New North Florida Cooperative

Marianna, Florida
http://www.farmtoschool.org/state-programs.php?action=detail&id=23&pid=32

Overview

The New North Florida Cooperative (NNFC) is a producer-driven aggregator, processor, and distributor of a limited line of fresh, chopped vegetables from small-scale minority farmers focused mainly on one market channel: schools (although they also sell in retail markets). By focusing on a few signature cropschopped collard greens in a two pound bag is the main product, as well as sweet potatoes, turnips, and green beans—not handled by broad-line foodservice distributors, NNFC has built a reputation for quality and dependability, and carved out a niche as ‘price-makers’ in this target market. As a result, the small-scale farmers that supply the cooperative enjoy some success.

Business Structure

The NNFC is organized as a limited member service cooperative in the state of Florida.

Formally incorporated as the New North Florida Cooperative Association, Inc., it has adapted its operations model to meet the needs of a growing number of farmers and schools. Although this association began as a cooperative, and is still referred to as such because of name recognition, since 2002 it has essentially functioned as a coalition serving networking functions, facilitating connections between farmers and schools.

The simplified organization, as a limited member coop built on relationships of trust, ensures streamlined decision-making on behalf of the grower community and customers. NNFC Manager Glyen Holmes’ responsibilities include price negotiations, facilitating farms’ access to USDA and State programs, and assistance to producers on adopting better production practices, like effective uses of irrigation.

Markets Served

The NNFC target market is school kitchens and cafeterias within a day’s travel of the Marianna, Florida processing facility. The coop reaches 30 school districts in the Southeast, serving more than 200,000 students.

In addition NNFC has found that sales to 60 independent retail stores in that same five-state region (FL, AL, GA, MS,) has allowed for higher volume and more consistent demand with year-round sales.

NNFC has developed a pricing structure well suited to these two markets, selling chopped collards for $4.00–4.50 per two-pound bag to the schools, who value monthly or bi-monthly direct delivery and freshness and coordination with their unique menu and schedule. Wholesale product to the retail stores can be sold in larger volume and on a more regular basis, at around $3.00 per bag, realizing the economy of scale.

The NNFC collards offer an interesting twist on referral marketing, in that students, after enjoying NNFC collards at school, encourage their parents to buy the product at the local grocers.

In the past decade, NNFC piloted direct-delivery market expansion to South Florida’s Broward and Miami/Dade counties, but the ten-hour, one-way trip was determined to be too costly and that pilot was abandoned. In 2012, this market is again being explored, in partnership with a local broad-line fresh vegetable producer Pero Family Farms www.perofamilyfarms.com that recognized NNFC’s collards as a complement to their product line. Pero will aggregate the NNFC collards for distribution to Broward and Miami/Dade through US Foods www.usfoods.com, optimizing transportation efficiency and reducing costs. This demonstrates how NNFC’s continual search for the most effective business model to benefit its small-scale minority farmers’ production capacity has harnessed the opportunity to provide fresh collards to 700,000 students in these large school districts.

Advisors

NNFC was founded in 1995 when the Research and Extension services of Florida Agricultural & Mechanical (A&M) University in Tallahassee and Quincy, Florida, brought together small farmers from northern Florida to develop marketing and training opportunities for low-income minority farmers.  A&M’s Dr. Vonda Richardson has been engaged with the group from the beginning, and she continues to guide NNFC.

Food Value Chain

The NNFC value chain is strongly focused on delivering fresh, chopped, local produce that meets both the production capacity of its small-scale farmers and also the cultural dietary preferences of students at schools across the Southeast.

Programs

The Florida Agricultural & Mechanical (A&M) University’s Research and Extension Center was instrumental in helping to organize NNFC in 1995 as an outcome of a training and market development program for low-income, minority farmers. A USDA-AMS cooperative agreement in the mid-1990s provided $40,000 in start-up funding that was instrumental in developing and expanding NNFC’s school marketing efforts. NNFC received a grant for $327,000 in 2001 from USDA’s Rural Business Enterprise Grant program with which they purchased four refrigerated delivery trucks. Since then, the organization has been self-funded.

In 2009, NNFC partnered with the United Methodist Conference to pilot a “Rolling Store” that enabled access to fresh vegetables for low-income residents of Tallahassee. This hybrid CSA venture, farmers market, and mobile store delivered produce weekly to churches as services let out, at the same time taking orders from customers for the following week. The churches received a portion of the revenue for serving as a drop-off site. The experiment, which lasted only a few weeks, demonstrated that, with adequate funding, “Rolling Stores” create an opportunity to increase food access for low income residents with limited transportation options.

Finance

The cooperative derives most of its income, about 90 percent, from marketing produce to school districts and grocery stores. It has obtained additional income by providing consulting services to National Farm to School Network members eager to learn from the organization’s success.

Key Learning

NNFC’s success offers these lessons:

Identifying and focusing on the right product can be critical to success. NNFC recognized that collard greens, a popular and traditional Southern food, are a culturally appropriate crop, can be grown year-round, and can be processed and packaged in a way that appeals to the target market because they require minimal storage and are easy to prepare.

Another lesson to note is the utility of developing complementary markets. NNFC’s retail to stores ensures consistent business when school is out of session; moreover, students who enjoy the product at school encourage their parents to buy it at local stores. Also, NNFC sells to schools and stores along the same delivery route, thus new business through one of these channels can drive new business to the other channel as well.

Another useful takeaway is that avoiding competitive bidding can be a valuable strategy for winning new business. By selling product volumes just under the maximum value threshold, NNFC bypassed competitive bid requirements with school districts and attracted their business.

The co-op’s streamlined approach, limiting products sold and narrowly targeting the demand of local schools, has enabled it to develop a niche market, increase the amount of product sold, and improve local minority farmers’ income. Consequently, it is able to negotiate a price that is fair to the school district and profitable for the growers.

 

Links

Decision Tree Snapshot

Advisors

Business Structure

Finance

Markets

Food Value Chain

Primary Business Activity