Let's grow our own

By Martin Yarnit

22nd July 2020

In the second of three instalments about strengthening Britain’s horticulture sector, Martin Yarnit draws on the experience of US food hubs and Italian cooperatives as potential business models.

Last year, with funding from the Winston Churchill Memorial Trust, I took a trip to the US and Italy to see at first-hand how support for small producers is delivered.[1] The US has carried out a large scale country wide experiment to boost the fortunes of small farmers for more than a decade. There, new intermediaries – food hubs – have opened up market access for small producers. In the US Department of Agriculture definition, 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.”

A strength of the hubs is their flexibility - they can take a variety of forms and can be initiated by a variety of partnerships:

  1. Producer-led, consumer-led, or a hybrid
  2. Coops, limited companies, charities
  3. Wholesale, retail, or a hybrid
  4. Complete range of food and drink, partial range (e.g. fruit/vegetables) or one product (e.g. fish)

Their unique strength is that they combine the interests of producers and consumers. Typically, warehouses provide storage and a distribution point and the internet is used to manage orders and deliveries, in some cases linking producers and consumers direct, thus shortening supply chains but also expanding reach and therefore scale. Hubs take several years to get established and achieve viability but when they do they offer better returns to producers than traditional intermediaries. A 2014 study by Diamond et al. showed that while three selected local food hubs offered between 65 and 80 cents in the retail dollar to the farmer, the national average for conventional intermediaries was 16 cents.[2]

The Redd, in Portland (OR), is a purpose built, state of the art facility, initiated by a trust with federal funding, that opened in 2019. With more than 20,000 square feet of warehouse space, the Redd provides cold storage, aggregation, packaging, and distribution services in partnership with B-Line Sustainable Urban Delivery. It also provides space for business incubation and kitchens for food processing, a way of adding value to crops. Through the Redd, rural producers can make one efficient drop rather than dozens all over town, entrepreneurs can access scale-appropriate services and office space, and direct-to-consumer farmers, ranchers, and fishermen can pack and distribute their CSA and CSF orders with ease. Currently, 170 food businesses utilise the services provided by this state of the art facility.[3]

Many of the more than 200 US hubs have now achieved viability by supplying a mix of mainly institutional consumers – hospitals, schools, workplace canteens – restaurants and hotels, as well as supermarkets and individual consumers. The power of public procurement is a key factor in some areas – for example, in Chicago, where the city’s airports are part of the council’s purchasing regime. The hubs are the lynchpin of a movement for ethical food and farming that promotes better livelihoods for all the people who work in the food chain – the producers, the shop workers, the truck drivers and those in catering and hospitality.

Italy’s agricultural coops offer a very different business model, often linking with consumer and processor coops to create a strong market identity and force. Bologna-based Apo Conerpo offers its 6000 farmer members established access to the national market for their fruit and vegetables and, through distribution associates, to the European market. Although they are a very different creature to the US food hubs, Italy’s coops have learned the same lesson of strengthening their market power by uniting producer and consumer interests – in Apo Conerpo’s case, by selling through the coop retail sector.

Finally, in contrast, a consumer-owned brand set up originally to protect the livelihoods of French dairy farmers.[4] French consumers have bought 123m. litres of milk labelled C’est qui le patron?! (CQLP -Who’s the boss?) since its launch in November 2016, making it the fourth-biggest milk brand in France, outsold only by the most cut-price supermarket-own brands. CQLP, run by a cooperative of 7,500 members who have each paid €1 to join, produces a growing range of products. CQLP’s organic butter has become the country’s most popular brand and the fastest-growing new organic product in France.

In its report, Our Future in the Land, the FFCC calls for stronger support for producer organisations and more investment in rural infrastructure. In the third and final instalment of this blog, I spell out how these proposals could add up to an ambitious agenda for change.

[1] Full report at https://www.wcmt.org.uk/sites/default/files/report-documents/Yarnit%20M%202017%20Final.pdf

[2] Diamond, A., D. Tropp, J. Barham, M. F. Muldoon, S. Kiraly, and P. Cantrell. 2014. Food Value Chains: Creating Shared Value to Enhance Marketing Success. Washington DC: U.S. Department of Agriculture, Agricultural Marketing Service, May. doi: 10.9752/MS141.05-2014

[3] https://civileats.com/2017/09/18/on-the-ground-at-the-redd-building-portlands-local-food-economy/

[4] https://twnews.co.uk/gb-news/how-millions-of-french-shoppers-are-rejecting-cut-price-capitalism

Martin Yarnit has had a career in education innovation. He now focuses his research on sustainable food production and distribution. He has built a cooperatively run village shop and local food centre and received Winston Churchill Memorial Trust funding to study food hubs and cooperatives in the U.S. and Italy.