Growing Magazine - May, 2013

FEATURES

Institutions

Meeting Their Growing Demand for Local Foods
By Tamara Scully


Chef Greg Christian, left, consults with food service staff on local food preparation and sustainable kitchen practices.
Photo courtesy of Beyond Green Partners.

It couldn't be easier: Call the food distributor, order everything needed and have a big truck deliver it the next day. If produce comes prewashed and sliced, while meat is already breaded and frozen, ready to cook, it really does simplify things in the kitchen. Employees do not need to know how to take food from its raw form to the prepared stage.

Nutritional values may already be calculated on the packages, so the dietician does not need to scrutinize every item for restricted diets.



Farmers and chefs, plus dieticians and food service supervisors, as well as workers all along the farm-to-fork supply chain, are discovering how to make local food sourcing work for institutional kitchens of all sizes.
Photo by PublicDomainPictures/pixabay.com.

Streamlining institutional food, be it school, hospital, correctional facility, restaurant chain, government office or corporate cafeteria, is the widely accepted operational method used in the U.S. today. However, it doesn't have to be. Hospitals and schools are realizing that fresh, local food is a key to healthy communities, although those in charge of procurement are often left wondering how to make contact with a real farmer. Even if they do have the time and resources to find and speak with a local farmer, barriers to building local food supply chains can seem insurmountable to parties at both ends of the table.

Major obstacles to farmers who may wish to supply the institutional market include food procurement rules, a lack of appropriate volume and consistent product, delivery issues, pricing and inability to provide ready-to-use products requiring little preparation.

Finding solutions

Organizations across the country are assisting institutions and farmers, tackling these issues in a variety of ways. Farmers and chefs, plus dieticians and food service supervisors, as well as workers all along the farm-to-fork supply chain, are discovering how to make local food sourcing work for institutional kitchens, no matter how big or small.

David Haight is the New York director for the American Farmland Trust (AFT). In his plenary address during the New York State Healthy Farms, Healthy People meeting held in Binghamton, N.Y., he said that farm-to-institution has "incredible untapped potential." However, he added that there is a need for a more coordinated approach, and the first step is to identify and prioritize the core problems. Addressing food safety concerns, creating motivated institutional buyers, accessing the existing infrastructure to store and distribute food, and making the process economically viable for all involved are vital components to successfully scaling up to meet institutional demands for local food. They are outlined in the AFT's New York state report, "Scaling Up: Strategies for Expanding Sales of Local Food to Public and Private Institutions in New York" (http://newyork.farmland.org/wp-content/uploads/2012/10/FINYS-Needs-Assessment-10-4-12.pdf).

Cornell University's Small Farms Program has issued a report, "Recommendations for Strategic Investments in New York's Small Farms"(http://smallfarms.cornell.edu/files/2012/03/SummitReport12.17.12-1pz8dd0.pdf). The top priority is to develop food distribution strategies, including collaborative marketing, product pooling and trucking.



Schools, hospitals and other institutions are realizing that fresh, local food is a key to healthy communities.
Photo by mensatic/morguefile.com.

In Dane County, Wis., the Institutional Food Market Coalition (IFMC, www.ifmwi.org) is a partnership between the Dane County Planning & Development Department, Univ-ersity of Wisconsin-Extension, and producers, distributors, food service buyers and growers. Its mission is to successfully connect farmers with institutions and to promote local food use. IFMC's report, "Selling to Institutions" (http://fyi.uwex.edu/danefoodsystem/files/2011/12/Selling-to-Institutions.pdf), outlines many of the basics, explaining how direct sales, distributor sales, food hubs and food aggregators all play a role in getting food from the farm to the cafeteria. Numerous other examples from across the nation lend credence to emerging food procurement systems that are anything but the anonymous supply chain that has dominated food service practices for decades.

Direct sales

For farmers wishing to sell to institutions, whether restaurants, schools, hospitals or corporate cafeterias, Greg Christian, a chef, local food advocate and founder of Beyond Green (www.beyondgreenpartners.com), a Chicago-based food service consulting firm, advises that finding the right person - the chef, the food buyer or the food service director - is the crucial first step. Proceed only if they are enthusiastic. It takes a motivated buyer to make farm-to-institution work, Christian said.



Major obstacles to supplying the institutional market include food procurement rules, a lack of appropriate volume and consistent product, delivery issues, pricing and inability to provide ready-to-use products.
Photo by bcnunnery/sxc.hu.

A farmer is not going to have to provide all of the items currently being used by the institution. It is important to realistically know what can be grown, in what quantities, and what the season is for a given item before committing to supply some of their yearly needs. Offer to provide a specific item (or items) based on what the cafeteria normally uses each week, and what can realistically be grown by the farm, Christian said.

"Don't assume that a cafeteria will need 50,000 pounds of potatoes. Find out what they use, what they would be willing to pay for a local source, and work from there. Don't plant blind," Christian advised. It isn't too important if the buyer needs more than the farmer can provide each week, as the buyer already has an existing distributor in place and can supplement from them with a few days' notice, but there must be a clear communication system in place, so the distributor can serve as a backup.

Farmers should not expect "to tell the institutions to change their menus to follow the seasons," Christian said. That may be the goal, but it isn't the starting point. "Local food isn't all a standard shape and size, and it isn't necessarily cleaned up as much as commodity produce coming from a large distributor. The staff will have to learn to wash, chop and dice the produce." Changing too much at once is counterproductive.

Standard pack sizes should be adhered to as much as possible, and delivery at a convenient time for the institution is a selling point. Institutions typically work on a system where payment is due 45 days after delivery. Liability insurance may be required, as well as third-party GAP certification or a written food safety plan.

According to Christian, one selling point that farmers can offer institutional buyers is a willingness to pack smaller than standard quantities if the institution finds that it has been wasting food. A large distributor sells in specific box sizes, but if the buyer is typically throwing out 25 percent of that box each delivery, working with a farmer who is willing to sell a smaller quantity is an advantage. Local could, in the long run, be more cost-effective, if waste is an issue.

The price when selling to institutions should not reflect marketing costs and should reflect that volume sales are being transacted. Pricing for direct sales to institutions is not the same as that for direct-market sales, Christian noted.

Farmers should know their cost of production, so they can set the price needed for a crop.

Working with distributors

Christian also recommends selling via a distributor. Distributors act as the go-between and handle many of the logistics that can complicate direct sales. Many are beginning to respond to requests for food transparency. They may be willing to handle small farm accounts, and they can aggregate supply to meet institutional demand.

Small and midsized distributors are becoming conduits for local food sourcing, as are some of the large regional or national companies. It may be more difficult to maintain a supply chain identity with larger companies, and their definition of "local" may be generous, as is their distribution radius.

According to the IFMC's report on institutional buyers (http://danedocs.countyofdane.com/webdocs/pdf/plandev/ifm/Institutional_Buyers_101_0.pdf), a small farmer can grow a diversity of produce and sell much of it retail, yet still choose one or two crops to sell to a distributor. A farm does not have to be a primarily wholesale grower to become part of the distribution supply chain, but can enter the chain at a much smaller scale. This spreads risk to the farmer across a variety of markets. Selling to institutions does not have to be an all-or-nothing proposition.

An October 2012 survey of 188 Vermont institutions, conducted by the Northeast Organic Farming Association of Vermont and Vermont Food Education Every Day, found that most institutions want to buy from a primary distributor or direct from a farmer. The report is called "Scaling Up Vermont's Local Food Production, Distribution, and Marketing" and is available at http://nofavt.org/sites/default/files/F2Ireport-full-web.pdf.

According to the report, "More than 50 percent of institutions cited their preferred format for purchasing local products is through a primary distributor. A slightly lower number cited buying direct from a farmer. A few noted their preferred format is through some other form of distribution network." The study concludes: "An emphasis must be placed on effecting change within the traditional distribution chain and increasing access of local food through national distributors."

Food service initiatives

Kathleen Reed, Kaiser Permanente's Sustainable Food Program manager, was a key presenter for Health Care Without Harm's webinar, "Local and Sustainable Food Purchasing and Policies in Hospitals" (www.healthyfoodinhealthcare.org/webinar091312.php). Reed was joined by Gail Feenstra, Ph.D., a food systems analyst for the University of California Sustainable Agriculture Research and Education Program and the Agricultural Sustainability Institute.

Reed oversees more than three dozen hospitals, implementing a program that prefers environmentally friendly purchases, including that of local food, for Kaiser Permanente's cafeterias. She practices "cost neutrality," finding ways to save in other areas of food service in order to defray some of the increased costs that come with local food sourcing. Distributor partnerships, whereby the distributor is an active partner in helping to source and trace local purchasing and is committed to procuring fresh produce, are imperative to success, she said.

Some obstacles the program has faced are those typically cited as deterrents: pricing, sizing consistency, tracking local purchases, seasonality of the product and distribution. Planning a menu around the seasons is one of the next major steps in making the program more functional.



It is important to realistically know what can be grown, in what quantities, and what the season is for a given item before committing to supply an institution's needs.
Photo by dtw2tva/morguefile.com.

"If we want to support producers, while simultaneously providing quality food at affordable prices in our institutions, we need to engage many kinds of other people," Feenstra advised. Addressing food production system concerns, distribution logistics and consumption patterns are all key points for institutions that wish to source "sustainable, regional food from small and midsize growers."

Creative cooperation

A publication from Cornell University Cooperative Extension, "Collaborative Marketing for Small Farms" (http://rvpadmin.cce.cornell.edu/pdf/submission/pdf98_pdf.pdf), outlines a variety of ways in which small farmers can work together to access a wider array of markets. This can reduce the risk to buyers, who are not reliant on one farm, as well as to the farmer, who would have other farms helping to supply the demand. A collaborative can be established simply by one or more farms selling directly to another farm, which then supplies the markets. It can also be established as a joint venture between several farms, or by forming a cooperative, a corporation or a partnership.



Planning a menu around the seasons is one of the next major steps in making the program more functional.
Photo by mconnors/morguefile.com.

The publication states: "Collaborative marketing is a realistic solution for small to midsize farms that are seeking access to larger markets, but are unable to individually serve such accounts. In collaborative marketing, several like-minded producers join together formally to market and distribute farm products, but not necessarily under the governance or control of a cooperative."

Food hubs are rapidly becoming key players in food distribution, working with small and midsize farmers to provide the needed infrastructure - transportation, storage, processing and safe food handling practices - along with advertising, order taking, order fulfillment, and billing and collections.

The USDA's working definition of a food hub is: "a business or organization that actively manages the aggregation, distribution and marketing of source-identified food products, primarily from local and regional producers to strengthen their ability to satisfy wholesale, retail and institutional demand."

While hubs come in all models, sizes and shapes, the focus on distribution to large-scale buyers is a key component of the majority of food hubs, based on a 2013 USDA report (www.rurdev.usda.gov/SupportDocuments/USDAReportFoodhub2013.pdf). James Barham, an economist with the USDA's Agricultural Marketing Service, addressed participants in a National Good Food Network webinar, "Food Hubs: Viable Regional Distribution Solutions" (http://ngfn.org/resources/ngfn-cluster-calls/food-hubs-viable-regional-distribution-solutions). Barham emphasized that a food hub is based upon a "value chain," which is defined as being relationship-based, transparent, source-identified and community-building, rather than the typical supply chain, which is strictly transaction-based.



Organizations across the nation are finding innovative ways to develop large-scale food sourcing that relies on small and midsized farms, and food with an identity.
Photo by missyredboots/morguefile.com.

All-inclusive approach

Farmers are not alone in this battle. Institutional buyers are motivated, and numerous public, private and nonprofit resources and businesses have emerged to fill the gaps in moving food from local farm to institutional menu. Christian, who has seen firsthand the work - on both sides of the table - required to make farm-to-institution viable, and who trains food service staff in sourcing and utilizing local, sustainable food, knows that farmers and institutions both need to make adjustments.

Adding other key players while retaining a short farm-to-fork supply chain can be beneficial, making local and regional food the new norm on institutional menus. Organizations across the nation are finding innovative ways to develop large-scale food sourcing that relies on small and midsized farms, and food with an identity. Be it hubs, distributors, collaborators, aggregators, food service purchasers or farmers themselves, real food advocates are making substantial inroads in reconfiguring where institutional food comes from, how it gets where it is going, and how the cost of production, distribution and preparation is shared from farm to fork.

The author is a freelance contributor based in New Jersey. Comment or question? Visit www.farmingforumsite.com and join in the discussions.