University of Wisconsin Center for Cooperatives
The Farmer-Food Buyer Dialogue Project
Chapter I: An Introduction
This project was the result of a joint effort by the University of Wisconsin Center for Cooperatives (UWCC) and the Center for Integrated Agricultural Systems (CIAS). The project was made possible because the people behind the Sustainable Agriculture Program of the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) had confidence in an open-ended proposal that aimed to address their concerns about the market for agricultural products grown sustainably in Wisconsin. Their confidence in the project was surely strengthened by the support of a great variety of organizations and businesses from around the state, including: Cooperative Development Services (CDS); the Wisconsin Rural Development Center (WRDC); the Michael Fields Agricultural Institute (MFAI); the Madison Chapter of the Chef's Collaborative 2000; the Coulee Region Organic Produce Pool (CROPP); and the Wisconsin Chapter of the Organic Crop Improvement Association (OCIA). (Addresses and phone numbers of these and all other organizations mentioned in this report are presented in Appendix I.)
The title of this project reveals its general strategy of bringing together farmers and food buyers (grocery retailers, restaurant chefs, food service providers, etc.) to engage them in a dialogue. The topic of the year-long discussion: how can we improve local markets for locally-grown, sustainably-grown farm products? The project's underlying goal was to expand and develop local marketing options for Wisconsin's sustainable farmers.
As it turned out, it was not often that farmers, grocers, chefs, and food service providers could be pulled together for face-to-face dialogues. Rather, through a combination of telephone interviews, written correspondence, focus group interviews, workshops, conferences, surveys, and meetings, the viewpoints and experiences of both sides were continually solicited and recorded, and the understanding that resulted was transmitted broadly through numerous updates and presentations.
Although part of the project's function was to collect information, it was not intended as a mere research project. The directive of the Sustainable Agriculture Program was that the project should demonstrate to farmers proven-effective marketing strategies for sustainable agriculture products. In this sense, it was an outreach and demonstration project. Furthermore, by bringing farmers and food buyers together, we hoped to develop altogether new marketing strategies. In this sense, this was an economic development project. While complicated at times, these three approaches -- research, outreach, and development -- generally complemented one another.
While quite broad in scope, this project was delimited in many ways from the start, and its boundaries narrowed even more as the project progressed. First of all, farmers were targeted who (a) claimed to use sustainable production practices and (b) produced food products that could be marketed directly to food buyers in Wisconsin and neighboring cities.
The first distinction above targeted farmers associated with organizations committed to sustainable agriculture practices in Wisconsin. The second distinction omitted farmers who marketed their cash crops or raw milk to national and global markets through various (and often numerous) intermediaries. Such products can be characterized as targeted toward commodity markets, as opposed to more direct links to restaurants, to retailers, and to food consumers themselves.
The strategy of direct marketing to local food buyers was chosen with the assumption that by so doing farmers might receive high enough prices to off-set the additional costs that more sustainable farming practices may incur. As a result of this project, this assumption is being put to a true test in the months to come -- in the form of a new wholesale enterprise called Home Grown Wisconsin (HGW). In effect, this final report is the story of why and how HGW came to be.
Farmers represented one side of this dialogue project. At the other end, food buyers were invited to participate. Three hundred food buying businesses of many shapes and sizes in a variety of sectors were sent a survey to measure their interest in (and problems with) sourcing sustainably-grown farm products from Wisconsin. Madison-area food buyers were especially targeted, although surveys were also sent to stores and restaurants throughout Wisconsin, eastern Minnesota and Chicago. But while the scope of the contact with food buyers was quite broad early on, that scope became increasingly narrowed in response to food buyers' participation and perceived opportunities.
This final report aims to bring the insights of the various participants together into one written summary -- so that the farmer may know what the retailers have said, so that the chef may know what farmers have said, and so on.
At the same time, in the process of facilitating the various meetings, conducting the interviews, and tabulating the survey results, certain insights were gained through the direction of this project. For instance, differences in scale and market orientation in each of the farm, retail, and restaurant sectors were identified early on, so that categories within each sector could be roughly identified and discussed separately as the project progressed. These categories and their respective attributes are presented herein, and tentative conclusions are made regarding obstacles and opportunities in certain categories and sectors.
The survey of selected food buyers will add some statistical support to the preliminary conclusions offered herein, but to a large extent many conclusions are based on anecdotal evidence gathered from informed dialogue participants. The mapping and characterizations of the various sectors are offered as a guide to market opportunities for Wisconsin farmers. Furthermore, conclusions offered may or may not be generalized beyond our Wisconsin experience.
The Regional Food System Approach
The concept of a "regional food system" has been explored for the past two years by the University of Wisconsin Center for Integrated Agricultural Systems, which has invited representatives from a wide variety of sectors to share their particular insights. A "food system" would include all of the actors, the technology, and the resources involved in the production-through-to-the-final-consumption (and waste management) of food. A "regional food system approach" draws a boundary around a defined region and considers therein such issues as:
- sustainability of production methods
- natural limits and adaptive technologies
- quality of life for producers
- food imports into and exports out of the region
- food processing and marketing within the region
- flow of capital generated from the sale of food products
- food safety and quality for consumers
- food security for low-income groups
- the role of governments, universities, and non-profit organizations
The fundamental goals of a regional food system approach are (1) to maximize the potential for regional self-reliance with regard to food,1 (2) to achieve a high minimum standard of quality food provision for all of the region's residents, and (3) to sustain and develop the resources upon which the whole system depends.
While food consumers did not participate directly in this project, advocates for certain consumer groups were invited to participate. The needs of low-income consumers were often voiced by these advocates as calls for greater "food security." Dr. Gerald Campbell, of the UW Center for Community Economic Development (CCED), conveyed six components of food security that a more regional food system should take into account:
- availability of a variety of foods at a low cost,
- ready access to grocery stores or other food sources,
- sufficient personal income to purchase adequate food to meet nutritional needs for each household member,
- freedom to choose personally acceptable food,
- legitimate confidence in the quality and safety of food available, and
- easy access to understandable and accurate information about food and nutrition.
These food security issues were not directly addressed by this Farmer-Food Buyer Dialogue Project. The eventual narrowing of the project's focus to organic vegetable farms, on the supply side, and to up-scale restaurants, on the demand side, precluded results that would effectively address the needs of low-income consumers. Not only are organic food products generally priced higher than conventional products, but, as an outcome of this project, they will now be marketed more aggressively to higher priced restaurants in the Madison area.
A more regional food system cannot be achieved from a singular approach. This project sought to make sustainable farming practices more profitable by finding attractive new markets for sustainable farm products. As more local farms are drawn to those profits, not only should sustainable farming methods become more common, but increased production, competition, and cooperation should lower the prices of those products to more affordable levels. For instance, organizing a critical mass of fresh vegetable growers could provide a market for time-saving technologies that are not readily available in Wisconsin at this time.
From another direction, groups like Hunger Task Force of Milwaukee, faculty at the University of Wisconsin-Madison,2 and Community Action Coalition of South Central Wisconsin are looking for ways to make information and resources more available to low-income consumers. By bringing these groups together with farms and their advocates, the UW Center for Integrated Agricultural Systems has coordinated a holistic effort to achieve a more regional food system.
Definitions Of Terms
A number of terms were used throughout this Farmer-Food Buyer Dialogue Project that require some explanation. One very old term, which is often a subject of debate, is quite simply, the farm. It has already been noted that this project generally omitted any farms that raised and marketed commodities that could not practically be sold directly to food buyers. Admittedly, such an omission surely left out the majority of Wisconsin farms. Nevertheless, most, if not all, of the farms that were approached in this study, would qualify, by most definitions, as both "farm businesses" in an economic sense,3 and as "family farms," in a social sense.4
The term, food buyer, is used to refer to any business or institution that purchases food for resale to food consumers (those who purchase food for consumption). Restaurants and groceries were the food buyers that were primarily targeted in this project, although one institutional food service provider was contacted and he provided valuable insights into the obstacles and opportunities within that market.5
Two types of grocery retailers are discussed here. Natural foods groceries specialize in various niche markets related to organic foods, health foods, and other products associated with what has become known as the natural foods industry. Natural foods groceries will be broken down further into those earning above and below $2 million in gross sales.
Mainstream groceries is a catch-all term referring to food retailers not targeted primarily toward the natural foods consumer. Of the many distinctions within the mainstream food retail sector, only differences in scale were acknowledged in this project. Again, a two million dollar cut-off point will loosely define smaller and larger mainstream groceries. The former category will include stores that were self-described variably as "mom and pop," corner, neighborhood, or locally-owned groceries. The smaller category would also include convenient store chains and gas station food marts, although few of these stores were represented in the project. Larger mainstream groceries were often labeled supermarket chains or mega-stores by project participants.
Within the restaurant sector, it was not so easy to clearly distinguish businesses based on their market orientation (i.e., toward niche vs. mass market consumers). A simple measure of difference would compare the average price per meal that restaurants serve. Unfortunately, neither the survey nor the interviews gathered sufficient data to accurately place a particular restaurant along a continuum of price per meal.
Nevertheless, a continuum was identified by participants that ranged from upscale restaurants (sometimes called "high end" restaurants or "boutiques") to fast-food chain restaurants at the other end of the spectrum. Falling between the two are mid-scale restaurants with meal prices somewhere between up-scale and fast-food establishments. As with most continuums, the dividing lines between each of these categories is blurred.
Of course, other food buyers often "come between" the farmer and the restaurants, groceries, and food service providers: brokers, processors, distributors, etc. This project did not target these intermediary sectors for their input -- except to the extent that farmers were able to broker, process, and distribute their products themselves, either individually or cooperatively. Nevertheless, certain anecdotal information concerning these intermediary sectors was provided by the farmers, chefs, and grocers that regularly do business with (or compete with) these so-called "middlemen."
These various "players" (farmers, brokers, processors, distributors, chefs, grocers, and consumers) are the economic actors in the local food marketplace of our regional food system. At the start, this marketplace was geographically defined by this project as expanding outside of the Wisconsin borders to include Wisconsin, southeastern Minnesota, and the Chicago area. The term "local" was used in place of "regional" because some participants suggested it a more marketable concept. Furthermore, while the term was generally used with respect to farms, it was used likewise to describe food buying businesses that are owned and controlled by individuals residing within the defined geographical area.
Figure 1: Food buyers define the term "local."
The geographic boundaries that this project chose to define as our "local region" are not presented as absolute. Rather, these local boundaries are a subjective matter. In a survey sent to 300 food buyers (Figure 1), recipients were asked up front to provide their own definition of "local," and to answer remaining questions using their own definition. Sixty-four surveys were returned. Fifty-five percent of respondents described "locally-grown" food as being sourced within 100 miles of their business, 23% described local as sourced within their state, 11% described local as food sourced within a region broadly defined as the "Upper Midwest" (Minnesota, Wisconsin, Iowa, Illinois, Indiana, and Michigan). The remaining 11% offered other definitions.
In this project, the term, sustainable, was used broadly in reference to farming methods and other systems used to produce, process, and provide food. Undoubtedly, the meaning of the term "sustainable" is even more elusive and subjective than the term "local." For this reason, farmers and food buyers were always invited to apply their own interpretation of this term throughout the project. In an "open letter" inviting farmer participation in this project, it was implied that the meaning and relevance of the term would ultimately be a matter for farmers, food buyers, and consumers to resolve on an individual level. (See Appendix II.)
Nevertheless, this project started with the value-laden goal of promoting a more sustainable agriculture, however defined. Therefore, participation of farmers was limited to those that proclaimed to use sustainable farming practices (or who were at least comfortable discussing the issue.) We targeted farmers already affiliatied with sustainable agriculture organizations in Wisconsin.6
It is unlikely that the issue of sustainability will ever be fully and forever settled. Nor should it be. Our understanding of the issues will change and hopefully improve over time. Technology will change. Each farmer, each food buyer, and each consumer may choose for themselves whether and how to address this complex issue. Their questions and answers will evolve over time, and environmental concerns are not the only factors that may be considered. Others may ask:
- Can our current farming methods (and consumption habits) sustain the families that work the land?
- Can our current ownership patterns and marketing strategies sustain the rural communities that depend upon agriculture?
- Can our broader food system sustain all rural and urban consumers by providing sufficient, affordable, and nourishing supplies of food?
This project did not attempt to answer the question, "what is sustainable?" Instead, it brought together farmers and food buyers who share an interest in achieving a more sustainable agriculture -- however defined -- through the expansion of local markets for local farm products.
Marketing Opportunities in the Local Food Marketplace for Wisconsin Farmers
One strategy of a regional food system approach is to make sustainable farming practices more profitable for farmers. With this in mind, this project conducted interviews, surveys, and meetings with local farmers and food buyers in order to:
a) map out the marketing options that are available to sustainable farmers within the local food marketplace,
One result, on April 18th of this year, was the formation of Home Grown Wisconsin. On that day, seventeen individual farmers, one existing farm cooperative, and half a dozen Madison chefs agreed to form a new cooperative enterprise. Four months later, a total of twenty-five Madison-area restaurants are being faxed weekly "availability sheets" describing fresh produce available from southern Wisconsin farms.
b) identify obstacles and opportunities in that marketplace,
c) identify and pursue "next steps" to overcome those obstacles and capitalize on the best of those opportunities.
As of this writing, gross sales for this business are 50% below what is needed to the cover costs of brokering and distributing locally-grown food. A $12,600 grant has been received from the Agricultural Development and Diversification Program of the state's Department of Agriculture, Trade and Consumer Protection. With this grant, UWCC will work to promote Home Grown Wisconsin and to pursue further opportunities in the local food marketplace.
Working with Steve Stevenson of CIAS, UWCC is also helping coordinate the "River Valley Kitchen" project in Spring Green, Wisconsin. The project aims to work with many of the same farmers, and with leaders in the Spring Green area, to explore value-added processing opportunities in the local food marketplace.
It is still much too early to predict whether projects like Home Grown Wisconsin and the River Valley Kitchen will succeessfully promote a more regional and sustainable food system. This report describes information gathered and the steps taken that led to the formation of HGW on April 18th. It offers recommendations for further "next steps" and poses questions that must be answered before any such steps can be taken.
1. CIAS Associate Director G.W. (Steve) Stevenson has presented the goal of regional "self-reliance" in contrast to regional "self-sufficiency." The latter goal would ultimately aim toward zero dependence on food supplied from outside the defined region. The goal of regional self-reliance, on the other hand, merely aims to identify what food products can be produced and provided within the region in an efficient and effective way, and to maximize the potential for regional provision of food before relying on outside sources. An underlying assumption isthat this approach will promote for economic development in the region, along with the added security of a diverse local food supply. For more on regional self-sufficiency, see the Final Report of the Regional Food Systems Seminar, available through CIAS.
2. In particular, Dr. Jack Kloppenburg of Rural Sociology, Dr. Sally Leong of Plant Pathology, Dr. Jane Voichick of Nutritional Sciences, Dr. Gerald Campbell of Cooperative Extension and the Center for Community Economic Development, have been frequent participants at the regional food systems seminars organized by CIAS.
3. In the past, the U.S. Department of Commerce classified farms as any business producing merely $1,000 worth of products per year (Strange 1988, p. 61). In 1987, the U.S. Department of Agriculture classified farms further into four categories: small ($1,000 - $39,999 in sales), medium ($40,000 - $249,999) , and large (over $250,000) (Strange 1988, p63). While gross sales figures were never requested from farmers, they were offered in many cases. Most participating farms probably fell in the upper range of the "small" through to the upper ranges of "medium" classifications.
4. There is no general agreement on the meaning of the term "family farm." Binswanger (1993: 1) defines it as a farm operated "primarily" with family labor, with some hiring in or out of labor. Comstock (1987: xxiv) claims that as long as a farm is owned and worked by a family, it is a family farm. Strange (1988: 32) describes a "system" of family farms as tending to be owner-operated, entrepreneurial, dispersed, diversified, technologically progressive, resource conserving, and family centered. There are undoubtedly many more definitions, many of which would likely contradict one another. For the purposes of this report, the use of the term "family farm" will most closely follow Binswanger's loose definition: a family farm is a farm business operated primarily (fifty percent or more) with family labor.
5. In short, Frank Kelly, food purchaser for the entire Madison Public School District, was an enthusiastic and valuable participant in discussions sponsored by this project and by Dr. Sally Leong's Foodshed Working Group. Kelly expressed interest in sourcing local and even organic foods for his school lunch programs, but he indicated that a well coordinated and sufficient supply would have to be established first. He also explained that if farmers could process their raw products (chop carrots, slice potatoes, etc.), school district kitchens would be more likely to incorporate local foods into their operations.
6. In particular, the state's Sustainable Farm Networks, the Wisconsin Natural Foods Association, and the Wisconsin Chapter of the Organic Crop Improvement Association (OCIA) provided many of the addresses needed to contact farms directly. The project was also presented at the Upper Midwest Organic Farming Conference in 1995 and 1996 at Sinsinawa, Wisconsin, and at the 1995 Urban-Rural Conference in East Troy. A broader group of fruit and vegetable producers was approached indirectly through the president of the Wisconsin Fresh Market Vegetable Growers Association, Juanita McDowell.