In today's food system, large scale food distribution has become the standard way food moves from farm to market. The system works well to feed a lot of people, and has allowed us to eat tomatoes in December and send produce far distances while keeping it fresh. But the system is not without its sacrifices.
Through large scale food distribution, farmers can lose the ability to set their own prices, and small-scale farmers can be cut out from the system for not being able to fill high volume orders. On the consumer side, this system can make local food harder to find and identify. Institutions interested in providing locally grown produce at their cafeterias may need the efficiency buying from large distributors provides, but find they're unable to source food the way they'd like.
Food hubs are businesses popping up around California and the U.S. trying to create a food distribution system that supports regional food systems. By aggregating food from small and mid-sized farms and selling it to large businesses and institutions, food hubs are able to help realize the consumer's desire for local food while helping small and mid-sized farmers succeed by connecting them with buyers who may otherwise be out of reach.
To help ease the challenge of starting these unique businesses, a network of food hubs in California, organized by the UC Sustainable Agriculture Research and Education Program, is learning how to conquer their business start-up and growth challenges together.
Food hubs as business innovators
Thomas Nelson, president and co-founder of Capay Valley Farm Shop, a food hub in California's Capay Valley, has built his business around a vision of a thriving regional food system where small farmers succeed. Thomas purchases food from 50 different farms in and near the Capay Valley, and sells primarily to corporate food service in the Bay Area.
“Our model is farmer-focused," Thomas said. “Farmers set the price for their food, and we add on our margin. We help tell the story of the farms so that their identity is kept throughout the supply chain. We let our buyers know about new products or new farms we're working with, and our buyers ask for produce by farm name.”
Thomas works closely with his 50 farmers, helping them plan their crops to best meet the demands of their clients, and working with the beginning farmers to get them through the hurdle of learning how to sell wholesale.
“It can be a challenge to accurately predict the next harvest,” Thomas said. “And it's our responsibility to mitigate some of those risks for the buyers as much as possible, but our buyers also get it. The reason they choose to work with the food hubs is they want to support local farms. What really makes this work are shared values.”
Thomas is one member of a new statewide food hubs network created in collaboration with the UC Sustainable Agriculture Research and Education Program (UC SAREP), a statewide program of UC Agriculture and Natural Resources whose work includes improving marketing opportunities for small farmers. The network, funded in part by the UC Global Food Initiative, brings together food hub mangers to learn from one another and collectively pave the way for successful food hubs in California.
The food hub business model is a relatively young one, few food hubs existed in the United States before 2008. Today, hundreds are in business across the country, and they're all trying to figure out similar things: how to best work with farmers and customers to make the business model effective, how to run a food business in a regulation-laden environment, how to increase efficiency without sacrificing price, quality, and the value of local agriculture.
“Food hubs are really working with farmers in their local areas to help them reach markets beyond selling directly at the farmers' market,” said Gwenaël Engelskirchen, who leads the food hub projects at UC SAREP. “We brought a group of northern California food hubs together for their first convening in February of 2015 and they realized that they all had a lot to learn from each other. They realized that there's opportunity in them working together.”
There's a hashtag on Twitter for what they're doing: #collabatition, or, collaborating with your competition. UC SAREP acts as the organizing body for the food hub network — coordinating resources to help the hubs wade through the many rules and regulations of operating a food business, and working through the visions of their own businesses and the network collectively.
“This is a newish space, so there is a ton to learn and share,” Thomas said. “By having a network we are supporting each other on the journey of growing successful businesses that serve local farms and regional buyers. Working with UC SAREP, we can have conversations with larger buyers that would be hard for us independently to access.”
One of those potential larger buyers is an organization close to home — the kitchens of the University of California.
“UC SAREP plans to interview kitchen directors from UC campuses all around the state to see what keeps them from buying local food, and whether the food hub business model is one that can support the desire they have to incorporate local food into their kitchens,” Gwenaël said.
And past successes show that food hubs can play an important role in linking UC dining programs with local farms. According to a recent report from the UC Global Food Initiative, through a relationship with the food hub Harvest Santa Barbara, UC Santa Barbara is currently able to source 23 percent of its produce from within 150 miles of campus.
“By linking UC food buyers with food hubs, we want to see if that success can be replicated around California," Gwenaël said. "In 2014, UC Santa Barbara alone served nearly three million meals, so the entire UC becoming a local produce buyer could be a major boon to regional food systems.”
The UC SAREP website offers a number of resources that can assist food hubs as well as farmers looking to see their produce wholesale. Find those resources here. Stay tuned for an upcoming article on food hubs in the next issue of California Agriculture journal.