indicated 25-50% of their monthly costs on local produce. Current local food marketing channels are pre-dominantly direct-to-consumer marketing channels and the supply of local foods through upscaled food distribution is minimal. When asked to identify any or all of the local food vendors that they currently purchase from, 40% of the respondents indicated individual producer and 60% indicated contracted distributors. It is likely that school districts purchasing directly from individual producers are participating in the Florida Farm to School program, which allows schools to partner directly with individual farms to supply fresh produce.
Sixty percent of the buyers indicated they are not willing to pay a premium price for local foods. School districts and other public institutions operate on limited funding and are often unable to pay price premiums for local food purchases (Boys et al., 2018). Certain agencies, like the USDA, provide funding to support grants, technical assistance, and other activities related to USDA’s Farm to School Program. However, 60% of the schools did indicate their willingness to purchase seconds or ugly as part of their local food purchases, while another 20% indicated they would ‘sometimes’ be willing to purchase seconds or ugly foods. This is important for reducing food waste in our food system and aligns with sustainability goals of stakeholders and food hub partners. Wholesale buyers sometimes have very strict standards in place for their food purchases and any food commodity not fitting those standards are frequently discarded. The willingness to purchase seconds or ugly produce by wholesale buyers can go a long way in reducing food waste in our local food system by utilizing those products as value-added products processed at food hub facilities.
Issues and concerns:
Buyers were asked to identify the barriers that prevent them from purchasing local foods. Buyers ranked the barriers from 1 to 5, with 1 being the largest barrier and 5 as the smallest barrier. Supply/supplier issues was identified as the largest barrier followed by contractual arrangements and compliance with food safety requirements. High prices and product quality were not considered significant barriers by school respondents.
Sixty percent identified supplier issues as the largest barrier. Currently, established contracted distributors or food service companies supplying local foods allocate only a small portion of their food procurement towards local foods, and the majority of local food sales occur through retail direct-to-consumer marketing channels (Caitlin Cerame, 2013; Cleveland et al., 2014). There is a lack of designated local food distribution facilities and value supply chains to supply fresh produce to local institutional buyers. Forty percent of respondents indicated contractual arrangements as the largest barrier in their purchase of local foods. Previously, respondents indicated that they use forward contracting in their local foods purchase with an average of one year long contract periods. Local producers are sometimes only willing to supply local foods without contracts and are not willing to have yearly contracts. Also, contracts require suppliers to carry insurance which is considered another challenge or constraint by the suppliers. Compliance with food safety requirements was the third important barrier indicated. It was interesting to see that high prices were not among the largest barrier selected by school respondents. While price is an important and persistent barrier for public institutions like schools (Christensen et al., 2018), it is probably the case that the schools have already established relationships with local producers (perhaps through the Farm to School program but may be not) and do not consider it an issue. Majority respondents indicated their unwillingness to pay a price premium for local foods, making high prices a constraint in their local food purchases. Quality of products was identified as the least significant barrier. While they had previously indicated local as an important attribute in their local foods purchase, they are not willing to pay a premium price for local foods.
Buyers were also encouraged to mention any other concerns that they feel limit their access to local foods. One of the buyers wrote, “We have a hard time finding farms that are willing to sell to us”, another mentioned “Availability and delivery”, “quantity”. Another buyer indicated “Inconsistent or not enough volume on main items”. Buyers also discussed some of the produce supply issues they faced during the COVID-19 pandemic. Respondents mentioned “periodic shortages”, “transportation” and “not enough grown for our demand”. Another buyer mentioned “Supply chain shut down even with produce available at the beginning of the pandemic, mainly delivery issues”.
The respondents were provided with the definition of a food hub and then asked questions pertaining to their overall interest, attitude, and willingness to use food hub services and buy produce through a food hub. Buyers were asked if they were currently sourcing product from a food hub. A majority (80%) of the respondents indicated they were not buying from a food hub. Buyers were also asked to identify food hub facilitating services and the important of those services with respect to their produce purchasing decisions. Temperature controlled storage (100%) and availability of food hub truck fleet to deliver fresh food products (80%) were the most important facilitating services highlighted by buyers. In total, 60% of buyers preferred the food hub assist producers in getting food safety certifications by indicating this a “very important” facilitating service, however, only 40% indicated that connecting to producers was an “important” facilitating service. Buyers would prefer a facility with a temperature-controlled storage to ensure optimum product quality and shelf life before it is delivered to them. Buyers are also not willing to travel to pick up food, and instead would prefer it delivered, thus delivery is a critical service that a food hub in this region would need to provide.
When asked about their preferred food hub ownership, 100% of the respondents indicated that they are very likely or likely to buy from a food hub where they can simply purchase produce, and thus do not prefer a particular ownership type. Grower-owned cooperative and grower owned were the second and third preferred ownership types by buyers. This could be because schools work with local growers as part of farm to school programs and are likely to buy from producer-led potential food hubs. School respondents indicated little to no preference for partly investing in a food hub or a non-profit food hub.
When asked how frequently they would expect deliveries from a food hub, 80% of the buyers indicated that they would expect deliveries anywhere between 1 to 2 times per week from a food hub located between 1- 25 miles. Only 20% of the respondents indicated expecting deliveries 3-4 times per week for a food hub distance between 1 – 25 miles. For a food hub between 26-50 miles, all the respondents indicated expecting deliveries 1-2 times per week. For a food hub distance greater than 50 miles, 80% indicated expecting deliveries 1-2 times per week while 20% refused to buy from a food hub distance of more than 50 miles. Thus, a buyer preferred food hub location should be located no more than a 50-mile radius from their location and at least 1-2 times per week. This is similar to producers, where they indicated they are willing to deliver produce at least 1-2 times per week to a food hub, located up to 50 miles from their location.
Finally, school respondents were asked about their overall interest in a food hub. A majority of the respondents (60%) indicated being moderately interested, while 20% said they were extremely interested and another 20% were slightly interested. This can also be attributed to different levels of perceived interest among buyers for a new business model such as a food hub.
There was a relatively lower response rate for buyer survey. While it was relatively easy to get responses from producer survey with the help of UF/IFAS extension and direct interaction with growers during farmers’ market visits, this was not possible for buyers’ survey. For schools, hospitals and prisons, cold calling followed by emails was the only possible method due to time and resource constraints. Food service professionals at most county prisons stated that they had no authority to answer the questions on the survey as the ultimate decision-making regarding food distribution is made at the Tallahassee headquarters. Most of the county school food authorities were supportive and interested and we able to achieve a 50% response rate for schools. With the help of Food Systems Coalition of Greater Gainesville, we were able to able responses from UF Gator Dining and Alachua County jail.
For restaurants, we decided to mail surveys to the all the randomly sampled restaurants in the ten counties. Although we had included clear instructions and a QR code through which respondents can take the survey without having to physically fill it out and mail back to us, the response rate was still extremely low. Also, we decided not to include any chain or fast-food restaurants in our survey because they already have their own vertically integrated supply chain and are seldom interested. Our target restaurants were local dining restaurants, some of which had been temporarily or permanently closed since the pandemic, and some of them did not have a designated P.O Box to receive physical mails. Hence, we had some of our mail surveys returned. With the help of Food Systems Coalition of Greater Gainesville, we were able to obtain a contact list of some restaurants that work with UF Gator Dining and thus receive some responses.
The fact that buyer survey was administered either by emails or physical mails, and there was no direct interaction with the stakeholders, also contributed to a relatively lower response rate. Emails with online survey link and unsolicited mails sent out are easily ignored or may go to a spam inbox.
Challenges for Food Hubs in North Central Florida:
While both producers and buyers indicated some level of interest in participating in a potential food hub, we believe that significant challenges exist for establishing a potential food hub in North Central Florida. Producers indicated a diverse variety of fresh fruits and vegetables that they currently grow or have the interest/capacity to grow more. Likewise, buyers (schools) indicated purchasing a diverse range of fresh produce in the form of fresh unprocessed, fresh processed, processed frozen or processed canned. Additionally, both producers and buyers would prefer a food hub for various services such as value-addition and storage. Thus, there is a challenge of supplying a diverse set of commodities through a food hub. This would entail significant capital requirements to have value added infrastructure for different types of fresh produce commodities. Grasshoppers Distribution LLC, a food hub started in Louisville, Kentucky in 2006, faced a major challenge of a lack of in-house logistic experience and infrastructure needed for value-addition (Feldstein & Barham, 2017). Thus, it was unable to provide an advantage to wholesale buyers over individual growers for quality, selection, or diversity of food products.
Different types of buyers such as schools and restaurants differ with their decisions to be flexible with their produce purchase as well as the frequency of the purchase. Producers expressed interest to participate in wholesale markets but then prefer not growing on contracts. Majority producers even indicated they would prefer to grow for a food hub but on contract. Buyers on the other hand, use forward contracting for their purchase, which can differ with the type of buyers. Schools require an average contract of one year whereas a contract for restaurants can range from a few months to a year. Both producers and buyers expect food hub to assist with the food safety certifications and insurance requirements. Producers would prefer to use a food hub for connecting to new buyers, storage, value-addition, food safety certifications and skill training. Buyers on the other hand would prefer a food hub to have a temperature-controlled storage, delivery of fresh produce and assist producers in achieving food safety certifications. Buyers are also not willing to pay a premium price for local foods while expecting a food hub for various facilitating services. Additionally, traceability of the produce is an important factor, helping producers to keep their brand image while supplying wholesale buyers and assisting buyers to get connected to different producers. A food hub is also expected to maintain traceability by stakeholders of North Central Florida.
Thus, the expectations from a food of different stakeholders such as growers and buyers are not only too high, but also varied, complex and difficult to be achieved only by a food hub as an intermediary. With these complex and varied expectations, it would become challenging for a food hub to coordinate between growers and buyers. As discussed previously, here the food hub is being expected to address multiple issues with great efficiency to ensure the well-being of all stakeholders. Food hubs on their own cannot address and neither should be expected to solve all the inefficiencies of the mainstream food system. The food hub’s own financial viability is as important to better serve the stakeholders for achieving the desired social, economic, and environmental objectives. A successful implementation of a food hub business model would require a collaborated community effort from different stakeholders involving suppliers and buyers, research institutions, extension, and local governments.
Educational & Outreach Activities
As part of our data collection, we interacted with 102 producers and buyers interested in selling and purchasing local food, primarily in the North Central Florida region. Of those, we consulted with five producers outside of our study region who provided feedback on the initial draft of our producer survey. We also reached out to experts at UF/IFAS to critique and those with experience in procuring local food to provide feedback on our buyer survey.
Our findings are being used to create and/or enhance lecture material for AOM4060: Agri-food Systems Innovation, an upper division course offered in the Department of Agricultural and Biological Engineering at the University of Florida. This material is now appearing in two modules in this course: Module 2: Innovation in Agri-food Systems Marketing, and Module 10: Innovations in Logistics and Information Communications Technology in Food Supply Chain Networks.
This research was presented at the UF Agricultural and Biological Engineering Department's Three Minute Thesis Competition in 2020 where it won 1st place. A poster presentation was given at the Southern Sustainable Agricultural Working Group (SSAWG) Conference in Fayetteville, AR in 2020. We have given an oral presentation of our study at the Florida Section of the American Society of Agricultural and Biological Engineers conference last year in June 2021. We plan to present our final study results at Florida Section meeting this year in May 2022 in Clearwater Beach, FL.
We plan to publish our study results in peer reviewed articles such as Journal of Agriculture, Food Systems and Community Development and Journal of Sustainability.
This research will contribute positively to future agricultural sustainability by providing an understanding of the needs that small and medium-sized specialty crop producers when selling to wholesale and institutional buyers. The intended outcome is that a food hub in the region will be developed and expanded upon giving stakeholders a facility for aggregation, value-added minimal processing, and distribution can occur. There is already plans to implement a pilot project in the city of Gainesville to test limitations and potential for this concept. The impact that this research will have will provide a better understanding so that policymakers, planners, and investors can achieve sustainable economic outcomes. The environmental benefits will include a smaller carbon footprint due to a reduction in food miles traveled as more food stays within the local economy. It will also create jobs and reduce food insecurity in the region as workers will be needed to build and operate the food hub and through expanded local options of healthy and nutritious food. We have not currently received any new grants that build off of this opportunity but we have several new grant opportunities that are being pursued to fund this work (USDA Local Food Purchase Assistance Program facilitated by the Florida Department of Agriculture and Consumer Services).
This was not a focus of the project since our survey was a needs assessment specific to food hub interest.
Future studies should focus assessing the economic impacts that a food hub in the region would provide. More detailed studies are needed to assess social factors that inhibit vulnerable populations from accessing food. As mentioned before, we are exploring a pilot project to facilitate value chain development and provide food hub functions by coordinating with local government and farmers in the region interested in participating in this type of business model.