A food hub may seem like a “big” idea, but there is no reason they can’t be started small. So why not create a “mini” food hub by piggy-backing off the capacity of an already existing farmers market?
Farmers markets represent a loosely organized group of typically small to medium-size regional farm and food producers focused on working together to attract local food buyers. A “Food Hub” has all the same primary goals. It just expands upon them.
Food hubs target a sizeable potential market share that doesn’t generally purchase via a farmers market — wholesale and institutional buyers. Food hubs can also provide other joint marketing opportunities, like a group CSA or a virtual farmers market. And food hubs don’t have to be big to make an impact.
In 2018, the West Virginia Farmers Market Association (WVFMA) and the West Virginia Food and Farm Coalition kicked off a “mini food hub” effort. They helped regional farmers market networks expand into their communities by focusing on ways to aggregate and distribute local farm food production jointly. They focused on how farmers markets could boost their vendor’s sales by working with regional distributors, implementing farm-to-school programs, creating mobile markets and collaborative Community Supported Agriculture (CSA) programs.
Especially with new online tools available to make organizing and aggregating food hub sales more accessible than ever and the growing success of “virtual” food hubs and online farmers markets, traditional farmers markets are a natural place to start collective market ventures — aka a food hub.
What is a Food Hub?
The United States Department of Agriculture (USDA) 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 to strengthen their ability to satisfy wholesale, retail and institutional demand.”
A food hub creates a dependable supply chain structure for sourcing local food, similar to the wholesale food distributors wholesale, restaurant and institutional buyers have traditionally relied upon. This allows smaller-scale farmers that aren’t big enough to participate in traditional wholesale distribution to band together to leverage their joint market share, giving them all access to wholesale, retail and institutional buyers.
A restaurant chef or institutional buyer (like a school district) might occasionally cruise a farmers market looking for unique items. Still, in reality, they need to preplan their menu (and their budget) further ahead than what they can find on a whim at the Saturday market. And, they typically require a larger volume of product than might be available at the market on a reliable basis.
According to a 2019 National Food Hub Survey, food hubs are experiencing rapid growth.
Surveyed food hubs reported that in 2019 they had collectively purchased or procured products from 2,861 farms and ranches, representing $31.8 million in sales for small and midsized farms.
Food hubs may be big. Some even function across state borders, aggregating a regional food supply into sales channels individual farmers have difficulty accessing on their own. But there is no reason a food hub can be small (or start small!).
Many farmers markets have a tradition of coordinating with a local food bank, allowing a food bank to cruise market stalls at the end of a market day, picking up whatever products the vendors have leftover but would rather not take home. That is, in essence, the market acting as a “food hub.”
Why not make it official and take the next leap?
Getting Started on a “Mini” Food Hub
Identify Potential Market Opportunities
The first step in starting a mini food hub is identifying new direct market sales opportunities the farmers market could easily capitalize on.
Is there a local demand for shoulder-season food when markets aren’t open? Survey local chefs and determine their level of interest — are they looking for more opportunities to purchase local food than they currently have? Are regional school districts, hospitals or other local institutions interested in pursuing farm-to-table opportunities for their cafeterias?
Consider Food Hub Aggregation and/or Delivery Options
Aggregation and delivery are two of the biggest hurdles for food hubs. Refrigeration quickly becomes an issue. But, there are plenty of ways to start simple, even without refrigeration.
When your farmers market is in season, can you organize aggregation by simply having a separate tent where all pre-ordered purchases are held until pickup (during market hours)? If you are selling when the market is closed (or even when it is open but on a different day), is there a local farmer partner that can stage a holding and pickup area for the product?
Delivery is popular with buyers but can make things more complicated. Many food hubs add refrigerated delivery trucks as they get bigger. But keep your options open and there might be opportunities, even for small mini food hubs. For example, can you contract out delivery services with a local delivery provider?
Talk to (and Partner with) Local Food and Farm Organizations
Reach out to local food and farm organizations, including your county extension office and state department of agriculture. Are there programs already established that can help you set up, establish and even fund a small food hub venture?
What other regional food hubs are in your area and would they share their experiences?
Consider Legalities and Liabilities
A food hub can have different legal hoops to jump through and liabilities to plan for than a farmers market. So make sure to check in with any county, city, and state regulators to know and follow any applicable rules.
How will your food hub be organized? If it is part of the farmers market, it will likely come under the market auspices but consider what that means and make any necessary paperwork adjustments to reflect the new venture.
Check with insurance providers and ask other food hubs how they handled their insurance liabilities.
Look into Funding Sources
Even a small grant can help kick off a mini food hub by paying for somebody to manage it or an initial marketing effort (like building a website). Don’t be afraid to inquire on a local, county, state and even federal level about grant programs you might qualify for.
As food hubs grow, they often turn to grants for larger purchases — like warehouse facilities, coolers and refrigerated deliveries. But even a small grant of a few $1000 can help kick-start the beginning of a mini “food hub.”
Choose Supportive Food Hub Software
With the advent of new online marketing and management tools explicitly targeted for farmers markets and regional food hubs — like Food4All’s Food Hub — software solutions are available to manage the organizational quagmire that can come with collective marketing.
Food hubs need to consider:
- How to allow each participating farmer to easily list their products, prices and adjust their inventory while retaining their own farm identity.
- How to collate all the orders and organize them for distribution and pickup (or delivery).
- How to handle payments in a simple and easy process for the buyer (aka only ONE purchase needed rather than purchasing from each participating farm) and doesn’t create a paperwork nightmare for the food hub.
A good food hub software program can solve all these problems — plus more.
So, don’t be afraid to take the leap! Most farmers markets already have established the most important parts of a food hub structure — the clientele interested in buying local food and the farm and food producers eager to find more sales channels.
For more information on how Food4All can help you turn your farmers market into a mini food hub or to learn about our free online solutions for direct-market farmers and food artisans, feel free to reach out to us online HERE or call us at (541) 604-8129