Final Report for ONE15-233
Project Information
Community Involved in Sustaining Agriculture (CISA) conducted a detailed study of the production, distribution, and marketing of locally grown produce to large-scale wholesale buyers in the Pioneer Valley of western Massachusetts. Forty-two farmers, buyers, and partners from 35 businesses and organizations provided input for this study through interviews, panels, and focus groups. In addition, we surveyed members of our Be a Local Hero, Buy Locally Grown® program for their input. Our assessment of local wholesale production, distribution, and recommendations for improvement and support are included in the attached Pioneer Valley Large-Scale Wholesale Produce Market Study 2016. The report examines the players engaged in large-scale local produce markets; the types of distributors serving local farms and local markets; methods of cultivating relationships with large-scale wholesale buyers; the requirements of wholesale buyers; pricing in these markets; and recommendations for improvement.
Growers, buyers, and partner organizations all made recommendations for improvements in the wholesale marketplace for local products. Some recommendations were specific to a particular business, while others referenced global marketplace forces that are difficult to change at the local or regional level. The third category of suggestions are those most amenable to local action that could benefit multiple players in the wholesale markets in our region. These recommendations are summarized below. Please see the full report for more detailed discussion of each recommendation.
Suggestions for support needed to fill in gaps in wholesale markets:
- Provide technical and financial assistance to farms for food safety improvements. More technical and financial support is needed to help local farms plan and implement food safety infrastructure improvements, as well as learn how to efficiently fit new tasks into farm workflows.
- Help buyers identify the “sweet spots” in purchasing local produce. Use targeted technical assistance to help buyers find opportunities to expand local purchasing that are most economical and can be implemented in such a way as to have the most impact in supporting local farms.
- Offer support to distributors that have a central mission of supporting local farms. Support given to these businesses – e.g. to facilitate business transitions, strengthen communication with stakeholders, update infrastructure, or help improve profitability – would benefit many farms.
- Continue to expand the “buy local” campaign. The most common advice given by farmers and buyers on how to strengthen large-scale wholesale markets for local food was to expand efforts to educate the community about the benefits of buying from local farms.
- Provide support for local sourcing and market support for farmers and buyers. Both growers and buyers can benefit from support from organizations that are in active communication with a range of farmers and buyers, who can help identify current market opportunities and prepare for possible future trends.
- Assist farms with in-depth business analysis. There is an unmet need for in-depth, individualized support to help analyze farm finances, evaluate current enterprises, assess opportunities, and strategically plan for the future.
Suggestions for buyers to help expand local food purchasing:
- Offer flexibility in requirements for local farms. Adopting scale-appropriate supplier requirements can help buyers ensure that local farms are able to compete with other vendors in supplying their needs.
- Prioritize investments in local produce that offer a larger “bang for the buck.” It often makes sense for buyers to start by working with farms and local crops that are more price-competitive with non-local produce and suppliers. Buyers should see these products and relationships as a platform from which to expand their local sourcing, rather than reaching an early and final plateau.
- Offer support to farmers for online ordering fees, food safety certifications, etc. When farmers must incur up-front costs to sell to a buyer, buyers can help ensure that small local farms are not disadvantaged by sharing in such costs or guaranteeing future order volumes and pricing.
- Maintain in-house labeling or packaging capacity for local farm produce in retail settings. Having the ability to label individual produce items in-house can enable smaller farms to sell to retail buyers without being unfairly disadvantaged by having to invest in expensive equipment to sticker produce.
- Offer greater transparency regarding rebates or “volume discount allowances.” Foodservice management companies should offer full transparency to their clients regarding the amounts of the rebates they are given for high-volume purchases so as to improve their client’s ability to understand the actual costs of food purchases and work in cooperation with them to manage budgetary costs of local food purchases.
- Offer training to increase staff capacity to prepare local food, and seek staff input. . Maintaining open lines of communication with kitchen staff and using the transition to more locally grown, less processed food as an opportunity for professional development and increased chef creativity is important for getting staff buy-in regarding changes.
- Consider foodservice management changes to expand local produce use. Local purchasing is hindered if foodservice managers and their client institutions do not hold shared local sourcing goals.
- Consider structural changes in dining services that support using local produce. Increased storage and washing space and more centralized kitchen and dining facilities can increase efficiency of processing fresh produce and result in budgetary savings that can be invested in local produce.
- Promote local farm suppliers to customers. Demand from end-users is a critical driver of local sourcing, and communicating to and educating those end-users helps to build momentum for local purchasing that can institutionalize local purchasing patterns.
CISA is disseminating the report and the information contained in it to farmers, food businesses, partners, and peer organizations. We are working with partners to address the recommendations for improvement identified by participants. The information available in this study will reduce the risk of failure for new investments and programs by providing place-specific, experience-driven analysis of production, distribution, and marketing patterns of the Pioneer Valley, and stakeholder identification of leverage points for high-yield improvements.
Introduction:
Demand for locally grown produce continues to climb. Across Massachusetts, larger buyers, like individual consumers, are choosing to use their food dollars to support local farms and to obtain locally grown products. Institutions, retailers, restaurants, and others call CISA and other ‘buy local’ organizations searching for locally grown products. As demand for locally grown produce grows and becomes more mainstream, there is an increasing need to support local farms, entrepreneurs, and partner organizations to enable them to more accurately assess the economic opportunities and challenges involved in scaling up to meet this demand. Effective support requires detailed, current, on-the-ground knowledge of patterns of production, distribution, and demand in large-scale wholesale produce markets.
The main objective of this study was to gain a detailed understanding of production, distribution, and demand patterns for local produce sold to larger buyers in the Pioneer Valley, and to identify pressure points where improvement was needed. CISA intends to use this enhanced knowledge base to serve local wholesale farms better, to more accurately identify the challenges and opportunities in large-scale wholesale produce markets, to channel our resources better so as to support efforts that will provide the most benefit, and to help peer and partner organizations and entrepreneurs use their resources most effectively to serve wholesale farms. This project represents the first step in a comprehensive effort to strengthen and enhance the production, distribution, and sale of locally grown produce for larger buyers.
Interviewees, focus group participants, and panel presenters:
Farms:
Apex Orchards
Clark Brothers Farm
Five College Farms
Full Bloom Farm
Harvest Farm
Mountain Orchard
Outlook Farm (also an aggregator/distributor)
Plainville Farm (also an aggregator/distributor)
Red Fire Farm
The Bars Farm
The Kitchen Garden
Twin Oaks Farm
Distributors:
Black River Produce
Fair Acre Traders
Fresh Point
Marty's Local
Performance Foodservice
Pioneer Valley Growers Association
Red Tomato
Squash, Inc.
What Cheer
Windham Farm & Food
Retailers
Randall's Farm
Big Y Supermarkets
Whole Foods
Schools and Colleges
Amherst College
Greenfield Public Schools
Hampshire College
Mt. Holyoke College
Smith College
Restaurants
Log Cabin Restaurant
Partner Organizations
Franklin County Community Development Corporation (also a processor)
Jill Fitzsimmons, UMass Amherst Department of Resource Economics
Massachusetts Farm to School
Ryan Harb, Consultant
This project addressed the following questions:
- What are current patterns of distribution and related services that connect Pioneer Valley farmers with local and regional wholesale buyers (restaurants, retailers, and institutions)?
- How can we strengthen this existing capacity in order to ensure that it serves a robust local and regional food system? Examples of improvements include providing technical assistance to existing distributors, adding on-line ordering capacity or tracking software, filling geographic gaps, and strengthening farmer-run aggregation and distribution efforts.
Objective 1: Gain a detailed understanding of existing distribution patterns for local food sold to larger buyers in the Pioneer Valley, and identify pressure points where improvement is needed.
Activities included:
- Review of information from other locations related to improving distribution (and related services) for local food systems, particularly focused on effective work with existing distributors.
- Detailed interviews and focus group conversation with farmers, including those serving primarily wholesale markets, those utilizing both wholesale and direct-to-consumer markets, and farmers aggregating product from other local farms for distribution to wholesale buyers. Interviews were designed to review markets and distribution, delivery, ordering, and invoicing methods.
- Detailed interviews, two panel presentations, and a focus group with buyers and distributors, including colleges, a K-12 school, retailers, a restaurant, and both established and new distributors operating at several scales.
During the period from September 2015 through October 2016, CISA staff conducted 26 in-depth interviews with farmers, buyers, and partners engaged in large-scale wholesale produce markets. In addition, three other large-scale wholesale produce buyers were invited to present at a farmer-buyer networking session held in December 2015. Each of these buyers provided an overview of their business’s work with local farms, shared their experiences of challenges and opportunities in local produce markets, and discussed how farms could develop sales relationships with them. In April 2016, two focus groups were held to obtain further input from small groups of wholesale buyers and farmers, with three additional buyers and four additional farms providing in-depth input about their experiences in large-scale wholesale markets at each of these focus groups.
In all, 42 farmers, buyers, and partners from 35 businesses and organizations provided input for this study through interviews, panels, and focus groups. This included 16 farmers from 12 farms, 22 buyers from 17 businesses, and four partners with expertise in large-scale wholesale produce markets. Participating buyers included ten distributors, five schools, three retailers, and one restaurant. In addition to these in-depth interactions, we held a discussion with 33 wholesale growers and buyers early in the process and had informal conversations with members of CISA’s Local Hero Program, which includes 270 farm business members and 159 buyer and food business members, including institutions, retailers, restaurants, and specialty product producers.
- Survey of CISA’s 270 member farms to gain their input on improvements needed in the supply chain connecting farms and larger buyers.
We surveyed CISA’s Local Hero farm business members about desired improvements for wholesale production and sales in the winters of 2015 and 2016; survey results informed our recommendations.
Objective 2: Write and disseminate a distribution inventory and a prioritized list of desired improvements for the Pioneer Valley.
Our assessment of local wholesale production, distribution, and recommendations for improvement and support are included in the attached Pioneer Valley Large-Scale Wholesale Produce Market Study 2016. This study examines the players engaged in large-scale local produce markets, the types of distributors serving local farms and local markets; methods of cultivating relationships with large-scale wholesale buyers; the requirements of wholesale buyers; pricing in these markets; and recommendations for improvement.
This report is not a directory of services currently available. Distribution services available to local growers are changing quite rapidly, and a directory of this sort would quickly go out of date. Instead, the report inventories the needs and challenges of both growers and buyers in the local wholesale marketplace, and details recommendations for improvement and support.
We found that stakeholders were reluctant to firmly rank recommendations for improvement, recognizing that different approaches were useful in different circumstances. Nonetheless, our interviews yielded valuable recommendations for ways that growers, buyers, distributors, and service providers can foster local purchasing by large buyers. The recommendations, if implemented, will help expand large-scale markets for local produce while supporting farm business viability.
Please see Publications/Outreach for information on our dissemination efforts.
Note that this project represents a portion of a comprehensive effort to strengthen and enhance the production, distribution, and sale of locally grown produce to large buyers. The research phase was supported by NESARE funds (focused on distribution) and funding from the USDA’s Rural Business Enterprise Grant Program (focused on production). Next steps include the following:
- Work with partners to provide comprehensive support to new and expanding enterprises and services that address the recommendations identified in our study. Increase the availability of in-depth business analysis support for farm businesses.
- Identify opportunities to increase the supply provided by existing growers by diverting produce from distant markets, supporting direct market growers who want to sell some product to larger buyers, and increasing land in production.
- Identify and prioritize gaps in the services available to new and existing farmers, including land and market matching and in-depth business planning and analysis, with the goal of increasing supply available through wholesale markets and improving viability of farm operations.
Cooperators
Research
The extensive interviews and discussions we held while conducting this study greatly enhanced our understanding of production, distribution, and purchasing for wholesale markets for locally grown produce in our region. These findings are detailed in the attached report, which concludes that the wholesale market for locally grown produce is both promising and fragile.
In this environment, greater financial and technical support is crucial in enabling farms to strategically evaluate and develop new markets as well as meet new buyer requirements. Support for distributors that primarily serve local farms can also help ensure that these key players in large-scale local produce markets are able to weather transitions and achieve the best prices possible for local products. A strong “buy local” effort is also needed to continue to build demand for local produce among a wider audience of consumers and large buyers. At the same time, in order to achieve true long-term sustainability and expansion of local wholesale produce markets, investment in the recommendations outlined in this report must be matched by efforts to shift federal agricultural policy in ways that support local food systems and family-scale farms.
CISA will use the information gained in this study in three primary ways. First, we will strengthen the support that we provide to farmers, buyers, and food businesses in our region. These services include information and referral, value chain facilitation, and technical assistance provided through more than 20 workshops each year, one-on-one consultations, networking events, and hundreds of informal interactions with our members and other farmers in our region. In 2015 our technical assistance activities served 539 farmers (farmers are double-counted if they attended more than one event).
Second, we will work with partners to pursue several of the recommendations outlined in the attached report. Already, we are working to improve technical assistance for farm and food businesses applying for financing; supporting four local colleges in an analysis of how they could work together to increase local sourcing; and expanding our ability to provide in-depth, one-on-one business planning to farm businesses.
Third, we will continue to promote local farms and food, to educate the public about the needs and benefits of local farms, and to engage the community in building the local food economy.
During the period between first outlining this study and completing it, we observed several shifts in the marketplace for locally grown food in our region. A number of established farms that have marketed primarily through direct-to-consumer channels made significant shifts to wholesale markets. Although the reasons for this shift varied to some degree from farm to farm, all of the farms cited slowing growth in direct-to-consumer markets as one factor. Several of these farms have been supported in this shift by the entrance of new distributors committed to local sourcing. In addition, we saw increased financial stress on many farms. Exacerbated but not created by the summer 2016 drought, this financial stress indicates that even in a region with enthusiastic public support for local food and farms, achieving and sustaining economic viability is far from assured.
These changes highlight the need for smart, targeted investments in the local food economy. Whether these investments are of time, money, or other resources, and whether they are made by farmers, food businesses, financing agencies or individual investors, non-profits, or government agencies, they will be more effective if they are informed by detailed knowledge of the current landscape of production, distribution, and markets. The information available in this study will reduce the risk of failure for new investments and programs by providing place-specific, experience-driven analysis of production, distribution, and marketing patterns of the Pioneer Valley, and stakeholder identification of leverage points for high-yield improvements.
Education & Outreach Activities and Participation Summary
Participation Summary:
The information gained through this project is presented in the attached report, Pioneer Valley Large-Scale Wholesale Produce Market Study 2016.
We are disseminating the report to three groups of stakeholders: 1) producers, buyers, and distributors; 2) technical service providers, non-profits, and agencies interested in financing for local food; 3) nationwide colleagues interested in this model of infrastructure assessment and needs identification. Dissemination methods include the following:
- CISA’s electronic newsletters and website; including the Local Hero enews received by our 429 local farm and food business members;
- Grower and buyer meetings, including our April 2016 Meet and Greet for growers and buyers and our on-going, year-round technical assistance for farm businesses;
- Our email list of local and regional partner organizations and agencies, including University of Massachusetts Extension, the Massachusetts Department of Agricultural Resources, Massachusetts’ 10 regional ‘buy local’ organizations, and thirty other governmental and non-profit partners in Massachusetts and neighboring states;
- National listservs and conferences serving peer organizations, including a presentation at the Massachusetts Farm and Sea to School Conference in November 2016.
Project Outcomes
Areas needing additional study
One common refrain from farmers interviewed for this study was that prices in large-scale wholesale markets have increased very little, if at all, in recent decades, while costs for things like labor, fuel, and production supplies have all increased substantially. While the farmers we spoke to view their current markets as economically viable for the farm, many of them reported that profit margins were small enough so as to make them worried about future price stagnation and cost increases. Although large-scale buyers are increasingly interested in buying local, price relative to globally sourced food remains a significant barrier to expansion in these markets. The potential for long term growth and success on small, diverse northeastern farms may well depend on tackling complex issues such as farm labor, the real cost of good food, federal farm policy, and income inequality. Solving these problems is beyond the scope of this project and of any one regional organization, but both study and action to address these challenges is required in order to build a vibrant local and regional food system.