In the United States, there has been a longtime consumer interest in local food. Many people want to purchase the best real food products, specifically food that is grown or produced locally. Because of the major desire for local food, effective distribution systems are vital. However, many small farmers lack the scale necessary to sell to larger organizations or to distribute food outside of traditional farmer’s markets or farm shares (CSAs). Food hubs help to solve this problem.
According to the USDA, food hubs act as a conduit to provide smaller and mid-sized farmers and ranchers with a place to access different food markets, including retail, institutional, and commercial food service markets, which are also the fastest growing segment of the local food market. Food hubs can be a place for food producers to access aggregation, distribution, and marketing services at an affordable price. They help create major opportunities for distribution of agricultural goods into new markets. This is becoming a more popular way for farmers to sell goods as well. There has been a major boom in food hubs, with a reported 288 percent increase from 2007 to 2012.
Another exciting aspect of food hubs is their ability to serve different social missions. In a recent study coordinated by the National Good Food Network (NGFN), more than a third of participating food hubs reported being organized as 501 (c) 3 operations, which represent a “social mission or structure.” Some of these missions include higher wages for farmers and farm workers and providing fresh foods to underserved populations.
However, food hubs also face a number of operational challenges. The NGFN also found that food hubs typically run at a break-even level before depreciation. This means that there is often little to no room for any spending variances, including debt service, new investments, or “[hiccups] in the supply or sales chain.” This becomes a greater challenge when food hubs operate as non-profits, especially if they rely heavily on grants or contributions. If non-profit food hubs don’t receive the outside funding, they run at a deficit. In his article “From Farm to Table,” Rowan Jacobsen reports that one of the major stumbling blocks of food hubs and the local food movement in general is that “there is no way to challenge the economies of scale of industrial food production, which is propped up by subsidies, kickbacks, and money-saving environmental shortcuts.” Food hubs can offset some of the economies of scale challenges that smaller farmers face but, as Jacobsen also reports “philanthropic and government support for operations [is] shrinking,” and “the paradigm will definitely shift to ‘survival of the fittest,’ with fitness measured in terms of operational and financial efficiency,” a difficulty faced not just by food hubs, but non-profits as a whole.
Despite some bleak outlooks, it is possible for food hubs to not only exist, but to thrive. The Healthy Food Access Portal, started in 2009 by PolicyLink, The Food Trust, and Reinvestment Fund, has a list of key strategies that address everything from financing to site development that can be helpful starting points for starting your own food hub. They also have suggestions of ways to advance equity as a part of your food hub, many of which are strongly based in assessing the needs of the community and place an emphasis on supporting historically marginalized producers. This has the ability to foster “more just, fair, and inclusive food systems and local economies,” which in turn strengthens the impact of food service social enterprise. Including sustainable and equitable food sources in food service social enterprise is a holistic way of working to create and sustain a food system where everyone can have what they need to flourish.
Written by Natalie Reitz
“Food Value Chains and Food Hubs: Supporting Local Producers Through Collaborative Planning, Aggregation, and Distribution,” USDA
“Are Farmers Market Sales Peaking? That Might Be Good For Farmers,” NPR
“Counting Values: Food Hub Financial Benchmarking Study,” NGFN Food Hub Collaboration
“From Farm to Table,” Rowan Jacobsen
“Healthy Food Access Portal” PolicyLink, The Food Trust, Reinvestment Fund