food hubs: supply chain traceability to enhance rural sustainability

FOOD HUBS: SUPPLY CHAIN TRACEABILITY TO ENHANCE RURAL SUSTAINABILITY

Jeremiah Thayer, Matson Consulting

James Matson, Matson Consulting

Presented October 16, 2013 – Food Studies Conference Austin, Texas

WHY ARE THESE APPLES NOT THE SAME?

Presented October 16, 2013 – Food Studies Conference Austin, Texas

Presented October 16, 2013 – Food Studies Conference Austin, Texas

ANSWER: A traditional commodity distribution

channel

vs.A developing local foods marketing

channel

Presented October 16, 2013 – Food Studies Conference Austin, Texas

TRACEABILITY

“The transfer of information about a

product from the producer or point of

origin through all intermediaries in the

transaction to the end consumer”

(Thilmany 2008)

Presented October 16, 2013 – Food Studies Conference Austin, Texas

TRACEABILITY

The information maintained through…traceability efforts can contribute to higher

pricing being received by the producer, because customers demand to know more about where their food comes from, and are willing to pay for it.

Presented October 16, 2013 – Food Studies Conference Austin, Texas

LOCAL FOOD EXPANSION Willing to pay a premium

Achieved $7 billion in sales for 2011 (USDA‐ERS).

Estimated 107,000 farms, or about 5% of all U.S. farms (CRS-2013).

Formation of multi-farm Community Supported Agriculture (CSA) programs and food hubs.

Presented October 16, 2013 – Food Studies Conference Austin, Texas

WHAT IS A FOOD HUB?

Gaskin, Julia W. et al. (January 2013). “Is There Farmer Interest in Food Hubs in Georgia? A Needs Assessment Survey.” Georgia Sustainable Agriculture Consortium.

Presented October 16, 2013 – Food Studies Conference Austin, Texas

USDA DEFINITION OF A FOOD HUB

“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”

(Barham et al. 2012).

Presented October 16, 2013 – Food Studies Conference Austin, Texas

BROADER DEFINITION OF FOOD HUBS

function rather than form:

evolved from an educational or social mission:

striving to keep food dollars in the local economy keeping working agricultural lands in production

“In many cases, food hubs share information with end users on where or how food was produced, providing a greater connection between producers and consumers.”

(Matson et al 2013)

Presented October 16, 2013 – Food Studies Conference Austin, Texas

THE VARYING FUNCTIONS OF FOOD HUBS

Market Access for Local Foods

Transportation and Distribution

Brokerage Service

Increasing Market Share by Bundling

Increasing Market Share by Extending the Season

Maintaining a Consumer-Producer Connection

Information Flow and Sharing (Source of

Information)

Presented October 16, 2013 – Food Studies Conference Austin, Texas

FOOD HUB AS AN INFORMATION SOURCE

Creation of Networks and the Linking of Buyers

- E.g. LuLu’s Local (Virtual)

Product Assurances- Assurances about product quality

Traceability- Point of origin

Presented October 16, 2013 – Food Studies Conference Austin, Texas

TRACEABILITY Producer to Consumer

Fresh produce has no label with pertinent production information.

Food Safety Inventory Management Information of Value

Consumers can make more informed purchasing decisions.

Presented October 16, 2013 – Food Studies Conference Austin, Texas

TRACEABILITY

Sustainability and Transparency The producer is able to become a price maker and

directly represent themselves and their products to consumers.

Presented October 16, 2013 – Food Studies Conference Austin, Texas

COMMUNITY REVITALIZATION

“Locavore”

Values Based Food Chain

Food Deserts

Intersection of Demand and Social Values

Presented October 16, 2013 – Food Studies Conference Austin, Texas

CONCLUSION

Traditional Market

Cost Volume Optimization

Traceable Market

Information Quality Satisfaction of

Customer

Presented October 16, 2013 – Food Studies Conference Austin, Texas

CONCLUSION Conventional U.S. Food

Marketing Chains are ill equipped to maintain the traceability of products.

Food Hubs connect producers and buyers

Food hubs maintain traceability as a value proposition

Presented October 16, 2013 – Food Studies Conference Austin, Texas

WANT TO KNOW MORE?

Visit: www.matsonconsult.com

For more information on local food marketing, check out USDA Report 73 by James Matson, Martha Sullins, and Chris Cook.

Connect with Matson Consulting on Facebook and Linked In

(803) 233-7134