Gathering 2011 Breakout Session - Local Foods - CAN presentation on Established Food Systems

Appalachian Funders Network

Established Local Food System

June 7, 2011

Presenters: Michelle Decker,

Kathlyn Terry and Leslie Schaller

Central Appalachian NetworkCAN is a network of sustainable economic development organizations working to build a more just and sustainable Appalachia.

CAN works to advance the economic transition of the region by fostering the development of enterprises, organizations, and policies that promote and protect the health of our local economies, communities, and environment.

Today we will…. Animate the food value chain of a mature model

Highlight the impacts of the wealth creation indicators in Central Appalachia

Review the crucial role processing, aggregation and distribution plays in economic impact of local foods

Emphasize the power of networks for branding, training and shared assets

Identify issues & gaps of mature value chains

Passion for Local Food Economies

We hope to leave you with a sense of possibility and excitement for this work as part of the

Appalachian Transition!

CAN’s Current Sub-regions of Focus

CAN Member OrganizationsCAN is led by a Steering Committee of six member organizations:

Appalachian Center for Economic Networks (ACEnet) Athens, OH

Appalachian Sustainable Development (ASD) Abingdon, VACenter for Economic Options (CEO) Charleston, WVMountain Association for Community Economic

Development (MACED) Berea, KYNatural Capital Investment Fund (NCIF) Shepherdstown, WVRural Action, Trimble, OH

CAN’s Local Food Systems Work

CAN member organizations approach sustainable economic development from a variety of sectors

Our current focus as a network is on the development of local food value chains

We use the wealth creation framework as an assessment, planning, and measurement tool for this work

What is the wealth creation framework? A systems approach to creating wealth that

sticks in rural areas

Emphasizes local ownership and control of resources

Facilitates the development of multiple forms of wealth simultaneously

The Seven Forms of Wealth• Individual

• Social

• Intellectual

• Natural

• Built

• Political

• Financial

2 Year CAN WCI HighlightsMembers worked with 96 producers who sold $3.5

million of local food into wholesale markets

Over 30 new producers brought into wholesale markets

Increased the value of sales of local food to wholesale markets to $4,754,180.54 or 33%

The number of acres being sustainably farmed by CAN producers increased 177% between 2009 and 2010

WCI as a tool for reinventing healthy local food systems Learning how measurement informs

interventions along the food value chain

Understanding gaps and disconnects

Building collaborations and leveraging shared assets

Traditional Supply Chain

Production Processing Distribution Marketing Consumption

Traditional Supply Chains: push supply to the next node in the chain

Making a supply chain—a value chain

A Mature Local Food Chain has…

Sustainable and diversified agriculture

Farmers and food producers utilizing multiple market channels

Production ready to scale

Seeded consumer demand through consumer education, branding & market partnerships

Food infrastructure & distribution in place

Southeastern Ohio Region

Southwest Virginia Region

Production

Production Innovators

Production scaling requires new models for PAD

Impact of Aggregation, Processing and Distribution

Models from the Region

ACEnet Food Ventures Center & Services

ASD --- Appalachian Harvest

Rural Action – The ChesterhillProduce Auction

Aggregation

Central aggregation & branding

Aggregation

Climate controlled warehousing

Figuring out appropriate equipment scale

Publicly supported investment

• Supported by RA since 2004

• Purchased in 2010 for $100,000 with public –private investment

• CPA: A Rural Appalachian Case History, at www.ohiofoodshed.org/newsfromthefoodshed

Aggregation

What is a Produce Auction?A wholesale venue supplied with fresh fruits and vegetables by local growers and sold through competitive bidding.

Meeting demand and creating marketsBuyers - providing a higher quality of fresh product packed and ready

for resale.

Consumers - The opportunity to purchase the freshest Ohio produce

available.

What sells?

What sells?• Fresh grown fruits

• Vegetables

• Bedding plants, flowers

• Handcrafted items

• Baked goods

• Eggs

• Herbs

• Grains

Seasonality

Produce Auctions are run during the growing season.

• Any one who would like to buy or sell is invited to participate.

• Rules and regulations are set for those who intend to buy or sell.

For more detail go to Homerville Wholesale Produce Auction Guidebook, http://www.hightunnels.org/ForGrowers/Marketing&Economics/HomervilleAuctionImages/HPA_Guidebook.pdf

Benefits of a Produce AuctionOhio University Began Purchasing from CPA in 2007

Location of CPA Buyers & Sellers 2009

Number of buyers and sellers doubled in 2010!

Processing

Shared Processing Facility

Processing Fresh Produce

Prepared Foods Production

Thermal Processing

Scale & Efficiencies

Access to Wholesale Markets

Workforce Development

Job Creation

Distribution

Distribution early stage

Regional Distribution

Buyer Dock Times

Produce Source Partners: M-F 7 AM to 4 PM, Sat/Sun 7 AM – 2 PM

Ingles: 4AM to 1030 AM

Earth Fare: 8 AM to 4 AM

Whole Food South: 4 AM – 10 AM, none on Wednesday

DOT- HOURS-OF-SERVICE RULES for Property-Carrying CMV Drivers

• 11-Hour Driving LimitMay drive a maximum of 11 hours after 10 consecutive hours off duty.

• 14-Hour LimitMay not drive beyond the 14th consecutive hour after coming on duty, following 10 consecutive hours off duty. Off-duty time does not extend the 14-hour period.

• 60/70-Hour On-Duty LimitMay not drive after 60/70 hours on duty in 7/8 consecutive days. A driver may restart a 7/8 consecutive day period after taking 34 or more consecutive hours off duty.

• Sleeper Berth ProvisionDrivers using the sleeper berth provision must take at least 8 consecutive hours in the sleeper berth, plus a separate 2 consecutive hours either in the sleeper berth, off duty, or any combination of the two.

Cost Containment

Full Trucks

Backhauling

Buying/Re-Selling

InglesReceive

Whole Foods

Earth Fare

Leading Green

Appalachian Harvest Packinghouse

Produce Source

Partners

Backhaul Produce to Resell

Deliver AH Produce

Haul AH produce and products for resale

Deadhead

Richmond, VA

Asheville, NC Area

Atlanta, GADuffield, VA

InglesReceive

Whole Foods

Earth Fare

Leading Green

Appalachian Harvest Packinghouse

Produce Source

Partners

Backhaul Produce to Resell

Deliver AH Produce

Haul AH produce and products for resale

Deadhead

Richmond, VA

Asheville, NC Area

Atlanta, GADuffield, VA

Appalachian Harvest Distribution Flow

Appalachian Harvest2010 Revenue > $685K

Employs 10-15 laborers and truck drivers in the peak season

Works with 50-60 farmers within the immediate area and over 100 in the region

Covered distribution costs in 2010 through a combination of backhauling, brokering and ‘traditional’ sales

Distribution Infrastructure

Marketing

How is food access measured?Physical Accessibility

– 24% or 475,095 of rural Ohio households do not live within a 10-minute drive of a retail grocery store of any size

– 75% of rural Ohio households live greater than a 1-mile walk to a grocery store…4% (59,389 rural Ohioan households) do not own a car.

Economical Accessibility– 71% of rural Ohio households live outside areas of competition

Nutritional Accessibility– “It is hypothesized that the relative lack of access to full-service

grocery stores and the easier access to fast and convenience foods may be linked to poor diets and, ultimately, to obesity and other diet-related diseases.” (USDA ERS, 2009)

Food DesertsAs Defined in 2008 Farm Bill

A food desert is an “area with limited access to affordable and nutritious food, particularly such an area composed of predominantly lower income neighborhoods and communities” (Title VI, Sec. 7527”).

Country Fresh Stops• MAP

Country Fresh Stops

Funding will offer interested businesses help with:

– Nutritional Education

– Advertising and promotional items

– Painting, shelving, and store updates

– Refrigeration

– Fruit and vegetable delivery through the ChesterhillProduce Auction and other local growers

Laura Jane Musser Fund and Ohio Department of Ag – Specialty Crop Initiative

Chesterhill

City of Athens

Reedsville

Current Locations

Chauncey

Stockport

Rutland

Chauncey pics – CeeDee mart

County Economic ClassificationLocation MORGAN ATHENS MEIGS U.S.

Three-Year Average Unemployment Rate, 2006–2008

9.6% 6.2% 9.1% 5.0%

Per Capita Market Income, 2007 $13,958 $17,478 $15,102 $32,930

Poverty Rate, 2000 18.4% 27.4% 19.8% 12.4%

Three-Year Avg. Unemp. Rate, Percent of U.S. Avg., 2006–2008

191.0% 123.0% 181.4% 100.0%

Per Capita Market Income, Percent of U.S. Average, 2007

42.4% 53.1% 45.9& 100.0%

Poverty Rate, Percent of U.S. Average, 2000

148.8% 221.0% 159.9& 100.0%

Appalachian Regional Commission 2011

Country Fresh Stops

Funding is providing: Nutritional Education Advertising and promotional items Painting, shelving, and store updates Refrigeration Fruit and vegetable delivery through the

Chesterhill Produce Auction and other local growers Reach 1500 new customers

Laura Jane Musser Fund and Ohio Department of Ag – Specialty Crop Initiative

Market Partnerships

Market Partnerships

Market Partnerships

Regional Brands

Preparation

Local Restaurants use local ingredients

Local Producers & Market Partners tell the story of the value chain

Youth Initiatives for Food Literacy

Consumption

Drive demand

Educate consumers

Create excitement

Market Partners & Consumers

Whole Foods provide producer loans

Regional partners: NCIF & MACED can assist with expansion loans

Private Support & Investment

Investment Partners

Measurement and TrackingProducer Measures• Profitability

• Revenue

• Number of Producers

• Producer Retention Rates

• Number of Products Grown/Produced

• Number of Acres by Level of Sustainability

• Gross Sales & Gross Sales within 3 hours

• Gross Sales Paid to Growers

• Number of Youth Engaged in Farming

• Number of Minorities and Women in Farming

• Pounds of Food Donated

• Market Access

• Division of Sales by Market

• On-Farm Infrastructure: Existing Infrastructure and Infrastructure Needs

Buyer/Customer Measures• Senior Farmers Market Nutrition Program Dollars Spent

• Markets Accepting EBT

• Dollars Spent at Markets on EBT

• Number and Type of Wholesale Buyers

• Amount of Sales to Wholesale Buyers

• Buyer Retention

Training and Education Measures• Number and Type of Technical Assistance Provided

• Training Attendance

• Impact of Training and Technical Assistance (Follow Up Evaluations)

• Number of National and Regional Outreach/Presentations

Value Chain Measures• Number, Diversity, and Strength of Relationships within the

Value Chain

• Number and Type of Shared-Use Infrastructure Available in the Value Chain

• Number and Type of Opportunities for Building and Utilizing Political Capital Available to Members of the Value Chain

Barriers and issues ---not everything works out the way you think!

Barriers & Issues Scale

Capacity --- human, financial, analytical, time

Time – long haul view

Flexibility to experiment

Tension between social enterprises & non-profit goals

Funding trend shifts

Higher entry cost for market and distribution access

Focus on Infrastructure Capital from private and public sources to reorganize

food production, processing and distribution

Program financial support and partnerships to creates a “food value chain” which engages all stakeholders in a just food system

Corporate partners in the value chain need to invest with seed capital/equity and go beyond loans and purchase orders

Focus on access to markets Food safety and market readiness training for

scale

Support for regional brands (entrepreneurs, market partners, funders, citizen eaters)

New delivery and distribution partnerships

Non-traditional partners driving consumer demand and educational campaigns

Focus on capital products Slow money, new mechanisms for angel

investment

Local money for local economies: local stock exchanges, local currencies, cooperative ownership, coop hybridization

New investment and debt products

Policy Education Webinars

Farm BillFood safety

Sub-regional producer education

Farm Bill Reauthorization

working with National Sustainable Agriculture Coalition (NSAC)

huge budget cuts to critical programs

Beginning Farmer & Rancher Program

Sustainable Agriculture Research and Education

Value-Added Producer Grants

Rural Micro-Entrepreneur Assistance Program

Rural Conservation & Development

What You Can Do ensure Appalachian voices are heard

advocate for programs to help small farmers, not agribusiness

support local work

Central Appalachian Network: www.cannetwork.org

Center for Economic Options: www.centerforeconomicoptions.org

Natural Capital Investment Fund: www.ncifund.org

Mountain Association for Community Economic Development: www.maced.org

Resources

ResourcesAppalachian Sustainable Development:

www.asdevelop.org

Appalachian Center for Economic Networks: www.acenetworks.org

Rural Action: www.ruralaction.org

Mountain Association for Community Economic Development: www.maced.org