University of Wisconsin Center for Cooperatives
The Farmer-Food Buyer Dialogue Project
In the survey questionnaires, both retailers and restaurant chefs were asked to consider seven conditions pertaining to local farm products. They were asked to rank from one to forty the degree to which each of these seven conditions hindered their purchase of more locally-grown foods. The higher the score, the greater the obstacle.
The first four months of business by Home Grown Wisconsin -- which is supplying (certified and non-certified) organic produce to Madison restaurants -- has indicated that, indeed, high price is a major obstacle preventing chefs from sourcing local foods. An HGW farmer postulated recently that it was not the organic label that boosted the co-op's prices; rather, it was inefficient production relative to larger farms and distribution channels emanating from warmer climates. None of this came as a surprise. Price is an undeniable obstacle to achieving a fundamental shift to a more regional food system.
For some food buyers, perceptions of a "lack of professionalism" among local farmers may have stemmed from deficiencies in food quality. However, interviews with food buyers generally elicited positive remarks about the local farmers' ability to produce quality foods. Rather, professional deficiencies more often pointed to farmers' shortcomings in marketing and distribution. For instance, a Chicago chef claimed that too often farmers displayed a total disregard or ignorance of market prices for food. It was not simply that farmers asked too much for their products, but that their prices were inconsistent and detached from common market standards. To some extent, this chef may have been unaware himself of the dramatic fluctuations of local, seasonal food supplies; nevertheless, many participating farmers agreed that limited access to marketplace information made pricing a difficult challenge.
Food buyers also experienced farmers' seeming lack of professionalism with regard to packaging and overall dependability. Apparently, many farmers did not conform to industry standards of packaging and offered inappropriate quantities, or neglected to pack foods to ensure optimum quality control. Finally, timeliness and consistent, dependable deliveries were often cited as lacking among local farmer suppliers.
"Consumer indifference to food source," and "restrictive contracts with current suppliers" were certainly listed as great obstacles by some food buyers, but, on average, these conditions were not seen as great obstacles. Apparently, food buyers were not obstructed from buying raw farm products because they were insufficiently processed.
Figure 6 presents food buyers' reactions to proposed "solutions" to the obstacles identified. No solution was offered to the erratic availability of local foods. Stated in full, as presented to food buyers, six questions asked whether food buyers would buy more local foods:
- If some organization were able to provide promotional materials to convey the value of local food to your customers.
- If farmers professionally processed their products (sliced vegetables, cole slaw, frozen french fries...) at a reasonable cost.
- If farmers could get their products to your current suppliers (because you cannot break any agreements with your current suppliers.)
- If you could always depend on prompt delivery of just what you ordered, conventionally packed and fresh.
- If the price was as cheap or cheaper than you could get from established distributors of non-local food products.
- If there was one phone call you could make to source local vegetables, meat, eggs, processed products, etc. as needed.
These six solutions were intended to parallel the first six obstacles presented in Figure 5. Food buyers were asked to rank from one to fifty the likelihood that they would purchase more local foods if these solutions were implemented. On average, food buyers claimed they would be more likely to purchase more local foods if any of the proposed solutions were implemented. With these responses in hand, this project set out to pursue "next steps" to improving the local marketplace for local farm products.
Home Grown Wisconsin: Revisited
A meeting was held with "farmer wholesalers" in December, the mid-way point of this one-year Farmer-Food Buyer Dialogue Project (which has since been extended six months). These farmer wholesalers included individual farmers and representatives of two farmer groups that were already selling food directly to local retailers and restaurants. All farmers present or represented were certified organic fruit and vegetable producers. As explained earlier, it was judged that these producers were most interested in pursuing "next steps" in a concerted and cooperative effort to improve local markets for local and sustainable farm products.
These farmers were asked whether the next best step was to pursue coordinated, collective efforts in wholesaling or processing. While there was enthusiasm for both directions, it was decided simplest to start with wholesaling and proceed later to processing initiatives. The farmers were then asked which types of local food buyers should be targeted. They indicated that the natural foods groceries were already being served well by existing local suppliers.
Given the choice of targeting either restaurants or mainstream groceries, the former was selected as the first priority, in part because Chefs Collaborative 2000 restaurants in the area seemed to be demanding improved supply of local, sustainable food products. Furthermore, and perhaps most importantly, the farmers agreed that this particular strategy of marketing to Madison restaurants might benefit most from a cooperative effort by all involved.
In short, none of the farmers or farm group representatives were interested in pursuing alone an intensified effort to serve local restaurants. There was interest, however, in pursuing this market together, offering chefs one phone call and dependable service through some kind of new collective inititative. Looking ahead, there was also hope that a concerted effort by all could lead to broader promotional and educational efforts around regional and sustainable food system issues.
Given three potential geographic markets, Madison was generally preferred over Milwaukee and Chicago because it is more central to the farms represented, and because good relationships were already being developed with a number of Madison chefs. One farmer present, Renee Randall, who markets organic produce for a group of farmers under the name Sweet Earth Organics, was encouraged to pursue opportunities in Chicago that she begun the year previously, and to report her success back to the group at regular intervals.
With this strategy in mind, UWCC and CIAS created a second survey questionnaire that was sent to sixteen restaurant members of the Madison chapter of Chefs Collaborative 2000. Recipients were asked to indicate their interest in purchasing local, sustainable food products from a wholesale enterprise newly created to meet their needs. As the interest of chefs was being measured, letters were sent to and meetings held with organic fruit and vegetable growers of southern Wisconsin. This region was chosen because it was determined more economical for farmers south of Tomah and Fond du Lac to serve markets in Madison.
From January through mid-April, interested farmers and chefs were identified and asked to participate. A "steering committee" composed of five farmers, one chef, and two university specialists met often to discuss strategies. Eventually, it was judged best to form a new cooperative venture that would offer membership not only to farmers, but to restaurant chefs as well. It was hoped that offering formal membership to chefs might encourage them to see themselves as part of and critical to the effort's success. A good number of both farmers and chefs liked this proposed arrangement, comparing it to the community supported agriculture phenomenon; some called it a "restaurant CSA."
Membership fees were set at $75, with the hope that twenty to thirty members would thereby provide enough capital to get the venture off the ground. Organizers hoped $75 would be small enough to encourage investment, but large enough to keep the business running until cash flow would generate enough to cover overhead costs. With four months of hindsight, it is becoming more apparent that the latter hope was not realistic. It was incorrectly presumed that the $2,250 eventually raised as start-up capital would suffice until cash flow would generate enough money to pay for brokering and distributing local foods to local restaurants. There is some risk that under-investment will result in significant losses in this first year. Dealing appropriately with these losses, if they do occur, will be one of many challenges of the winter months ahead.
One commonly expected problem has not yet arisen: conflicts between growers as to who provides what produce. In a single meeting in April, farmers indicated which crops they would prefer selling. An hour was spent going over lists of dozens of fruits and vegetables, and, for the most part, each crop was assigned to one or two farms. The idea was that farms assigned to specific crops would be given first priority, when feasible, when those crops were ordered by chefs. It was clear to all that a goal of distributing sales equally among all members -- to reflect their equal investment of $75 -- might not be achieved if "practicality" favored some farms over others.
Supply, quality, and price differences among farms were discussed vaguely as issues that might result in disproportionate sales distribution among farms at season's end. It was generally recognized by all farmers that varying levels of experience and farming skills were represented in Home Grown Wisconsin. A long-term goal of raising all members' production skills was presented for eventually balancing sales among farmer members. There was also discussion of eventually shifting the capital structure of HGW to a so-called "new generation cooperative" model, which would distribute capitalization responsibilities equitably in terms of business done with the co-op. This discussion should resume again this winter, when it is more clear how first season sales balanced out.
One important aspect of the HGW initiative that has already been hailed a success by most participating farmers and chefs has been the "logistics" that were designed to move food from farm to kitchen door. A model was provided by the success of Georgia Grown Cooperative in Georgia. After adjusting this model to reflect local conditions, the methods of communications and transactions were designed as follows. Farmers fax or phone into the manager an inventory of items for sale to the chefs. The manager consolidates the available produce into a collective availability sheet; it is faxed to the chefs who fax back their orders. The manager informs the growers, who bring the products to Madison the following evening.
Growers drop produce off at the dock of Golden Produce (a local, private wholesaler that already distributes commercial produce to Madison restaurants). Owner and operator, Bobby Golden, distributes HGW produce to restaurants that order it, for a set fee per box.
The HGW co-op manager, Joe Sonsa-Novera, meets the farmers at the dock to check over their product, applies a co-op label, and provides invoices to the distributor, who delivers them to the chefs along with the produce. Within 30 days the chefs send checks to the co-op manager, who takes off 25-30% for overhead, and the rest of the money is sent to the farmers in proportion to the produce they provided.
There are certainly some "kinks" to be worked out -- not least of which is pricing. Specifically, it seems that either farmers' prices or overhead charges need to come down if the chefs are to buy enough produce to cover the co-op's overhead. At the same time, it is also apparent that some chefs buy more HGW produce than others. To a certain extent, those restaurants buying more may be in a better position to afford HGW prices. But that may not be the only factor.
It also appears that some chefs are more committed to using local produce. These chefs are making the effort to design meals and menus, when necessary, to reflect the seasonal variations in local supplies. They have also designed meals and promotions around distinctive produce, like pattypan squash or white asparagus, that HGW farmers are able to provide. Using HGW produce for specialized food ingredients (rather than using "bulk" ingredients that requires great quantities), may offer a distinguishing quality to a meal that will make it more attractive to customers.
The six or so chefs that consistently order HGW produce unanimously agree that the quality of the food is generally better than commercial produce. They speak of "less waste," "less labor" (spent chopping off waste, for example), longer "shelf-life," and superiour taste and presentation. They argue that these qualities make it worth the added price (although, since even these chefs buy limited supplies, such claims regarding price-value may be exaggerated).
Already, it is clear that the winter should be spent addressing concerns of price and utilization of HGW produce. Hopefully, there will be sufficient interest among farmers and chefs to generate solutions to these and other challenges. As mentioned, this initiative was generally seen as a relatively low-cost, low-risk experiment. It is an experiment that has been subsidized twice by the state's Department of Agriculture: first by the $10,995 grant from the Sustainable Agriculture Program that funded this Farmer-Food Buyer Dialogue project, and, more recently, by a $12,600 grant from the Agriculture Development and Diversification program. More than likely, for this experiment to evolve into a successful and sustainable business, greater investment will be required of the restaurants and farms it has been designed to serve.
Five General Recommendations
Home Grown Wisconsin, as well as the River Valley Kitchen project described earlier, represent two small steps in the direction of a more regional food system. They are, more than anything else, real-life experiments designed to test theoretical designs. Is a more regional food system a realistic and appropriate goal? What are the obstacles? Which obstacles can be overcome? How? These questions may best be answered by action. At this early stage, both of the named projects above have probably generated more new questions than they have answered old ones.
These projects have been described in this report as first steps of many that remain to be taken. However, while they may be the first steps following the start of this one-year project, these projects would be better described as just two in a long walk that began many years ago in Wisconsin. Looking back, it is clear that earlier initiatives taken have resulted in such significant developments as the Chefs Collaborative 2000, the Dane County Farmers' Market, CROPP Cooperative of La Farge, the expanding natural foods industry, and the sustainable agriculture movement in general.
The last pages of this report will briefly present five general recommendations regarding next steps that should move us closer to a more regional food system. These recommendations simply summarize what many farmers, food buyers, and and other regional food systems proponents have been concluding for the past eighteen months.
The most vocal proponents of new efforts in farmer education were farmers themselves. Among organic vegetable producers, a need was seen to transition "gardeners into farmers" and/or to convert commercial farmers to organic methods. This reflected a general opinion that demand for organics will continue to grow, and that Wisconsin farmers should be educated to meet that demand.
Farmers also called for assistance from the state's university and extension system. Organic farmers, in particular, were interested in state-funded test plots devoted to organic production, along with outreach designed to make these methods more available. All types of farmers -- organic and commercial, vegetable and meat producers, etc. -- called for more information and education around the topic of marketing, in general. There may also be a renewed need for education and outreach with regard to developing new cooperative marketing and processing enterprises, such as those being formed in North Dakota and Minnesota over the past five years.
Food Buyer Education
Food buyers were less likely than farmers to call for their own education. However, most of the farmers in Home Grown Wisconsin -- and a few of the chefs -- believe strongly that education of chefs (as well as retailers, food service providers, and other food buyers) is critical to achieving a more regional food system. Food buyers need to become more aware of the availability of quality local products. Beyond that, there is the more difficult task of getting chefs, in particular, to adjust their meals and their marketing strategies to reflect and accentuate Wisconsin's seasonal bounty.
It is not clear how education of food buyers would best be achieved. Chefs Collaborative 2000 may represent a means for chefs to educate one another. Perhaps there are ways that university and extension resources, and other state dollars, could support and subsidize new food buyer education initiatives. To be sure, food buyer education is hindered by the limited time that busy chefs and retailers can give to these issues.
If there was one issue every farmer and food buyer agreed on, it was the need for consumer education. Farmers who want higher prices to pay for sustainable agriculture costs realize that, without more consumers understanding and willing to subsidize those costs, there will be only limited movement toward more sustainable practices in Wisconsn. Farmers are not at all surprised when restaurant chefs and retailers say that they themselves can only purchase what their customers demand.
Movement toward a more regional food system is a broader and perhaps more difficult task than achieving more sustainable farming practices. As presented in recent years by the UW Center for Integrated Agricultural Systems, the regional food system approach is still in the development stages, and there is still much for educators to learn themselves before they can educate consumers about the issues involved. Nevertheless, farmers, chefs, and retailers who support a more sustainable and a more regional food system seem to be unanimous in their belief that consumer education is and will continue to be critical to the success of both pursuits.
Anyone that has read this far likely has already generated more questions (and doubts) than there were answers provided by this report. Ambiguous or subjective definitions, for terms such as "local" and "sustainable," would benefit from more extensive qualitative research to ascertain the most common, most acceptable, meanings of these terms. Assumptions or preliminary conclusions offered herein need to be tested with more quantitative research. More sophisticated analysis of the local food marketplace might benefit from research by university economists and business experts.
Many unknowns that were acknowledged in this report need to be studied. For instance, it would be good to know more about the quantities of various foods produced in Wisconsin by sustainable farming practices, however defined. Efforts in other parts of the country and the world to move toward a more sustainable agriculture and a more regional food system need to be explored and presented through case study research. Behind all of this research, of course, there must be financial support. And, of course, the process of finding and securing that financial support often requires significant research and resources in and of itself.
Funding for this project certainly would not have been granted had there not been a strong showing of support by other organizations in the region, whether from state, university, profit or non-profit institutions. In fact, by many accounts, it would seem that interdisciplinary research involving partnerships between institutions, and with a "local" or "regional" focus (however defined), is becoming more popular with many traditional funding agencies. For instance, the Kellogg Foundation is offering grant moneys to University of Wisconsin faculty that design research projects that address local food system issues in partnership with "community" organizations and their leaders.
This perceived trend in funding reflects a broader theme that was raised many times in this project and in this report: cooperation. Some forms of cooperation exhibited in this project were more informal, such as the strategic alliances of organizations pursuing joint funding; or the state's sustainable agriculture networks; or Wisconsin Fresh Market Vegetable Growers Association. Other efforts incorporated the more formal cooperative model: consumer-owned natural foods stores, like Mifflin and Williamson St. groceries in Madison; retailer-owned purchasing cooperatives like North Farm, also of Madison; farmer-owned wholesale suppliers and processors of dairy products, like CROPP Cooperative of La Farge; and now the new farmer- and restaurant-owned produce supplier, Home Grown Wisconsin has joined the so-called "cooperative sector."
Furthermore, new food processing ventures, which were identified by farmers and food buyers alike as potential opportunities, might be modeled after a new generation of cooperative development in agriculture that is evolving in North Dakota and Minnesota. The UW Center for Cooperatives and its partners are committed to exploring opportunities like the "New Generation" cooperatives so successful in our neighboring states, and fitting these models to the conditions and concerns of Wisconsin.
Both formal and informal cooperation must be continued and strengthened if a more sustainable agriculture and a more regional food system are to be achieved. There was clearly a spirit of cooperation exhibited by the many dozens of individuals that participated in small and large ways in this Farmer-Food Buyer Dialogue Project. Any shortcomings or failures in this report and this project can be attributed to its author and coordinator, while a sincere thanks goes out to all whose good advice and gracious contribution of resources made this project possible and worthwhile.