Skip navigation

Retail & Institutional Markets

Retail and Institutional Markets poster

Highlights from Day 1 of SUMMIT, May 11th:
•    “Feed the Fort” Game Changer  — generally positive response but since Fort Bragg is such a large institutional market, it might not be transferable across the state to smaller settings
•    This requires that as the Fort Bragg initiative is designed and implemented, we consider how to accommodate and include farmers and businesses of different scales, particularly small and medium scale.
•    Major take away: ONE SIZE DOES NOT FIT ALL.  Design processes so we accommodate LARGE RETAIL AND SMALL RETAIL AS WELL AS LARGER FARMS AND SMALL FARMS.


original WIT meeting facilitators & SUMMIT breakout leaders, winter 09:

  • Maurice Totty, Compass Group, and
  • Andy Kennedy, Food Logic

staff: Nancy Creamer

 

Background

Institutional, food service, and retail markets have generally been very difficult for small, mid-sized, and often even large-scale farmers to access. Institutional markets are large, and nationally, in 2006, $30.9 billion was spent in the United States for food at schools and colleges, representing 5.8 percent of all expenditures for food away from home (USDA-ERS Briefing Room 2008). Another $42.8 billion was spent at other institutions, such as hospitals, corporate cafeterias, prisons, and airlines. It is estimated that half of the $4,010 per capita spending per year on food is spent outside the home at restaurants and other food service outlets.

North Carolina Perspective

In North Carolina’s institutional markets (schools, colleges, hospitals, corporate cafeterias, prisons) very little food is specifically sourced from North Carolina producers. Insufficient physical infrastructure and business and logistical support exist to allow these markets to be accessed by small and mid-sized farmers. North Carolina Department of Agriculture & Consumer Services (NCDA&CS) hosts marketing programs to facilitate the sale of products grown in North Carolina to schools and retail markets. A label for consumer recognition of North Carolina products is also administered through the NCDA&CS. There is broad public support for facilitating sales of local products to local institutions, including from student groups who advocate for making this possible on many University campuses in the state.

Issues Under Discussion

There are many barriers that need to be overcome in opening up retail and institutional markets to the state’s producers. The specific obstacles depend on the product, market, or sophistication of the local infrastructure. Barriers can include:

  • Lack of competitive prices
  • Lack of consistent availability of product, or lack of consistent product (size, variety, etc)
  • Substandard packaging in some cases
  • Certain cuts of meat preferred by certain institutions and no coordinating entity exists to optimize utilization and grower profitability
  • Lack of processing infrastructure available (produce and meat)
  • Lack of storage capacity, delivery channels, coordinated ordering, transportation and distribution logistics
  • Commercial liability insurance not available or not affordable
  • GAP certification requirements and audits untenable for smaller producers

 

The initial WIT meeting produced the following ideas, to discussed, developed, and expanded further at the SUMMIT:

 

Game Changer

We will develop a statewide model for developing and utilizing institutional markets through support of the Sustainable Fort Bragg’s “Feed the Fort” initiative. This model can then be expanded to facilitate other institutional markets across the state, for example, the UNC system, or school systems, hospitals, and small and large retail markets.

Partners in this Farm to Fork Game Changer include BRAC-RTF, Sustainable Fort Bragg (SFB), Sustainable Sandhills, (SS), Center for Environmental Farming Systems (CEFS), NC State Extension (and food safety task force), Foster-Caviness, Compass Group (Food Buy), FoodLogiq, Southeastern Food Systems Project, Carolina Farm Stewardship Association, and Eastern Carolina Organics. We will develop new partnerships and a coordinating business entity that will address many of the challenges to NC producers penetrating institutional markets. These issues include competitive pricing, marketing difficulty, lack of consistent availability of product, or lack of consistent product (size, variety, etc), substandard packaging in some cases, minimal and appropriate processing, ease of ordering, storage/transportation/distribution logistics, lack of affordable commercial liability insurance, and GAP certification and associated audits. We will develop baselines and project procurement goals to evaluate success and adequate progress towards goals.

Other Statewide Action Plan Ideas

Through development of our game changer, we will address other Statewide Action Plan Ideas, including:

  • Addressing contract issues and opportunities between distributors and buyers to encourage sourcing of local product.
  • Development of support systems that enable traceability to the farm (including coordinating with the NC Fresh Produce Traceability Initiative), verified on-farm food safety program (NC Fresh Produce Safety Task Force), and address lack of crop & liability insurance availability for small and medium sized producers.
  • Development of a basic matrix of information that would facilitate the effective transfer of pertinent demand/supply needs from the end retail markets to growers and vice versa. This would eventually be developed into a statewide database.

Local Action Ideas

  • Build a template based on our experience with Feed the Fort that can be replicated with other institutional buyers around the State
  • Develop local and regional cold storage, processing and distribution centers
  • Offer educational programs for producers and institutions
  • Cultivate a smaller network of farmers actively using the new entity to anchor the supply
  • County government and local retail procurement marketing tools
  • Host local food sourcing competitions at colleges, schools, and businesses

.

Notes from Regional and Institutional Markets SUMMIT Breakout Session:

Game Changer Idea: Develop a statewide model for developing and utilizing institutional markets through support of the Sustainable Fort Bragg’s Feed the Fort initiative.

Group Discussion/Comments:

  • Farmer’s stake and perspective is critical  – chance to benefit
  • DoD committed – need strong confirmation
  • Doesn’t help small retail
  • Market surplus products – need program inspected/processing, etc. for w/ mobile cold transport
  • Behavior reform systems may need to adjust
  • Poultry providers and houses in place now – not favor new poultry houses
  • Need a farmer recruitment effort
  • Need to use ‘the whole animal’
  • Needs to integrate seasons/availability for a whole year
  • Basic question of what the model is for the effort – need info

Table Top Comments: Game Changer Idea

  • 2 systems; for small farmers – direct markets, coops, CSA’s, farmers markets
  • Medium-large farmers, regional networks of distribution centers, locate existing possibilities
  • Suggestion: clear fair contract standards
  • DOD procurement barriers- what strategies exist or will be implemented?
  • How proprietary will the final result be? Is there a plan to pool product- one farmer cannot sustain all of Ft. Bragg
  • How much do they believe NC can provide of their food needs?
  • What percentage of fruits/veg compared with meats?
  • What is price competitive? Define as compared with imports that don’t have the regulatory restricting that we do
  • Is this a private industry or public effort? When will this effort begin collaborating with others in the state
  • Concern of purposeful communication within the state, not too site specific
  • We need wholesale middle man
  • Without profit nothing will change
  • Local branding possibility
  • How replicable because Ft. Bragg dominates the regional economy and has uncommonly large institutional commitment
  • Can see similarity of issues so system developed could provide a model for seemingly unrelated entities
  • This has little relevance to small retail where it’s a store for local food
  • This adds to demand when we are conscious of the limitations/bottlenecks in supply side
  • The model needs to include the means for identifying & supporting those large institutions which have this type of commitment
  • Poultry- local integrators should use existing poultry houses
  • Need more processing capacity for small meat producers
  • Requirements in contract for sustainable humane small farm local food (priority for these types of farms in contract)
  • NC State orders food through computer based system- computer communicates with distributors regarding what is needed to fulfill menu. How does Fort Bragg order? Does their system function well for local farmers
  • How is the distribution of the innovation going to happen? How will we move the idea from Fort Bragg to other institutions? Need both bottom up and top down efforts
  • Pricing? How is this determined? Sustainable price for grower v. institutional. Need to control costs for the middleman. Weaver street tries to eliminate budgets
  • Why is the feed the fort initiative a good model? We don’t feel we know enough about it to know why it is a good model and what can be applied to other institutions
  • Who will implement this program? What is the marketing plan to recruit NC farmers to disseminate information?
  • What is the goal percentage wise of the commodities to be from NC?
  • What measures will be in place for farmers to plan for future crops?
  • How widely will FTF source? Regional? Statewide?
  • What are criteria for local sourcing?
  • Take into account existing models in state
  • Consider farmland preservation in design of new development housing, commercial- that will accompany base enlargement- consider land use/planning implications
  • Interrogate existing system- retrain professional buyers, change expectations and rules on buyers part not just farmers
  • Infrastructure changes needed
  • Relationship building- planning that involves farmers and buyers. More realistic expectations are what local farmers can provide
  • Farmers need to know what markets they’re growing for
  • Institution helps farmers handle risks
  • Support capital improvements
  • Link conservation to markets- use of Bragg land resources, link to Bragg ‘buffer’ area. Support farmers there.
  • Create a % of local foods that must be local, fair, small farm
  • Coop model for supplying or distributing food
  • Food assessment
  • Educational component- make sure labeling and outreach to final consumer
  • Contextual data- are others doing something similar? Benchmarks
  • Use eco model
  • Produce as commodity on regional level
  • ECO as a model for business structure (farmer partnership) of distribution operation
  • Work with NCDA farm to school resources for additional support/partnership
  • Collect baseline data on what and how much is currently consumed at Fort Bragg
  • Develop strategy of communication from distributor to the café managers for farm profiles etc. that can be easily utilized
  • Collect baseline data on easy opportunities of what is currently available from NC Farms in volumes, etc.
  • Identify the institution and the purchaser / buying institution
  • Product liability insurance
  • Buy surplus products from local farmers markets
  • Analyze scalability of Ft. Bragg model
  • Processing, distribution facility inspections, packaging, and traceability
  • Use mobile refrigerated units to transport products
  • Develop private business models/plans
  • Collaborative effort, involve farmers in distribution but maintain relationship with end user. Organic Valley model. Use the entire animal
  • Farmers need help in developing cooperative and marketing efforts
  • 3rd party audit/traceable necessity- beef OK, chicken only 1 plant- need one in eastern Carolina, but must have the volume & contract to support. Vegetable- expensive proposition & a headache for farmers
  • Government subsidy is $ aside for infrastructure
  • How to fill/provide brokerage services for small-limited resource farmers
  • How do you develop a regional coop?
  • How do farmers band together to meet large institutional contracts?
  • Why do some coops succeed while others fail?
  • Streamlined and consistent product origin system and labeling. Traceability of product
  • Address issues of biosecurity
  • Define role of ‘middleman’
  • Incentives for farmers to participate and deal with extra ‘red tape’
  • Assisting producers and infrastructure of regulations and who pays for this
  • Pricing: subsidy like school lunches will not be competitive
  • Security issue for base from locally owned. Less risk. Fort wants to be sustainable and maintain farmland around the base
  • Could determine multi-pricing levels for products i.e.: turkey

Other State Action Ideas:

  • Meat sourcing issues- how to provide?
  • Eating lower on food change is more tax dollar efficient
  • Menu reform- use less meat
  • Consistency and industry standards
  • Processor is the ‘middle man.’
  • Still have the issue of distribution system
  • Focus is small & medium farmers supporting large buyers & their systems which necessarily introduce price depression
  • This advances the interest of large over small
  • Need to link small retail food stores into a network of buyers
  • Level playing field better, small check, larger farm, guaranteed pricing

Addressing contract issues and opportunities between distributors and buyers

  • Fair/balanced relationship
  • Insurance, metal detectors
  • Pricing- fair for farmer
  • Studies about price elasticity of consumers
  • RAFI’s fair contract standard

Development of support systems that enable traceability to the farm

  • Easy strategy thru broker communicating
  • SKA
  • Keep costs down
  • Shared systems/multi-use
  • The farmer is traceable
  • Grant money, government outlay to jumpstart
  • Funneling through distributor limits competition at farm level
  • It has to have enforcement it can be the means for a large crush small
  • Statewide funding for educating farmers about GAP
  • Grants or getting certified
  • Coop for insurance
  • GAP difficult for farmers

A basic matrix of information that would facilitate the transfer of pertinent demand/ supply needs

  • Conferences that allow farmers & buyers to meet
  • Wifi network for using online market tool, online tools for info sharing (craigslist for food)
  • Very important key is user friendliness of system & ability to project a year in advance
  • Appropriate software
  • Market maker
  • Food assessments to understand needs

Other Ideas

  • Collect other NC models of institutional farmer relationships.

General Comments on Local Action Ideas

  • Local/Small producers need to be a part- has to be farmer driven- put farmers first
  • Redefine regions by ‘food sheds’- needs analysis by shed and by component of food system on an appropriate scale
  • Early access to help gain insights/participation
  • Criteria for sustainability, environment, animal welfare, and family farms
  • Great! Do it!
  • This is a place for farmer coops to have ownership of the facility
  • This needs to be via community college system
  • Does this mean that the new entity forces those currently building local food out of business?
  • NC State recognition of success
  • Define the food shed and criteria for establishing
  • Education for storage and processing for individual and institutions
  • Needs analysis for location and type of processor
  • Flexible yet specific model so that different size/shape institutions can pick and choose the pieces that work for them
  • This is very expensive. Need to find a way to consolidate. Too expensive for each county to have a cold storage mobile unit- orange county processing serves many counties- needs to be regional because dark have enough products to support 1/ county
  • Local is great, but unless you have hi-quality control, packaging, etc. it won’t work.
  • Can we engage all 16 campuses to UNC system in singular model
  • Need regional cold storage facilities and ‘processing plants’ small farmers can use year round and rotate the crops. Grow tomatoes in spring and sweet potatoes in fall
  • Storage freezing facilities, IQF equipment
  • Distribution sharing network, transportation, cold storage trucks or easy rentals
  • Central regional location- easy access to I95
  • Community certified kitchens for small farmers
  • Utilize NCCE
  • Streamline and scale GAP for farm size
  • More processors
  • Use experience from Coops for model of more
  • Computer database of needs/availability as in foothills fresh
  • Don’t reinvent the wheel, use the system
  • Establish networking opportunities for local groups
  • Published information needs so accessible
  • Ensure food safety stakeholders
  • Sustainable
  • EQYP program, requiring registration
  • Intermediaries, how to include in the language system, what support do they need
  • Poultry need volume to support needed facilities to supply community
  • One producer per species of animal and protein producers
  • How to get an ag extension involved?
  • Outline of system and where local farms, entrepreneurs can fit into system
  • Engage universities, community colleges, to understand needs

Additional Local Action Ideas

  • Teach farmers to schedule/stagger planting and growing / collaborate green houses- cooperation
  • Clearinghouse of info/examples of current institutional farm relationships
  • Start small – Ft. Bragg may be too big to start with- applicable to smaller systems
  • State could do more cost
  • Have a farmers market on the fort or outside the gates- as an educational tool
  • Continue working to have a farmers market at the commissary
  • Share programs- economic funding
  • Promoting model now- other local initiatives to compare
  • Local food expo- chefs- institutional buyers, invite all producers
  • FSA- registering farms through them to promote traceability- get a Farm ID, labels
  • Teach farmers about variety demanded by buyers
  • Who is your market potential?
  • Need processing facilities for farmers to rotate crop and share the facility based on need
  • Organic farming- cost to small farmers
  • We need to include fair contract standards in any definition of sustainable
  • Enhanced local advocacy to cut local carbon footprint cost
  • Don’t grow all the same products at the same time

What is important for us to know about this game changer idea? Additional questions, strategies, concerns?

  • Need for a matrix of various target groups and what kinds of communications are needed for each group
  • Work on fair contract standards for state legislation
  • Use existing facilities and join forces
  • That small producers are not crushed or pushed out of market
  • That processing facilities are humane and eco friendly
  • That getting good food to the table is primary that ideas of nutrition change
  • Need to ensure small farms
  • Poultry processing to accomplish this
  • Need to ensure small farms are at the table with measurable benchmarks
  • Transparency
  • Allow for local entrepreneurs to fill distribution processing gaps created through this effort, not just jobs that compass adds
  • Equity concerns- need to make sure minority farms are included
  • Needs to be public/private partnerships
  • Economic development opportunities involved/highlighted
  • Utilization of whole animal
  • We need to know more about how the model functions- we can’t apply ideas until we know what they are
  • How are farmers going to learn how we can participate
  • Government subsidy to help level out playing field- how can we compete with meat on price point without same government subsidy at least like in public school system
  • ‘How to’ regulate and realize template
  • Need to know more about it
  • Any regional/institutional markets will pull toward distance and larger scale systems. How to ensure local/small scale
  • Institutional markets increase demand even more. Have heard over and over that demand is extraordinary already. How to address supply and processing bottlenecks? Adding demand will only further strain those systems.
  • While I am very impressed with the project and appreciate the good intension of all involved, I have not heard compelling evidence this project can truly translate beyond the military setting as a ‘model.’ I’m not saying it’s not worth doing, just not sure it is ‘generic’ enough to help other institutional buyers use more local food. Very good potential for the audience it serves, however.
  • Not enough time to explain with is involved with sustainable Fort Bragg and the efforts
  • Diffusion/transfer model- what is the fidelity of this model when implemented in other institutions? Is it flexible
  • What about convenience stories? Smaller store venues?
  • Evaluation of template can we measure if processes are working. If processes are not working how much model adopted/approved?
  • What is local? Will sustainability be sacrificed for proximity?
  • Resiliency- what happens when the local producers cannot provide
  • Ordering how to get individual farmers integrated into sophisticated computerized ordering systems
  • Criteria for sustainability- what is the effect on the environment, animal welfare, family farms
  • Who’s implementing?
  • Farmer recruitment plan?
  • Target-Market marketing plan?
  • Where do farmer surplus go?
  • Could farms be gleaned for avoiding waste?
  • Need to ID business models to provide sustainable source of funds for operation of processing centers/infrastructure- nonprofit or for profit
  • A big picture question is about the influence of the farm subsidies and commodity markets
  • How can using replicating the model build a database about costs and subsidy comparisons that truly accounts for savings and investments
  • As a small producer, concerns about quantities

What is important for us to know about other discussed ideas? Any additional state action ideas?

  • Also with a captive audience that any intuitional buyer would have a model should integrate benchmark health outcomes; what difference have we’ve seen in 3 years out in diabetes/obesity in the served audience.
  • Food safety a part of this? Enough input? To ensure accurate suggestion
  • Processing plants, community kitchens needed
  • We need an association of food coops and other stores for local good so they can support one another and have economies of scale
  • Critical issues- thanks for addressing them
  • Don’t trust county governments to handle this. Not all counties are as forward- looking as Chatham, Orange, etc.
  • Communication throughout these other programs is important.
  • Use each other for resources- how do we network?
  • Got to be NC is a great resource & umbrella branding program

Any suggestions for local action ideas presented today? Any additional local action ideas?

  • Can we educate NCSU ag extension to building local food systems, marketing, use ag extension to help farmers in each county accomplish this
  • Get the message to consumers that they need to demand local products at restaurants and grocery stores. We as a buying group have to take ownership and hold buyers accountable
  • Non GMO Seeds need to be available for local use – more freely
  • Local networked to other locals? Consistent evaluation between local systems? Capacity amongst neighborhood networks
  • Make sure small cooperative producers farmers farming works and communication individual generals local of primary importance
  • Level playing field for small
  • Consider food banks as a part of reaping donations from overages, waste, quality control
  • Volunteer forces for repackaging and keeping costs down
  • Put farmers first
  • Collaboration and cooperation and utilize explain efforts
  • UNC-System wide buy-in to implement greater flexibility in state purchasing system- example NCUS dining very inflexible in terms of procurement- not open to new ideas. Need more students (bottom up) and board of governors and general administration (top down) to overcome intention of people involved in day to day decisions