Connecting Sustainable Farmers to Emerging Health Care Markets

Project Overview

LNC11-334
Project Type: Research and Education
Funds awarded in 2011: $162,952.00
Projected End Date: 12/31/2013
Region: North Central
State: Minnesota
Project Coordinator:
Anna Claussen
Institute for Agriculture and Trade Policy
Co-Coordinators:
Karen Quiroz
Institute for Agriculture and Trade Policy

Annual Reports

Information Products

Commodities

Not commodity specific

Practices

  • Farm Business Management: farm-to-institution, feasibility study, market study

    Abstract:

    In collaboration with three hospital systems and numerous farmers, IATP identified barriers to and opportunities for hospitals and hospital systems to become a growing market for sustainable farmers and ranchers. While significant barriers certainly do exist, we identified numerous strategies farmers and hospitals can use to increase hospital purchases of local and sustainable food, and there is evidence of strong interest on both sides. We produced educational resources for both our specific hospital partners and more broadly applicable tools that can be used by any hospital, hospital system or farmer interested in accessing this growing market.

    Introduction:

    Hospitals and hospital systems represent a sizable potential market for sustainable farmers, and interest in increasing purchases of local, sustainably produced food among hospitals and hospital systems is growing. However, limited hospital resources and the complexity of food purchase contracts and agreements at many hospitals have prevented farmers from accessing this market in any significant way to date. This project assessed the current and potential hospital food markets for North Central region sustainable farmers, and provided farmers and hospitals with tools they can use to take to increase hospital purchases of local, sustainably produced food. The 1,684 hospitals in the North Central region represent significant buying power and many of them have expressed interest in purchasing local, sustainably produced food. However, few hospitals consistently purchase such food, and the information needed to connect hospitals to farmers who produce it has been sorely lacking.

    Existing hospital interest in increasing their purchases of sustainable, local food is demonstrated by steady increase in hospitals who have signed the “Healthy Food in Health Care Pledge,” a voluntary commitment which outlines steps hospitals can take to support food that is healthy for people, communities and the environment. In addition, some hospital systems are developing their own food policies or revising existing policies to address sustainability issues in addition to nutritional requirements. However, many hospitals are still in the beginning stages of initiatives to increase the sustainability of their food purchases and, despite their good intentions, have little time and resources to do the kind of analysis done through this project.

    Prior to this project, most SARE-funded projects on increasing institutional purchases of sustainable food have focused on “farm to school” programs, examples of which can be found in (among other locations) Maine (1,2), New York (3), Appalachia (4), and even within the North Central region (5, 6, 7). In other cases, SARE-funded projects focused on whole food systems of which hospitals are a part, on more general “institutional purchasers,” or on more general marketing and distribution efforts that could be applied to general institutional purchasers (8, 9, 10, 11, 12, 13, 14, 15).

    Importantly, prior SARE-funded projects addressing general institutional purchasers reported limited success in increasing purchases of local sustainable food at hospitals as opposed to restaurants or schools.This was often due to inadequate information to address the specific purchasing requirements of hospitals. By considering hospital purchasing exclusively, this project was able to more fully and directly address hospital-specific procurement requirements. (A 2007 SARE project out of the West Region did find some success in developing hospitals as a market, but found that success in the context of offering a farmers market on hospital grounds and delivery of community supported agriculture, or CSA, shares (16). In contrast, our project will focus on the higher volume, higher value wholesale side.)

    To our knowledge, no prior SARE-funded projects focused exclusively on hospitals as a potential wholesale market for sustainable farmers. However, several important lessons have come out of projects where hospitals were directly addressed as part of larger efforts. For example, a 2006 project in Wisconsin explored expanding the restaurant and institutional market within a seven county region. Despite considerable success with restaurants, the intention of securing commitments from at least two hospitals, and initial outreach including several hospitals, the project found little success with hospitals. In their final report, the project team identified the two main barriers as 1) inconsistencies between what farmers can supply and what food service operations are accustomed to using and 2) price (in cases where the farmers’ products did meet the hospital’s requirements) (17). These types of barriers still exist, but our project will used a systems approach to encourage and support the systemic changes among hospitals that need to occur over time to contribute to lasting change that will eliminate or mitigate these barriers.

    As part of a 2006 SARE project in the Northeast Region, a project team identified a hospital with interest in purchasing local food and connected this hospital with a potential farmer supplier. However, the farmer who attempted to sell to the hospital reported that a lack of communication about vendor requirements prevented the sale from actually occurring, to the disappointment of both parties (18). Our project was explicitly designed to prevent such problems through two facets: 1) we developed resources to help farmers understand the steps in the process of selling to a hospital and resources to help hospitals understand how they need to work with farmers, and 2) we helped hospitals understand how their current vendor relationships can get in the way of reaching their purchasing goals andthe steps they can take to fix this situation.

    A 2000 North Central SARE project placed interns with a number of institutional food buyers to increase their purchases of local and sustainable food. The project team found some success with a number of institutions, including hospitals. However, they noted that one hospital (which had been increasing its local, sustainable purchases) suffered a major setback when the hospital outsourced its food service operation to a national vendor that was not as amenable to local, sustainable sourcing (19). Given that a majority of hospitals outsource their food service operations (and often to large vendors), addressing local and sustainable purchasing within the context of large, national vendors will be critical to truly expanding hospitals as a market in the long term. It’s important to note that food service contractors are feeling increasing pressure to provide more, local and sustainably produced food options for their institutional customers in no small part due to projects such as this one.

    Work to connect hospitals and farmers has been going on outside of SARE-funded projects as well. IATP published Healthy Food, Healthy Hospitals, Healthy Communities-Stories of Health Care Leaders Bringing Fresher, Healthier Food Choices to Their Patients, Staff and Communities (20) in May 2005. At that time, there were just a few known examples of hospitals and long-term care facilities working explicitly to buy more local and sustainably produced food. Through the work of IATP and our partners in the Healthy Food in Health Care Initiative, the list of health care facilities actively engaged in these types of activities has grown exponentially over the past few years; some of this growth is highlighted in the 2008 Health Care Without Harm Menu of Change (21) report on the progress of Pledge signers.

    In the early years of this work to influence health care purchasing, much of the energy has been focused on bringing hospitals on board: building relationships, making the health-based case for change, engaging with staff at individual facilities on project and pilot-type activities and supporting their efforts, sharing stories, providing hospitals with opportunities to tell their own stories as their jobs allow, and providing hospitals with tools they can use to benchmark progress toward improving the health and sustainability of their food service operations and the food they serve.

    It has been gratifying to see how many hospitals are engaging in activities designed to improve the overall sustainability of their food service operations and increase patient, employee and visitor access to fresh, local and sustainably produced food. However, with few exceptions, most of the hospitals who are actively engaged have yet to move beyond the low hanging fruit and make real, lasting changes to their procurement policies and procedures. We believe it is in this next level of change—in which we help hospitals change their systems, not just find ways to act within their existing systems—where farmers will finally have access to the full extent of the potential hospital market. Our project was specifically designed to move beyond low hanging fruit and facilitate a move to the next level.

     (1) Healthy Acadia, 2008. Downeast Maine Farm to School. Northeast Region SARE Sustainable Community Innovation Project. Project reports at http://projects.sare.org/sare_project/CNE08-050 (accessed 10/15/10).

    (2) Healthy Acadia Coalition, 2006. Farm to School in Hancock County. Northeast Region SARE Sustainable Community Innovation Project. Project reports at http://projects.sare.org/sare_project/CNE06-012 (accessed 10/18/10).

    (3) Seeking Common Ground, 2008. Expanding connections: Marketing farm to cafeteria in the Finger Lakes Foodshed. Northeast Region SARE Sustainable Community Innovation Project. Project reports at http://projects.sare.org/sare_project/CNE08-051 (accessed 10/15/10).

    (4) Appalachian Sustainable Agriculture Project, 2007. Appalachian Grown: Farm to School Project. South Region SARE Research and Education Project. Project reports at http://projects.sare.org/sare_project/LS07-197 (accessed 10/15/10).

    (5) University of Minnesota Extension, 2008. Building Minnesota’s Farm to School Policy and Infrastructure through University of Minnesota Extension and Community Partnerships. North Central Region SARE Professional Development Program Project. Project reports at http://www.sare.org/sare_project/ENC08-104 (accessed 10/18/10).

    (6) Michigan State University, 2006. Distribution Strategies for Developing Farm-to-School Connections. North Central Region SARE Graduate Student Project. Project reports at http://projects.sare.org/sare_project/GNC06-069 (accessed 10/19/10).

    (7) Good Natured Family Farms, 2008. Bistro Kids Farm 2 School Program – Bringing Healthy, Locally Grown Food to the Next Generation. North Central Region SARE Farmer/Rancher Project. Project reports at http://projects.sare.org/sare_project/FNC08-714 (accessed 10/19/10).

    (8) University of Wisconsin-Madison, 1999. Institutional Markets for Sustainable Agriculture Products. North Central Region SARE Research and Education Project. Project reports at http://projects.sare.org/sare_project/LNC99-157 (accessed 10/18/10).

    (9) University of North Carolina Wilmington, 2008. Southeastern North Carolina Food Systems Project. South Region SARE Graduate Student Project. Project reports at http://projects.sare.org/sare_project/GS08-067 (accessed 10/22/10).

    (10) Appalachian Sustainable Agriculture Project, 2003. Appalachian Grown: Toward Regional Community-based Food Systems. South Region SARE Research and Education Project. Project reports at http://projects.sare.org/sare_project/LS03-146 (accessed 10/18/10).

    (11) Southern Louisa University, 2005, Expanding the Marketing Opportunities for Minority and Limited Resource Farmers in Louisiana and Mississippi. South Region SARE Research and Education Project. Project reports athttp://projects.sare.org/sare_project/LS05-180 (accessed 10/28/10).

    (12) University of California, 2010. Developing regional distribution networks to enhance farmer prosperity: Retail value chains. West Region SARE Research and Education Project. Project information at http://projects.sare.org/sare_project/SW10-810 (accessed 10/28/10).

    (13) Cooperative Extension, 2007. Assessing the capacity of producers to supply institutional markets. Northeast Region SARE On Farm Research/Partnership Project. Project reports at http://projects.sare.org/sare_project/ONE07-074 (accessed 10/18/10).

    (14) Yale Sustainable Food Project, 2007. Creating sustainable food purchasing guidelines in the Northeast. Northeast Region SARE Sustainable Community Innovation Project. Project reports at http://projects.sare.org/sare_project/CNE07-029 (accessed 10/18/10).

    (15) Land Stewardship Project, 2002. Supporting Community with Retail and Institutional Food Service: Keeping it Safe, Legal and Local. North Central Region SARE Professional Development Program Project. Project reports at http://projects.sare.org/sare_project/ENC02-068 (accessed 11/1/10).

    (16) PlacerGROWN, 2004. Fresh, From Our Family to Yours: Direct Marketing Education for Producers. West Region SARE Research and Education Project. Project reports at http://projects.sare.org/sare_project/SW04-058 (accessed 10/25/10).

    (17) REAP Food Group, 2006. Buy Fresh Buy Local: Building Marketing Opportunities for Local Foods in Restaurants and Institutional Food Services. North Central Region SARE Research and Education Project. Project reports at http://projects.sare.org/sare_project/LNC06-269 (accessed 10/25/10).

    (18) Seeking Common Ground, 2006. Canandaigua Lake foodshed: Farm-to-cafeteria program. Northeast Region SARE Sustainable Community Innovation Project. Project reports at http://projects.sare.org/sare_project/CNE06-004 (accessed 10/25/10).

    (19) University of Northern Iowa Center for Energy & Environmental Education, 2000. Expanding local markets through linking institutional food buyers to local farmers and processors in Northeast Iowa. North Central Region SARE Research and Education Project. Project reports at http://projects.sare.org/sare_project/LNC00-166 (accessed 10/25/10).

    (20) Kulick, Marie, 2005. Healthy Food, Healthy Hospitals, Healthy Communities: Stories of Health Care Leaders Bringing Fresher, Healthier Food Choices to their Patients, Staff and Communities. Institute for Agriculture and Trade Policy. Available online at http://www.iatp.org/iatp/publications.cfm?accountID=258&refID=72927 (accessed 11/3/10).

    (21) Harvie, Jamie, 2008. Menu of Change: Healthy Food in Health Care: A 2008 Survey of Healthy Food in Health Care Pledge Hospitals. Health Care Without Harm. Available online at http://www.noharm.org/lib/downloads/food/Menu_of_Change.pdf (accessed 11/4/10).

    Project objectives:

    The long-term outcome of this project will be that hospitals and hospital systems will become a growing market for sustainable farmers and ranchers—a market that is both significant in size and straightforward for farmers and ranchers to access. (This is also means that in the long term, hospitals will be able to structure their food sourcing contracts in a way that allows them to maximize their purchases of local, sustainably produced food.)

    This project contributed to this outcome in the short term by (1) increasing knowledge among hospitals and health care purchasing officials about steps they need to take to increase their purchases of local, sustainably produced food (including changes that may need to be made to purchasing contracts and agreements); and (2) increasing knowledge among farmers about how to access the hospital market and create a fair, sustainable and successful purchasing relationship.

    The intermediate outcome of this project will be that hospitals increase their purchases of sustainable, local food, and that farmers will increase their sales to hospitals. Because of the complex nature of food sourcing contracts, we anticipated that in some cases increased sales achieved in the intermediate term may be limited by these agreements. Thus, an additional important intermediate outcome will be that hospital participants will begin to take steps as necessary toward adapting their purchasing guidelines and contracts to allow for increased purchases of local, sustainable food. (This may include taking steps to adapt current contracts, but more likely will be in the form of planning how they will change the next round or renewal of the contracts.)

    The audience for the project was two-fold. First, local farmers who produce food sustainably will use our information and resources to learn about and access a sizable new potential market. Second, hospitals will use our information and resources to more easily and effectively meet their internal goals for increasing the sustainability of their food purchasing.

    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.