Consumer demand for local foods, which they perceive as healthier, is undeniably growing. Operators want to satisfy this demand but face issues dealing with supply consistency, reliability, food safety and logistics.
Enter the regional food hub.
These partnerships between foodservice companies and local producers facilitate a consistent supply of products with customer appeal while also assuring them that their business helps companies and farmers in the area. For those producers, the hub presents a way to get business from customers they wouldn’t otherwise have a chance to approach.
A new national report, Solving Local, presents five case studies showing how hubs are teaming up with wholesalers to get products from small farms and other food businesses into high-volume supply chains.
One of the five regional food hubs profiled in the Wallace Center report is Common Market in Philadelphia, which realized $1.7 million in sales last year to more than 200 local customers, including schools, colleges, hospitals and workplaces. Collectively, these segments represent almost half of Common Market’s current business, with the rest consisting of retailers, restaurants and various nonprofits and faith-based organizations.
Sales have grown some 60% since 2011 and the food hub is looking for even more by casting its net north into the New York City market and south into Baltimore. It stocks more than 700 sustainably produced SKUs, including fruits, vegetables, dairy, meats, grains and various value-added products and works with more than 75 farmers in the Mid-Atlantic region.
The most recent development has been a frozen spinach pilot that is Common Market’s first foray into local, source-identified frozen produce. Institutional customers, especially hospitals, have driven demand for lightly processed produce that gives the food hub a year-round business opportunity.
Not so common
Common Market has its own 20,000-sq.ft. warehouse in North Philadelphia, including 100,000-cu.ft. of cold storage space. It operates three refrigerated trucks that pick up from producer locations and rural aggregation points.
Serving on Common Market’s board is Tina Rodriguez, who is also CFO and general counsel of SAGE Dining Services, a contract management company that serves the independent school and college markets across the U.S. and now in Canada as well.
“One of our school clients had been involved with a Philadelphia area business officer initiative trying to find ways to get schools to buy more local, and that led to our looking at Common Market as a potential supplier,” Rodriguez says of her initial exposure to the organization, which was only about a year old at the time. “We determined that before we could use them, they had to secure third-party certification with regard to food safety.”
It’s a complex process to get third-party certification, and can be daunting for a small organization with limited resources or in-house expertise, Rodriguez explains. “Among the things you need are training programs, training modules, documentation. It’s not just that you have great processes but that they are verifiable.”
Rodriguez joined Common Market’s board in 2009 to help them get through this process. They not only did so but have been able to renew the certifications as needed since and the organization is now at the point where it is able to assist the farmers it works with to ensure their practices are compliant with applicable Good Agricultural Practices.
Third-party certification has allowed Common Market to expand into the institutional market and its cast of large volume buyers like healthcare organizations, colleges and school districts. Third-party certification is required for any vendor wishing to do business with most of the entities in these segments.
That also means that Common Market does business with not only SAGE but its competitors as well. Not only is Rodriguez unbothered by this, but she’s delighted.
“That’s the goal!” she says. “The goal is to get local food everywhere!”