Food Hub Development in the Rural Midwest

Project Overview

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

Commodities

Not commodity specific

Practices

  • Farm Business Management: cooperatives, farm-to-institution
  • Production Systems: Food Safety
  • Sustainable Communities: food hubs, local and regional food systems, new business opportunities, values-based supply chains

    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.

    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.