Using Food Hubs to Optimize the Marketing and Distribution of Farm Produce

The rising demand for food produced locally, coupled with the need to assist small and mid-size farmers meet market demand and sales targets has seen several states in the US embrace the idea of food hubs. According to an excerpt published on Huffington Post on 17th January 2017, the demand by shoppers in New York for Northeast farm products has led Greenmarket to act as the link between shoppers and farmers. The state of New York took notice and allocated some $15 million out of the targeted $20 million to help build a new 20,000 sq-ft food distribution center or food hub for Greenmarket.

 

The regional food distributor will raise $5 million from public and private investors in the venture. Once the project is completed in 2019, Greenmarket will use the new premises to sell various products, including maple syrup, grains and honey to the tune of $18 billion annually. Some of the states following New York’s lead include Vermont, Michigan, Ohio and the federal government. Michigan has already set up a $30 million private-public fund to develop food hubs along with regional economic councils and enterprises to help underserved communities and small scale farm holders in the state.

 

According to the US Department of Agriculture (USDA), food hubs are a crucial subset of food value chains. The hubs are designed to help ranchers and farmers operating small or mid-size farms find capacity to independently access the retail, commercial and institutional food service markets. The role played by food hubs in aggregation, distribution and marketing farm products at affordable prices also helps producers target the lucrative local food market. The Huffington Post reports that locally sourced food sold in 2014 hit $12 billion.

 

The sales volume is expected to rise to $20 billion by 2019. Although food hubs have always existed in other forms, their re-emergence about a decade ago is largely attributed to growing food demand from consumers, grocery stores, institutions and restaurants. The other defining factor is the need by consumers to serve healthy, sustainable and locally grown food. Greenmarket, whose parent company is called GrowNYC, has grown steadily from a wholesale market of 9 farmers in 2009 to a food hub with 75 farmers in 2012. The sales also increased from $400,000 to $12 million during the same period.

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