Aubrey Relf

Maricopa County Viable Food System

November 14, 2011

Key Take Aways…

Although the farm to institution movement and local foods provide and promote much important social good—such as:

• Increased access to healthy foods

• Childhood nutrition education

• Supporting and building local economies

• Reduced fossil fuel emissions

• Support of small sustainable family farms and increased food security

The core function of buying and selling food products is a business. In order for any business to thrive and continue to achieve its social

purpose, it must remain profitable.

Matchmaker – Connect key stakeholders, public interest broker, bring unlikely partners together.

Facilitator – Involved in building long term relationships among food value chain actors.

Third-party certification: Establish program whereby producers receive independent verification of their adherence to a certain set of standards.

Educator – Provide marketing and educational support. Branding that “tells a story.”

Catalyst/innovator – Test out innovative business models Through grants and donations might take greater risks than for-profits.

Resource prospector: Identify and pursue resources—grants, loans, and service providers—to support value chain collaborators as the develop enterprise.

Compiled by Aubrey Relf

To determine viability of a project in terms of grants for healthy foods, an organization must demonstrate viability by identifying all of the

activities necessary for success are:

• Understanding the Concept of bringing healthy foods to a community

• Approaches to this system

• Models of distribution, and

• Basic information about a community’s capacity to support a strategy

If nonprofits want to foster the creation of new food distributors that promote local purchasing and sustainably grown foods, it is critical they:

inventory the existing assets of potential value chain partners that

could be used for distribution purposes. For example, if farmers

have trucking capacity, storage space, or family labor that could

be used for product grading, aggregation, and distribution, this

should be considered first before seeking funding to purchase or

lease trucks, lease warehouse space, or hire new employees. Not

only does such an approach reduce upfront capital requirements,

it also may lead to more economic benefits accruing to those

ostensibly intended to benefit from the enterprise in the first place.

Non Profit Driven Model Recommendations

Producer

• This includes the production of arable crops (grains, oilseeds), horticulture (fruits, vegetables), fish (farmed, wild), meat, and dairy.

Processor

• Food processors purchase fruits, vegetables, meat, dairy products, and other raw foods

• manufactured to add a specific value; for instance, canning or freezing.

Distributor • Distributors buy food directly from farmers or

processors and then sell the food to grocery stores, restaurants, hospitals, food banks, and schools.

Retail and Consumption

• Food that is sold at a retail price, directly to the consumer.

• Includes food sold at grocery stores, restaurants, or in institutional settings.

Food Supply Chain

Management

Management team skill is critically important, particularly in marketing and sales

Network

Establish a wide and cooperative network of growers

Collaboration

Collaborate with other intermediaries to strengthen the market

Stakeholders

Engage all stakeholder to maintain a supportive climate

Assessment of a Viable Strategy to Improve Access to Affordable Healthy Foods in Maryvale

Project Viability: Enterprise Development must derive from healthy balance sheets, income, and cash flow statements in order to be viable. Start up dollars

must be in hand, and the commitment to provide necessary resources must be present.” The Nonprofit Entrepreneur.

Demonstration of Viability (Grant Funding)

• Activities necessary for success of the project consistent with project’s scope, scale, and projected outcomes

• Demonstrate the staffing, facilities, equipment and supplies, and funding necessary for the project

• Identify competing activities that might reduce the availability of resources for this project.

• Ability to manage funds

Community’s experience in direct sales (Figure 1)

• Labor: Five sectors of the food system: production, processing, distribution, retail, and consumption (Figure 2)

• The community’s economic base (Figure 3) Location Quotient

• The location quotient is very useful for describing the parts of the local economic base where there is a strong concentration of employment and

economic activity. It is the ratio of the area concentration of occupational employment to the national average concentration. A location quotient

greater than one indicates the occupation has a higher share of employment than average, and a location quotient less than one indicates the

occupation is less prevalent in the area than average.

Occupation Title in Maricopa – MSA Total

Employment

Hourly Mean

(salary)

Annual Mean

(salary) Location

Quotient

Advertising and Promotions Managers 380 40.95 85170 **

Marketing Managers 2150 48.69 101280 **

Transportation, Storage, and Distribution Managers 1470 33.83 70360 1.021

Food Service Managers 3480 25.85 53780 1.237

Buyers and Purchasing Agents, Farm Products 90 27.23 56640 0.689

Purchasing Agents, Except Wholesale, Retail, and Farm Products 4310 27 56150 1.287

Market Research Analysts and Marketing Specialists* 4460 34.66 72100 1.195

Food Preparation and Serving Related Occupations 149170 10.53 21900 0.698

Cooks, Institution and Cafeteria 2650 11.81 24570 1.405

Food Preparation Workers 7330 10.93 22740 0.906

Sales Representatives, Wholesale and Manufacturing, Except Technical and

Scientific Products

22410 29.03 60390

0.515

Farming, Fishing, and Forestry Occupations 3770 9.8 20370 0.985

First-Line Supervisors of Farming, Fishing, and Forestry Workers 140 19.03 39570 1.225

Agricultural Inspectors 90 20.12 41840 0.884

Graders and Sorters, Agricultural Products 330 11.25 23400 0.388

Agricultural Equipment Operators ** 9.99 20780 0.887

Farmworkers and Laborers, Crop, Nursery, and Greenhouse 2740 8.63 17950 0.64

Farmworkers, Farm, Ranch, and Aquacultural Animals ** 9.51 19780 0.533

Butchers and Meat Cutters 1470 16.43 34170 0.669

Meat, Poultry, and Fish Cutters and Trimmers 840 13.09 27230 0.497

Approaches to Improve access to healthy foods in communities

Suggested Distribution models to Overcome Barriers

• Online local food transactions. One new website offers consumers

within a 30-mile radius an opportunity to order local food online for

pickup at specific times and locations (Jespersen, 2009). Consumers

can learn about producers, link to their websites, and place orders.

• Local School Food - Designed exclusively to market local foods to

institutions and school food service directors.

• Women Infant & Children (WIC)local food Line- Food product line would

be carried by produce firms designed and exclusively to market local

foods to WIC -only stores

• Farmers Market/ Farmers Market Association - Optimize structure of

farmers market as gathering point. Develop wholesale marketing

through single hub market

• Farmers Collaborative - Develop capacity to collectively market, process

and distribute their own foods

• Farm Direct Distribution Model, CSA in the Classroom - CSA

relationship between a local farm and school with schools utilizing CSA

boxes of local foods for classroom instruction and taste tests.

Barriers to Direct to food service approaches

Figure 3. Supply: Types of Jobs needed to operate various strategies by title, salary, and location quotient

Figure 1. Maricopa County Experience in Direct to Sales Approaches

Institutional Barriers Farm Barriers

• Inadequate kitchen facilities

• Limited cooking skills

• High labor costs

• Limited labor availability

• Inadequate storage

facilities

• High minimum orders

required from produce firms

• Limited outlets for local

food

• Unrealistic institutional

quality controls

• High price points

• Binding food contracts

• Geographic isolation

• Managing multiple farm

accounts

• Rapid payment collection

cycles

• Reliance on rebates and

incentives from processed

food providers

• Inadequate or no packing and

on- farm storage facilities

• Insufficient packing materials

• Limited or no access to value-

added processing facilities

• Limited or no means of

transporting foods

• Limited knowledge of institutional

markets

• Lack of capital investment

• Limited or inconsistent food

supply

• Geographic isolation

• Unrealistic institutional quality

controls or food safety standards

• Low price points

• Competition with rebate

incentives

• Competition from other

businesses Maricopa

Producer Processor Distributor Retailer Consumer

Food Service

Value chain business models place emphasis on both the values associated with

the food and the values associated with the business relationships within the food

supply chain.

Community Supported Agriculture (CSA)

• Direct relationship between farmers and eaters A group of people buy shares for a portion of the expected harvest of a farm.

Farmers Market

• Common facility / area where several farmers / growers gather on regular basis. Sell variety of fresh fruits and vegetables, other locally grown farm products directly to consumer

Farm to School

• The National Farm to School Network defines farm to school as: “A program that connects (K-12) and local farms with the objectives of serving healthy meals in school cafeterias, improving student nutrition, providing agriculture, health, and nutrition education opportunities, and supporting local and regional farmers

Food Hub

• Drop-off point for farmers and a pickup location for distributors and customers. It permits the purchase of source-identified local and regional food, coordinates supply-chain logistics, It is a facility for food to be stored, lightly processed, and packaged so that it can be sold under the hub’s regional label. It contributes to the expansion of local and regional food markets.

Packing House

• Aggregation facility that receives and prepares raw fruits and vegetables from farmers to then sell fresh and in some cases frozen to wholesale customers. Packing house roles vary from facility to facility and can offer such services as washing, cooling, sorting, grading, packaging, labeling, and sales, marketing and distribution

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Defining the Relevant Product

• Healthy Nutritious Food

Demand

• Income and Price

• Affordability

• Availability

Supply

• Input costs

• Labor, Land, Capital, Transportation, Wholesale Product

The Market

• Firms and consumers meet to exchange goods for money

Four Components to Consider in terms of Viability Food Chain Supply

• Small farms (less than $50,000 in total farm sales) usually sell direct-to-consumer food markets such as farmers’ markets.

• Many mid-sized farmers (total farm sales of 50,000 to 499,999) are engaging in an array of alternative strategies for wholesale food

aggregation and distribution.

Figure 2. Food System Sectors