Bridging the Gap: Bringing Small and Mid-sized Producers Together with Retail and Foodservice Distributors
Connie Hardy, Mary Holz-Clause, and Ray Hansen P&S, Value Added Agriculture Program
At the time this project was funded, October 2005, popular press coverage was documenting a rapidly growing demand for locally grown foods on college campuses on the East and West coasts of the USA. Students wanted fresher food with a clear connection to the producer and, in some cases, developed garden plots to supply foodservice operations at their school. Consumers, restaurateurs and others on the buying end of the food chain pushed the intermediaries (food service and retail) to innovate their purchasing in order to bring these new attributes to them in products and labels. While producers, through farmers markets and other direct means, were acting on this demand, a great opportunity was developing for sales in the retail/food service supply chain.
This project was designed to discover to what extent Iowa-based food distributors were seeking local foods for their customers and what attributes would be most important to their foodservice and retail customers. Interviews with 21 distributors revealed that some distributors were beginning to see demand from their customers for foods grown and processed locally and that the demand spanned the market sector, from high-end restaurants to health care institutions to grocery store chains. To meet the new demand in retail and institutional sales, producers would need to change their approach to sales by establishing collection and processing locations, thereby aggregating supply and reducing the number of producer contracts. Moreover, distributors emphasized the importance of producers meeting with the distributor to understand what the distributors customers would want to buy before planting decisions and livestock purchases were made.
Activities and Output:
- Create a base level of information on how to conduct business with the foodservice and food retail section which could be disseminated through workshops and via the Internet.
- Learn what new marketing opportunities were developing in institutional foodservice and larger retail markets and encourage producers to explore them.
Representatives of food service and food retail distributorships based in Iowa or nearby states were interviewed to determine:
- The types of customers they serve (i.e. restaurants, institutional cafeterias, grocery and convenience store, etc.).
- If they are intentionally sourcing locally produced foods to meet customer demand.
- The contracts and logistical practices they require of vendors.
- The suggestions they might offer to producers who would like to sell their products to distributors.
Data from the interviews was presented in a series of workshops and included a report that is posted on the Value Added Agriculture Program, Agricultural Marketing Resource Center, and Leopold Center for Sustainable Agriculture websites. A brochure entitled How to Work with Distributors was developed using the interview data and made available at the workshops, on the websites, and by mail. In Spring of 2006 and 2007, a total of 6 workshops were held at various locations in Iowa. Total attendance at the workshops was 115, many of whom were fruit and vegetable producers and processors of meats and meal entrees. Workshop speakers were food distributors, Extension and CIRAS personnel, and Iowa producers who sell either directly or through distributors to institutional and large retail markets. One conclusion that came out of workshop discussions was the need for new infrastructure to allow for collection, storage, and light processing of locally grown vegetable and fruit crops.
Planning assistance from the nationwide foodservice distributor, Sysco Inc. was available throughout the project. In summer 2006, Sysco funded an internship and managed by Extensions Value Added Agriculture Program. ISU Marketing major, Nicole Bogenreif was chosen to interview potential institutional (Iowa Regents Universities and Iowa Correctional Facilities) and restaurant markets in Iowa. The results of these interviews are included in the written report. Nicole also developed a direct mail registration form to encourage producers to register in Extensions interactive marketing database called Iowa Market Maker. This database allows producers and buyers to locate each other and learn what agricultural food products and markets are available in Iowa and other participating states.
Impacts and Outcomes:
Total workshop attendance was 115 people and additional handouts have been sent to approximately 25 producers who expressed an interest in the information. Through the direct mail registration process, more than 300 new producers were registered in Iowas Market Maker database. Beyond these numbers, actual impact is hard to measure. However, the workshop information demanded a dramatic change in producer marketing practices, and it was well timed with the announcements by the Iowa Regents Universities and other private colleges of their plans to incorporate significant amounts of locally grown and processed food in their foodservice and catering menus over the next five years. This new demand, in addition to growing demand in selected restaurants and grocery stores will require producers to work with food distributors and form collection, storage, and light processing facilities. One central Iowa fruit and vegetable producer has increased vegetable production and made a financial commitment to develop a food collection and light processing facility with a loadout platform on their farm with the intention of supplying foodservice distributor contracts in central Iowa. The full impacts of this project are yet to be realized as more producers rise to meet the increasing demand for local foods.
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August 3, 2007
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