The idea of a foodshed is based on a watershed, which is that ecological area connected by water flowing from brooks to tributaries, to rivers. Instead of water, it is the flow of food that defines a foodshed. Foodsheds are technically geographic areas that you could draw on a map, much like the radius of a certain distance around a city. But more accurately, foodsheds are places that connect common food and agricultural interests through commerce.
Instead of a big red apple from anywhere, more food buyers — including schools, hospitals, and even prisons — are shopping for apples that have additional qualities. They’re looking for locally produced apples so that the economic benefit of their purchase will be felt locally. Consumers are also looking for new choices, such as extra flavor that comes with just-picked freshness and the opportunity to build biodiversity by supporting farms that raise uncommon varieties.
Market trends indicate that local food is extremely important to consumers, which represents a valuable market for domestic producers. Producers have several market options to capitalize on this strong market, including various direct strategies such as farmers markets and community supported agriculture (CSA). The USDA has been tracking another, rapidly growing market option for producers: regional aggregators of source-verified product called food hubs. Food hubs offer producers access to larger, potentially more lucrative and stable markets, in particular, the wholesale markets that single farms might not be able to supply without aggregation. Because these hubs tend to be new and growing rapidly, many producers selling into hubs are new to this market.
Triple Bottom Line
The New American Foodshed is thus a triple-bottom line business environment: social, ecological and local economy outcomes matter. It’s a new frontier in many respects. As an entrepreneur pursuing a new business plan, you’ll need to address the missing links—all the way from the beginning of production to the end consumer. Some of the facilities and services that we take for granted in more established food and agricultural markets, such as extensive food processing and distribution channels will need to be developed. Foodshed entrepreneurs like you are filling these gaps and building their new foodshed markets as you go.
A livestock producer whose business plan involves selling pasture-raised meat directly to restaurants must find meat processors that can accommodate these specific requirements. Though the size of a processing facility can make it a less-than-perfect match (a large operation with a lot of overhead must run efficiently and was often built for use by its owners, and a small facility focusing on customized work may not be able to handle the volume many growing producers require), the issue is usually lack of availability in the first place. The enormous capital investment required to build a new processing facility, or bring a custom-slaughter operation up to inspection standard is not to be taken lightly.
What we see in foodshed markets is the emergence of informal and formal partnerships among entrepreneurs who realize they need to work together to solve these challenges. A group of livestock producers working with a smaller meat processor to ramp up capacity is one example of such a win-win relationship. Another is the mainstream food distribution company that develops new systems for handling smaller farms’ products so that the distributor can satisfy increasing demand for local foods from schools, universities, and other customers. Another is the corner grocery store that urban neighbors work together with farmers to open, in a part of town that before had only convenience stores for food.
Such win-win working relationships for addressing capacity gaps are a common feature of the New American Foodshed. The new term “values-based food supply chain,” also called “food value chain,” captures this dynamic aspect of foodshed market innovation. The chain of events from farm-to-table — production, packing, processing, distribution, marketing etc. — is normally an anonymous process; businesses along this food supply chain do not generally know each other. But in foodsheds, consumers value knowing where their food comes from and encourage entrepreneurs to get to know each other and work together creatively. In fact, these relationships are a fundamental part of ensuring that the foodshed consumer gets what the foodshed consumer wants.
For example, “Local Produce Edging Out Organic in Importance Among Consumers, Reports Mintel” from http://www.prnewswire.com/news-releases/local-produce-edging-out-organic-in-importance-among-consumers-reports-mintel-143665566.html
The USDA defines a food hub as “a centrally located facility with a business management structure facilitating the aggregation, storage, processing, distribution, and/or marketing of locally/regionally produced food products.” USDA’s Regional Food Hub Resource Guide, http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5097957