“Food Hubs” Emerge as a Viable Solution to meet Consumer Demand for Local Food

June 15, 2016

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“Food Hubs” Emerge as a Viable Solution to meet Consumer Demand for Local Food

June 15, 2016

East Lansing, MI – The “food hub” model is proving to be financially successful across a variety of legal structures and markets, according to a newly published report from the Michigan State University Center for Regional Food Systems and the Wallace Center at Winrock International.

“Food hubs are responding to increasing consumer interest in local and regional foods, and our findings show that a majority of them are doing so in a viable way” said Rich Pirog, Director of the MSU Center for Regional Food Systems.

Food hubs are businesses that aggregate and distribute source-identified food products. Established food hubs are thriving and new food hubs continue to open for business:

  • 75 percent of food hubs are breaking even or better, an increase of 7% in two years.
  • Almost all food hubs expect their business to continue to grow.

“This is the first time that national ongoing data of this caliber is available on food hubs,” said Dr. Michael Hamm, C.S. Mott Professor of Sustainable Agriculture at Michigan State University. “The 2015 National Food Hub Survey findings are novel because they build on the 2013 National Food Hub Survey.”

In addition to revealing a promising business environment, the survey suggests that food hubs benefit local communities, local economies, and small and medium-sized local and regional producers: 

  • Food hub suppliers and customers are almost entirely regional. More than 9 out of 10 food hub farm or ranch suppliers are located within 400 miles of the hub, and 3 out of 4 food hub customers are located within 400 miles of the hub.
  • Food hubs average nearly 80 farmer and food business suppliers each and more than 9 out of 10 food hubs source exclusively or mostly from farms and ranches with gross sales less than $500,000.
  • Food hubs invest in community health and healthy food access. In their daily operations and programs, more than 87% work to increase access to healthy or fresh food and more than 95% work to improve human health.

But despite strong demand for their services and their positive impact on communities, food hubs are facing challenges. In particular, they expressed concern about maintaining product supply and keeping up with business growth.

“Food hubs bring great opportunity, but they face unique challenges that will require investment and innovation to overcome,” said Dr. John Fisk, Director of the Wallace Center at Winrock International.

“More than 50% of hubs are concerned about securing more supply – and growth could be a liability for at least 40% of hubs because of barriers to adequate capital and limited delivery, warehouse and staff capacity.”

The full report, Findings of the 2015 National Food Hub Survey, and a sharing toolkit with topline findings is available online at:http://foodsystems.msu.edu/resources/2015-food-hub-survey. A fall 2015 webinar recording of key findings is available at:http://www.ngfn.org/resources/ngfn-clustercalls/food-hub-survey-2015.

The Web-administered survey was conducted in March, April, and May of 2015. One hundred fifty-one completed and partial surveys were used in analysis. The 2013 National Food Hub Survey data were used for comparative analyses. Details regarding sampling, data collection, analysis, and response rate are included in the 2015 report.

About the Michigan State University Center for Regional Food Systems
The Michigan State University Center for Regional Food Systems (CRFS) works toward a thriving economy, equity, and sustainability for Michigan, the nation, and the planet. CRFS unites the expertise of community partners with that of MSU faculty and staff to cultivate regionally-rooted local food systems that yield Good Food: food that is healthy, green, fair, and affordable. Learn more athttp://foodsystems.msu.edu/ and connect on Twitter and Facebook @MSUCRFS 

About The Wallace Center at Winrock International
The Wallace Center at Winrock International serves the growing community of civic, business, and philanthropic organizations involved in building a new, good food system in the United States. The Center is focused on developing market-based strategies to expand the supply, distribution and consumption of healthy food. Working through collaborative partnerships, research, networking, and model development the Center positively impacts farmers, communities and the environment. Learn more about the Wallace Center, its National Good Food Network and The Food Hub Collaboration at http://wallacecenter.org/ and at http://ngfn.org/