The Dirt Issue 20 – Food Hubs

Posted on October 3, 2017
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It’s what we all want, and here’s one way we get it

In the last few years, there has been a market-changing shift in what consumers want to eat. The interest in food, its source and how it’s grown have led to a demand for what’s local, fresh and seasonal. That’s good news for local farmers and ranchers, particularly for those who produce something a bit different, a bit special.

But, producing such food is one thing. Getting it to market is another issue altogether.

A continual balancing act between supply and demand

If you have a small to mid-size farming or ranching operation—and that’s exactly where the different, the special is produced—you are juggling responsibility for every aspect of running the business. That means you bear all the costs, all the commitment, all the risks. Searching out customers to buy your product, meeting their specific requirements and getting the product to them in a timely manner are the parts of the business that can decide success or failure.

Enter the food hub

The National Food Hub Collaboration defines a food hub as “a business or organization that actively manages the aggregation, distribution, and marketing of source-identified food products, primarily from local and regional producers in order to satisfy wholesale, retail, and institutional demand.”

In 2012, the Puget Sound Food Hub opened for business. Established through the good work of the Northwest Agriculture Business Center (NABC) and funded, in part, through a grant from the USDA Rural Development Program, the Puget Sound Food Hub was set up, in effect, as a wholesale intermediary in the business of moving local food into high-volume sales channels.

The idea was to crack the wholesale market and get local products to where consumers were demanding them: restaurants, grocery stores, schools and institutions. All these outlets are served by buyers who need foodstuffs at a certain scale, a scale which the small or mid-size producer cannot hope to meet. But, by aggregating product from many producers, it could be done.

After a successful startup, a new cooperative

In 2016, ownership was transferred from NABC to the Puget Sound Food Hub Cooperative. The farmers and ranchers themselves now own and operate the food hub.

The goal of the cooperative is set out in this statement, “We share a vision of providing our region with direct access to locally produced food while supporting the sustainability of our local farms.”

An advantageous system for all parties

One of the distinguishing characteristics of food hubs in comparison to other, more traditional distribution methods is the win-win aspect of business transactions. The producer benefits by setting the price of their product themselves and by retaining a larger portion of the wholesale dollar. The buyers have direct access to the freshest possible product while enjoying a greater variety of product than would normally be available.

But, there’s so much more. Both producers and buyers have the means to form a direct relationship, even going so far as to jointly determine what product is produced and when. Because the Puget Sound Food Hub Cooperative is run the way it is, food is never treated like a commodity. Product from one farm is never mixed with product from another. All food is traceable to the farm or ranch from whence it came and the methods under which it was produced are totally transparent to the buyer.

Here’s how it works

The buyer orders online from multiple, sustainable family farms. The farmers then harvest that order direct from the fields and the food is delivered to the nearest aggregation site. Finally, the freshest possible food is delivered direct to the buyer. The whole system is carefully designed to make it easy for the customer to buy direct from multiple local farms, but all with one order, one delivery, one invoice.

Now you know how it’s done

The next time you’re perusing a menu or see a grocery store display featuring a specific local farm as the source of the food, you’re likely seeing the effect of the food hub. It’s an effective, efficient, and wholly transparent way to know you’re getting exactly what you want—delicious food that’s fresh, local and seasonal.