What does it take to scale up to wholesale?

In 1990, Steve and Suzi Fry started farming on a handful of acres in the Rogue Valley. Now, over 25 years later, their operation has expanded to over 90 acres of vegetable, flowers, and berries being grown across the region.

As their acreage increased, the farm reached capacity for their washing and packing house. When the family began to look into options to improve their infrastructure, they realized that this was a growing problem for many people in the wholesale market who wanted to grow their business. With this in mind, the family started to think about developments that would not only help their farm, but also the larger local farm community.

The Fry Family Farm Food Hub is a recently completed a 1.2 million dollar project to develop an on-farm produce-washing and sorting line, cooler and freezer space, loading dock, commercial kitchen, and retail space. Family members Ashley and Amber Fry stressed the importance of planning to determine the appropriate design, capacities, and scale of the facility to ensure full utilization.

This farm was one of the stops on a recent tour hosted by OCFSN’s “Wholesale Market Development” committee. Participants learned about opportunities and challenges for farmers trying to scale from direct to wholesale markets, and for distributors and retailers trying to source more local products.

Tour stops included two local farms (Fry Family Farm and Wandering Roots Farm), two handling facilities (Fry Family Farm Food Hub and Naumes, Inc.) and one retail store (Cartwright’s Valley Meat Company).

Panel discussions were also held with wholesale distributors (Charlie’s Produce, Organically Grown Company, and Rogue Natural Foods), retail food buyers (Ashland Food Co-op, Natural Grocers, and Ray’s Marketplace), and farmers exploring wholesale markets (Blue Fox Farms, Rainshadow Organics, and Shasta View Inc.)
Speakers on the distributor and retail panels affirmed that there is growing consumer demand for local products, but it can be challenging finding the right fit for both buyers and farm suppliers. As Mike Nuebeck from Organically Grown Company said:

“Selling to wholesale is the graduate school of farming. The requirements are the highest and the returns are the lowest. You have to have skills to make it work.”

Issues of concern raised by panelists included the quality of produce, consistent supply, meeting requirements for food safety, and the importance of cosmetic appearance. Sarahlee Lawrence, from Rainshadow Organics, noted that it is a real struggle to have enough “perfect” produce. On average, this is only 20% of their total crop.

Farmers noted the importance of telling their story and using websites and social media to enable a connection with the end buyer, even with distribution.

Both farmers and food processors also called out increasing challenges in meeting labor needs.

Local organizers for the tour included THRIVE and Rogue Valley Farm to School. Support for the event came from Meyer Memorial Trust and the Corvallis Environmental Center.

Tracy Harding of Rogue Valley Farm to School, a recent graduate of the Food Hub Management certificate program at the University of Vermont, put together the following list of resources for people interested in learning more about food hubs:

The Role of Food Hubs in Local Food Marketing
Running a Food Hub: Lessons Learned from the Field
Running a Food Hub: A Business Operations Guide
Food Hubs – Solving Local: Small-Farm Aggregators Scale Up With Larger Buyers
USDA Food Value Chains Creating Shared Value to Enhance Marketing Success
Fresh Connections: The Pilot Season of a Rural Food Hub
Best Practices Guidebook: Food Hub Vendor Manual
Best Practices Guidebook: Food Hub Grower Manual
Sacramento Region Food Hub Feasibility Analysis
Building Successful Food Hubs: A Business Planning Guide for Aggregating and Processing Local Food in Illinois
Running a Food Hub: Assessing Financial Viability