LOCAL FOOD DISTRIBUTION: NOT AS EASY AS YOU THINK

By Margaret LeRoux / Illustration by Eric Lewandowski

The road from farm to table is a rocky one. Just ask the guy who grew that heirloom tomato, or the woman who raised the chicken you ate for dinner last night, or the artisans whose goat cheese and strawberry jam are staples of your Sunday brunch. When you’re the owner of a small farm or food company, the many challenges in growing, raising or producing are only the beginning. Getting your products into the hands of people who want to buy them can be just as difficult.

Small farms in Massachusetts have traditionally relied on direct sales—from their own farm stands or stores, farmers markets, and shares in CSAs (Community Supported Agriculture programs). Worcester County touts its status as number six in the nation, with $10 million in direct farm-to-customer sales last year. However, that doesn’t mean big profits for most small farmers. Richard Bonnano, president of the Massachusetts Farm Bureau, points out that 78% of farms in the state gross $25,000 or less.

As small farms and artisans look for ways to boost their bottom line and more urban consumers seek local sources for food, there’s increasing interest in the process of bringing the two groups together. New businesses that combine the farmers market model with online sales and home delivery have sprung up throughout the state. So far, none of them have gotten it quite right.

As the founder of a recently shuttered attempt at local food distribution noted, “There’s not a model out there that has solved the problem. We’re all trying to work from the grocery store model and that’s not only archaic but also promotes homogenization,” said Ryan Schoen, who recently closed his business, Watershed Exchange in late April.

Watershed Exchange offered a variety of locally-raised products including meat, produce, artisan cheeses, and fish when it came online in September 2014. Despite initial enthusiasm from producers and customers, “sales weren’t where I wanted them to be,” Ryan said.

A survey of his customers revealed “a plethora of diversity in what people want,” he continued. “Some want local food only. Others would pay a premium just to get everything in one order; they didn’t care if it was local. Some want weekly delivery, others monthly.”

The supermarket model has created unrealistic expectations, according to Ryan, who notes that each category of product, such as meat, fish, dairy or produce, has its own challenges and requires a different system.

Another challenge is changing peoples’ behavior patterns. “The younger generation is used to shopping online, but they’re not experienced with cooking from whole ingredients like a chicken or a roast,” Ryan said. “The older generation knows how to cook, but doesn’t think of shopping online for food.”

Coming at the distribution challenge from a different angle, Something GUD, based in Somerville, offers customers a curated selection of food, delivered weekly. Customers can shop the company website for an assortment of food boxes including organic, vegetarian, gluten free, pescatarian, and paleo. They can also buy individual items from farmers and artisan food producers located within 200 miles of Boston. The cost of delivery is included in the online price.

The process of aggregating helps artisans too, according to Something GUD’s co-founder Nick Krantz. “We can buy a small producer’s entire production of ravioli, for example, and direct market it to an audience who’s interested in local food,” he said.

The company started out two years ago as a group of friends who sought out the best products from local farms at area farmers markets. “We wanted to figure out a better way to get them to consumers,” Nick explained. Something GUD buys from the farmers and producers it lists, then distributes directly to customers. The company contracts with drivers using a model similar to Uber, paying them per delivery. Customers get their orders in an insulated tote bag cooled by ice packs.

The company stresses their process is transparent at all levels. “We carry products from farms that are certified organic, as well as from those that use low spray procedures,” Nick said, adding that information about each farm’s procedures is included in its online profile.

Something GUD connects urban customers with farmers in eastern and Central Massachusetts, New England and beyond.

In Central Massachusetts, Lettuce Be Local advocates for the farmers whose products it delivers throughout the region and Mass Local Food, an online co-op, uses a network of volunteers to get local products into the hands of customers.

Mass Local Food operates a monthly online farmers market, though customers pick up their own orders and pay by check. There also are fees: $50 to join and $10 annually. Members who volunteer at least two hours can avoid the annual fee.

The five year old co-op has over 500 members and offers a wide selection including meat, chicken, salad greens, eggs, cheese, pickles, jams, flour and pasta, all from within the state. Farmers and artisan members list their products for a 10-day open market period every month. On the second Thursday they bring items they’ve sold to a warehouse the co-op rents in Gardner and go home with a check from Mass Local Food.

The co-op handles invoicing, sorting and delivery to eight sites in central and northern Worcester County and also Framingham. Mass Local Food relies on a network of volunteers who organize products into individual bags and coolers and drives them to the pick-up sites. Aside from mileage paid to drivers, no one in the organization gets paid.

“Our all-volunteer system supported by the membership fee means that farmers don’t have to spend all day like they would at a farmers market,” said Kerrie Hertel, Mass Local Food’s founding vice president. “They know exactly how much they’ll make in sales; bad weather doesn’t make a difference.” However, reliance on volunteers is both a challenge and a vulnerability as the co-op looks to a sustainable future.

Lettuce Be Local began by trying to solve the transportation piece of the farm-to-table dilemma. Founder Lynn Stromberg put thousands of miles on her truck as she drove to farms in Central Massachusetts, picking up locally-raised produce and delivering it to restaurants in Worcester. As she got to know her farmer clients, Lynn soon added advocacy to the mission of her company.

“I’ve had so many conversations with farmers and have learned their problems and challenges,” she said. “I can bring farmers together or refer one to another.” Which led to the latest development in Lettuce Be Local’s business model: aggregate sales.

The impetus was a chance encounter at a farm stand. “I overheard a customer ask if they had peppers. The farmer was explaining that his peppers weren’t ready for harvest yet,” Lynn explained. “I knew that a farm just a few miles away had a bumper crop. ‘Tell your customer to come back in a couple of hours and we’ll have them,’ I said to the farmer.”

Lynn quickly realized the potential of the market for sales between farms and has promoted partnerships among her farmer clients. “Farmers are able to supplement their CSA boxes or their farm stands with the addition of other local products such as honey, maple syrup, and flour from neighboring farms,” she said.

Keeping farmers’ welfare in the forefront also means they’re paid as Lynn does her pick-ups; customers are asked to pay in advance or at time of delivery. Lately, however, more and more of those customers are also the farm clients of Lettuce Be Local, as farm-to-farm sales have grown to represent a major share of the business. The company also delivers to Clark University and a selection of retail stores.

“Now we‘re best described by the acronym EAT,” Lynn said, “We educate, aggregate and transport local food. We’re trying to figure out a way to make it easier for consumers without taking advantage of farmers.” Some of those farmers would rather avoid conventional distribution channels. “I’m an old school farmer; I do it myself rather than signing on with a distributor,” said Ann Starbard, creator of the highly-regarded Crystal Brook Farm goat cheese. “The margin is so small I want to keep a little more money in my pocket.”

Ann and her husband, with help from a few seasonal employees, handle the entire process, from raising Saanen and Alpine goats—the herd produced 120 kids this season—to making and hand rolling logs of goat cheese.

They sell their cheese at a tiny, self-serve store on the farm in Sterling and at two dozen retail sites, from Whole Foods to farm stands. “I like having a good relationship with small businesses,” Ann said. “Unlike some of the larger ones, they pay their bills on time.”

Ann also has CSA clients and works with buying clubs. “They know months in advance how much cheese they’ll need on a specific week, so I can have 50 or 200 pieces of cheese ready for them,” she explained. These methods of distribution have an advantage over farmers markets “where you can’t always tell in advance that it’s going to rain and there go your sales.”

Nevertheless, for years Ann was a regular at farmers markets, often doing eight every week. “The pace of eight markets is brutal,” she said. “There are not a lot of cheese vendors in Central Massachusetts and to be at a market you have to deal with regulations and health permits. And, unlike farmers who sell tomatoes or corn, if you’re selling cheese you have to provide samples.”

Crystal Brook Farm goat cheese can also be found on the menus at high-end events throughout New England, as a result of a fortuitous encounter with a caterer early in the product’s history. Ann was setting up her samples at a Taste of the Nation event 17 years ago when John Lawrence, co-owner of Peppers Fine Catering, tried some. Before the doors opened to the public, he placed an order. “John attached me to his coattails, brought me along to several meetings of the Chef’s Collaborative and introduced me to Bill Brady, the chef-owner of Sonoma Restaurant (in Princeton),” Ann said. “For someone whose background was agriculture and animal health, it was a bit daunting.”

The hardworking farmer made natural connections with chef-owners of restaurants. “They get how hard I work and have an appreciation for the quality of the cheese I make,” she said.

Another Central Massachusetts farmer forged his own connections with supermarkets decades before local produce became trendy. “When I started in the business in the 1960s no one was touting buy local,” said veteran farmer Richard Bonnano, who also is a food safety educator and soil and weed specialist with UMass Extension. His 40-acre family farm, Pleasant Valley Gardens in Methuen, has been selling produce to supermarkets as well as at his farm stand for 50 years.

Back then, local supermarket chains like Star Market were buying almost all of their lettuce from California. “They were paying $10 a box and growers in California were probably getting only $7 of that,” Rich said. “I could sell lettuce to them for $9 and it only cost me a few cents to ship.”

“Today, supermarkets are dying to sell local products,” Rich continued. “Every major chain in Massachusetts is scrambling to sell local.” What’s more, not all supermarket chains require farmers to go through corporate headquarters. “Sometimes you just have to pick up the phone and contact your local supermarket,” he added.

But it’s not quite that simple; farmers aiming for supermarket distribution have to understand the stores’ expectations. “When Hannaford opens your box of zucchini, they want it to look like all the other zucchini they’re selling,” Rich said. “Customers who will buy that odd looking tomato at your farm stand are a lot pickier when they’re shopping at the supermarket.” He advises farmers to study the market when considering distribution channels.

“The state’s dense population is an advantage, Rich said. “There are people who will not pay more than 99 cents for a head of lettuce, but there are also people willing to pay $3.50. Farmers have to think of themselves as a business and develop a customer base,” Rich concluded. “You have to make people want to buy what you are growing, but you also have to give people what they want.”

The same is true for artisan food producers; in addition, if they sell online they also deal with the challenges of shipping.

“It’s like a maze to figure out shipping,” said Alison Coutts Chateauneuf, proprietor of Coutts Specialty Foods of Boxborough, Mass. The postal service and shipping companies have multiple categories, she explained, “although the purchaser picks up the cost of shipping it still is added onto the final cost of the product.”

Alison’s grandfather started the jelly and preserves company in 1938; she took over from her father 14 years ago. Using some fruits and produce from local sources, she makes jams, jellies and marmalades sold under the “Mother’s Pure Preserves” label and applesauce, cranberry sauce and relishes under the “Mother’s Prize” label.

Alison belongs to a Yahoo group of artisans and is vice president of the Massachusetts Specialty Food Association. “We share information like how to ship at more reasonable rates and what is a good software program for shipping,” she said.

“My saving grace is that we’ve been in business so long; I use contacts my parents made. When I call a trucking company I know about different classifications; that’s knowledge gained through experience,” Alison said.

Artisan food producers have to keep a close handle on costs and be well acquainted with their margin of profitability. “Knowing your margin will drive a lot of decisions,” Alison said.

Getting the product to market is a major hurdle, she added. “The distribution channel can be difficult” whether its through farmers markets, a wholesaler or a distributor. Each step has its own issues.”