Northern California Regional Land Trust

Feasibility Study: Food Hub - Creating Local Food Systems

THE CLIENT:
Northern California Regional Land Trust, (“NCRLT”), assists Northern California landowners and public agencies in the voluntary protection of land and other natural resources.  As part of that work the NCRLT is very active in grass roots efforts to protect and promote local food systems. 

OPPORTUNITY:
Most small farmers sell directly to consumers (e.g., at the farm or farmers’ markets) and/or to a limited number of local buyers, finding marketing and distribution to commercial buyers cumbersome, time consuming, and costly.  The demand for local produce has never been higher and many local growers would like to produce more and/or have outlets for production beyond what their current sales channels can accommodate, but find marketing and distribution too challenging. 

By the same token, local retailers, restaurateurs, food service organizations, school districts, and even large national retailers would like to buy fresh, local produce but often find it challenging.  Buying local produce in sufficient variety and quantity usually requires buyers to work with multiple farms, which is also time consuming and costly. 

FEASIBILITY STUDY:
Morrison & Company was engaged to perform a feasibility study to assess the possibility of forming a local “Food Hub.”  The Food Hub would help small producers access broader markets while allowing buyers to more easily purchase larger quantities and varieties of locally grown produce through a single portal.

There is growing interest in food hubs in communities across the nation and many models have been tried.  These include operating as part of other organizations with complimentary facilities and needs (such as consumer food cooperatives), stand-alone operations with cold storage and logistics/distribution capacity, and various web-based systems.  

Our feasibility study procedures consisted of assessing a grower survey conducted by our client, interviews with growers, interviews with buyers in various segments (e.g., retail, food service, school district), assessment of case studies of other food hubs, and interviews with management at various food hubs around the country.  Considering these factors and the available resources, we prepared financial projections under different scenarios, identifying an approach most likely to fit both the available resources and the needs of local growers and buyers. 

OUTCOME:
The feasibility study found that an on-line “Food Hub” model would be the most viable option as part of a first phase of development.  In a subsequent phase, a sustainable Food Hub would need to develop and leverage existing resources to rollout a full-service Food Hub complete with logistics and cold storage capacity.  NCRLT is currently developing the necessary software and preparing to implement the first phase model.