Stand-alone Fresh Produce Cross-docking Facility
Food Hubs – defined by USDA as “a centrally located facility with a business management structure facilitating the aggregation, storage, processing, distribution, and/or marketing of locally/regionally produced food products” – have become a popular strategy considered by local government jurisdictions (e.g., municipalities, towns, counties) to build a local food economy. Research indicates that these entities need a minimum of $1 million in annual sales to break even. This team’s goal was to consider a food hub alternative that provides only the aggregation and storage functions for produce, with marketing and distribution costs arranged directly between grower and buyer. The hub charges per-case and pallet for cold and freezer storage and rents out production equipment as a secondary income source. The team created a spreadsheet proforma cost model, based on the experiences of a food hub in North Carolina, that can be utilized by others to estimate the feasibility of such an operation.