University of Wisconsin Center for Cooperatives
Vegetable Producers Develop a Market: Home Grown Wisconsin
UW Center for Cooperatives
November 22, 2000
During a recent train layover in Chicago, I wished I had more time to explore and find one of the dozen or so restaurants that feature Wisconsin grown produce delivered by Home Grown Wisconsin cooperative. Eating a fennel fritatta or garlic-delicata squash puree, elegantly displayed and exquisitely prepared from vegetables grown on a farm near my home would not just satisfy my hunger. It would also make me proud of the marketing prowess of the group of small-scale producers that made Home Grown happen.
Home Grown is a producer-owned organic vegetable marketing co-op that grew out of an idea that surfaced in a 1995 survey of 126 Wisconsin sustainable farmers. The survey found significant interest in a farmer-owned enterprise that processed and marketed organic produce.
A follow-up survey indicated that Madison area food buyers (restaurants, institutions and food retailers) thought their customers would be interested in "locally grown food". But, the buyers also said that a reliable and consistent supplier was needed to serve that desire. The buyers made it clear that individual producers were unable to meet their needs. However, if producers joined together, product variety and consistency of supply might entice the buyers to try "local".
This was a market opportunity! It was a perfect time to form a cooperative. Add a group of committed, hard working producers and marketers, support specialists and willing funders (a $10,000 grant from the state’s Sustainable Agriculture Program (now defunct) and a $12,600 grant from the state’s ADD ( Agriculture Diversification and Development program) and you have the basic ingredients for a successful cooperative.
Meeting for the first time in the winter of 1996 and fueled by an inspirational presentation by the coordinator of Georgia Grown Cooperative (whose model was followed) six producer-marketers formed the Home Grown steering committee. Producers were again surveyed and given information about the idea, eventually resulting in 15 start-up members. The steering committee spent many hours hashing out systems and standards co-op members would be asked to follow. They made personal appointments with Madison restaurant chefs to explain the products and get commitments. A manager was hired, trucking was arranged, and the co-op was off and running, after heroic efforts, for the 1996 season.
Making an average of $500 in sales per week that first year, the co-op didn’t cover costs and ended the season with a $3,200 debt. At the fall member meeting, the joys, hazards, problems and potentials were outlined and argued. Hard marketing was identified as the key to reaching a positive bottom line. The co-op needed to court new customers, give them a hard sell, and provide stellar service and product quality. The group re-committed for the 1997 season, decided to expand into the Chicago market (bringing on significant new logistical challenges), and hired a new manager that was extremely sales focused.
Starting any business is hard, and starting a cooperative is no different. Making a profit in the first year of operation is usually an unrealized dream. By deciding to move on, after making significant changes in operations, HGW producers gave the business the chance it deserved. Like most other businesses, losses generally are absorbed by the owners, which in this case are the member farmers. In HGW’s case, a very generous producer member offered to express his belief in the co-op by taking on the loss and basically loaning the co-op the amount of the loss until the day he could be repaid. This action cast a great vote of confidence.
That difficult decision to continue into 1997 was a good one, and the co-op is thriving today with 20 producers serving 5 restaurants in Madison and 16 in the Chicago area. From the early days to the current $4-5,000 per week gross sales average has been a long road. Rink DaVee, a producer and the co-op’s present Coordinator, has much to reflect upon, having been a member of the cooperative since its early years.
DaVee notes that the focus of the cooperative has changed since its inception. Formed out of a need for professionalism, uniformity and product diversity on the side of the restaurants, the co-op early on set strong standards and systems for producers. The restaurants have grown to trust the co-op, its products and producers. The role of the co-op as market developer has now risen to the surface as key to its success. "There are a limited number of hours in a day, and allowing the farmers to use them doing their specialty-production- while the co-op works on its specialty-marketing- is what makes it all work." DaVee says.
A recipe for success? DaVee says that much of the success of the co-op depends on the identity of each producer coming through to the buyers and diners at each restaurant. Consumers need to know that there is a small scale, hard working farmer producing each morsel of food. Home Grown’s product availability list, faxed to buyers twice a week, lists each product by producer name. But beyond that, DaVee mentions that it is key for the producers to make the effort to meet and share stories with the chefs at least twice a year, through on-farm visits and shared meals at the restaurants. He cautions that producers can’t expect to just drop product off at a dock- they need to put in some time, to put their face on the product.
DaVee also notes that Home Grown has succeeded because it has been flexible. "This was an experiment when it started, and some of the assumptions and early decisions that were made have had to be changed. Home Grown has become strong by learning and changing as we go."
Though the Co-op’s 2000 estimated gross sales of approximately $170,000 split among 20 producers is not going to make any one rich, the extra chunk of income and diversification of market can be a welcome stabilizing influence for a smaller producer. The annual membership fee of $75, and return to producers of approximately 70 cents of every sale dollar, seem like reasonable prices to pay for the co-op’s role in creating something bigger than what each individual producer can do on their own. Without the co-op, most of these producers would not be selling product to restaurants in either city.
In my opinion, bringing high quality organic Wisconsin produce to the kitchens and the tables of restaurants in Madison and Chicago where consumers have the opportunity to learn about and support small Midwestern sustainable farms is a huge victory for Home Grown Wisconsin. I agree with Rink DaVee that Home Grown has done a good job of defining it’s special niche, and will continue, with committed producers and skilled staff, to thrive well into the future.
Although Home Grown is doing well with it’s 20 current members, there is some opportunity for new growers to join if they can produce specific items and are within the co-op’s geographic range. To learn more, contact Rink DaVee, Home Grown Coordinator at 608-967-9368, firstname.lastname@example.org