Kojo explores the creative business strategies fueling America's boom in fast-casual dining - and why food has become one of the engines for innovation in the American economy.
Demand for locally grown food is skyrocketing here and around the country. Along with individual customers, many grocery stores, restaurants and schools would like more local products, but farmer’s markets alone can’t meet that demand. Enter food hubs: bringing farm fresh products from multiple farmers to central locations in nearby cities for pickup and distribution. We discuss new thinking on getting fresh food to cities.
- Matt Mulder Director, Development and Communications, Arcadia Center for Sustainable Food and Agriculture
- James Barham Agricultural Economist, Marketing Services Division of USDA's Agricultural Marketing Service
- Zach Buckner Founder and CEO, Relay Foods
MR. KOJO NNAMDIFrom WAMU 88.5 at American University in Washington, welcome to "The Kojo Nnamdi Show," connecting your neighborhood with the world on Food Wednesday. Demand for locally grown food is off the charts, grocery stores and restaurants boast about their local products. Schools and hospitals would like more local options and farmers markets are crowded with customers.
MR. KOJO NNAMDIBut while demand keeps growing, it turns out getting fresh produce from regional farms to the customer is not easy, but there's new thinking on ways to do efficiently. Imagine a pickup location near your office or your child's school where your order of vegetables, bread, cheese and other farm fresh products would be waiting.
MR. KOJO NNAMDIIt's what's known as a food hub and ideas like that are gaining traction in our region. joining us to discuss them is Jim Barham. He is an agricultural economist in the marketing services division of the USDA's Agricultural Marketing Service. Jim Barham, thank you for joining us.
MR. JAMES BARHAMThanks Kojo, good to be here.
NNAMDIAlso with us is Matt Mulder. He is the director of development and communications for the Arcadia Center for Sustainable Food and Agriculture. Matt, thank you for joining us.
MR. MATT MULDERThanks for having me.
NNAMDIAnd Zach Buckner is founder and CEO of Relay Foods. That's a food hub based in Charlottesville, Va. Zach Buckner, thank you for coming up.
MR. ZACH BUCKNERThanks for having me.
NNAMDIYou too can join this conversation. Give us a call at 800-433-8850. Where do you buy fresh produce? You can also send email to email@example.com or send us a tweet @kojoshow. Jim, what kind of demand is there for locally grown food and is it in fact increasing as it seems to be?
BARHAMIt's really kind off the charts Kojo, in terms of what we're seeing, in terms of the demand for locally grown food. I mean, it's hard to kind of nail down an exact number but when we did look at some studies with our economic research service and this goes back to about 2008, the local food market sales was about $5 billion dollars.
BARHAMSo we're talking about a multibillion dollar market for locally grown food. that was 2008, so now we jump five years. We don't have the data yet because our Agri-census will kind of tell us that. We do that every years but, you know, we're looking at probably a doubling of that, you know, to today's market and it is not, it certainly isn't kind of stabling off.
BARHAMWe're really seeing it continue to grow quite significantly so, you know, anybody I talk to and I work with a lot of food hubs, you know, I often ask like, you know, is there still good market there, do you have enough customers and, like, it's not about the demand. It's really about our supply, do we have enough producers...
NNAMDIYes, because you say a lot of that demand is unmet at this point.
NNAMDIMatt, your organization works with underserved communities. What kind of need is there for fresh produce in those areas?
MULDERThere's a tremendous need. There's very little access to fresh fruits and vegetables in low income communities in the D.C. area. Most people end up buying their produce at the local corner store and a lot of times that involves maybe an old apple and an old banana.
MULDERSo what we're trying to do is reach out to those communities and bring locally grown produce and we're bringing the same stuff that you'll see at your local farmers market. We'll bring the same stuff that you're going to see at places like Whole Foods and other permanent markets and so we're finding that there's tremendous demand in those communities as well.
MULDERThey're willing to come and eat this food, they're willing to buy the food. It just has to be in an affordable price range and it has to be good quality but anytime they have a choice between really high quality local food versus what they're getting the stores now, they're totally choosing the local food.
NNAMDI800-433-8850 is the number to call. Would you be interested in a food hub at your office or your child's school? Give us a call, 800-433-8850. You can also send email to firstname.lastname@example.org. Zach, you say it's the inefficiency in our current system that led you to found a company based on the concept of a food hub. Tell us about that.
BUCKNERThat's right. Kojo, to be honest local food wasn't a huge part of the original design for Relay. It started in 2007 with an idea and that was, you know, Charlottesville has something like 16 strip malls, each with a big anchor tenant big box store.
BUCKNERIt just seemed incredibly inefficient that we get into these big metal pods, you know, drive for 20 minutes just to get our groceries and drive back for 20 minutes. You know, we do this outlandish expense both from our pocketbook and our shared environment.
BUCKNERSo, you know, I got the idea to build a new market place and it just so happened that local food was perfect for that and we saw escalating demand and to be honest I thought it was a fad at first but I've become both, you know, a convert and the owner/operator of a business that is helping bringing this access to cities like Charlottesville...
NNAMDIClearly filling a need. Jim, we know urbanites will pay a premium for locally grown produce but what kind of a challenge is it for farmers to get their products into the hands of customers in places like D.C.?
BARHAMIt's a huge challenge and, well, let's put it two ways. At first, there's a wonderful opportunity and we all are really well aware of the great role that farmers markets play in D.C. We have a wonderful network of farmers markets, that's an opportunity for small farmers to really sell their products directly to the consumer and that's wonderful.
BARHAMBut, you know, that's often once a week or maybe there's not a farmers market that close to your neighborhood and you're looking for other ways to be able to access this food. And whether it's actually at your workplace, whether it's at home delivery or whether it's at your local corner store or grocery store and you want to find this local food, the opportunity and this is really why all these food hubs have popped up.
BARHAMThere are some for profit like Zach's Relay or nonprofit like Matt's Arcadia. All these different types of business organizations are finding ways that they can bring all these small farmers' products together and be able to move it efficiently into a market place, again, whether directly to consumer or into a grocery store and playing this kind of new distribution kind of opportunity innovations at place.
NNAMDISo there are different kinds of food hubs and there are a number of different types of legal status for food hubs, is there not?
BARHAMWell, right, I mean, really when we look at a food hub it's actually defined more by the function that it's for. So legal status wise it could be a for-profit, a nonprofit, there's a lot of producer cooperatives out there that we classify as food hubs and they're really the longest and oldest tradition of food hubs.
BARHAMThey've been around for, you know, centuries some of them, these farmer cooperatives where a lot of farmers were bringing their products together, what we call aggregating their products together and distributing and marketing their products to the consumer.
BARHAMBut, you know, now we have these food hubs, you have a lot of nonprofits entering the sector that have worked with farm families and realized there's a real need to be able to get all these farm products together and move them more efficiently and then of course, the for-profit sector has really stepped up and looked at this wonderful market opportunity to really connect farmers and consumers together.
NNAMDIYou see food hubs as helping farmers to concentrate on what they do best. Can you explain?
BARHAMIt's let farmers be farmers and...
NNAMDIIt ought to be truck drivers.
BARHAMYes, well, you know, some farmers are great at marketing and love the opportunity to be at a farmers market and to market directly their products and to tell their story. other farmers would really rather not, you know, spend four hours in a car, getting up at the crack of dawn, spending eight hours at farmers market. They'd rather spend that time on their farm, have somebody else actually moving and marketing their products for them. And that's really the role that food hubs play.
NNAMDIFood hubs help farmers, don't they, Matt?
MULDERAbsolutely. The farmers that we work with and that we've spoken to while we're developing our food hub operation is they're all showing interest in taking in more acreage if they had a food hub, if they could spend that time on their farm, they could tend more acres of produce or take in more animals and increase the amount of space they're caring for.
MULDERSo absolutely, they love the idea of being able to do what they do best as Jim put it and frankly the amount of the time that they're off their farm is money lost to them in general. They gain from marketing and reaching out to new customers but if they were able to maintain that connection, which we've been told that that's a really important contact, is when they're selling to a chef they want to be able to tell the chef that this is why my food is great.
MULDERAnd so that's an important step and it's something that needs to be maintain but if the farmers can spend more time on their farms doing, as Jim said, what they're good at then that's a win for everybody.
NNAMDIAre you interested in a food hub at your office? Do you wish there were more options besides farmers markets for getting fresh, local produce? Give us a call, 800-433-8850 and speaking of farmers, lets speak with John, in Silver Spring, Md. John, you're on the air, go ahead please.
JOHNHi there, thank you for taking my call. Five years ago, since 2007, I started a small organic farm in Olney, Md. It's kind of the ultra local farm and we sell all the produce at the farmers markets direct to restaurants and grocery stores and to our CSA members.
JOHNAnd my question is, we have to sell at a premium price in order to make our, keep our business viable and we're called the farm at our house. In our case we partner with a nonprofit but regardless of that my question is, how can you make, if there's, how do you make it so it's, how do you make this a farm hub viable for the farmers so they get the maximum they can get for their produce or enough for their produce to keep their, to cover their expenses and earn a living?
NNAMDIZach Buckner, care to talk about that?
BUCKNERSure. Well, you know, I would say, you know, Relay sees itself as an alternative to selling to distributors and I don't know what the actual statistics on this are. I'm guessing, Jim you know, but you know, we've heard figures like farmers get $0.12 on the retail dollar.
BUCKNERYou know, by participating in a food hub and bringing economies of scale to these businesses and in some cases cutting out middle men like distributors or big box stores I know at least at Relay can offer substantial increases in profit margins to the farmers.
BUCKNEROur average is in the 60 percent range so, you know, it's, we believe a way for people who were selling to distributors to become a lot more profitable on the goods they're selling.
NNAMDIAnd Matt, we heard John mention CSA's. He's talking about Community Supported Agriculture often shortened to the acronym CSA, could you in answering John talk about what CSA's are and how they relate to the idea of food hubs?
MULDERSure, CSA's in general essentially an agreement between the community that supports the farm and the farmer where the community pays up front. So you typically buy a subscription for the season. Most people call it a share. In return for your investment at the start of the season you're sharing in the success or the risk of the farm.
MULDERSo if there's a bumper crop of some vegetable they typically divide it equally among all the people who are members and they'll distribute it and then you get a box of vegetables each week for the entire season. that's a single farm CSA typically is the most well-known model to people but there are plenty of multi-farm CSA's where a lot of farmers come together and pull, similar to a co-op.
MULDERAnd in response to John's comment, we as a nonprofit organization have taken the role on of making sure that we making, paying the farmers a fair market rate for their food. We also take on that risk. We typically at times will buy the food from the farmer and then resell it so the markup is pretty much on us.
MULDERSo the farmer knows what they're going to get and they know what they're having ahead of time and one of the ways that we're able to make it more viable for the farmers is that our mobile market program which currently hits nine market stops in Maryland, D.C. and northern Virginia offers and accepts federal benefit programs and we have matching dollars programs. So that's where the margin can come into play versus taking it out of the farmer's hide.
NNAMDIJohn, thank you very much for your call. Any of that of assistance to you? John, are you there?
NNAMDIDid you hear what our panelists said?
JOHNI did, yes. It seems like it could, I guess you have, as a small farmer we have to scale up in order to make it profitable because we don't, we have a very small farm and we do a lot of our work by hand with tractor. So it seems like there's some kind of requirement to scale up a little bit. If we get 100 percent of course on everything we sell from the farm, so yes.
NNAMDIWell, here's Jim Barham. He might have some suggestions for you.
BARHAMYes, and I think that there a certain extent where the direct marketing that you're doing is ideal for the size of your operation. But let's say you did want to kind of grow your farm business and you begin to have some overproduction. Let's say you had a bumper crop of tomatoes or, you know, you had little additional crops that would -- which may not be able to sell through some of your other market channels. That's where food hubs can come in.
BARHAMFood hubs act as kind of an honest broker and a produce distributor for the small and midsize farms that can offer them instead of that 15 to 20 percent, more along the lines what Zach, his company and others can, if we're talking to food hubs usually is like 60 to 75 percent of return on what you're selling to them. And they do that by really, as what Matt mentioned, telling that farm story.
BARHAMSo everything that you do to connect with your chefs and with your customers is also what food hubs are doing. And they're branding and marketing to put a face to that product, to differentiate that product. Like when you sell to a traditional produce distributor, you're selling your product as a commodity and you're going to get a lower price for that.
BARHAMWhat food hubs are doing is doing really a lot of product differentiation, which just means being able to tell that your product is a higher quality, is fresher, it's more local, it's going to be from the family farm, or in your case even organic. And be able to apply that value proposition to buyers who are then typically willing to pay more for it and then allow you to retain a greater amount of that consumer food dollar.
NNAMDIJohn, thank you very much for your call. We've got to take a short break. If you have called, stay on the line. We will get to your calls. If you'd like to call, the number's 800-433-8850. Do you think we could make food distribution more efficient with centrally located food hubs? Give us a call, 800-433-8850. I'm Kojo Nnamdi.
NNAMDIWelcome back to our Food Wednesday conversation on food hubs. We're talking with Matt Mulder. He is director of development and communications for the Arcadia Center for Sustainable Food and Agriculture. Jim Barham is an agricultural economist in the marketing services division of the USDA's Agricultural Marketing Service. And Zach Buckner is founder and CEO of Relay Foods. That's a food hub based in Charlottesville, Va.
NNAMDIWe got an email from Linda who says, "Washington Green Grocers delivers organic and mixed boxes ordered online." Zach, it's my understanding that Relay Foods does some home delivery but it's mostly focused on neighborhood pickup centers. How does that work?
BUCKNERSure. Well, there's two options, as you mentioned. Both of them start with going online RelayFoods.com. You place an order, you put stuff in a basket, you check out just like you would on any e-commerce site. And at checkout instead of saying I want this shipped via FedEx, you say, hey I want this -- you know, I want to pick this up at my employer. And if you choose that route, a neighborhood pickup route, it's free. You just stop by, pop your trunk, we load groceries, you go.
BUCKNEROr we have a home delivery service, which is subscription based where you can say, hey I actually want you to cart these things up my stairs and drop them at my doorstep.
NNAMDIHere is Al on the eastern shorn, which will relate to something that Zach also does. Al, your turn.
ALHi there. Thank you for taking my call. We have a funny thing going on here. I guess it's the entire thing going full circle or something . Every once in a while if we get at the farmer's market a little lighter than normal, the Giant grocery store, big, big, big grocery store down the street has already been there. And one morning we got there and he had not only bought all the blueberries that the blueberry guy had, which we really love because he does really good stuff, but he had three fields he hadn't picked. And the grocer bought them too.
NNAMDISo you've got to get up early in the morning, don't you Al...
ALWe got to be there when they're unpacking.
NNAMDIOkay. Well, Zach, this model, the model that you have is mutually exclusive with the regular old supermarkets. In fact, you partner with traditional grocery stores.
BUCKNERWe do. Yeah, we partner with Super Value, which is -- most of you probably don't know who Super Value is. It's a big grocery distributor. And in Richmond and Charlottesville we partner with Whole Foods. So it's a mix of everything you might want to buy from a grocery store to those blueberries.
NNAMDIOr you can get your diet Coke or your Cheerios.
NNAMDIYou sell conventional food. How do you make that decision?
BUCKNERWell, we get this question a lot. I mean, we, of course, try to promote healthy eating but we realize that people are joining Relay at various points on the on-ramp. So, you know, if we don't sell that diet Coke, it's possible that the whole experience will be a no-go. Those blueberries will be a no-go. So we pick people up on various points on that ramp and try to explain what it means to buy organic. What does that mean for the farm? What does it mean for your belly? And the same goes for local food. What does that mean to your community? What does that mean to your wallet?
NNAMDIOkay. Al, thank you very much for your call. We move on now to Julia who is in Alexandria, Va. Julia, you're on the air. Go ahead, please.
JULIAHey. I just wanted to say, to make a comment that I've been a community pickup point for the local (unintelligible) share for the last three years. In fact, we just got our first delivery today for the preview and it's been a fantastic -- I can't say how important it is, at least to me, to understand what goes on for the farmer. And I think that, to me, that's a really important experience to realize that, you know, one year -- one summer it doesn't rain and that has implications for the produce that he's able to deliver.
JULIAI just wanted to say that there's lots of ways of getting food delivered to your home. The community farm shares, community pickup points, Relay, all of these are great ways and are important to our whole community.
NNAMDIOkay. Thank you very much for your call, Julia. We're getting great examples from callers about where they find their farm produce. Jim, how do you go about finding a food hub in your neighborhood?
BARHAMWell, there's -- one way to do it is go on our website. If you just Google USDA and food hubs you'll come up to all the food hubs we've identified across the country, which is about 230 plus. And it's a really huge under -- estimate of the number of food hubs across the country. We also partner with the national nonprofit called The Wallace Center at Winrock International. And they also have a fantastic food hub website. Again, if you just Google the Wallace Center and food hubs.
BARHAMThere you'll find listings of food hubs, maps of where they are located, whether they're direct consumer like the ones that Matt and Zach have, or if they're wholesale food hubs in which they may be selling to your local grocery stores, your hospitals, your schools, that type of thing. And then we have a lot of other resources, more on just what is a food hub, what resources are available to support food hubs. So I'd encourage folks -- it's one way to find out more about food hubs.
NNAMDIMatt, tell us a little bit more about your organization Arcadia and who you serve?
MULDERSure. We're a nonprofit organization. We just recently received our 501C3 status. And we are -- our mission is basically to create a more sustainable and equitable food system in the area. So we have a number of different programs ranging from farm-to-school programming. We have a demonstration agriculture operation and we have our mobile market program, which is probably the way we're most impacting food access in the D.C. area.
MULDERAnd overall our goal is to make food available to these low income communities, as well as anybody else who lives in the area. But we're trying to bring more equity to the system. And we see all of our programs tying together because we think there's a need to develop a capacity for these communities to support these types of efforts. It's not good enough just to get the food into the community.
MULDEROur mobile market -- right now Ben and Juju (sp?) are out today and they're doing cooking demonstrations. They're doing nutrition education. They have a WIC cookbook that they're putting out this year that's going to talk about -- basically give recipes on how WIC customers can use the foods that are available to them, the staple foods and what's in season and pair those together for really delicious, nutritious recipes.
MULDERAnd so it's that extra level of service that we're providing that we feel is the next step to fixing the food system essentially that's out there, because there's a huge portion of the population that's just been neglected.
NNAMDIYou operate at Arcadia a mobile farm stand. Tell us about how it works and plans for a food hub.
MULDERSure. So the mobile market is a rehab school bus. It was a retired school bus that's painted bright green. People have probably seen it driving around D.C. We have nine market stops this year. There's two in Virginia, one in Maryland and six in D.C. We're in both Wards 7, 8 and 1 in D.C. today if people want to check it out this afternoon. They can go up to the National Children's Medical Center, their WIC clinic and we're actually right there now, I think, selling. And then this evening we'll be at Ledroit Park.
MULDERAnd if -- basically the market stops in a community. We prearrange this ahead of time. We have the same nine stops all season long. We stop there weekly, weather permitting, and we set up for two to three hours at the market. And we operate a standard farmers market. The difference is we're going into communities where other farmers markets either haven't succeeded in the past or haven't tried.
MULDERAnd so we're really trying to demonstrate that there's a demand for this food. And we're trying to link those communities to the farmers. And ideally we'd work ourselves out of a job in each community within several years because somebody would take over operating the market, establishing a market or we'd be able to link local growers with corner stores or other standalone concrete brick and mortar businesses that could take over that business for us.
NNAMDICan we find where your mobile market is by going to your website?
MULDERSure ArcadiaFood.org, you can go to the website and you can check out all of our stops, our market schedule. And we actually put out a huge report at the end of last year that details how we got the market started ,the investment that it took, how it operated, the lessons learned. We also conducted research with a professor from George Mason who came out and looked at it and showed that we were actually able to fill some of this demand that's out there.
MULDERBut we could operate four more mobile markets and we still would only make a minor dent in the whole system. And so ultimately our goal is to expand that program and develop a food hub similar to the local food hub in Charlottesville that's an alternative to the standard distribution system that's out there.
MULDERSo we would do a lot of what we're continuing to do but specifically work in a structure that would offer fruits and vegetables, locally grown meats, everything, eggs. And pretty much all the food that is able to be produced locally to restaurants, chefs, schools and hospitals and other institutions direct to consumer. And then ideally through our mobile market as well. And we'd like to create a tiered pricing structure where those chefs and those restaurants that we already have a really strong relationship with pay a little bit more money so that we can reach out to these low income communities.
MULDERAnd so far that's been effective. We have a group of restaurants, Birch and Barley in D.C., Vermillion in Alexandria, Evening Star in Alexandria, buy our leftover produce at the end of our market day that isn't going to make it to the next market day. And they take it, they put it on their menu and it actually subsidizes the market in a way. It helps pay for fuel. It helps cover those expenses rather than just having that produce be lost.
NNAMDIMatt Mulder is the director of development and communications for the Arcadia Center for Sustainable Food and Agriculture. You can find a link to Arcadia's website at our website kojoshow.org. He joins us in studio along with Jim Barham who is an agricultural economist in the marketing services division of the USDA's Agricultural Marketing Service. And Zach Buckner, founder and CEO of Relay Foods. that's a food hub based in Charlottesville, Va.
NNAMDIWe're inviting your calls to 800-433-8850. Do you wish there were more options besides farmers markets for getting fresh local produce? Give us a call. Would you be interested in a food hub at your office or, well, maybe your child's school, 800-433-8850? You can also send us a Tweet at kojoshow. Here is Liz in Silver Spring, Md. Liz, you're on the air. Go ahead, please.
LIZHi everybody. Thanks for taking my call. I'm a minister at a congregation in Silver Spring, Md. and we have a CSA that operates out of our church. And I just wanted to list up another aspect of this, which is that there's lots of community schools and I think lots of different faith communities as well in the area that are really focused on this as part of -- on these kind of opportunities, local food, CSA, farmers market as part of living sustainably in the world.
LIZAnd they're doing it not just because they want fresh healthy local food, but because really ethically and theologically it's part of our world view. And I'm sure there's lots of ways that there could be even greater connections built between food businesses that are interested in this for all these kind of reasons. And communities like school and congregations that already exist and that share these kind of perspectives. And I think there's lots of room for further development in that area linking these communities that are already in place. And just need to have better connections between them.
NNAMDIWhich is why, as Jim Barham was pointing out at the beginning of the broadcast, demand is I guess greater than supply at this point because there is such a wide variety of reasons that people want to do this.
BARHAMYou know, there -- yeah, and people enter local food from a myriad of different ways that attract them. You know, for some it's supporting their local community and their farm community. For others it's access to the healthy local food. Others there's a strong environmental mission involved. It really -- people enter in many different ways. And, you know, the faith-based community has been very strong supporters of a lot of local food work.
BARHAMIn fact, one of my favorite examples of a food hub is one down in Oklahoma City. It's got the Oklahoma City Food Co-op and was started by a music teacher at a church. And he used his social justice mission and brought the Muslims in the community together, the Christians, the Jewish community together to form that kind of first set of customers to support the local growers and created this kind of online buying club.
BARHAMOr that different from what Relay's offering in terms of you go online and you basically can order what you want from different local growers. And they use this portal to kind of bring both the producers and his faith-based community together to really have this shared experience and access this local food. And it's one of the things we highlight in some of our reports.
NNAMDIWell, Zach Buckner, does Relay's food hub model make my tomatoes and eggs more or less expensive?
BUCKNERWell, it all depends on what you're anchoring that comparison to. If you're anchoring it to, you know, what you might find in a Food Lion realistically, it's more expensive. If you're comparing it to what you might find in a Whole Foods store or in a farmers market, we do our best right now -- and actually I should say emphatically we succeed at matching the prices in farmer's markets and on store shelves.
BUCKNERLonger term the thing is this. There are economies of scale. As businesses like this get bigger, you don't need 200 full service grocery stores in an area the size of Richmond to service it. I don't know what the number here is in D.C., but it's unquestionably few orders of magnitude higher. You know, with those economies of scale come cheaper groceries. So I think long term the future is that you should be able to get apples and strawberries and kale less expensively through services like Relay than you could with big box stores.
NNAMDIHow different is what Relay Foods does from an online delivery service like Peapod?
BUCKNERWell, you know, Peapod is one of the oldest businesses in this game. So I would say it's very different from a web experience standpoint. It's very much a new web experience. It's different too in that Peapod is owned by a large Dutch...
NNAMDIEverything you get comes from a Giant Supermarket.
BUCKNERIn this area, everything you get comes from a Giant. Relay, we have 30,000 products from 200 different stores and farms. So it's a really, really wide selection. You can get, you know, bread baked for you, you know, with your name on it so to speak. Carrots pulled up from a field the morning before your delivery. And these are things that big grocery stores just can't do, of course.
NNAMDIWe got an email from Gus who writes, "I understand the Pentagon is working on a new innovative healthy-based initiative Operation Live Well, including some military bases in Virginia. Would food hubs work for delivery to mess halls and PX commissaries, Jim Barham?
BARHAMWell, if I hazard to guess, I know who Gus is.
BARHAMYes. I'm going to call him out. Hello, Gus Schumacher (sp?) , how are you doing? We -- I've just started to have conversations -- and other people you'll see are actually having more conversations with the Pentagon. They are doing this healthy-based initiative. My group works a lot with farmers markets as well so we're really encouraging them. And they're very encouraged to actually start putting farmers markets near or on bases. And then even in their own commissaries to begin to source more locally grown food.
BARHAMNow that -- you know, the Pentagon -- and they have their own kind of distribution system of how they get food into a lot of their commissaries, so for a lot of food hubs -- food hubs will act kind of as that intermediary to aggregate or bring together a lot of different small farm local products, and then feed into kind of their complimentary distribution system. So it's certainly possible and within reason, and we are working with them on this kind of going forward. It's very exciting though.
NNAMDIGus Schumacher muttering to himself, busted. Matt Mulder?
MULDERWe actually partner with Gus's organization Wholesome Wave as one of funders for a matching dollars program at our market, and we're actually hoping to start a program with the Healthy Base Initiative at the Defense Logistics Agency, and we're working with a couple other area farmers market partners to start operating farmers markets on bases, and there's a lot of challenges to it, but we're slowly working our way through the system, and we're hoping that that's the first step in getting local food onto to the bases.
NNAMDISpeaking of busted, we got a tweet from Sarah. "Love my CSA, community supported agriculture. Easy way to get fresh local food. I pick up from Spiral Path Farm at Silver Spring Farmers Market," which tells me that's got to be Sarah (word?) who works here. Busted. Got to take a short break. When we come back, we'll continue this conversation on food hubs. If you have called, stay on the line. We will get to your calls. If not, give us a call at 800-433-8850, or send email to email@example.com. I'm Kojo Nnamdi.
NNAMDIWelcome back to our conversation on food hubs. We're talking with Jim Barham. He is an agricultural economist in the marketing services division of the USDA's Agricultural Marketing Service. Matt Mulder is the director of development and communication for the Arcadia Center for Sustainable Food and Agriculture, and Zach Buckner is founder and CEO of Relay Foods, a food hub based in Charlottesville, Va. Directly back to the phone, here is Sushmita (sp?) in Arlington, Va. Sushmita, you're on the air. Go ahead, please.
SUSHMITAHi. I was excited to hear about Arcadia Farms because my daughter's school just went on a field trip there and my daughter is seven years old, doesn't eat any fruits or vegetables, but she came back and told me she ate carrots and beets and leaves that taste like Sour Patch Kids candy.
NNAMDIArcadia is stealing your child.
SUSHMITAAnd I didn't believe her at all, nobody I spoke to believed her. So I took her to the grocery store. She pointed out all the vegetables to me, and we brought them all home, and we created it and ate a salad and I'm so thrilled that she got to do this.
NNAMDIWow. What do you say to that Matt Mulder?
MULDERThanks for telling us that. We love those types of stories. We really see our job in a lot of ways as building literacy among children and even adults about local food and about healthy eating, and along those lines we have a farm camp program where we bring in -- we're going to bring in 120 kids this summer. They're going to learn about growing food, eating new things, cooking it. They're going to go out every day and harvest food from our gardens and come back in and actually prepare it.
MULDERAnd we had similar stories from children last year where parents were trying to get their kids to eat this food, and it's mainly just getting them to try it, and we found that a lot of times doing taste tests at schools and at the mobile market, if the person says I cooked this, why don't you give it a shot, they'll take it. The kids will taste it, and a lot of this stuff, if it's prepared well, even if it's not prepared well, it still can taste really good as long as it's just not overcooked.
NNAMDISushmita, thank you very much for sharing that story with us. Jim Barham, why is the USDA focused on food hubs, and what role does the department play in developing them?
BARHAMWell, you know, it's part of a wider, larger initiative that started about five years ago with the new administration, and our former deputy secretary Kathleen Merrigan helped start an initiative called Know Your Farmer Know Your Food, and it was really a very concerted effort within USDA to help support local and regional food systems development. First by really looking within ourselves at USDA, you know. We have all other own little agencies and do our own little thing, and kind of get caught in our little stovepipe of what we're doing, and so one was to really coordinate between all those different agencies so that we could figure out the best ways to support local food systems work.
BARHAMNow, within that, one of the things we recognized very early, and, you know, I've been at USDA for about six years and it's what I've really focused on, is this idea of legal food distribution. There's huge demand for local food. There's a lot of farmers out there. Can we make the connection? Yes, we do it directly, but being able to get farm product into grocery stores and schools and hospitals and other institutions is a tough nut to crack. And one of the things that was emerging when I first joined USDA were these alternative consideration networks.
BARHAMNow, that's not a sexy title. No one likes to call -- like, what do you do? We have an alternative distribution model or network, you know. But the food hub term was also kind of coalescing at this time too, kind of the knowledge of this kind of concept, and it was really a convenient way -- it's certainly a more sexier term to look at all these different ways that farmers were getting their products efficiently, affordably, and reliably into these larger markets. And so we at the USDA said, well let's really -- we're going to go full in on this because we believe this is an appropriate model.
BARHAMOur main job, at least within the agency I work with is to help improve market opportunities for farmers. So being able to really focus our attention to food hubs as one solution for overcoming some of these distribution challenges that small farmers face.
NNAMDIAnd it's not just the USDA that's focused on food hubs. Other federal agencies also see food hubs as a vehicle to achieve a number of goals. Can you talk about that?
BARHAMYeah. It's been really exciting, particularly these last couple years when we've been reaching out to different federal agencies and they've been reaching out to us to understand more about local food, local food projects, and what it could mean for a variety of communities. So, you know, Health and Human Services, and, you know, the Centers for Disease and Control have become huge partners with us on the food hub because they see it as a way to increase access of healthy food and really satisfy one of their missions of increasing fruit and vegetable consumption.
BARHAMThen you look at someone like the Department of Commerce and their Economic Development Administration, and their main thing is job generation, creating new jobs, particularly in distressed areas, and they look at the establishment of a food hub as one means to create jobs, create good paying jobs, and at same time serve that community with good food. And then, again, like Treasury, even HUD and others all have really been stepping up and looking at ways in which they can use their federal programs, grants and loans to support this type of work.
NNAMDIYou mentioned alternative distribution as another unsexy name, but what is source verification and why is it important?
BARHAMSource verification. Very good question. So this is -- the main idea here, and we've kind of touched on it before, it putting a name to the products that you're selling, and source verification, or source identification is this idea that when you as a consumer, or you as a chef, or you as a grocery store produce buyer get that product, you know where that product is it coming from, who grew it and in some cases, how it was actually grown. So that's source identification. Every food hub worth their weight spend a tremendous amount of energy ensuring that every single product is source identified.
BARHAMBecause ultimately the consumer, much like the initiative we're doing at USDA, Know Your Farmer Know Your Food, people want to know their farmer. They want to know where their food comes from and how it is grown. And so part of the marketing and branding of food hubs is to be able to share those attributes with consumers.
NNAMDIBefore we get off of this topic, Debra in Catlett, Va. has a question for you. Debra, your turn.
DEBRAHi. I'm a small farm out in Fauquier County. I have a destination flower form business and I do very well, but I've also waded into the local food world in the last five years, and have learned the struggles that are involved in it. And I'd like to pull back for a minute and take or more global view of some things that need to happen with local food. One is that fruits and vegetables get designated as commodity crops instead of specialty crops, and therefore can receive subsidies.
DEBRAThe second is that there are almost no profitable food hubs -- for profit profitable food hubs right now, and I really feel like the USDA needs to put our money where our mouths are, and become part of it financially. So in this age of wanting small government, I'm actually for bigger government when it comes to the USDA helping out small farmer. There isn't enough small farmers -- mid-size farmers to immediate the demand that's out there right now, and small farmers cannot scale up unless they have financial help and solid markets, and I don't see that happening any time soon without the help of the USDA.
NNAMDIWhat do you say to that Jim Barham?
BARHAMWell, okay. First, on the one question of whether food hubs are profitable or not, you know, there -- the numbers that I have in talking to a lot of food hubs, you know, you have all -- you have some that are financially still trying to get on their feet in terms of being in the black, others that are well on their way, you know. It is more in the probably 60 to 70 percent of the food hubs right now are financially viable. That being said, you know, where does USDA come in in determines of support for fruit and vegetable production. We do classify them as specialty crops, and we have grants through our Departments of Agriculture that we give out a fair amount of money to support specialty crops.
BARHAMIs it enough? Probably not. It's not necessarily something that I can answer adequately just because we're often beholden by the Farm Bill which is still kind in those negotiation stages of how we actually get funding and what we're actually authorized to do. We really -- that is kind of the legislation -- legislative piece, and I don't mean that as an excuse, but that is kind of the reality that we face today. As far as supporting small farmers, we do what we can. Some would say not enough. My particular group, our focus and mission is specifically on supporting small and mid-size growers.
BARHAMWe do that through food hubs because food hubs are one channel where small and mid-size growers can actually get their products into larger volume markets. We do that through our support through grants of farmers' markets and direct marketing through our farmers' market promotion program. We do that through a lot of technical assistance and research support that way. So we're trying to do our part, but there's certainly always more we can do with small and mid-size farmers.
NNAMDIDebra, thank you very much for your call. Zach, the idea of food hubs is something many people would embrace, especially if it brings more farm fresh food to their tables, but there are challenges, and some early experiments failed. Tell us about Webvan.
BUCKNEROh, my goodness. Yeah. That's a colossal failure. Yes. So I mean, this is a very, very difficult business, and was just pointed out, it's tough to make ends meet, especially when you're tiny. But, you know, some of the earlier experiments in this area, they were totally on the other end of the spectrum in terms of mass and I want to say Webvan took in something like a billion dollars worth of investors capital in the west coast. This is during the very, very earliest days of the Internet, and where, you know, frankly a lot of people weren't yet comfortable entering a credit card into a website.
BUCKNERAnd what they were trying to do was a little less of a food hub in that they were, instead of brokering these transactions among lots of different farms, they were essentially trying to stockpile the stuff in one bill fulfillment center, and it's a really tricky way to make the business work, especially if you're then going to cart this to every customer's doorstep.
NNAMDIYou say the example of Webvan scared away investors, but it also provided some lessons. What did you take away from the Webvan experience?
BUCKNERWell, there were two biggies. You know, one, as a just highlighted, we don't want to take inventory of food ourselves as a general rule. You know, we like the idea of working with a diverse network of providers and having them plug in so that we say customer 622 placed on order for a baguette and the bakery says here's the baguette. We don't take inventory of it, there's no perishability loss. There's no perishability risk. So inventory is one.
BUCKNERThe other is is engineered a system that doesn't require us to do the last mile. For engineers, last mile is a loaded phrase. You know, paradoxically it's a lot more expensive for Fed Ex if you ship a package from Anchorage, Alaska to your doorstep in DC, Fed Ex will spend a lot more money from the fulfillment center in DC to your doorstep than they did on that transcontinental journey. Where I'm going this is, Relay's pickup model, the model where we place pickup points at churches or schools or employers or gyms, this model allows our customers to do the last mile for us.
BUCKNERThey're already going home, and in a lot of cases it's a lot more convenient than waiting around for one of our drivers to show up. You cart the stuff home, you put it in your fridge, and we both save.
NNAMDIHere is Gail in Arlington, Va. Gail, your turn.
GAILHow are you?
GAILSo I just wanted to mention quickly that, we regard to CSAs, that I'm a real estate agent, and my office is in Arlington, Va., and a few weeks ago, about 20 agent in my office decided to do a CSA, and it's like one of the most exciting things on Tuesday the farm delivers 20 boxes of produce and some eggs to our office, and it's -- as far as I know, we're probably the only real estate in our area that has a CSA -- a farm delivering produce to our -- to the office, and it's just -- I've never joined a CSA before. I always wanted to, but it's really fun to do it with other agents, and now other agents in our office are going can we get in on it? We'd like to join. So it's one way to get -- and real estate agents are notorious for eating badly by the way.
NNAMDIMatt Mulder, care to comment?
MULDERJust, I think in general -- there's a box of vegetables sitting right here, and I think the general response people have to this stuff is just, I mean, it's -- it's food and it's delicious and it's just beautiful when you look at it, and I think --
BARHAMI can smell the strawberries.
NNAMDII told you not to mention that box. There's going to be a stampede on this room in about ten minutes. Thank you very much for your call, Gail. Here is Sophie in Poolesville, Md. Sophie, your turn.
SOPHIEHi. Sorry. Thank you for taking my call. I was in a small farm (word?) and when we go to the farmers' market, the people that are shopping there are mostly picking out just like one or two items and it's never they're doing their major shopping, or getting everything they need for the week and all their meals there. They're just normally getting like a head of lettuce or a box of peaches. And I was wondering when -- like, if you think all the farms in the DC area are enough to feed every -- all of the DC areas like complete meals throughout the week, or if it's always going to be just like supplemental and they're there to make meals healthier, or if it's there to kind of just like...
NNAMDIWe don't have a lot of time left. I'll have Jim Barham take a stab at that.
BARHAMWell, right now there certainly isn't the supply the meet all the demand in the DC area, but what food hubs are offering is a higher level of convenience and customization so that, you know, you can -- whether you're ordering online on actually going to a grocery store and they have well stocked shelves with local food that you can do your one-stop shopping there, or have the one-stop pick up spot to help that. And if you have that growing market, it helps seed and, you know, begin to build that supply if you have more producers who get comfortable with that market and want to sail up their operations.
NNAMDIJim Barham is an agricultural economist in the marketing services division of the USDA's Agricultural Marketing Service. Matt Mulder is the director of development and communication for the Arcadia Center for Sustainable Food and Agriculture, and Zach Buckner is founder and CEO of Relay Foods. That's a food hub based in Charlottesville, Va.
NNAMDI"The Kojo Nnamdi Show" is produced by Brendan Sweeney, Michael Martinez, Ingalisa Schrobsdorff, Tayla Burney, Kathy Goldgeier, Elizabeth Weinstein and Stephannie Stokes. The engineer is Tobey Schreiner. Natalie Yuravlivker is on the phones. Thank you all for listening. I'm Kojo Nnamdi.
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