Tapping the Green Stuff in Local Markets
Taste the Local Difference convenes first forum, releases survey results
February 8, 2006 | By Patty Cantrell
Great Lakes Bulletin News Service
Research by Taste the Local Difference indicates that if northwest Michigan farm entrepreneurs had more assistance in packing, processing, and distribution, a new $45 million market could open up for local food and farm businesses.
TRAVERSE CITY − At 5 a.m. every Friday morning, Tina Werp pulls out of the driveway of her snow-blanketed Grand Traverse County farm and heads off to the big neon lights and thick commuter traffic of Chicago. Loaded in her van are insulated boxes of baby lettuces, sweet pearl-size turnips, and other specialty vegetables and herbs. She and husband Mike Werp harvest the “micro-greens” from their six commercial greenhouses Thursday afternoons for Friday delivery to Chicago.
Not loaded in her van, however, are meats, cheeses, and other products from neighboring farms that Tina Werp believes her customers − chefs from high-end restaurants in Chicago, Detroit, and right near her home in northwest Lower Michigan − would love to buy.
“It feels like a waste. Here I am driving this van to Chicago,” she said. “It’s definitely worth it to us, but there’s a lot of room left.”
She’s overwhelmed, however, by the next logical step for filling the van: Recruiting other farms and coordinating their different products, schedules, and personalities. “When I start thinking of all the details, my mind bogs down,” said Ms. Werp.
On Monday, February 13, 2005, Taste the Local Difference, a collaborative of economic development, agriculture, university, and nonprofit partners from northwest Michigan, will hold the first of a series of forums to bring growers like Ms. Werp together with retail and institutional food buyers. The goal of the event, scheduled for 6 p.m. to 9 p.m. at Northwestern Michigan College’s Hagerty Conference Center, is to help regional farms tap into emerging markets, explore opportunities for increasing and strengthening local farm and food connections, and establish cooperative marketing arrangements that can help Ms. Werp and other entrepreneurial growers.
Taste the Local Difference also will present data from surveys it recently conducted that found farms from Manistee to Mackinac have significant opportunity to move well beyond the $1.9 million in annual sales they currently make directly to restaurants, stores, and other consumers.
Examples of such successful local food business connections from around the country include Home Grown Wisconsin, a group of 25 farms marketing under the same label, and GROWN Locally, a 14-farm cooperative in northeast Iowa. Economists predict that the business-building steps needed to expand local food sales in northwest Michigan can equip area farm and food businesses with the skills and facilities needed -- such as cooperative distribution arrangements -- to put their products into Detroit, Chicago, and other Midwest markets.
It’s clear from Taste the Local Difference research that area farms are eager for help. The project’s survey of 400 direct-market farms had a significant 21 percent response rate. Of the 84 respondents, 41 percent said they could use help connecting with new buyers and 33 percent were interested in assistance with business issues.
Such assistance could lead to more successful farms. Mr. Werp, for example, says operations like his have only scratched the surface of potential local food sales, as well as opportunities in nearby cities. The Werp farm’s narrow focus on micro-greens is just one area. “I could put up six more big greenhouses and still sell everything I’m raising,” he said.
But unlike the Werps, smaller, mostly side-job farms have not had the time, opportunity, or wherewithal to invest in the greenhouses, packaging, delivery routes, and other things needed for growing their businesses past the roadside-stand stage.
Research by Taste the Local Difference indicates that if entrepreneurs had more assistance and support to bridge gaps in packing, processing, and distribution, a new $45 million market, or five percent of the region’s $900 million in annual food and drink sales, could open up for local food and farm businesses. At a national average of 20 cents on the retail food dollar that flows back to producers, that five percent share could return $9 million annually to local farms, more than quadrupling their current direct-market sales.
In total jobs and dollars, it’s nothing like bringing a big Toyota factory with more than 1,000 jobs to northwest Michigan. But in terms of quality of life − a vital economic asset in the 21st century − area leaders see great value in making local farming more profitable. Prosperous farmers, in addition to land conservation tools, protect the region’s farmland and rural character.
“Land preservation is critical to the quality of life we all enjoy, and we see our food and agriculture programs as a vital link to this,” said Andy Hayes, director of the Boyne City-based Northern Lakes Economic Alliance, which is a partner in the Taste the Local Difference initiative. “Helping agricultural enterprises and farms increase their business opportunities is a way to increase their land use choices.”
Demand and supply strong
Making local food purchasing easier for restaurants and other retail buyers is a key ingredient for expanding direct-marketing so that it works for more farms and farmland in the region, according to Taste the Local Difference research. The research also provides specific information on how and why local retailers buy local farm products and how area farms market their products
The project’s survey of all restaurants in the region (530) had the strongest response rate of 26 percent. Of those 136 restaurants that responded, 44 percent already purchase some of their ingredients directly from area farms. The project’s survey of all food retailers in the region (183) had a response rate of 15.2 percent. Of those 28 respondents, fully 83 percent said they buy directly from farms.
Vegetables and fruits topped the list of locally grown items that restaurants and stores buy. But also significant on their lists were herbs, honey, dairy products, eggs, and meats. Few of the respondents indicated that contracts with large-scale distributors would prevent them from buying from local farms. Only one, part of a national fast food chain, responded that direct-farm purchasing would be impossible.
Taste the Local Difference surveys of direct-market farms uncovered a broad range of offerings. Local farms’ production includes more than 100 varieties of vegetables, all types of berries and tree fruits that can be cultivated in the region, plants, meats, dairy products, and specialty items, such as wool and maple syrup. Direct market sales at roadside stands, farmers markets, restaurants and other outlets were significant to most of the farms, with 56 percent reporting that direct market outlets accounted for 100 percent of their farm business income.
One of the biggest reasons why restaurant and grocery respondents said they buy local farm products is the freshness of such items as strawberries, greens, and beans that are often picked within 24 hours of delivery. Supporting the local economy with direct-farm purchases was also a high priority among respondents, along with the fact that they believe fresh, local product is more attractive to their own customers.
Yet while their interest is strong, only 25 percent of restaurants and 36 percent of grocery stores reported they go out of their way to buy local farm products. Among the barriers they cited were unpredictable availability of local foods, higher prices, inconsistency in the size and quality of the product, and inadequate delivery, storage, or packaging.
Amanda Danielson, co-owner of Traverse City’s Trattoria Stella restaurant, is one who goes out of her way to buy local farm foods.
“Beyond the obvious benefits of it tasting better, we really believe as business owners that it is our responsibility to support the community that supports us,” Ms. Danielson said.
She added that she also likes knowing the farmer personally and wouldn’t want to lose the ability to work directly with farmers should the market expand to the point that distributors get involved in helping local farms and restaurants with streamlined ordering and delivery.
“I feel I have more control over the food I’m using if I can look at the farmer and say ‘Hey let’s talk about these tomatoes’ or ‘Let’s talk about this lettuce.’ ”
Nevertheless, Ms. Danielson welcomes the day when farms like the Werps might get together to share delivery costs and details. “Anything that could consolidate some of the work would cut costs for farmers and cut our costs, too.”
Patty Cantrell, a journalist and economist, directs the Michigan Land Use Institute’s Entrepreneurial Agriculture Program. To read the survey results, referred to in this article, click here. Reach her at email@example.com