What is a food hub?

What is a food hub?

Answer: Interest in local and regional food systems is increasing as their health benefits and contributions to economic, environmental, and social sustainability are recognized. Statistics from the U.S. Department of Agriculture (USDA) show growth in local food sales from about $4.8 billion in 2008 to $7 billion in 2011. Traditional commodity markets continue to make up the vast majority of food distribution systems. They are structured around larger-scale mechanized production. However, new business and marketing opportunities for producers, many of whom are small and mid-size farms and ranches, are being created to enhance direct-to-consumer market outlets. Food hubs are playing a valuable role in local and regional food systems by providing small and mid-size farms and ranches with access to more mainstream and larger-volume markets through distribution support and other services.The more than 200 food hubs currently in operation in the United States are helping to remove economic and infrastructural barriers in order to facilitate the supply of local food to larger markets. Supply chains traditionally move food from the farm to a packing and shipping facility or processor and then to a wholesale distributor. While this model once supported local businesses such as canneries, mills, grain elevators, and independently owned grocery stores, today’s system focuses on economies of scale, i.e., increases in efficiencies to produce larger volumes of product allow for a decrease in consumer price. As a result, smaller producers face challenges, such as in distribution and processing, which limit their ability to supply larger markets, including institutions, restaurants, retail stores, and other commercial markets.Food hubs operate in many forms but all serve to facilitate the sale of fresh and local food from producers to consumer markets. The demand for local food in larger-scale markets has exposed production, economic, and logistical challenges standing between local food buyers and smaller-scale producers. Small farms having less than $250,000 in annual gross sales make up 91% of all farms in the United States. And while small farms provide over half of direct?to-consumer sales, through such outlets as farmers markets, on-farm sales, and community supported agriculture (CSA) programs, many smaller-scale producers have limited marketing opportunities. This is particularly true for mid-size producers who have annual gross sales between $50,000 and $250,000, as they frequently find themselves too large to rely solely on direct-to-consumer sales, yet too small to compete on price in larger-scale commodity markets.The USDA currently defines a regional food hub as “a business or organization that actively manages the aggregation, distribution, and marketing of source-identified food products primarily from local and regional producers to strengthen their ability to satisfy wholesale, retail, and institutional demand.” This working definition focuses on increasing small and mid-size producer access to wholesale market outlets through aggregation and distribution. Other definitions focus on economic, environmental, and social values as they relate to the mission and services a food hub provides. These can include health and social services, community development, and education. For this reason, food hubs are sometimes referred to as “values-based supply chains.” Food hubs also are defined by their functions, such as selling to businesses or institutions, consumers, or both.To learn more about this topic, consult the ATTRA publication Food Hubs: A Producer Guide, available at https://attra.ncat.org/attra-pub/summaries/summary.php?pub=450. This publication provides information on food hubs, followed by an overview of considerations and production-oriented topics important in working with a food hub. Although many food hubs also work with meats, dairy, grains, and other products, much of this publication focuses on the food hub mainstays of fresh fruits and vegetables. Case studies and a list of further resources are included.