1

A. Purpose and Vision

The purpose of the ACEnet scope of

work was to assist the Portage

County Regional Planning

Commission, the project partners,

market partners, food and farm

entrepreneurs and community

stakeholders in the targeted counties

of Northeast Ohio to assess the

current assets, opportunities and

entrepreneurial eco-system to

implement a food hub in Portage

County.

This study took into account and builds on the November 2012

Planning for a Food Hub in Portage County study. The project

approach ensured the collaboration of current partners and purposefully

engendered greater participation among all stakeholders to test the

viability of a food hub facility. The public engagement approach

addressed the needs for entrepreneurship support, market and local

food value chain development and capital investment by both public and

private partners.

The local food economy and wholesale demand continues to grow

throughout Ohio. Although we see great economic promise re-

localizing our food systems, production and distribution remain the

largest challenge for farmers, food entrepreneurs, and non-profits

operating social enterprises to address these gaps in the supply chain. In

particular, agricultural producers do not generally set out with the goal

of becoming a wholesale distribution business and are not equipped

with the regulatory knowledge, financial assets or market expertise to

meet this new demand from institutional and wholesale buyers.

B. Food Hub Trends

Over the past decade a new model for the aggregation and distribution

of local/regional food has emerged in urban and rural centers.

Commonly referred to as Food Hubs these facilities have attempted to

connect local agricultural

supply to the growing demand

by wholesale buyers for local

food. The U.S. Department of

Agriculture’s (USDA) working

definition of a food hub is 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” (USDA

James Barham et al. 2012, 4).

1. Project Background

2

With strong support from the USDA for this model, recent economic

analysis identifies that there has been “a proliferation in the number and

recognition of ‘food hubs’ across the United States, as well as a

substantial increase in foundation and public funding to support their

development. In addition to generating economic value within a local

economy, funders and policy makers are also acutely attentive to the

impact of food hubs on local agricultural producers.”1

C. Opportunities and Benefits of Food Hubs

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.” By offering these services, food hubs allow smaller

farmers to access larger volume or wholesale markets that they may not

have been able to access on their own. Food Hubs focus on inserting

value into the supply chain. The value inserted is often referred to as the

1 Assessing the Economic Impacts of Regional Food Hubs: The Case of Regional Access Todd M. Schmit, Cornell University Becca B.R. Jablonski, Cornell University David Kay, Cornell University December 2013

“value chain” which focuses on the needs of producers and buyers who

are concerned with ideas of sustainability, concerns for public health,

social justice and supporting local farms and their economic benefits.

There are around 300 food hubs operating in the United States today

according to Counting Values, Food Hub Financial Benchmarking Study. This

study looked at the financials submitted by 48 food hub operations from

fiscal year 2013.

Within the study, hubs are geographically dispersed, varied in size, length

of operation and operating model. As the chart above depicts, 89.04% of

revenue comes from Net Product Sales while other revenue streams

make up the remaining 10.96% of revenue. Additional revenue streams

include Delivery and Brokering Fees, Grants and Contributions,

Membership Fees, Other Enterprise Income, and Miscellaneous Income,

which includes interest and dividends.

3

Nationally, 33 percent of food hubs fit in the farm to business model

bringing local food into wholesale supply chain to serve groceries,

restaurant and institutional foodservice buyers. For many start-up food

hubs, to be viable they also augment their market channels with “food

bags” or CSA shares direct to consumers. Many hubs have partnered

with larger corporations to create health and wellness programs to

deliver a large volume of weekly food share to employees on corporate

campuses.

In Ohio, non-profit, private and social enterprise organizations such as

Fresh Fork Market, AZOTI, Lake to River Cooperative and Great River

Organic (GRO) have capitalized on the direct to consumer market

shares, either by operating aggregation hubs or through online logistic

services. Other hubs have focused on combining hub activities with

incubation, education and value-added

processing. Many non-profits such as

Common Wealth and ECDI in

Youngstown and Cleveland have

implemented promising models to

develop food entrepreneurship

capacity for the preparation,

processing, aggregation and

distribution of local/regional foods.

All of these projects and facilities

support farmers and food

entrepreneurs to develop new product

lines and distribute fresh and value-added foods to direct and wholesale

demand markets. Grocery stores, restaurants, corporate and

institutional buyers have worked with these champions to increase their

sourcing of local food through innovative CSA models, new wholesale

distribution systems and the development of market ready product lines

from private entrepreneurs selling into groceries and restaurants.

D. Portage County Scope of Work

ACEnet’s scope of work initially focused on four primary activities and

deliverables to design a Food Hub feasibility analysis and business plan

for a Portage County facility. The research and survey components

addressed the market viability of the model to the market channels; the

infrastructure environment and existing gaps; the optimum governance

model for the business sustainability; and the financial feasibility analysis

and business plan.

4

Stakeholders engaged in 6 focus

group meetings from May 2016

through January 2017.

Agricultural producers were

convened into affinity groups

based on production and

product category. Consultants

and project partners did

extensive outreach to

agricultural producers via

traditional and social media.

Consultant, Lynn Gregor,

attended farmers markets, community gatherings and Northeast Ohio

Food Hub Network meetings to encourage producer and buyer input

throughout the process. Although the January 2017 meeting was the

best attended by agricultural producers and value-added processors, the

survey results have been limited and will be reviewed in Section 2 of the

Study Approach and Opportunities. By the middle of March 2017, we

compiled the final survey results.

Online and in-person interviews were conducted with wholesale market

partners, regulators and resource partners. Surveys were also

distributed to buyers, but most of the input was gathered through in-

person interviews and phone calls. The strongest buyer interest came

from other regional partners operating hubs, regional distribution, food

preparation, online markets and social enterprise retailers.

Public funders and grant-makers were also interviewed and invited to

public meetings to encourage their project buy-in and input. Section 8 of

the Funding Resources provides an extensive overview of possible

funding sources for next stage implementation. Ohio Rural Development

staff and OSU Cooperative Extension educators are interested in

providing resources to move the project forward.

Additional regional network partners: food hubs, food system educators

and resource providers have all expressed on-going interest in planning

and supply chain logistics. Many are willing to participate as trainers and

outreach partners to engage more support in the next steps of an

implementation process. Information on other northeast Ohio and

statewide programs and partners are profiled in Section 3 of the Market

Analysis and Section 4 of the Business Analysis and Recommendations.

E. Project Team

The consultant team comprised of ACEnet staff: Leslie Schaller and

Grace Kroeger and Portage County consultant, Lynn Gregor. The

Appalachian Center for Economic Networks consulting team draws

from over 30 years of experience in regional economic development,

small business incubation and shared-use facility design and management

of entrepreneurship networks. With 30 years of consulting experience,

Ms. Schaller contributed her experience working in Ohio and national

food hub networks. Ms. Kroeger assisted with the survey design and

collation, online outreach and communications and study research and

narrative development.

Ms. Gregor is an engaged stakeholder and a long-term steering

committee member contributing to the planning process. She acted as

the on-location researcher and interviewer for producers and buyers.

Ms. Gregor has worked in the wider food enterprise network, with over

twenty-five years’ experience in horticulture, specializing in urban

agriculture, local food systems, and education.

5

A. Regional Agricultural Census Data

When beginning to think about the feasibility of a food hub, one of the

first broad questions to ask is: “How many farmers are in the area to

potentially provide supply?” To assess the agricultural landscape of

Portage County and surrounding counties 2012 Ag Census Data was

analyzed. Findings show that Ag Census Data does not indicate between

land in specialty crop vs. land in commodity crop production. When

determining the feasibility of a food hub, specialty crop producers are a

more likely market partner for food hub operations. It is likely that

commodity crop growers have outlets for their crops and typically will

not be a targeted group of producers to sell within the food hub model.

The 2012 Ag census data does indicate number of farms with “Land in

Berries” “Land in Orchards” and “Land Used for Vegetables Harvested

for Sale”. Looking at these three data sets, we can start to understand

how much land is being used for specialty crop production. The chart

below indicates the number of farms within each of the data sets. Data is

collected for Portage County and surrounding counties of Geauga,

Mahoning, Portage, Stark, Summit and Trumbull.

The graph above estimates the number of farms producing specialty

crops compared to the total number of farms using the “Land in

Berries” “Land in Orchards” and “Land Used for Vegetables Harvest for

Sale” data sets as the specialty crop indicators. Data is combined from

43

1420

2419

222327 29 28

22 20

95

4650

66

4448

Geauga Mahoning Portage Stark Summit Trumbull

Land Use in Number of Farms to Determine Idea of Specialty Crop Farmland Available to Sell into a Food Hub.

Land inBerries

Land inOrchards

2. Study Approach and Opportunities

4.744640

0 1000 2000 3000 4000 5000

"Specialty Crop" Land in Farms Compared with Total

Number of Farms

6

the six counties of Geauga, Mahoning, Portage, Stark, Summit and

Trumbull. The total amount of farms indicated by census data for the six

county data set is 4,744 farms and 640 of that total is predicted to be

specialty crop farms, only a 7.4% capture of agricultural production.

The Market Value of Ag Products Sold Chart shows the value of Portage

County sales. The chart also shows that Stark County has the largest

market value of products sold within this six county dataset by nearly

double of Mahoning County value, which is the second highest market

value within this dataset.

The 2012 Ag Census Data Ohio County Report details the percent of

total farms selling into different market streams. The three market

streams detailed are Direct to Retail, Community Supported Agriculture

programs and Value Added Commodities. The bar graph below shows

that Produced and Sold Value Added Products is the largest market

stream option for each county studied. Direct to Retail is the second

largest market stream and CSA’s are the smallest. CSA programs are a

growing subset of farm businesses and another way to aggregate and

distribute products.

2012 Agricultural Census Data sets of “years operating a farm” shows a

total of 75 beginning farmers as defined by the USDA. USDA defines

beginning farmers and ranchers as those who have operated a farm or

ranch for 10 years or less either as a sole operator or with others who

have operated a farm or ranch for 10 years or less. Data sets include “2

years or less” “3 or 4 years” “5-9 years”.

Beginning Farmer Landscape

2012 Agricultural Census Data sets of “years operating a farm” shows a

total of 75 beginning farmers as defined by the USDA. USDA defines

beginning farmers and ranchers as those who have operated a farm or

ranch for 10 years or less either as a sole operator or with others who

have operated a farm or ranch for 10 years or less. Data sets include “2

years or less” “3 or 4 years” “5-9 years”.

Geauga

39,799

Mahoning

63,632

Portage

40,769Stark

128,979

Summit

10,186

Trumbull

59,352

MARKET VALUE OF AG PRODUCTS SOLD

INCLUDES DIRECT SALES

TOTAL SALES ($1,000)

7

Beginning Farmer Landscape

6%

4% 4% 4%

7%

2%2%

1% 1% 1% 1% 1%

11%

7%

8%

7%

12%

5%

Geauga Mahoning Portage Stark Summit Trumbull

Percent of Total Farms Selling Product into Different Market Streams

Value Added Commodities are most used sales outlet compared with products

marketed directly to retail outlets and products sold through CSA.

Marketed Products Directly

to Retail Outlets (farms)

Marketed Products

Through Community

Supported Agriculture

(CSA)

Produced and Sold Value-

Added Commodities

8

A. Producer Interest

Surveys were created by consultants from the Appalachian Center of

Economic Networks. Surveys were adapted from a multitude of food

hub feasibility studies and from the consultant’s previous work on food

hub feasibility studies.

Surveys were created in paper copies for distribution at “Producer

Meetings” hosted with the project team in Portage County. A format of

the survey was also input into Google Forms. The online version of the

survey allowed for distribution and outreach throughout social media

outlets and listservs that reach producer populations within Portage

County like the local extension agency and the Ohio Ecological Food

and Farming Association.

As surveys were distributed throughout the growing season, the

consultant team saw a lack in response and producer meeting turnout.

When conducting a food hub feasibility study or engaging with

agricultural producers on any types of projects it is advantageous to

interact with producers in the off season throughout late November to

early February.

Producer Surveys

A total of 35 producers completed the producer survey. Tables below

report survey responses. Numbers in parentheses indicate the number

of responses for each option unless otherwise indicated. In most cases,

respondents could choose more than one answer option. A few

questions were left open ended as to not restrict responses from

producers and in some cases producers left answers blank.

Demographics

The respondents make up a variety of producers including fruit and

vegetable farmers, bakers, meat and dairy and value-added products.

Table 1.01 indicates responses to primary and secondary commodities.

Table 1.01

What is your primary and secondary commodity?

(Respondents could chose multiple options, numbers

demonstrate amount of responses)

Vegetables (20) Meat (9)

Value – Added Products (6) Fruit (6)

Baked Goods (2) Maple Syrup (1)

Honey (1) Dairy (1)

Grains (2) Eggs (1)

Other (7)

For the viability of the food hub, it would be important to identify

additional producers that could diversify the offerings of products

beyond the primary commodity of vegetables. Value-added products,

maple syrup, baked goods, grains, frozen meats and shelf stable dairy

products will help to keep buying options throughout the winter.

Additional producers must also be determined to fulfill the large amount

of demand that a food hub will have to fulfill in order to remain viable.

9

Table 1.02 identifies the geographic locations of markets that surveyed

producers are operating within.

Table 1.02

Where are your current direct or wholesale markets?

Ohio (5) NE Ohio (25)

Portage County (2) Pittsburg (2)

Summit County (1) Stark county (1)

Other (4)

The information detailed in Table 1.03 indicates that 23 producers in

the survey group are considered Beginning Farmers by USDA standards.

The USDA defines beginning farmers and ranchers as those who have

operated a farm or ranch for 10 years or less either as a sole operator

or with others who have operated a farm or ranch for 10 years or less.

Beginning Farmers face additional burdens to operating a business

compared to well establish farmers. Young farmers who chose to attend

college have student loan debt which inhibits them from borrowing to

buy land.

Additional resources may need to be in place within the food hub

structure or management team to work with beginning farmers, to train

them and help them understand the benefits of working with a food hub

facility. There are increasing amounts of resources in place to provide

assistance to beginning farmers. US Ag Census Data shows the average

age of farmers to be 58.3 years old, the realization that farm operators

are nearing the age of retirement is spurring the new investment in

beginning farmer programs.

Table 1.03

How long have you been an agricultural producer?

0-5 years (13)

6-10 (10)

11-20 (3)

21-30 (2)

31-50 (3)

50+ (3)

Operational Data

Of the 35 producers surveyed, 32 survey respondents participated in

direct sales. Respondents could choose more than one answer for this

question. Further work may be needed to determine percentage of

direct sales vs. other outlets like CSA or wholesale. Direct Sales get

farmers a higher price and cut out the middle man. Finding the right

farmers to sell in to a food hub is critical. Many farmers use direct sales

at farmers markets or farm stands to step off the farm and interact with

the community.

Identifying farmers that want to sell large

quantities of wholesale will be an important factor

for food hub viability.

A CSA concept for the food hub can be an option to explore as an

additional revenue stream for the food hub facility. CSA stands for

10

Community Supported Agriculture. This model of operation for small

farmers is increasingly in popularity.

Aggregating a variety of products from area farms, packaging them into a

CSA Box or Share for customers will allow farms to focus on

production rather than coordination of sales and marketing. Many CSA

farms pay an employee to be the CSA coordinator. The food hub

stepping into the coordination role could potentially alleviate stress for

some farms. Further research into CSA models and conversations with

currently operating CSA Farms within Portage County would be

suggested before venturing in to this model. An understanding on

whether or not farmers want the food hub to aggregate their products

potentially with other farm products is important to address. In this

model there is potential for a shared brand under the food hub

operation. Explaining the benefits of shared brand and marketing

strategy will be an important message to convey to farmers.

There is potential for a shared brand under the food

hub operation.

Table 1.04

What is your current sales model?

Direct sales (32)

Wholesale (10)

CSA (7)

Regional Distributor (3)

Social Enterprise (2)

Other (4)

Further learning on why there is a lack of farmers working with a

regional distributor may also be important to the success of a food hub.

Are there issues with supply that are limiting regional distributors from

picking up from local farms? Would the food hub run their own

distribution route? If so, perhaps being more sensitive to picking up

smaller loads from individual farms will help more farmers to begin

working with a distributor. Distribution logistics will come in to play,

maximizing route pick up and drop off locations and potential

backhauling options are ways to eliminate some of the burdens

associated with picking up smaller load. Further information on

distribution is included in Table 1.15 and Table 1.16.

Of the sales models listed, only direct sales was listed as the sole sales

model of surveyed producers. The wholesale sales model was always

accompanied by at least one other model. This may indicate that the

potential food hub facility will have difficulty finding producers that want

to work entirely through wholesale to the food hub. Further research

may need to be done on what amount of wholesale volume would make

selling into the food hub at wholesale prices a viable options for

producers in the area.

Table 1.05

Are you interested in expanding your direct or wholesale

customer base?

Yes (28)

No (6)

Possibly (1)

11

80% of producer survey respondents are interested in expanding their

direct or wholesale customer base. To further understand the landscape

of this question, more exploration should be done to determine which

market outlet is preferential to producers: direct, wholesale or both. The

willingness of producers to expand shows potential for the supply side

of the food hub feasibility. If resources are put in place to expand supply,

demand must also be paid attention to at the same time. A balancing act

of supply and demand is key to food hub success. Producers will not

come back to the food hub if demand is promised for their product,

while buyers will not return if supply promised does not come through

to them.

80% of producer survey respondents are interested

in expanding their direct or wholesale customer

base

One respondent interested in expanding their customer base indicated

that they would like help starting up a lamb cooperative. The

cooperative model, where farmers and producers have say and buy in to

the operations of the food hub may be one model of food hub

operations to further explore. A cooperative could be housed within the

food hub while a variety of other business activities take place within the

food hub model as well.

Table 1.06

Would you like to diversify your farm in order

to increase production?

Yes (17)

No (14)

Possibly (1)

Season Extension

Season Extension questions were added to the producer survey in

order to assess food hub viability throughout 12 months of the year.

Season Extension Practices increase on farm revenue for farmers and

help farm operations keep employees beyond seasonal labor. Survey

responses for seasonal operations were nearly half and half seasonal and

not seasonal, with 17 producers operating seasonal businesses and 18

operating businesses that are not seasonal operations. Encouraging

season extension investment would increase long term viability for food

hub operations.

Partnerships to further explore season extension opportunities are

listed in the recommendations section of this study.

Table 1.07

Is your business seasonal?

Yes (17)

No (18)

12

In order to assess seasonality further respondents were asked to

choose a statement that best describes their business. Respondents

could choose multiple options for this question. Table 1.08 describes the

current season extension landscape and the interest for more

investment.

Four respondents have extension already and are interested in

developing more practices (these 4 respondents chose options “I have

season extension” and “Interested in developing”). One respondent who

indicated they did not have season extension equipment in place also

indicted that they would be interested in developing. Five respondents

did not respond to this particular question, 5 left answer blank and 2

indicated that this option was not applicable. A further look into the

respondents that did not answer show that two respondents are bakery

owners therefore season extension does not apply to their operation.

Table 1.08

Which of the following statements best describes you?

I have some produce grown in season extension structures

(15)

I am interested in developing seasonal extension practices

to increase production (8)

I do not use seasonal extension to lengthen the growing

season on my farm (6)

Table 1.11

If demand were identified, would you invest

(or further invest) in farm equipment or

structures to extend the growing season?

Yes (12)

Possibly (2)

In the Process (3)

No (7)

NA (2)

Again the season extension data set is nearly split in half. Of the 35

survey respondents, 19 responded by either leaving the answer blank,

N/A or No they are not interested in investing in season extension

practices. Of those 19 no or non-answers, only 8 of those producers

indicated fruit and vegetables as their primary or secondary commodity.

The other 11 respondents not interested in season extension are mainly

meat producers along with value added and grain producers.

3 respondents are already in the process of / or have built season

extension equipment or structures in order to meet demand. 12

Respondents said yes they are interested in investment. One respondent

answered they are possibly interested. Only 4 of 12 producers using

season extension answered that they harvested year round from their

season extension structures. This means that if farmers have season

extension infrastructure and practices on their operation that does not

necessarily mean they will get a yearlong continual harvest.

More work needs to be completed to determine why the farmers with

season extension are not harvesting all year. Potential outcomes may be

that farmers need help with crop planning, labor through the winter for

13

harvesting, or other outcomes that once identified could be addressed

through workshops in Portage County with partners like non-profit

organizations, peer-peer training opportunities or Agriculture Extension

Agencies.

Limitations

Table 1.12

What are your limitations to expansion?

Labor (24)

Financing (19)

Connections to wholesale markets (10)

Infrastructure (8)

Lack of Demand (6)

Land (2)

Distribution and Food Safety

Training farmers to meet distribution qualifications can sometimes

become a barrier. The food hub will have to think about if they want to

run their own distribution operation or conduct further research to see

if there is a possibility to work with regional distributors.

Regional Distributors often require food safety certifications like GAP,

traceability, on farm food safety plans and liability insurance.

Currently there are 3 survey respondents working with a distributor.

The rest of the producer respondents are self-distributing. This means

that the food hub facility will have to train up producers to meet

standards of working with larger wholesale buyers and distributors.

There are resources and partnerships available to help with this training.

Distribution companies offer trainings or toolkits to help producers to

meet their standards. Group GAP trainings are also available to certify

multiple farmers in GAP training at one time.

Table 1.15

What is your current distribution system?

Self-distribute (33)

Work with a distributor (3)

Working with a food hub could potentially alleviate some barriers to

farmers so that they can focus more on the farming or business

operations rather than spending a day distributing or paying an

employee to make deliveries. Interestingly enough, the large amount of

self-distributing producers do not own refrigerated trucks. Only 2

respondent own a refrigerated truck.

Table 1.16

Do you own or rent refrigerated

trucks to deliver you agricultural

products?

I do not own a refrigerated truck (28)

I own a refrigerated truck (1)

14

57.5% of the self-distributing respondents would deliver their produce

to a food hub. Only 18.2% of self-distributing producers would replace

their current distribution plan for a central distribution plan out of the

food hub.

These responses show that the food hub should take caution and

complete further assessment before investing in trucking equipment and

staffing. Trucking equipment may only be needed to distribute aggregated

product from the food hub facility to demand partners. Staffing

personnel may be needed to coordinate drop offs and orders with

farmers if they are more interested in self-distributing to the food hub

facility.

The producer survey asked respondents what barriers they have

experienced in distributing their agricultural products. For this question,

respondents could fill in any answer rather than choose from a set of

pre-determined answers. For this question the consultant team did not

want to limit the answers so the question was left open-ended. A variety

of answers followed. Nine producers chose to leave the question blank.

The following chart details the answers that were provided, duplicate or

similar answers were combined.

Producers worry that customers do not understand the products they

are selling, family farms have the burden of raising children while

operating a business or only having a small amount of family members as

employees and are unable to pay extra labor.

One producer needs help with production planning in order to ensure

selling fresh product to market, vehicle size can be a barrier along with

other logistics like the miles traveled and cost, it may not be worth it for

a producer to drive many miles to deliver to only one wholesale

account.

Table 1.17

Would you deliver your produce to a regional

food hub?

Yes (19)

No (9)

Possibly (2)

Table 1.18

Would you replace your current distribution

system for one central distribution plan out of a

regional food hub?

Yes (6)

No (20)

Possibly (4)

A variety of distribution barriers are detailed in Table 1.19. This

question was left open-ended as to not put any limitations on answers

provided by producer respondents.

15

Table 1.20

Do you have storage capacity for all of your

agricultural products?

Yes (18)

No (6)

Some (2)

Working on it (2)

Table 1.21

Do you have a packing house for washing and

packing of your produce?

Yes (10)

No (18)

20 producers indicated in Table 1.01 that their primary or secondary

commodity is vegetables. Only 10 respondents answered that they have

a packing house for washing their produce. This gap in infrastructure

indicates that the food hub facility may be able to fulfill a role in

processing and packing of fresh cut and or frozen produce. Preparing

fresh cut and frozen products is a great way to create products for

institutional buyers. Food Hub Operators must work with potential

buyers to indicate their product specifications so that buyers are getting

a product they want and that is convenient for their operation. Branding

and communication with customers is very important, especially now

with more consumers shifting their buying patterns and focusing on local

and sustainably produced products. Branding and Marketing will be an

important part of the potential food hub business plan.

Table 1.24

Do you use your own farm label or other branding

collaborations when your product is packed for delivery?

Yes (17)

No (11)

In the Process (1)

N/A (2)

What barriers have you experienced in distributing your

agricultural products?

Cost

Communication with buyers/customers

Time

Labor

Infrastructure (refrigeration, docks)

Logistics

Distance to Markets

Managing Supply and Demand

No barriers

16

The following 4 tables identify surveyed producers experience with food

safety. As previously mentioned distributors often require different

certifications. Identifying distributors’ conditions and then working with

producers selling into the food hub to make sure they have the

appropriate trainings or certification will help create stronger

connections between supply and demand outlets.

Table 1.22

Are you familiar with standard safe handling, washing and

packing protocols?

Yes (30)

No (2)

Table 1.23

Are you familiar with USDA grading

standards?

Yes (15)

No (13)

Somewhat (1)

When asked about food safety certifications, 20 respondents out of 35

total respondents left this questions blank. This is by far the most

amount of blanks for this survey. Respondents could choose from GAP,

HACCP, GHP, Certified Organic or type in alternative certifications. It is

unclear as to whether respondents were confused by the nature of the

question or if they left the answer blank because they do not have food

safety certifications. According the AMS Organic Integrity Database,

which compiles a large range of organic certifiers, only 4 farming

operations are certified organic in Portage County. 3 respondents here

have identified that they are certified organic. Food safety and organic

certifications will allow producers to work with a larger variety of

customers. Organic Certifications help producers get a premium for

their product.

Table 1.25

Do you have any food safety certifications?

Certified Organic (3)

GAP (4)

ODA (1)

HACCP (1)

Producers selling into the food hub may have to be trained to work with

market partners. The producer group surveyed here shows strong

interest in receiving trainings if they were made available.

17

Table 1.26

Three respondents said they grow on contract, those same three

respondents were asked what percentage of their total output is grown

on contract and they answered 0-10%. This shows that there is not

much contracted buying happening with farmers. The food hub would

have to determine if they wanted to provide contracts to farmers. 11

farmers indicated in Table 1.28 that they are currently conducting pre-

season crop planning with their customers.

Pre-season crop planning can be an important factor in food hub

planning so that producer partners are growing a variety of crops which

will work to diversify offerings of the food hub to their buyer partners.

A food hub facility can act as a middle man and identify demand from

buyers and then plan with farmers to meet that demand in the next

season.

This planning can be a way to balance supply and demand which is most

often a tricky aspect of food hub operations. 20 producers indicated that

they would be willing to work on pre-season crop planning if they were

to be connected with market partners willing to buy their products

(Table 1.29).

Table 1.27

Do you currently grow on contract?

Yes (3)

No (27)

N/A (1)

Table 1.28

Do you conduct pre-season crop planning with any

of your current customers?

Yes (11)

No (14)

N/A (2)

Table 1.29

Would you be willing to work on pre-season crop

planning if we connected you with a distributor

interested in selling your products?

Yes (17)

No (8)

Would you be willing to receive training to expand your

market or work with a wholesale distributor?

Yes (26)

No (7)

Maybe (1)

18

Pre-season crop planning may not always come with a contract. As

indicated in Table 1.30 growers are only slightly interest in entering

contracts with the food hub facility. If contracts are not in place in the

startup stages of the food hub facility, they could be an option later on in

the business plan when producers have a stronger trust in the ability of

the food hub to secure demand partners and sell the producer partners

produce at a competitive price point.

Table 1.30

Which of the following statements best describes you?

I would prefer to grow on contract with the ability to sell

additional produce to the food hub without a contract (8)

I would like to grow for the packing house but not on

contract (9)

Not Sure (3)

Interest in Food Hub

Food Hubs are new and emerging trends. Producers were asked about

their familiarity with and interest in food hubs to assess the feasibility of

a potential food hub within Portage County. Surveys that were

conducted at the scheduled Producer Meetings created more familiarity

about food hubs for producers. These meetings had project team

members available to present on food hub capabilities and opportunities.

The more producers learn about the potential of a food hub, the more

they may be willing to participate. 62% of respondents are familiar with

the concept of a food hub (Table 1.13). While 69% of respondents

would be interested in selling their produce to a food hub facility*

(Table 1.14).

Table 1.13

Are you familiar with the concept of a food hub?

Yes (18)

No (8)

Unsure (3)

Table 1.14

How would you describe your level of interest into

selling wholesale produce into a food hub facility?

Not at all Interested (4)

Not Very Interested (3)

Somewhat Interested (13)

Very Interested (5)

Extremely Interested (6)

Need to Know More (3)

*Includes answers of somewhat interested, very interested, and extremely

interested.

Producers were asked what would make them likely to participate in a

food hub operation. Results varied as the question was left open ended.

Price was the most occurring theme. Producers want profit margins on

their produce. Wholesale prices alone will not support most farmers,

retail prices are higher than wholesale prices and having a mix of retail

and wholesale partners can help farmers get better prices on their

19

product. Moving enough volume through the food hub will also be a

way to make sure money is getting back into the hands of the producers.

Choosing the geographic location of the food hub facility is also

critical. If farmers are delivering their produce to the facility, is the facility

in a location that farmers will deliver too? Will the facility be in a

position that distributors will be able to access or incorporate the stop

into their pre-existing routes? An appropriate geographic location will

help with the convenience factor of working with a food hub facility.

Producers will want to know the business plan, invoicing system,

payment terms, product specification and further details to ensure a

partnership that is convenient for their business operation.

Table 1.31

What would make you more likely to participate in a food

hub operation?

Price*

Geographic Location

Need to Know More Information

Marketing and Distribution Plans in Place Before Opening

Ease of Access/Convenience

Volume Assurances

Access to a Shared-Use Kitchen

A Market for Surplus Crops

Ability to Differentiate Products

Not interested

* Close to retail prices; Getting a good price for my produce; Earning a

reasonable profit margin/higher volume; if the space is affordable; Strong

business model that is financially sustainable

Work and more in-depth communication will be needed with producer

partners if moving forward with a food hub operation. Producer

relationships are key to the success of a food hub operation. Without

producer input and buy-in the food hub has no supply to fulfill demand.

Table 1.32 and Table 1.34 indicate that the majority of the already

identified producers would be interested in future discussions and

information sessions on the potential of the food hub.

One producer did mention that the spring and summer are very tough

times for producers to leave the farm and take time for additional

meetings. The project team recommends meeting with producer

partners in the off season when duties on the farm are less. The project

team also recommends that identifying a larger amount of producers

and with a range of products to offer for sale into the food hub facility.

Table 1.32

Would you participate in future food hub

information sessions scheduled this spring and

summer?

Yes (16)

No (7)

Possibly (7)

20

Table 1.34

Can we contact you about the food hub?

Yes (26)

No (5)

B. Buyer Interest

Restaurants

A limited number of locally owned restaurants and food trucks are

interested in sourcing from local producers. A few purchase from local

suppliers and Sirna & Sons distributors. They also shop seasonally at

farmers markets and farm stores. Those attending focus groups were

interested in connecting with more producers and suggested a database

for contact information and seasonal availability from producers.

None of the buyers were familiar with Ohio Market Maker or other

existing online platforms. Buyers said they would be interested in

platforms similar to the Lake to River Coop online marketplace if order

was easy and delivery was reliable.

They described themselves as relationship based buyers --- more

interested in quality, reliability and price considerations – as opposed to

GAP compliances. Most of the restaurant buyers expressed interest in

buyer and seller forums, where they could meet producers during the

winter months and engage in joint planning.

Farm to College

Kent State University (KSU) and Hiram College would be ideal

future partners for an aggregation and distribution hub model.

Although given these market channels would be best served by a

growth stage hub in existence for 2 to 3 years operated by 30 to

40 small to mid-size farmers. The facility would need to carry

group GAP and each of the individual farms would need to be 3 rd

party GAP certified.

21

Hiram College is currently served AVI Foodsystems which has a

track record of sourcing from local and regional food distributors.

In the interim, technical support could be provided to agricultural

producers at a scale to sell to AVI.

Kent Natural Foods Cooperative

The Kent Natural Foods Coop is completing a

renovation to their store and expect to have increased

ability to source local produce and other refrigerated

value-added products.

The expansion will include a new walk-in cooler for cold storage.

Currently they source from individual agricultural producers and are

open to purchase from an aggregator or eventual food hub. Management

expressed similar concerns to other foodservice buyers about reliability,

price, seasonal availability and quality assurances.

Lake to River Cooperative

The managers of the Lake to River Coop are

definitely interested in partnering with producers

in Portage County. They are open to assisting with

future coordination between northeast Ohio

food hubs and would be interested in possible

collaborations that could lead to Farm to School

and Farm to College market channels. They also expressed a potential

interest in providing support and training to producers who would want

to join their coop prior to the formation of a Portage County hub.

Processors

Owner Tom Lane of

Innovation Foods

attended all of the food

hub meetings and focus groups and spoke to his interest in working with

Portage County agricultural producers to source ingredients for his

prepared meals.

Innovation Foods mission is based on the belief that everyone deserves

access to nutritious meals daily. The company operates from Twinsburg

in a new facility creating prepared meals for childcare centers, schools,

businesses and senior living facilities throughout Northeast Ohio.

Innovation Foods employs both a full-time Executive Chef and a full time

registered dietitian who work hand-in-hand to create innovative,

flavorful, and nutritious meals. Mr. Lane and his executive chef have begun

working with producers over the winter to begin sourcing more local

ingredients for their recipes and product lines.

22

Sirna & Sons

Sirna & Sons Produce is a fourth-generation,

family-owned wholesale food distributor. The

has three locations and is headquartered in

Ravenna. Sirna & Sons purchase from larger

produce growers across the nation and Ohio.

The distributor’s market channels include

healthcare facilities, restaurants, hotels, country

clubs, and institutions throughout Ohio, western and central

Pennsylvania, northern West Virginia, northern Kentucky, and eastern

Indiana. According to their website Sirna & Sons relies on a dedicated

network of local Ohio farms and participates in the Ohio Proud brand

program.

Initially active on the food hub steering committee, they are still

interested in the project, although recognize that they need to source

from larger producer throughout northeast and central Ohio. Their

commitment to local sourcing is rooted their companies values. But as la

large regional distributor they have specific requirements on volume,

price, licensing and quality assurances that many current Portage County

producers cannot meet. If a food hub begins to aggregate produce they

would consider future partnerships if their stipulations could be met by

the hub.

Other hubs throughout northeast Ohio are interested in coordinating

with any future model developed in Portage County. Many of the

existing food hubs and those still in the early stages of development

want to stay connected through the Northeast Ohio Food Hub

Network.

23

A. Food Hub Models

Defining Food Hubs: Over the past decade a new model for the

aggregation and distribution of local/regional food has emerged in urban

and rural centers. Commonly referred to as Food Hubs these facilities

have attempted to connect local agricultural supply to the growing

demand by wholesale buyers for local food. The U.S. Department of

Agriculture’s (USDA) working definition of a food hub is 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” (USDA James Barham et al. 2012, 4).

With strong support from the USDA for this model recent economic

analysis identifies that there has “a proliferation in the number and

recognition of ‘food hubs’ across the United States, as well as a

substantial increase in foundation and public funding to support their

development. In addition to generating economic value within a local

economy, funders and policy makers are also acutely attentive to the

impact of food hubs on local agricultural producers.”2

Portage County could easily replicate a number of hub models in

targeted neighborhoods. But for food hubs to be financially viable they

need to serve mid-size farm operators, as well as small producers or

beginning farmers. An urban hub can encourage aggregation that

2 Assessing the Economic Impacts of Regional Food Hubs: the Case of Regional Access Todd M. Schmit, Cornell University Becca B.R. Jablonski, Cornell University David Kay, Cornell University December 2013

combines produce and processed food lines sourced from urban

farmers and specialty food processors, as well as rural producers to

reach the scale necessary to be sustainable. Distribution, processing and

marketing services would add to the number of new business starts and

job creations within targeted neighborhoods.

Food hubs as business models are derived from a variety of goals. The

characteristics of the model directly relate to the November 2012

PCRPC Plan for a Food Hub in Portage County. The objectives include:

Economic Development to Stimulate Underserved Communities: As the

demand for local foo grows, recent studies indicate that food income

spent at a local level creates a multiplier effect. Some professionals

conclude that by keeping food dollars local can have a multiplier impact

up to 1.4 to 2.6 times within a local economy over food coming from

greater distances.

Job Creation: Food hubs create jobs for food and farm producers along

the supply chain from seasonal production, to packaging, marketing and

distribution. For agricultural producers, hubs encourage smaller farmers

or direct marketers to expand acreage for product, transition from

commodity crops and invest in more food workers to harvest specialty

crops. According to a recent University of WI-Madison study, 2.2 jobs

are created for every $100,000 in local food sales.

3. Market Analysis: Understanding the Food Hub Model

24

Sustainable Livelihoods for Agricultural Producers: Small farmers and

direct market growers could benefit from the significantly higher market

value of fresh market crops by converting acreage from commodity

crops. Sales per acre for fresh market vegetables range from $5,000–

10,000 vs. $200–1,100 for commodity crops. Food hubs can also help

farmers market value-added products produced on the farm or in

licensed facilities operated as kitchen incubators or by co-packers.

Increased Healthy Food Access: The increased production of specialty

crops can address food insecurity in underserved areas of a county.

Easier access to fresh produce can offset community health issues of

residents to combat obesity, hypertension and many other diet-related

health issues and diseases.

Environmental Impact: On average, each fruit or vegetable purchased in

the Midwest travels 1,500 miles from farm to plate. The previous study

confirmed the available land in Portage County that could be utilized for

agricultural production. Creating new outlets and distribution systems

for local and regional food could preserve farmland and decrease the

carbon footprint of food being truck into the county

From the analysis and focus group input, in the next 10 years Portage

County could benefit from the development of 3 to 4 types of food hub

and shared-use processing facilities. These could include:

1. Privately owned food hubs owned and operated by urban

growers and rural farm operators aggregating and distributing a

range of produce, shelf stable product lines, meat and dairy

products under one food hub marketed brand. A facility of this

size could range between 4,000 to 10,000 square feet and serve

10 to 40 farmers through collective ownership. Food hub staff

can constitute 3 to 4 full-time equivalents and would most likely

need $500,000 to $1,000,000 in annual sales by year 3 to reach

financial sustainability.

This model is most often driven by the desire of agricultural

producers to band together to diversify into wholesale market

opportunities.

2. Social Enterprise food hubs managed by non-profits or multi-

stakeholder cooperatives. Many of these models may primarily

focus on produce, meat and dairy, but also includes micro-

processing capabilities for fresh cut, vacuum packed and frozen

food production. These types of facilities can range in size from

10,000 to 100,000 square feet, and can serve a larger mix of

farmers and processors and usually create 5 to 8 full time

equivalent jobs to manage the operations and financial

management.

Many agencies serving developmentally disabled individuals have

designed social enterprise hubs to create employment programs

and respond to healthy food access issues in underserved

neighborhoods. There are a number of these types of hubs in

Ohio in metro areas.

3. Private or publicly held shared-use processing and distribution

hubs are emerging as growth firms graduating from kitchen

incubators are co-locating in shared facilities. These models are

very early stage and are dependent on successful kitchen

incubator programs that need the next level of infrastructure

for graduating tenants. In general each tenant or partner has

25

dedicated processing rooms for their operations and to comply

with licensing requirements.

To increase financial viability the co-locating partners will share

centralized packaging, shipping, distribution and warehousing

infrastructure. These facilities may also share office, accounting

and marketing staff and office equipment as well to reduce

overhead for the individual processors. The hope is that these

models will impact higher job creation and retention impacts as

the growth businesses generally can create 10 to 20 jobs in their

individual operations and the facility may have additional shared

staff to manage the facility and office operations. Many economic

development professional view this model as having the greatest

impact

4. Food Innovation Hubs are often affiliated with larger

partnerships and often championed by land grant universities to

create larger scale facilities that focus on entrepreneurship

pipelines, introduction of new technology for processing

innovations to meet new market demand and create workforce

interventions to accelerate job growth and new business

development in the food sector.

These models are typically held by universities or regional

economic development partnerships as strategic interventions

for economic impacts in neighborhoods, development districts

and rural sub-regions. In size and impact they are similar to the

private or publicly held models, and have significant investments

from grant programs and workforce development funding.

The analysis recommends that a thorough understanding of the

conditions, opportunities and obstacles of infrastructure development

and a targeted site selection to situate these facilities in underserved

neighborhoods could have both social well-being and economic impacts

to the county through job creation, new business development and tax

revenue. It would be advisable to over time develop a diverse

infrastructure of hub models to have the desired economic impacts.

The challenge of the past year is to come up with a roadmap and

timeline for hub development that builds on prioritized interventions

and staged investment and market opportunity.

To more deeply understand the models this section will review a few of

the long standing models of success nationally and then turn to short

competitive analysis of established or start-up hub models in northeast

Ohio.

B. Food Hub and Distribution Logistics Models

Case Study: Regional Access, LLC in Upstate New York

The 2013 study: Assessing the Economic

Impacts of Regional Food Hubs: the

Case of Regional Access lead by a small

interdisciplinary team at Cornell (Todd

Schmit, Dyson School of Applied Economics

and Management; Becca Jablonski,

Department of City and Regional Planning;

26

and David Kay, Department of Development Sociology/the Community

and Regional Development Institute), utilized funding from an

Agricultural Marketing Services Cooperative Agreement to design a

best-practice methodology to evaluate the economic contributions of

food hubs on their local economies and the mid-scale farms aggregating

through hubs.

The framework developed was utilized to create a case study analysis of

a food hub located in Upstate New York, Regional Access, LLC. “A

community-oriented, grassroots company, Regional Access was built on a

vision of providing ecologically responsible, locally grown food in

Upstate New York. From humble beginnings in founder Gary Redmond’s

3 http://regionalaccess.net/history-of-regional-access/

garage to their current spacious modern warehouse, the company has

flourished over the last 24 years, helping to redefine regional food

systems and pave the way for a myriad array of new businesses and

social efforts focused on improving and developing more sustainable

food connections.”3

A mature food hub committed to sourcing from local farmers, Regional

Access was established in 1989 and by 2011, operates with $6 million

in annual revenue. During the case study review, Regional Access

employed 32 full-time equivalents, operated 9 vehicles and a 25,000

square foot warehouse, delivering over 3,400 product listings to buyers

in New York State. The food hub sells to over 600 customers, including:

residential households, restaurants, institutions, other distributors,

fraternities and sororities, buying clubs, retailers, manufacturers, and

bakeries. Regional Access purchases products directly from 96 farm

vendors, the majority in New York State and 65 specialty processors, as

well as from conventional supply chain sources.

By applying the methodological framework the study authors found that

food hubs have the greatest impact of increasing market access for

farms. Interviews were conducted with 30 food hub farm operators,

representing 35% of all farms selling to the food hub located in the state

and selling more than $100 of products in 2011. Of the 30 farms

interviewed 37% were classified as ‘small’ ($1,000-$249,999 in gross

sales), 43% were classified as ‘large’ ($250,000-$999,999 in gross sales),

and 20% were classified as ‘very large’ ($1 million or more in gross

sales). The distribution of farms by primary commodity category was

37% meat and livestock, 30% fruit and vegetable, and 33% value added

products (including cheese, butter, yogurt, honey, maple syrup, wine and

juice).

27

Additionally, the study authors found a gross output multiplier of 1.82,

indicating that for every additional dollar of final demand for food hub

products, an additional $0.82 is generated in related industrial sectors.

Case Study: Great River Organics Columbus, Ohio

Great River Organics (GRO),

started in 2014 is a farmer-owned, non-

profit cooperative comprised of

growers committed to expanding the

footprint of local, certified organic

products in the central Ohio

marketplace. According to their website “GRO was born of our

growers’ passion for providing central Ohio consumers with a diverse

range of locally and organically grown produce of the highest flavor,

nutrition and quality—while honoring both the farmer and the

environment.”4 Although the farmer-owners are situated in the rural

outskirts of Columbus the aggregation facility is at 4561 East F5th

Avenue adjacent to Port Columbus International Airport. Farmer coops

or other farmer-owned distribution companies will often locate facilities

in urban centers to be closer to markets.

The food hub value proposition is to grow regional farm businesses,

preserve central Ohio farmland and provide a larger-scale, local option

for customers to select organic produce. Each of the farm members are

certified organic and combined have 60 years of farming

experience. That commitment to organic is at the core of their mission

and takes advantage of the growing demand for both local and organic

4 http://www.greatriverfarms.org/

produce produced grounded in GRO’s values of sustainability,

transparency and ethical growing practices

Still in the early stages of hub development, GRO as a farmer coop is

connecting with larger market partners such as the Whole Foods store

in Upper Arlington and other grocery chains in central Ohio and

Portage County, as well as Green BEAN Delivery. Featured last summer

on the cover of Edible Portage County magazine, their brand continues

to attract customers and larger buyers who are motivated to buy local

and organic.

To increase the financial viability of the hub, GRO also sells directly to

Columbus area customers through Great River Market Bag, a multi-farm

CSA share of Ohio’s best certified organic produce. Their marketing

message reflects GRO’s competitive positioning in the marketplace:

“Great River Organics is a farmer-owned, non-profit cooperative. That

means there’s no middle man. Your CSA share always comes directly

from our fields to your table. We're not a for-profit business. We're not a

software company. We're a group of highly skilled and experienced

farmers, joining together to bring the highest-quality certified organic

produce to you and your family.”

28

Case Study: Red Tomato--Boston, Massachusetts

Another long standing model is Red Tomato

outside of Boston, Massachusetts that has

shifted from a pure food hub to a supply chain

logistics business. In Red Tomato’s early days,

the company managed their own delivery

trucks and warehouse. They picked up the

product from the network of farms,

aggregated the product, managed the

warehousing and did all the distribution to their various market

channels. “After several years of trying to do it all, our team realized

that the resulting wear and tear was actually limiting our growth. In

2005, the team decided to divest of our warehouse and trucks. Instead,

our distribution plan now relies on farmers with storage capacity to

5 http://www.redtomato.org/logistics/

aggregate product, and farmers, distributors or third party logistics

companies to move the product to its final destination.”5

The shift to a logistic base model has allowed the company to grow,

both in revenue, sales and profitability, allowing the staff to focus on

what they believe they do best: customer service, marketing and

product development. In consequence they have also brought better

income results to their farmers and increased the affordability of fresh,

local food to their customers, many in underserved urban markets.

29

Study: Azoti Local Food Solutions—Columbus, Ohio

A more local, logistics model is

Azoti.com Local Food Solutions. The

company’s goal is to provide value to

everyone in the food supply chain so large

buyers can justify local food price

premiums. Opened in in the spring of

2012, in Columbus they have spent the

past four years identifying and working

with small agricultural producers.

Primarily working as software-as-a-service platform consists of two key

modules: Demand Planning and Just in Time Inventory that allows

large buyers and distributors to engage with small local producers

through a centralized ordering and delivery platform. Azoti focuses on

the marketing benefits of local food. By working with corporate buyers

they bring a hybrid CSA model to a base of local food customers

conveniently to their workplaces.

In Central Ohio, Azoti works with about 30 local farms and makers of

artisanal food such as baked goods, honey and cheese. It has about 500

subscribers who get deliveries through 35 employers, churches and

schools. Local distributors are Columbus-based DNO Inc. for produce

and Johnstown-based Oink Moo Cluck Farms for meat.

Consumers get custom orders of fresh local meat and produce, farmers

get a stable subscriber base, distributors get new local suppliers and

customers, and participating HR managers get to look like heroes for

providing a convenient way to take home healthy food.

30

For the owners of Azoti, “Local food has always been about value for health, soil and the environment; now you can get that same value plus tangible ROI for all

participants”1 according to their marketing messages. They diagram their leverage point as the development of a supply chain that captures value for all the

stakeholders in the local food value chain.

31

C. Retail Market Model

Case Study: Celebrate Local—Columbus, Ohio

Local stores such as Celebrate Local, started as an initiative of the

Economic & Community Development Institute (ECDI) have

demonstrated the demand for local and regional food products. In

recent years the Celebrate Local has become a separate social

enterprise as the retail home to more than 300 Ohio artisans, small

businesses and agricultural producers.

Their first location opened in Easton Town Center with 60 local

producers and after 2 years expanded to a larger storefront in January

2013 to accommodate the growing demand of customers and new

vendors.

In 2015, Celebrate Local opened their second retail store at Liberty

Center serving customers from the Dayton and Cincinnati area. A new

online marketplace brings hundreds of Ohio-made products to

customers all across the nation.

Many central Ohio specialty food processors, craft beverage makers,

farmers and makers have not only benefited from expanded market

access, but also receive small business support services to grow their

individual businesses from market partners like Celebrate Local, Whole

Foods and the Hills Market. Columbus is experiencing a renaissance, like

many urban places, in the artisanal food sector. Having integrated

infrastructure that supports these types of businesses in the city or

targeted neighborhoods can accelerate job growth through ownership

and microenterprise sector development.

32

Case Study: The Wild Ramp—Huntington, West Virginia

When the Wild Ramp market

was launched in the summer

of 2012, Huntington did not

have a year-round farmers

market.

The Wild Ramp began as the Capstone project of three Marshall

University students, Christa Galvin, Kelly Cox and Lauren Kemp. Almost

5 years later Lauren continues as a Wild Ramp board member and staff

of Unlimited Future Incorporated which played a key role in supporting

the development of the market model.

The first meeting dedicated to the concept of a local foods market was

held in January 2012. A core group of citizens quickly came together and

some of those citizens visited, Local Roots Market & Cafe, a local foods

store located in Wooster, OH. Tri-State Local Foods, a non-profit

organization, was formed and the search for a location began.

The entrepreneurial spirit at Heritage Station seemed like a perfect fit

for a local foods market. A lease was signed and renovations began.

Meanwhile public calls were put out to local farmers and producers and

interest meetings were held. A blog was started to document the

process and promote the concept of local foods and seasonal eating. The

Wild Ramp opened for business on July 12, 2012. Those first few days

The Wild Ramp was an open-air market as we awaited our final

renovations and occupancy permits.

In 2014, the Wild Ramp moved to their current location in Old Central

City, in the west end of Huntington. This location has provided the space

and customer support for significant growth. In 2016 the Wild Ramp

installed a commercial kitchen for additional food entrepreneurs to

operate from and provide prepared foods and beverages.

In 2016, the Wild Ramp hit a new milestone. According to their annual

report the Wild Ramp has returned over $1.2 million to local producers

and artisans since opening in 2012, The Wild Ramp was open 357 days

during 2016, closed only for Sundays, holidays, weather days, and 3 days

for power outages and maintenance. That translates into 2,785 hours

that producers' goods were available to consumers and the producers

could be on their farms or in their studios, producing and creating more

goods in order to grow their businesses. In 2016, The Wild Ramp had

123 registered farmers and 35 registered artisans, for a total 158

producers; 124 had sales throughout the year. Of the $358,900 in sales,

$276,873 were returned to producers.

33

D. Northeast Ohio Food Hub Models

Lake to River Cooperative Online Market

Lake-To-River Food Cooperative is

a member-owned, multi-level

cooperative of food producers,

processors, and institutional and

retail buyers who grow, add value

to, market and prepare agricultural

products in the Mahoning Valley and

throughout northeast Ohio.

Comprised of 22 farmers and

value-added food entrepreneurs,

L2R provides marketing, sales,

aggregation and delivery of products including fruit, vegetables, grassfed

and conventionally raised meats, eggs, locally produced cheese, granola,

peanut butter and much more.

Established in 2011, L2R has succeeded in growing its sales more than

300% in its first two years. The Co-op’s uniqueness lies in its multi-level

stakeholder structure putting producers and workers at all levels of the

food value chain into a cooperative, rather than competitive production

and delivery system. Capturing value for others within the co-op

through marketing, distribution and value-adding helps all members

retain value; this retained value can be passed up and down the value

chain to help strengthen sustainable and profitable ways to get more

fresh, whole, locally grown food directly to consumers and retain more

wealth for producers.

Rather than seeking the cheapest food possible (locally, paying the

“Bottom Dollar” or seeking “everyday low prices”) consumers see their

purchases as investment in preserving and growing local and regional

food capacity. The Cooperative structure, which has members at all

stages of the value chain, makes more people available to educate our

region about the worth of agriculture and locally grown food in building

community and increasing opportunity for farmers and food

entrepreneurs.

L2R conducts outreach and establishes relationships with numerous

faith-based groups resulting in regular, monthly sales of farm products to

local churches for fundraising events. One remarkable example of

success is at St. Patrick Church, Youngstown which purchases more than

125 lbs of locally raised ground beef from River Bend Farm, a L2R

member, for its monthly fundraising spaghetti dinner. Fr. Ed Noga, pastor

of the church in this economically hard-hit southside neighborhood

points out to the entire Mahoning Valley at every opportunity the

importance of “keeping it local to help grow our communities. It takes a

little bit more effort, but it makes a difference.”

L2R has initiated, promoted and manages a farmers market inside St.

Elizabeth Health Center Main Campus which attracts physicians, nursing

and administrative staff and the public. In collaboration with HMHP, L2R

administers the Fruit and Vegetable Rx program which furnishes a

monthly voucher for $25 in local produce to patients with a medical

condition affected by diet. The considerable efforts of L2R and HMHP

help this successful program bring $20,000 in sales to farmers in

Mahoning, Trumbull and Ashtabula counties annually and healthier food

to the more than 180 patients who benefit directly.

34

Recently, L2R Cooperative identified the need to simplify inventory, and

order-taking and make products more accessible to customers. L2R

Online Market is now used by schools, restaurants and individual

customers to quickly identify the range of products available and

conveniently purchase them; different databases for different price

structures, promotes producers and processors throughout the region

and provides valuable information about buying habits to aid in future

planning for crops, staff and infrastructure.

The e-commerce site’s functionality and processes provide a convenient,

fully integrated platform to buy, sell and distribute local food. L2R has

gathered feedback from a variety of stakeholders and identified new

opportunities through previous work.

6http://www.cleveland.com/metro/index.ssf/2014/11/hattie_larlham_to_open_food_hu.html

Hattie Larlham Food Hub

Hattie’s Food Hub officially opened

its doors to Akron residents in June

of 2016. As community members

gathered for the grand opening

celebration, Dotty Grexa vice

president of vocational services at

Hattie Larlham shared “Today is the

result of an ongoing and positive

conversation with our neighbors and

the greater Akron community,” said “We are honored to be a part of

this community. We hope to serve our neighbors for years to come.”

Hattie Larlham is a non-profit that works with people with disabilities,

will open the North East Ohio Food Hub and Workforce

Development Center. The organization was allocated $250,000 in

state funds this year to create the Food Hub, which houses a

produce-processing kitchen, community space and a market. An

innovative food-processing hub, operated by people with

developmental disabilities, will open in Akron and serve four

counties.6

Sitting on a once-vacant lot Hattie’s Food Hub provides a new corner

market in the Cedar-Douglas neighborhood. The neighborhood will

benefits from access to fresh, locally grown produce. Hattie’s Food Hub

is a strong addition to Northeast Ohio’s farm-to-table movement.

Working with local growers and small start-up businesses, Hattie’s Food

Hub supports the local food economy while changing the way the

community eats. To encourage healthy eating and support better dietary

35

choices, Hattie’s Food Hub hosts cooking demonstrations and events

free of charge.

“Access to fresh, local food is vital to the health and well-being of our

community,” said Zac Rheinberger director of food operations at Hattie

Larlham. “At Hattie’s Food Hub, we foresee a community which eats

well, is well and treats each other well. We’re cultivating a community

where everyone has a place at the table.”

Hattie’s Food Hub is open Monday – Saturday, 10 a.m. – 7 p.m. The

store of the food hub accepts cash, check and MasterCard, Visa and

Discover credit cards and debit cards. EBT and WIC will be accepted

soon.

Hattie’s Food Hub also acts a workforce training program. It creates 8-

12 Akron employment opportunities for people with and without

intellectual and developmental disabilities. Working with guidance from

job coaches, Hattie’s Food Hub employees develop the technical and

social skills needed for competitive community employment.

Oberlin Food Hub

The Oberlin Food Hub is a local food aggregation and distribution

center, sourcing local goods from local farms for sale to local wholesale

buyers.

The Oberlin food hub works with established farms like The George

Jones Farm and Green Field Farm to coordinate produce delivery. The

Hub seeks to support producers in Lorain and six surrounding counties:

Ashland, Cuyahoga, Erie, Huron, Medina, and Wayne. The Oberlin

Food Hub also works with a collaborative of other projects such as the

Lorain Incubator Kitchen, Farm Fare and the New Agrarian Center to

fosters network coordination of local food systems.

36

Lorain Incubator Kitchen Cooperative

The Lorain Incubator Kitchen Cooperative (LIKC) was incorporated in

2013 in response to the need for infrastructure in Lorain County,

OhioH to support food-based entrepreneurs. LIKC is led by Dr.

Chester Bowling, who recently retired from The Ohio State University's

Cooperative Extension Center, where he helped build organizations

that enable community and economic development through agriculture.

LIKC pursued development of an incubator kitchen in Lorain, Lorain

County's largest and most economically depressed city, orchestrating an

opportunity to acquire donated equipment from a closing hospital and

re-purpose it into a commercial kitchen for the Lorain's Boys and Girls

Club of Lorain County. LIKC is pleased to bring their incubator kitchen

expertise to an Oberlin-based incubator kitchen that is co-located with

a wholesale aggregation and distribution.

New Agrarian Center

The New Agrarian Center (NAC) has created and promoted healthy,

sustainable, and equitable local foods systems in northeast Ohio since

2001. An independent non-profit located on land leased from Oberlin

College on a long-term basis, its goal is to make healthy, sustainably

grown food available to everyone, regardless of income, and to act as a

workforce development center for those interested in choosing

sustainable farming as a career path. NAC does this through two key

programs: the George Jones Farm and City Fresh.

n 2005, Brad Masi and Maurice Small, employees of the non-profit

organization now known as New Agrarian Center, along with a crew of

farmers, volunteers, and OSU educators, organized the first Community

Supported Agriculture (CSA) distribution location in the Clark-Metro

neighborhood in Cleveland. A year later, the mission expanded to

include 3 distribution locations, or “fresh stops”. Soon after, the

program now known as City Fresh expanded to include more than 15

fresh stops throughout Cuyahoga and Lorain counties. Since 2006, City

Fresh and its army of volunteers have helped move more than 1.5

million pounds of fresh, naturally-grown, local produce into our urban

core.

Ashtabula Food Hub

The Ashtabula Local Food Council

focuses on three distinct areas of

local food work: Community,

Growers, and Policy. In 2015, the

council worked primarily to “get off

the ground”. Every food system has a series of vital parts, and the

Ashtabula Local Food Council consider it our highest priority to focus

on the growers that produce our food and the communities they

serve. Ashtabula County has a proud heritage of food and agricultural

traditions.

The first project established an online Local Food Guide for Ashtabula

County, since then they have hosted a Growers Summit, and have

recently begun a Food Hub Feasibility study, started Geneva Farmers

Market, held a Local Food fundraising event, hosted a summer film series,

and held a canning workshop for Ashtabula County Community Action

Agency’s My Neighborhood.

37

In 2016, the council emphasized community education efforts, took

further steps to increase food access in Ashtabula County, cooperatively

marketed area farmers markets, and hosted a series of farm tours.

Since the inception of Ashtabula Local Food Council, has made a series

of small steps with the ultimate goal of forming a food hub in Ashtabula

County. Currently a site has been secured to house the hub and the

council is holding our stakeholder meetings with agricultural producers.

Fresh Fork Market

Fresh Fork Market is a Farm Buying Club —

providing members with a weekly subscription

service to fresh and local foods. Fresh Fork

operates year round providing a Summer and a

Winter seasonal shares that include produce, meat,

eggs, dairy, breads, canned goods, pastries, granolas

and more. Every week, members meet one of our

refrigerated trucks in their community and pick

up their grocery grab-bag filled with local food.

Fresh Fork sources from over 100 farmers and producers to bring

together our weekly share of high-quality food for to sell to 3,000+

families. From Amish farmers to local kombucha brewers. A few of

our suppliers are a little farther away, such as Snowville Creamery and

Shagbark, b Seed and Mill in the Athens area. Lucky Penny of Portage

County sells through Fresh Fork Market

Fresh Fork has more than 20 weekly pickup locations around Northeast

Ohio. At the beginning of the season customers choose their primary

stop, and you can also pick up at any location if you need to.

C. Food Safety and Regulatory Implications

The regulatory environment surrounding food involves many players;

each assigned to work with a specific process or product. Currently, the

FDA regulates most food handling, using a uniform food code enforced

by local or county health departments. The USDA also oversees most

of the meat and poultry slaughter and processing in the U.S. The recent

2011 Food Safety Modernization Act (FSMA) expanded the FDA’s

power to regulate farm and local food production and handling.

Operations that have less than $500,000 in annual sales are generally

exempt from this legislation, unless there is a specific food safety

38

incident or recall whereby the operation is subject to FDA and local or

county health department inspections.

In 2002, the Bioterrorism Act mandated all food facilities—not including

restaurants, retail stores, farmers markets and farms—register with the

FDA. Farms that are conducting their own post-harvest handling are

exempt from registering with the FDA, but if they are providing these

services for products from other farms, they must register. Because

food hubs aggregate product from multiple farms and most do not

operate as a retail store, it is suggested that food hubs register

themselves with the FDA. This process can be done by fax, mail, or

online: www.fda.gov/ Food/GuidanceComplianceRegulatoryInformation/

RegistrationofFoodFacilities/OnlineRegistration/ default.htm

Besides registering a facility with the FDA, food hubs are not currently

government-mandated to have certain food safety certifications,

although this is now changing. Many customers, however, have specific

requirements for the food they purchase, making it in the food hub’s

best interest to comply with the needs of their customers. This practice

will also keep the food hub current with food safety regulations should

they later be mandated, and transfer knowledge to growers. Planning and

building the facility to meet these regulations will reduce the likelihood

of needing structural retrofitting later.

Essential Definitions

3rd Party GAP: GAPs are any agricultural mgt. practice or

operational procedures that reduce the contamination of fruits

& vegetables on the farm or the packing house. More buyers

require that either the farmer has received GAP training or

has been certified.

GHP: Good Handling Practices examine the post harvest

handling of produce. Basics steps include: written

documentation, contaminant protection during transport &

facility handling, wash/pack lines meet EPA microbial

requirements and worker health & hygiene policies are in

place.

HACCP: Hazard Analysis Critical Control Point plans are the

benchmark for food safety throughout the whole supply chain

that assure food is safe for human consumption. Plans identify

the risk and preventive measures in place.

The National Good Agricultural Practices (GAPs) Program

was established in 1999, funded by CSREES-USDA and US-FDA, and

based at Cornell University. The GAPs Program

has collaborators in 34 states throughout the nation and has created

many educational materials to help implement good agricultural

practices on the farm.

Good Agricultural Practices (GAP) and Good Handling Practices (GHP)

are voluntary audits that verify that fruits and vegetables are produced,

packed, handled, and stored as safely as possible to minimize risks of

microbial food safety hazards. GAP & GHP audits verify adherence to

the recommendations made in the U.S. Food and Drug

Administration’s Guide to Minimize Microbial Food Safety Hazards for

Fresh Fruits and Vegetables (pdf) and industry recognized food safety

practices. In 2015, The USDA Audit Program performed audits in 50

states, Puerto Rico, and Canada, covering over 90 commodities.

The traditional GAP approach is to audit individual farms. This makes each

farm responsible for the full administrative and financial burden of

compliance. The GroupGAP approach provides an umbrella of support, with

39

the central entity and participating producers addressing food safety

compliance cooperatively.

Group GAP:

Distributes the administrative load by clearly defining

food safety roles and responsibilities

Supports the development, communication, and constant improvement of best

practices within the system

Allows producers to access a high level of food safety

training and expertise

Improves product traceability, facilitating faster

corrective action

Provides a trusted framework for articulating compliance

to buyers

Creates transparency in every level of the operation,

building confidence in customers, managers, and

producers

GAP & GHP Audit Services Include:

Produce GAPs Harmonized Audit

USDA GAP&GHP Audit

GroupGAP

Tomato Food Safety Audit Protocol

Mushroom GAP

California LGMA

Arizona LGMA

How to Request a GAP & GHP Audit

Determine what type of audit you need. For example, your

customers may require a Harmonized GAP audit or, if you grow

mushrooms, you might need a Mushroom GAP (MGAP) audit. (see

list above)

Complete the Request for Audit Service Form FV-237A

Next select the office closest to the facility that needs to be audited,

from the list of Local Specialty Crops Inspection Division audit

offices. For non-domestic audits, please contact the national office

using the information below, under “Contact Information

Email or fax your completed Audit Request Form to the office that

you selected.

The office will contact you and confirm the receipt of your request,

give you more information about the program procedures, and

schedule your audit.

Complete an Agreement for Participation in Audit Services form FV-

651 and submit it to your auditor or to the contact below, via email

or fax.

GAP & GHP Program Logo

GAP program participants that maintain compliance with program

requirements may apply to use the GAP & GHP program

logo. Participants must submit a written request using FV-652 form,

Logo Use Request for Audit Programs. and submit supporting

documents as identified in the FV-652 form and the Instructions for the

Use of the GAP & GHP Logo.

40

Contact Information

Telephone: (202) 720-5021

Fax: (202) 260-8927

Email: fvaudits@ams.usda.gov

The Ohio Produce Growers & Marketers Association (OPGMA) is an

organization whose goal is to encourage and support the production of

exceptional crops, improve the business intelligence of its members, and

expand the consumption of Ohio-grown fruits and vegetables through

improved marketing and retail operations. OPGMA provides educational

and business development opportunities to any businesses associated

with the production and marketing of Ohio’s fresh produce.

Volunteers who are engaged in production and retail govern OPGMA. It

is for the industry and by the industry. A member-centric organization,

you can expect to feel like you’re a part of the OPGMA family when you

join us as a member.

Protecting the well being of our

customers should be your number

priority. It has been one of OPGMA’s

critical issues for several years.

Throughout the year, we offer articles

and other learning opportunities on this

topic.

Ohio Produce Marketing Agreement

OPGMA established the Ohio Produce Marketing Agreement (OPMA)

in 2009 to formally address the increasing fears about biological

contamination in our fresh food products. OPMA is a state-wide

voluntary program that provides a framework for food safety strategies

on your farm and inspections for those farms that require it. It is

officially approved by the Ohio Department of Agriculture.

OPMA is governed by a separate board of directors and is currently

affiliated with OPMGA through management services only.

Cannery Regulations

Ohio Revised Code Chapter 913

Definitions

Cannery - a place or building where fruits, vegetables, or specialty

products are packed in hermetically sealed containers and thermally

sterilized and the products of which are placed on the market for

general consumption as human food, regardless of where the product is

sold in commerce.

Low-acid foods - any foods, other than alcoholic beverages, with an

equilibrium pH greater than 4.6 and a water activity greater than 0.85,

except that tomatoes and tomato products having a finished equilibrium

pH less than 4.7 are not low-acid foods.

Acidified foods - either: (1) Foods that have a natural pH of 4.6 or

below; (2) Low-acid foods to which acid or other acid foods are added

and that have a finished equilibrium pH of 4.6 or below and a water

activity greater than 0.85.

Acidified foods does not include foods that are stored,

distributed, or retailed under refrigeration.

41

Specialty products - food products other than fruits, vegetables, and

meats that by their natural characteristics have a potential to produce

botulism. "Specialty products" include, but are not limited to, puddings,

gravies, sauces, and fish.

Cannery Licensing

License- the document issued by the licensor that authorizes a person

to operate a food service operation or retail food establishment.

License holder- the entity that:

Is legally responsible for the operation of the food

service operation or retail food establishment such as

the owner, the owner's agent, or other person; and

Possesses a valid license to operate a food service

operation or retail food establishment.

Licensor means one of the following:

A board of health or the authority having the duties of a

board of health approved under section 3717.11 of the

Revised Code;

The director of agriculture acting under section 3717.11

of the Revised Code or 3717.111 of the Revised Code

with respect to licensing retail food establishments; or

The director of health acting under section 3717.11 of

the Revised Code or 3717.111 of the Revised Code

with respect to licensing food service operations.

Any person, firm, or corporation engaging in the business of operating a

cannery must obtain a license for the operation of each cannery from

the director of agriculture.

Obtaining a license requires submitting an application along with a $200

fee. Licenses are issued on the 30th of June and expire on that date each

year unless renewed. Licenses must be renewed each year. Renewal is

accompanied by a fee as well.

Canneries operating under a license are subject to inspection during any

normal business hours. Failure to comply with regulations may cause

licenses to be suspended, revoked or violations may have to be

corrected to continue carrying a license.

In 2015 the Food Safety Modernization Act effected ODA licensing and

regulations with regard to Cannery and Bakery licenses.

Prospective processors interested in developing thermally processed

products not exempt under the Ohio Cottage Food Law should

schedule time to meet with their regional ODA-FDA inspector

Kitchen incubators and other shared-use facilities can no longer allow

tenants or users to operate under one facility license for FDA

processing. Each producer must apply for their own license and be an

authorized processor.

Agricultural Districts

Ohio Revised Code Chapter 929

Definitions

Agricultural production - means commercial aquaculture, algaculture

meaning the farming of algae, apiculture, animal husbandry, or poultry

husbandry; the production for a commercial purpose of timber, field

crops, tobacco, fruits, vegetables, nursery stock, ornamental shrubs,

ornamental trees, flowers, or sod; the growth of timber for a

noncommercial purpose if the land on which the timber is grown is

contiguous to or part of a parcel of land under common ownership that

42

is otherwise devoted exclusively to agricultural use; or any combination

of such husbandry, production, or growth; and includes the processing,

drying, storage, and marketing of agricultural products when those

activities are conducted in conjunction with such husbandry, production,

or growth.

Agricultural production includes conservation practices,

provided that the tracts, lots, or parcels of land or

portions thereof that are used for conservation

practices comprise not more than twenty-five per cent

of tracts, lots, or parcels of land that are otherwise

devoted exclusively to agricultural use and for which an

application is filed under section 929.02 of the Revised

Code.

Withdrawal from an agricultural district - includes the explicit

removal of land from an agricultural district, conversion of land in an

agricultural district to use for purposes other than agricultural

production, and withdrawal of land from a land retirement or

conservation program to use for purposes other than agricultural

production. Withdrawal from an agricultural district does not include

land described in division (A)(4) of section 5713.30 of the Revised

Code.

Conservation practice - has the same meaning as in section 5713.30

of the Revised Code.

Application to become an Agricultural District

Any person who owns agricultural land may file an application with the

county auditor to place the land in an agricultural district for five years if,

during the three calendar years prior to the year in which that person

files the application, the land has been devoted exclusively to agricultural

production or devoted to and qualified for payments or other

compensation under a land retirement or conservation program under

an agreement with an agency of the federal government and if:

The land is composed of tracts, lots, or parcels that total not less than

ten acres; or

The activities conducted on the land produced an average yearly gross

income of at least twenty-five hundred dollars during that three-year

period or the owner has evidence of an anticipated gross income of that

amount from those activities. The owner shall submit with the application

proof that the owner's land meets the requirements established under

this division. If the county auditor determines that the application does

not meet the requirements of this section, the county auditor shall deny

the application and notify the applicant by certified mail, return receipt

requested, within thirty days of the filing of the application. The applicant

may appeal the denial of the application to the court of common pleas of

the county in which the application was filed within thirty days of the

receipt of the notice. If the county auditor determines that the application

meets the requirements of this section, the county auditor shall approve

the application and notify the applicant within thirty days of the filing of

the application. An application that is not denied shall be deemed to be

approved. The county auditor shall provide an applicant with a copy of an

approved application within thirty days of the filing of the application. An

application that is approved is effective upon the date of the filing of the

application.

Farm Markets

43

What types of foods may the farm market offer for sale and

still be exempt from the Retail Food Establishment (RFE)

license?

Retail food establishment means a premises or part of a premises

where food is stored, processed, prepared, manufactured, or otherwise

held or handled for retail sale. Except when expressly provided

otherwise, "retail food establishment" includes a mobile retail food

establishment, seasonal retail food establishment, and temporary retail

food establishment.

A farm market that only offers for sale the following types of food items

is exempt from the RFE license:

Fresh unprocessed fruits or vegetables;

Maple syrup, sorghum, or honey [properly labeled];

Properly labeled products of a cottage food production

operation;

Cider and other juices manufactured on site at the farm market

[properly labeled];

Eggs on the condition that the farm market operator is

selling eggs from his own flock of five hundred or fewer birds;

Poultry on the condition that the farm market operator offering

to sell the poultry annually slaughters one thousand or fewer

chickens of his own raising;

Non-amenable meats (rabbit, bison, etc.) on the condition that

the non-amenable meats that farm market operator is offering

to sell are raised by him; and

Commercially prepackaged food that is not potentially

hazardous, on the condition that the food is contained in

displays, the total space of which equals less than one hundred

cubic feet on the premises where the person conducts business

at the farm market.

Federal Food Production Standards

“The FDA Food Safety Modernization Act (FSMA), the most sweeping

reform of our food safety laws in more than 70 years, was signed into

law by President Obama on January 4, 2011. It aims to ensure the U.S.

food supply is safe by shifting the focus from responding to

contamination to preventing it.”

The Standards for the Growing, Harvesting, Packing, and Holding of

Produce for Human Consumption outlines science-based minimum

standards for the safe growing, harvesting, packing, and holding of

produce on farms.

Produce Safety

The FDA Food Safety Modernization Act (FSMA), signed into law by

President Obama on Jan. 4, 2011, enables FDA to better protect public

health by strengthening the food safety system. It enables FDA to focus

more on preventing food safety problems rather than relying primarily

on reacting to problems after they occur.

As a key element of this preventive approach, FDA was mandated under

FSMA to establish science-based, minimum standards for the safe

growing, harvesting, packing, and holding of produce on farms to

minimize contamination that could cause serious adverse health

consequences or death.

44

Key Requirements for the Produce Safety Final Ruling

Water quality criteria based on eliminating potential e.

coli contamination

Soil amendment rulings to minimize contact of

produce with manure or compost contaminants during

and after application

Sprout regulations on testing seeds, growing location,

and water sources to prevent contamination and food

borne illness

Measures to prevent contamination from wild or

domesticated animals

Worker Training and Health and Hygiene

requirements that will prevent possible contamination

Appropriate storage, maintenance and cleaning of

Equipment and Tools

See Table Below for information on EXEMPTIONS to any of

these rulings

http://www.fda.gov/downloads/Food/GuidanceRegulation/FSMA/UCM47

2499.pdf

45

Compliance Dates

Compliance dates for covered activities, except for those involving

sprouts, after the effective date of the final rule are:

Very small businesses, those with more than $25,000 but no more

than $250,000 in average annual produce sales during the previous

three year period : four years

Small businesses, those with more than $250,000 but no more than

$500,000 in average annual produce sales during the previous three

year period: three years

All other farms: two years

The compliance dates for certain aspects of the water quality

standards, and related testing and recordkeeping provisions, allow an

additional two years beyond each of these compliance dates for the

rest of the final rule

Compliance dates for modified requirements for farms eligible for a

qualified exemption are:

For labeling requirement (if applicable): January 1, 2020

For retention of records supporting eligibility for a qualified

exemption: Effective date of the final rule

For all other modified requirements:

o Very small businesses, four years after the effective date of the

final rule

o Small businesses, three years after the effective date of the final

rule

Labeling and Packaging

Packaging Definitions

Reduced oxygen packaging - the reduction of the amount of oxygen

in a package by removing oxygen; displacing oxygen and replacing it with

another gas or combination of gases; or otherwise controlling the

oxygen content to a level below that normally found in the surrounding

atmosphere, which is approximately twenty-one per cent at sea level and

includes

Vacuum packaging in which air is removed from a package of

food and the package is hermetically sealed so that a vacuum

remains inside the package

Modified atmosphere packaging in which the atmosphere of a

package of food is modified so that its composition is different from

air but the atmosphere may change over time due to the

permeability of the packaging material or the respiration of the food.

Modified atmosphere packaging includes: reduction in the

proportion of oxygen, total replacement of oxygen, or an increase in

the proportion of other gases such as carbon dioxide or nitrogen

Controlled atmosphere packaging in which the atmosphere of

a package of food is modified so that until the package is opened, its

composition is different from air, and continuous control of that

atmosphere is maintained, such as by using oxygen scavengers or a

combination of total replacement of oxygen, nonrespiring food, and

impermeable packaging material

Cook chill packaging in which cooked food is hot filled into

impermeable bags which have the air expelled and are then sealed

or crimped closed. The bagged food is rapidly chilled and

refrigerated at temperatures that inhibit the growth of

psychrotrophic pathogens

46

Sous vide packaging in which raw or partially cooked food is

place in a hermetically sealed, impermeable bag, cooked in the bag,

rapidly chilled, and refrigerated at temperatures that inhibit the

growth of psychrotrophic pathogens.

Labels

Labels may be submitted to the Ohio Department of Agriculture for

review and approval to the:

Ohio Department of Agriculture

Division of Food Safety

8995 E. Main Street

Reynoldsburg, Ohio 43068

Email: foodsafety@agri.ohio.gov

The Ohio Department of Agriculture staff can review the labels for

compliance before a product goes to market. If labels and packaging are

not in compliance with food safety regulations, inspectors can issue a

violation. Inspectors routinely visit farmers market to ensure label

compliance.

Resources to help with the labeling process

Ohio Department of Agriculture and the Farmers

Market Management Network have online training

materials available for labeling and packaging

requirements.

OSU Direct Marketing team and food system

practitioners provide extensive training on all aspects of

licensing, labeling and food safety changes.

Area kitchen incubators can also provide assistance at

many levels for home-based producers and agricultural

producers interested in going to the next level with

value-added products not under the Ohio Cottage Food

Law requirements.

BASIC REQUIRED FOOD LABELING COMPONENTS

Foods labeled in accordance with these standards are acceptable food

products that a retail food establishment or food service operation

licensed under Chapter 3717. of the Revised Code may offer for sale or

use in preparing and serving food.

A. Ingredient List – Ingredients shall be listed by common or usual

name in descending order of predominance by weight. Meaning, the

ingredient that weighs the most is listed first, followed by the next

heaviest ingredient, with the ingredient that weighs the least listed last.

Any ingredient that is composed of two or more ingredients (sub-

ingredients) shall be declared in the Ingredient List. Sub-ingredients shall

be designated in the Ingredient List by declaring the established common

or usual name of the ingredient, followed by a parenthetical listing of all

the ingredients contained therein in descending order of predominance.

Ref: CFR 21, Part 101.4

B. Statement of Identity – The Statement of Identity is the name of

the food. The name shall be the common or usual name of the food,

and shall accurately identify or describe the basic nature of the food or

its characterizing properties or ingredients. Ref: CFR 21, Part 101.3

C. Statement of Responsibility - Shall include the: Business Name,

Street Address, City, State, Zip Code

All information in the Statement of Responsibility shall be continuous. If

the business name is listed in the local telephone directory, the street

47

address may be omitted. If the business name is listed in the local

telephone directory, a Post Office Box may be used in place of the

street address. Telephone numbers, web-site addresses, and e-mail

addresses are permitted, but not required. This type of extra

information shall not be placed between the Ingredient List and the

Statement of Responsibility.

Ref: CFR 21, Part 101.5

D. Net Quantity of Contents – Ref: CFR 21, Part 101.105 Ref: FLPA,

Title 15 – Chapter 39, 1453(a)

The term “NET WEIGHT” - or an appropriate

abbreviation - shall be used when stating the Net

Quantity of Contents in terms of weight.

The Net Quantity of Contents shall be declared in both

the U.S. Customary System and the SI (metric system).

The second declaration shall be stated parenthetically.

The quantity of contents shall be placed on the principal

display panel. It shall be within the bottom 30 percent of

the area of the label panel in lines that are generally

parallel to the bottom of the package as it is designed to

be displayed.

Note: Labeling requirements for Net Quantity of

Contents is under the purview of the ODA Division of

Weights and Measures. Local enforcement is provided

by Weights and Measures programs administered by the

county Auditors’ throughout the State of Ohio.

E. Cottage Food Declaration – Food products that are

manufactured in compliance with Ohio’s Cottage Food Rules, must bear

the statement, “This product is home produced.” The statement

means that the food product was produced in a private home that is not

subject to inspection by a food regulatory authority. Ref: ORC 3715.023

F. Artwork – To draw consumer attention to the product, artwork is

frequently used on food labels. Artwork is permitted as long as it does

not misrepresent the product or renders required information difficult

to read. Artwork may not be placed between the Ingredient List and the

Statement of Responsibility. Ref: 21 CFR, Part 101.2

Cottage Food Rules

All cottage food products are subject to food sampling conducted by the

director of agriculture, or representative the director authorizes, to

determine if a food product is misbranded or adulterated. A component

of the food sampling conducted under this section may include the

performance of sample analyses

Cottage food products may not be packed using reduced oxygen

packaging.

48

Except for products obtained from a home bakery registered by the

Ohio department of agriculture, products from cottage food production

operations, and maple syrup, honey, or sorghum products produced as

provided in section 3715.021 of the Revised Code; food prepared in a

private home may not be used or offered for human consumption in a

food service operation or retail food establishment.

Definitions

"Adulterated" has the meaning stated in section 3715.59 of the Revised

Code.

CFR - Code of Federal Regulations

Cottage food production operation has the same meaning stated in

section 3715.01 of the Revised Code

Director means the director of the Ohio department of agriculture.

Misbranded has the meaning stated in section 3715.60 of the Revised

Code.

Allowable cottage food products

Non-potentially hazardous bakery products

Jams

Jellies

Candy, not including fresh fruit dipped, covered, or otherwise

incorporated with candy

Flavored honey which has been produced by a beekeeper

exempt under section 3715.021(A) of the Revised code

Fruit chutneys

Fruit butters

Granola, granola bars, granola bars dipped in candy, if fruit is

used in any of these products it must be commercially dried

Maple sugar produced by a maple syrup producer exempt under

section 3715.021(A) of the revised code

Popcorn, flavored popcorn, kettle corn, popcorn balls, caramel

corn, not including popping corn

Unfilled baked donuts

Waffle cones and waffle cones dipped in candy

Pizzelles

Dry cereal and nut snack mixes with seasonings

Roasted coffee, whole beans or ground

Dry baking mixes in a jar, including cookie mix in a jar;

Dry herbs and herb blends;

Dry soup mixes containing commercially dried vegetables, beans,

grains, and seasonings;

Dry seasoning blends

Dry tea blends.

A cottage food operation may not do any of the following

Process potentially hazardous foods

Process acidified and low acid canned food

Offer for sale adulterated or misbranded food

Refuse the taking of samples as authorized by rule 901:3-20-03

of the Administrative Code

Produce food items not expressly listed in paragraph (A) of rule

901:3-20-04 of the Administrative Code

Sell cottage food products outside the state of Ohio

Home Bakery License

A Home Bakery is defined in Chapter 911 of the Ohio Revised Code

to mean, "Any person who owns or operates a home bakery with only

49

one oven, in a stove of ordinary home kitchen design and located in a

home, used for baking of baked goods to be sold."

“Home” means the primary residence occupied by the residence's

owner, on the condition that the residence contains only one stove or

oven used for cooking, which may be a double oven, designed for

common residence usage and not for a commercial usage, and that the

stove or oven be operated in an ordinary kitchen within the residence.

Permitted Foods

Non-potentially hazardous bakery products

Cookies breads, brownies, cakes, fruit pies, etc

Potentially hazardous bakery products

cheese cakes, cream pies, custard pies, pumpkin pies, etc

Potentially hazardous foods are permitted but require refrigeration.

These foods require temperature control because it is in a form capable

of supporting the rapid and progressive growth of infectious or toxigenic

microorganisms.

Distribution

Properly labeled Home Bakery products may be sold from your Home

Bakery. Commercially produced foods may be sold through grocery

stores, convenience stores, farm markets, farmer's markets, and other

retail outlets.

Retail outlets are subject to all applicable rules and regulations

administered by local health departments, local zoning, and other

agencies.

Home Bakery products may also be served as a food item offered by

restaurants.

Home Bakeries may distribute their products outside of the state of

Ohio.

Accessing Information

Ohio Department of Agriculture web portal for licenses

http://www.agri.ohio.gov/apps/odalicensing/odalicensing.aspx

Food Processing Establishments –Current draft

http://www.ohioagriculture.gov/public_docs/ProposedRules/201

5.10.16%20-%20AMR%20-%20Food%20Processing%20Establish

ment%20Fees.pdf

Regulatory Intent - Ohio Revised Code 3715.041 requires that

individuals who operate a food processing establishment

register with the Ohio Department of Agriculture

(Department). The rule outlines the cost of the registration

which is based on the size of the establishment.

Common Sense Initiative – Business Impact Analysis

http://www.agri.ohio.gov/public_docs/ProposedRules/2015.10.19

%20-%20BIA%20-%20Food%20Processing%20Establishments.pdf

Standards for the Growing, Harvesting, Packing and

Holding of Produce for Human Consumption --- Final

Rule

http://www.fda.gov/Food/GuidanceRegulation/FSMA/uc

m334114.htm

50

A. Aggregation and Distribution Food Hub

Most food hubs are designed to fill the gaps between wholesale demand

for local food and small and mid-size farms. To be financially viable, these

new hub models need to offer a different set of services and products to

compete with regional and national produce distributors. They assist

farmers entering these wholesale market channels to address their

challenges of scaling up production, quality assurances and licensing,

while maintaining and promoting the inherent values of local and

regional foods. Hubs need to meet the volume demand, at the same time

meet the desires of increasingly discriminating customers for local or

organic produce and other locally sourced items in dairy, meat, egg and

farm value-added products.

As more produce food hubs open across the U.S. they need to be

responsive to customers and wholesale buyer’s desire for transparency,

taste quality, taste, FSMA compliances and marketing collateral.

Although specialty crop producers have been in the lead to organize and

own food hub, many of these new generation produce distribution

systems have struggled to create financial viability. Many have started

undercapitalized and have experienced a steep learning curve to master

their operational logistics and financial management. In turn, they are

also in competition with conventional produce distributors and cannot

undercut their pricing structures.

With the growing trend for local food from institutional buyer and the

expediential growth of farmers markets, specialty crop farmers have

been encouraged to the food hub model allowed farmers to band

together to reinvent local aggregation and distribution hubs to meet the

perceived consumer interest. According to Building Successful Food

Hubs: A Business Planning Guide for Aggregating and Processing Local Food

in Illinois, “agricultural producers formed hubs to overcome the following

obstacles:

Quantity, consistency, and variety of produce grown are often

insufficient to motivate a buyer to purchase from a single farm;

Investments in the certifications, cooling, and storage

infrastructure, liability insurance, and safety protocols needed

for selling wholesale are extensive; and

Many growers do not have the time, interest, or skill set to

successfully manage a wholesale sales and marketing strategy.”

All of these issues were reflected in the recent Portage County

producer surveys. By mid-March 2017, 35 producers had completed the

food hub surveys and another dozen farmers not completing surveys

had attended meetings and focus groups. Although the surveys

confirmed interest in moving forward on a food hub project, there was

not strong evidence that agricultural producers were ready to

commitment to a producer owned hub models.

First and foremost before moving forward on any of the hub models,

funding resources and partner coordination need to be utilized for

agricultural producer planning. The following recommendations can be

implemented in stages over the next 12 to 18 months.

4. Business Analysis and Model Recommendations

51

Recommendation: Partner with Portage County Extension Agent,

Robin Christensen, OSU Direct Marketing staff and ACEnet to

schedule Introduction to Market Ready Workshop and day long

Wholesale Ready training.

Recommendation: Partner with Hattie Larlham Food Hub and Lake

to River Coop to present their hub models: governance, operations,

supply chain logistics and financial management.

Recommendation: Host a half-day workshop with market partners

to address their licensing, FSMA compliances, procurement

procedures and quality assurance policies.

The core services offered by a food hub differ by business model. A

packing house typically will provide a complete range of services that

cause a product to move from the field to the customer. Some packing

houses may even offer harvesting services. Aggregation facilities and

web-based aggregators do not handle the product to the same degree,

but common to all models is aggregation, sales and marketing, and

distribution (although this may be outsourced).

B. On-line Market Model

Many food hubs get started by offering hybridized Community

Supported Agriculture (CSA) subscriptions. CSA shares draw local

customer investment and aggregation can also be accomplished without

a central facility. Although if the model offers a shares/bags that

aggregates produce from multiple farms a space for packing and

distribution is still needed. This is space that could be provided by an

agency or charitable partner free of charge.

An online marketplaces utilize technology solutions that benefit the

producers, but producers need to be willing to use the digital interface

on a daily to weekly basis. These models can be producer driven where a

single grower or a group of growers post their available products in a

given week and buyers can place direct orders, or can be run by a social

enterprise or for-profit entrepreneur outside the grower community.

Online models are competitively positioned to focus on customer

service. This model can allow the customer to pick items from a number

of different product line, fresh and value-added, allowing for weekly

choice from a number of different producers. It also creates an up to

date solution for producers and processors to only offer what is

available or in season during that week.

Many of these models combine both direct customers sales to serve

smaller wholesale buyers such as restaurants and food carts. A central

aggregation site or larger producer can either regularly drop off a

delivery to a remote collection point managed by volunteers or partners

or provide direct delivery services. Creating an online marketplace could

be a financial and operational first step toward creating a brick-and-

mortar Aggregation/Distribution Food Hub or Market Model.

Recommendation: Coordinate technical assistance support from

Melissa Miller at Lake to River Cooperative or other resource

partners to review on-line market components.

Recommendation: Identify partners willing to provide a site for

aggregation and customer pick-up.

Recommendation: Secure phase 1 funding to create

implementation plan for on-line marketplace.

52

C. Store Market Model The market model food hub has emerged in the past 5 to 7 years as

another viable opportunity for agricultural producers to partners with a

committed local customer base. The market models discussed

previously: Local Roots and the Wild Ramp have demonstrated success

because of an extraordinary commitment from volunteers who serve on

the governance boards, provide education and events activities and

volunteer labor hours to the day to day retail operations of the market.

The Wild Ramp in Huntington, West Virginia harnesses 500 hours a

month in volunteer labor to augment 4 paid staff positions.

These models often were only able to start because of affordable or no

cost space to operate from. In Wooster the Wayne County

Commissioners made an empty storefront available to the cooperative

during the start-up phase. Local Roots Wooster now operates their hub

and processing kitchen from two storefronts that serve as leverage for

public and private investment.

In Huntington the Wild Ramp started in a low-cost storefront in

downtown at Heritage Station. Leasehold improvements, building

renovations by volunteers and equipment donations and a kickstarter

campaign allowed the start-ups Board and volunteers to launch the

model on a shoe-string budget.

After two years of success in 2014, The Wild Ramp moved to their

current location in Old Central City, located in a low-income

neighborhood in the west end of Huntington. The Wild Ramp was

chosen as the beneficiary of Huntington’s “River to Rail” initiative. The

initiative secured them a new location in the town’s historic Central

City Market building with subsidized rent and $43,000 per year for five

years from the City of Huntington and the West Virginia Department of

53

Agriculture. The current facility provides nearly three times the space

and the ability to have a small commercial kitchen that generates tenant

income and food demo capacity.

Recommendation: Research partnerships and potential storefronts

in Ravenna to launch a prototype market model.

Recommendation: Identify agricultural producers, regional

processors and artisans interested in forming a planning

committee to start a producer-owned market.

Recommendation: Secure funding through USDA grant programs,

Ohio Finance Fund programs and customer capital campaign to

hire a project manager and consultants to devise business plan

and implementation model.

D. Distribution Partnerships

Although Portage County might not be ready to invest in a “bricks and

mortar” distribution food hub, on-going investment in distribution

project management could still immediately allow specialty crop and

other agricultural producers connect with current regional hubs, social

enterprises or private aggregators. Some producers are already selling

through the Lake to River Coop, Fresh Fork and Hattie Larlham Food

Hub. Tom Lane of Innovation Foods began meeting with Portage County

producers as an outcome of the meetings. It is likely that Innovation

Foods will begin sourcing from 4 to 6 farmers starting in the 2017. Mr.

Lane is also determining whether to add aggregation and distribution

services to his existing business model of prepared foods. He is actively

reviewing potential properties in the county for his expansion. Assisting

private entrepreneurs with site selection and governmental resources

could foster future co-location of a multi-stakeholder cooperative hub

model.

If an online and/or market model are implemented in the 1 to 2 years, it

could also be gradually built onto with coordinated delivery and

distribution services. It could begin simply by renting a truck daily and

using a cell phone to communicate with the paid staff driver.

As more producers go to scale a can meet FSMA compliances and

quality assurance standards, a market model site could with a larger

specialty manufacturer like Innovation Foods or regional licensed

distributor like Sirna and Sons.

A Portage County model may allow producers and processors to

generate a large amount of inventory, steady sales, and seasonal

extension products. This could also entail making arrangements with

food hub members, agencies or other nonprofit business entities for

low-cost storage and cooling facilities or transportation equipment.

Transportation and delivery expenses are frequently the main costs for

operating a food hub. Through partnerships that offset the purchasing or

leasing trucks, paying commercial drivers and the distribution logistics of

pick-ups from producers and deliveries to customers to regional

distributors—can provide a “win-win” scenario for each party. The

market model can recruit, prepare and select producers/processors

ready to go to scale. They can also identify for the regional distributor

new market partners and possible niche product lines not currently

served by the distributor.

54

Recommendation: Assist private entrepreneurs to access support

and governmental programs to develop private enterprises that

source from agricultural producers in Portage County.

Recommendation: Coordinate GAP certified agricultural producers

to connect with wholesale buyers and regional distributors with

the assistance of OSU Cooperative Extension Services.

E. Benchmarking Best Practices

As Food Hubs models become more established it is critical that start-ups or

expansions attract diverse sets of investment. Champions and owners need to

become comfortable speaking about their models in the lexicon of investment.

And be thoroughly conversant in how their business plan model stacks up with

national benchmarking.

Although benchmarking for financial success is at a relatively early stage, some

industry standards are emerging and should be considered in each of the

models.

With regard to produce hubs focused on aggregation Counting Values: Food

Hub Financial Benchmarking Study does the best review of financial metrics.

Food hub surveys were sent to more than 100 hubs in spring 2014. From these

invitations, full data submissions were received from 48 hubs. A review of 48

hubs that submitted data in 2014 focused on financial data from fiscal year 2013.

The data included Income Statements, Balance Sheets, Cash Flow Analysis,

Customer Channels, Governance Model and Operations.

7 http://www.ngfn.org/resources/ngfn-

database/knowledge/Food%20Hub%20Benchmarking%20Study.pdf

The largest challenges which reflect the Portage County’s obstacles include:

adequate and consistent supply, access to investment, access to expansion farm

labor and dependence on start-up subsidies.

Legal Status

According to the study many food hubs organizes as 501 (c) 3 operations. The

not for profit models legal formation comprised one third of the study

respondents. 7

Not for Profit Formation 38%

Ownership of Product 72%

Sales from Hub Processing 1%

Membership Fees Paid

Vendors 28%

Customer 15%

Customers

The study demonstrated that 39% of products were sold through customer

sales (shares, CSA bags/boxes) as direct market channels. Wholesale grocery

channels accounted for 28% of revenues. And restaurant foodservice buyers

accounted for 15%. Institutional buyers such as schools and healthcare facilities

accounted for 2.8%. In many ways demonstrating the challenges of Farm to

School initiatives. And Distributors accounted for almost 14%, illustrating the

growing opportunity for partnerships. 8

8 http://www.ngfn.org/resources/ngfn-

database/knowledge/Food%20Hub%20Benchmarking%20Study.pdf

55

Grocery & Small Retail 27.6%

Restaurants/caterers 14.9%

Other Distributors 13.6%

Direct Marketing to Customers 38.2%

Institutional Buyers 2.8%

Food Processors 1.9%

Scope of Operations

The study respondents were a mix of established and start-up food hubs.

Age of Hub 7 years

Total Revenue $2.83 million

Product Sales $2.53 million

Enterprise Income can include delivery charges,

brokerage & membership fees & equipment rentals

$108,241.00

Annual Operating Days 276

Facility Specs 1.9%

Square footage 6,936 sq. ft.

Mileage Driven 40,315

Number of Loading Docks 2

9 http://www.ngfn.org/resources/ngfn-

database/knowledge/Food%20Hub%20Benchmarking%20Study.pdf

Financial Viability

Food Hub profit or net margin is probably the most important finding in the

study. Due to investment in infrastructure and equipment, the typical food hub’s

depreciation expense amounts to 2 percent of sales. Depreciation is an

unavoidable overhead cost as assets wear out or become obsolete, regardless

of the amount of sales generated. While things may wear out faster with more

use, most depreciation, or decline in value, is related to aging. The typical food

hub, then, runs at a break-even level before depreciation, which means it can

usually pay its operational expenses.

Even hubs operating at break even or minimal profitability struggle to manage

expansion or even re-investment. There is often no room for debt service and

new investment from members or other community stakeholders. 9

Sales 100% 100%

(Less) Cost of Goods Sold 71.95% (69.41%

(Less) Cost of Sales 13.56% 14.51%

=Gross Margin 14.49% 16.09%

(Less) Overhead costs 16.28% 12.32%

= Net Operating Margin aka

Profit

-1.79% 3.76%

(Less) Income Taxes 0.52% 0.66%

+ Grants/Contributions 6.45% 0.07%

=Overall Excess 4.13% 3.18% 4.13% 3.18%

56

= Net Operating Margin aka Profit -1.79% 3.76% (Less) Income Taxes 0.52%

0.66% + Grants/Contributions 6.45% 0.07% =Overall Excess 4.13% 3.18%.

The following charts illustrate these challenges from the 2013 benchmarking

study.10

Averages: Income Statement Costs and Expenses

10http://www.ngfn.org/resources/ngfn-

database/knowledge/Food%20Hub%20Benchmarking%20Study.pdf

Income Statement Benchmarks by Sales Volume

Income Statement Benchmarks by Seasonality

57

Many of the food hubs respondent to the 2013 study were not

profitable. Many of these hub were incorporating interim strategies of

volunteer labor, partnerships and grant subsidies to remain operational.

Most have remained solvent by obtaining outside funds, whether in the

form of donations, grants, foundation funding, or by being subsidized by a

larger agency or non-profit with overlapping social missions.

While a few hubs plan for outside funding to be a regular part of their

operations for the foreseeable future, most believe that grants and other

sources of short-term funding were necessary for launch and phase one

of operations. The vast majority of food hubs aspired to cover

operational costs internally by increasing and diversifying revenues.

With regard to rural or small city food hub development it is pertinent

to note that these hubs were much more dependent on grant subsidies

than those in metro areas. According to the September 2013 FINDINGS

OF THE 2013 NATIONAL FOOD HUB SURVEY: “There was no statistically

significant relationship between the type of county in which a food hub

was located and the hub’s reported reliance on grant funding to carry

out operations. However, the proportion of a region’s food hubs that

reported being “highly dependent” on grant funding was much higher

for the regions that included nine food hubs reporting a location in

nonmetropolitan counties and not adjacent to a metro area (33%) than

for the average region (17%).

This suggests that proximity to a highly populated area may be

important for the financial success of food hubs.”11 If a hub were located

in Portage County, its market channels would most likely need to serve

11 http://foodsystems.msu.edu/uploads/files/2013-food-hub-survey.pdf

northeast Ohio metro centers such as Cleveland, Akron and Canton to

be financially viable.

58

F. Ownership & Leveraged Investment F. Ownership & Leveraged Investment

For any of the food hubs models to emerge in Portage County, a clear ownership structure will need to evolve. Typical start-up investment can come

from a variety of formal and informal sources. Typically equity, start-up capital and term debt can come from the beneficiary investors through member

fees, donation of infrastructure and equipment, in-kind labor, crowdsourcing investments and debt from low-income loan programs, commercial banks or

private lenders. To start an aggregation and distribution food hub model would take the largest combination of start-up investment. But the chart below

could be a guidepost for any of the suggested models described earlier to identify the spectrum of capital for either a start-up or expansive phase.

Foundations

Government Grants

Impact & Program

Related Investment

CDFI & RLF

Commercial Lenders

Venture Capital

Angel Investors &

Slow Money Loans

Crowdsourcing

Membership Fees

Friends & Family

59

G. Start-up Business Model Investment

Each of the models can be started with modest entrepreneurial, coop or social enterprise investment. But it is essential to understand the phases of

development and to adequately forecast the market channel revenues, sources and uses budget and initial “worst case” cash/flow analysis. The vast

majority of food hubs have taken 5 years to reach break-even. That scenario requires significant subsidies along the past to viability which can mean

significant fundraising, grant writing and harnessing of considerable volunteer labor. Multi-stakeholder cooperatives can have the advantage of diversifying

equity and attracting impact investors. Healthcare institutions are emerging as equity investors for hubs in their service area that meet healthy food

access needs low-income neighborhoods and food deserts. The chart below suggest some possible strategies for phase one financing.

Line of Credit Working capital Interest only & balloon

payment Short-term liability

One year or less/can

have renewals

Short-term Loan

Construction/equipment/wor

king capital Balloon payment

Short-term liability Short (1 year) or

project lifespan

Credit Card Financing

Operational expenses Monthly payment

Short-term liability 1 month to 1 year

Term Debt Purchase of long-term

assets

Monthly principle &

interest payment Long-term liability

3 to 7 year term

Real estate could have

longer term mortgage

CDFI/RLF Debt Purchase short & long tern

assets

Monthly payment of

principle, can sometimes

defer payment or defer

interest over specified

term

Long-term liability

Typically 3 to 5 year

term

Capital Lease

Purchase short to mid-

term equipment or

property

Monthly payment

Long-term liability 3 to 7 year term

Operating Lease Purchase assets and/or

maintenance contracts Monthly payment Operating expense Useable life of asset

60

H. Start-up & Expansion Stages of Development

All food hubs will have different stage of development as part of their lifecycle. The chart below identifies a number of the opportunities and obstacles

during each of these development stages.

Viable Business Plan Cash Liquidity Scale & Diversify

Revenue

New Market

Analysis

On-going Market

Analysis

Market Channels Defined

Customer & Revenue

Secured

Diversify Channels &

Customer Satisfaction

New Products &

Geographic Reach

On-going Product

Diversification &

Manage Geographic

Channels

Ownership Structure

Designed

Governance Policies Manage Investment &

Decision-making

Diversify

Leadership &

Ownership

Diversify Leadership &

Ownership

Management Structure

Defined

Appropriate

Management

Strengthen

Professional

Management

Expand

Management Staff

Innovate Management

to Keep Pace

Funding & Investment Market Entry

Demonstrate

Competitive Position

for Growth Funding

Manage

Competitive

Market Position

Manage Competitive

Market Position

Financial Management

Financial Systems

Advance Financial

Mgt. Capabilities

Advance Financial

Mgt. Capabilities

Continuous

Improvement of

Financial Mgt.

61

I. Balance Sheet and Income Statements

Sample Food Hub Balance Sheet

Chart of Accounts

ASSETS

Current Assets

Cash on Hand

Cash in Checking/Savings

Accounts Receivable

Inventory (should match the sales/COGS categories)

Bakery

Beverages

Dairy

Prepared Foods (ready to eat)

Value-Added/Grocery

Meat and Poultry

Produce

Packing & packaging Inventory

Inventory Change

Prepaid (Maintenance Agreements

Other Current Assets

Total Current Assets

Intermediate Assets

Machinery & Equipment

Fixtures

Vehicles

Office Equipment/Furnishings

Other Intermediate Assets

Accumulated Depreciation

Total Intermediate Assets

Long-Term (aka Fixed) Assets

Buildings

Leasehold Improvements

Greenhouses

Real Estate/Land

Land Improvements

Other Fixed Assets

Accumulated Depreciation

Total Fixed Assets

Total Assets

62

Current Liabilities

Accounts Payable

Payroll Taxes Payable

Accrued Expenses

Income Taxes Payable

Short-term Liabilities (under 1 year)

Line of Credit

Credit Cards

Slow Money Loans under 1 year

Intermediate Loans (under 10 years)

Term Debt

Deferred Loans

Long Term Loans (over 10 years)

Long-term Loans

Property Mortgage

Total Liabilities

Equity

Owners’ Equity -- Membership

Owners’ Equity -- Deferred Patronage

Retained Earnings

Total Equity

Total Liabilities & Equity

INCOME STATEMENT

Product Sales

Bakery

Beverages

Dairy

Prepared Foods (ready to eat)

Value-Added/Grocery

Meat and Poultry

Produce

Fruit

Vegetables

Greens

Other

Total Product Sales

Processing Income

Miscellaneous Income

Delivery Fees/Trucking Income

Brokering Fees

Membership Fees

Total Business Receipts

Coupons/Incentives

63

Returns

Net Sales (Gross Less Discounts/Returns)

Variable Costs (aka Cost of Goods Sold/Cost of

Production)

Purchases for Resale/Cost of Production

Bakery

Beverages

Dairy

Prepared Foods (ready to eat)

Value-Added/Grocery

Meat and Poultry

Produce

Fruit

Vegetables

Greens

Other

Shrink

Donated Food

Processing Costs

Labor Costs (Production Labor)

Wages/Salaries/Guaranteed Payments

Contract employees

Health insurance

Payroll Taxes

Workman's Compensation

Total Labor Costs

Packaging

Credit card processing/Merchant account fees

Other Misc. Selling Costs

Delivery Costs

Delivery labor and related costs

Gas/Fuel/Oil

Parking/Tolls

Total Variable Costs

Gross Margin

Overhead / Administration Costs

Depreciation

Insurance

Fire/Liability

Auto

Interest

Labor: Admin

Wages/Salaries/Guaranteed Payments

64

Contract Employees

Health insurance

Payroll Taxes

Workman's Compensation

Marketing/Advertising/Promotion

Office Expense

Professional Fees

Property Taxes

Rent or Lease

Facility

Equipment/Vehicles

Repairs

Facility

Equipment/Vehicles

Trash & Maintenance

Utilities

Electricity

Heat

Phone/Internet

Other Expenses

Licenses/Permits/Inspections

Bank Fees

Dues/Subscriptions

Total Overhead Costs

Net Operating Margin

Other Income

Grants

Contributions

Other Enterprise Income

Other Expenses

Program Support Expense

Business Income Taxes

Other Enterprise Expenses

Net Margin

65

A. Ownership Structure

Though hubs share many features, they operate using a wide diversity of

business models. Some sell exclusively wholesale to businesses, others

only directly to consumers (retail), yet others are becoming hybrid

models. Some operate more as brokers or logistics systems, others have

significant infrastructure, some operate packing lines, while others

require producers to pack and grade their own product.

Many non-profit models are significantly “producer-led.” But producer

models, especially ones owned and governed by producers need

extensive technical assistance and start-up subsidies and can take many

years to reach break-even.

One distinguishing characteristic of a food hub compared with a

conventional produce wholesaler is the value proposition. By design,

many food hubs have a mission to strengthen local producers’ capacity

and increase their access to markets. In turn, this means the food hub

needs to be rooted in the needs of the agricultural assets and identified

needs of the producers.

From the response received through focus groups and surveys, both

Portage County producers and buyers are concerned with supporting

“Good Food Values” for underserved communities. Those interests

range from concerns for public health and social justice to demand for

local economic and farmer friendly impacts.

The ownership and governance of hubs is typically driven by the goals

and values of its formation. A producer-owned and operated hub will

focus on the viability and expected profitability for small and mid-size

farmers. Other hubs might be operated by agencies or non-profits that

have a social mission. For instance an agency serving developmentally

disabled individuals may focus on job creation and skill building for their

customer base. A low-income neighborhood organization might focus on

healthy food access for food insecure neighborhoods. In many ways the

goals and constituencies served by the food hub ultimately guides the

legal ownership and preferred governance policies.

The challenge at this stage in Portage County plan resides in a lack of a

committed agency, association or organization prepared to step forward

to take on the project or facility ownership. This section will outline a

number of possible ownership structures that could work for a variety

of food hub models: online market, retail store model and produce

aggregation and distribution facility.

Exposing producers and partners to educational resources through

webinars and workshops should be included in the steering committees’

follow-up activities. Abundant training resources are available in Ohio to

review the advantages of each governance structure. Workshops that

assemble of diversity of stakeholders can hopefully move the next level

of ownership decision-making forward.

5. Business Structures & Recommendations

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A. Producer Cooperatives

Many established food hub models were formed by agricultural

producers as agricultural cooperatives. Farmers have histories,

sometimes both good and bad, operating in coops. This governance

structure can be off-putting for some long-term farmers because of past

dissatisfaction in larger coops.

The strength of the cooperative structure is grounded in the “buy-in”

producers have in operating the cooperatively owned business. Coops

elect their own board of directors, hiring and overseeing management.

All decisions are made democratically based on their By-laws and other

operational procedures. Profit shares are determined by the governance

rules and are typically distributed annually based on membership usage.

Producer owned and democratically controlled

organizations that serve their members through cooperative

marketing, support, and/or purchasing

Allow members who produce the same or similar products

to cooperatively market and sell their products

Can be made up of multiple producers working in different

types

of enterprises (livestock, produce, etc.) but still market

collectively

Owned and democratically controlled by “producer

owners”

Conventional wisdom in food hub development believes that producer

cooperatives form the most resiliency and long-term financial viability.

Producers are invested in making the business model work through

their mutual self-interest. In most case, producers are investing in the

capital needed to launch and expand the hub. When producers are

committed, seasonal supply and pricing agreements are more likely to

stabilize the hub’s performance and meet customer demand.

On the down side, cooperatives can sometimes get mired down in

democratic decision-making and a shared willingness to reinvest in the

food hub’s on-going capital needs. Profit-sharing and reinvestment can be

a delicate balance. Producer-run food hubs need professional

management to operate successfully to balance the collective business

model and still provide a return on investment to the agricultural

producers.

Although the recent round of surveys and the previous round of 10

tabulated from the November 2012 study does not definitively

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demonstrate producer willingness to from a cooperatively owned hub,

the study recommends holding additional producer gatherings to outline

the producer cooperative model.

In Ohio, Hannah Scott is the Manager of the Ohio Cooperative

Development Center at the Ohio State University South Centers and

can assist with the formation of producer cooperatives. Ms. Scott is also

the convener of the Ohio and West Virginia Food Hub Network and has

extensive experience working with start-up and existing hubs in both

states.

The Ohio Cooperative Development Center (OCDC) at The Ohio

State University South Centers is leading an effort to cooperatively

develop local and regional food systems by working with new and

emerging food hubs and incubator training farms. The two-state Ohio

and West Virginia Food Hub Network brings together food hub

stakeholders and technical assistance providers in a peer exchange

network to experience educational programming and peer learning.

The network was developed in 2014 out of the Non Profit Local Foods

Network, Inc., which was formed in

2010. On-going connections to the

network could provide linkages to other

hubs in Northeast Ohio and acquaint

Portage County stakeholders to resources

and networking opportunities with

incubator training farms that may be

interested in NE Ohio food hub formation.

As stated on their website: “Great River

Organics (GRO), a farmer-owned, non-

profit cooperative comprised of growers

committed to expanding the footprint of local, certified organic

products in the central Ohio marketplace. We’ve built a network of

member farms who share a common set of values based on the craft of

organic farming, a sense of place unique to Ohio, and the

superior taste and quality of the products produced here.”

The Lake to River Coop currently purchases from some Portage

County agricultural producers, in the short-term a clear referral system

could encourage producers to ramp up production with greater market

access through this coop and the Hattie Larlham Food Hub in Summit

County.

Recommendation: Contact Hannah Scott to schedule a workshop on

cooperative models in the spring of 2017.

Recommendation: Contact Michael Jones of Great River Organics

for a possible tour of their cooperative and hub in Columbus,

Ohio.

Recommendation: Contact Melissa Miller of the Lake to River

Cooperative to determine collaborative opportunities, tour their

new retail operation and receive training on their online market

model.

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B. Worker Owned Cooperatives

In some cases food hubs can also be formed as worker-owned

cooperatives. They operate similarly to producer coops, focusing on the

following governance principles:

Voluntary and Open Membership

Cooperatives are voluntary organizations, open to all persons able to

use their services and willing to accept the responsibilities of

membership, without gender, social, racial, political or religious

discrimination.

Democratic Member Control

Cooperatives are democratic organizations controlled by their

members, who actively participate in setting their policies and making

decisions. Men and women serving as elected representatives are

accountable to the membership. In primary cooperatives members have

equal voting rights (one member, one vote) and cooperatives at other

levels are also organized in a democratic manner.

Member Economic Participation

Members contribute equitably to, and democratically control, the capital

of their cooperative. At least part of that capital is usually the common

property of the cooperative. Members usually receive limited

compensation, if any, on capital subscribed as a condition of

membership. Members allocate surpluses for any or all of the following

purposes: developing their cooperative, possibly by setting up reserves,

part of which at least would be indivisible; benefiting members in

proportion to their transactions with the cooperative; and supporting

other activities approved by the membership.

Autonomy and Independence

Cooperatives are autonomous, self-help organizations controlled by

their members. If they enter to agreements with other organizations,

including governments, or raise capital from external sources, they do

so on terms that ensure democratic control by their members and

maintain their cooperative autonomy.

Education, Training and Information

Cooperatives provide education and training for their members, elected

representatives, managers, and employees so they can contribute

effectively to the development of their cooperatives. They inform the

general public – particularly young people and opinion leaders – about

the nature and benefits of cooperation.

Cooperation among Cooperatives

Cooperatives serve their members most effectively and strengthen the

cooperative movement by working together through local, national,

regional and international structures.

Concern for Community

Cooperatives work for the sustainable development of their

communities through policies approved by their members.

A unique model in southwestern

Ohio is Our Harvest Food Hub,

a union worker-owned hub in

Cincinnati. Our Harvest

Cooperative, was formed in

2012 by the Cincinnati Union

Coop Initiative. The Cincinnati

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Union Coop Initiative, began in 2009 as a collaboration between Spain’s

Mondragon Worker-Owned Cooperatives and the United Steelworkers.

Our Harvest was launched first as a food hub to ensure healthy food

access to under-served populations. Rapidly it expanded to include

farming and farmer training as well. According to Our Harvest’s Food

Hub Manager Kristin Gangwer, the organization’s primary goals are to

produce sustainably-grown local produce, build a food hub to strengthen

the local food system, increase access to healthy food, create family-

sustaining jobs in Greater Cincinnati, and to sustain these efforts by

training new farmers.

Recommendation: Contact Our Harvest to learn more about their

food hub model regarding social investment and workforce

partnerships.

C. Multi-stakeholder Cooperatives

In Ohio, multi-stakeholder coops tend to outline their stakeholder

groups in their bylaws. So looking at their legal entity filings do not

always identify them as a multi-stakeholders cooperative. Lake to River

Cooperative may formally outline multiple stakeholder groups with

different rights and responsibilities.

Generally multiple stakeholder coops abide by similar cooperative

principles and follow these guidelines:

Businesses that are owned and democratically controlled by

multiple stakeholders

Multiple stakeholders can include workers, consumers,

producers, and/or community members

Represents more than one typical ownership group (producers,

consumers, workers)

Typically have a more diverse membership base rather than

forming around a single class of members.

Long standing example: Weaver Street Market, North Carolina

http://www.weaverstreetmarket.coop/behind-the-scenes/we-

own-it/

Local Roots in Wooster includes producer and consumer members,

although it doesn’t appear that they treat them as two separate groups

of members. Article Three of Membership Section 1. Qualifications of

the Wooster Local Foods Cooperative, Inc. as “Any person, family, firm,

partnership, LLC, corporation or association, who or which agrees to

sign and abide by a membership agreement with the Association, and

meets such other conditions as may be prescribed by the board of

directors, may become a member of the Association. Membership

becomes effective upon signing the membership agreement provided

that all membership requirements are met.”

Recommendation: Contact Board members of Local Roots for a

review of their formation with a focus on multiple stakeholder

interests.

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The other essential local resource is the Ohio Employee Ownership

Center at Kent State University. They have worked with numerous

local food system organizations to assist with the formation of

cooperatives. Staff of the OEOC can assist with market analysis,

business plans, financing and governance formation. In the region they

have assisted in the creation and operations of the Lake to River

Cooperative, as well as the ongoing planning and creation of an

additional 5 regional “food hubs” around the state of Ohio.

Recommendation: Coordinate with steering committee member a

Multi-stakeholder Cooperative workshop to gauge cooperative

formation interest between Portage County producers, processors,

consumers and wholesale buyers.

D. Social Enterprise

Within local food system development, more economic and social non-

profit practitioners are identifying their models as social enterprises.

Social enterprises are defined as revenue-generating businesses

grounded in social impacts and community based values. Whether

operated by a non-profit organization or by a for-profit company, a

social enterprise has two goals: to achieve social, cultural, community

economic and/or environmental outcomes; and, to generate revenue to

ensure long-term viability to fulfill the social mission.

“On the surface, many social enterprises look, feel, and even operate like

traditional businesses. But looking more deeply, one discovers the

defining characteristics of the social enterprise: mission is at the center

of business, with income generation playing an important supporting

role.” (from The Centre for Community Enterprise)

A number of social enterprises are developed to serve specific

constituencies or to generate revenue for the overall mission of a non-

profit organization. The common attributes of social enterprises include:

An organization that applies commercial strategies to maximize

improvements in human and environmental well-being. This may

include maximizing social impact alongside profits for external

shareholders

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A revenue generating business with primarily social objectives

whose surpluses are reinvested for that purpose in the business or

in the community, rather than being driven by the need to deliver

profit to shareholders and owners

Example: Hot Chicken Takeover – Columbus, OH

http://hotchickentakeover.com/our-story/our-mission/

The social enterprise description can contain many of the previous legal

formations, and can include for-profit models that identify as a benefit

corporation under some state law designations. What differentiates the

for-profit models are their adherence to a core of social as a vehicle for

profit. In Northeast Ohio, the Hattie Larlham Food Hub is a regional

example of a social enterprise food hub. As described in section 3,

E. Private LLC

With the growing popularity of food hubs, more privately held hubs and

processing facilities are springing up. Many of these models are started

by an entrepreneur or group of investors identifying the growing

demand by natural and conventional grocery and institutional buyers for

local food. Many of the start-up entrepreneurs already have experience

in in agriculture or grocery supply chain management. Most of these

models have been centered in urban centers with greater access to

market and with established market partnerships by the lead

entrepreneur. The LLC structure can allow for a group of entrepreneurs

that includes producers and logistics managers to attract capital and

cover risk with the following attributes:

Business structure that combines the pass through taxation of a

partnership or sole proprietorship with the limited liability of a

corporation

Primary function is to generate profit for stakeholders

Limited Liability Companies are partnerships in which partners

are personally shielded from company obligations; shareholders

do not

risk losing personal assets in this structure but certain

restrictions are placed on the selling/trading of shares.

This model can be attractive to farmers and food processors not ready

to commit to the formation of a cooperative. Professional management

and partial ownership in the legal entity can provide additional

assurances to farmers that their risk to increase production will have

legitimate and consistent wholesale channels.

Tom Lane of Innovation Foods has attended all of the meetings and

focus groups as a for-profit, interested party looking at future

opportunities to incorporate food hub practices into his business model.

F. Other Facility and Ownership Models

Although customer demand for local food is expanding, we believe that

a critical obstacle facing both rural and urban agricultural producers is

the inadequate regional infrastructure for processing, storage,

aggregation and distribution. Energetic entrepreneurs on both the

demand and supply sides are trying to bridge this gap and have

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embraced the food hub model to accelerate shared infrastructure

development. But aside from standard produce food hub models, other

municipal, regional and institutional models exist to promote local

agriculture and healthy food access. Among the infrastructure

innovations that can provide greater capital and technical support for

agricultural entrepreneurs are the following types of facilities:

Kitchen Incubators

Kitchen Incubators take a comprehensive approach to preparing

entrepreneurs for market. The facilities should be licensable for food

manufacturing, food-service, food handing and aggregation with

dedicated space for processing, packaging, mixed-use operations, and

warehousing. Local food entrepreneurs in an incubator setting need

comprehensive technical assistance to comprehend the alphabet soup of

FDA regulations: GAP (Good Agricultural Practices), GMP (Good

Manufacturing Practices) and HACCP (Hazardous Analysis Critical

Control Points). They also need to be sufficiently trained to operate

commercial equipment and follow safe food handling practices.

Portage County producers have easy access to the Common Wealth

Kitchen Incubator in Youngstown.

Shared-Use Licensed Kitchens

For-profit, shared-use facilities provide another model of easy entry for

new food entrepreneurs. These kitchens target start-up entrepreneurs

needing licensed commercial kitchens, with designated areas for

preparing, packaging, catering and baking. Many of the for-profit facilities

run cooking classes, nutritional training programs, and “pop-up”

restaurants to attract aspiring food entrepreneurs.

University Food Innovation Centers

Food Innovation Centers harness the research and industry resources

to assist food processors in business development, market research,

product and process innovation, food science, workforce development

and training, regulations and compliance support, and quality assurance

and food safety systems.

Farm Incubators

Over the past five years the number of farm incubation programs has

increased nationally. Incubator farms are a fairly new model developing

across North America to address barriers to beginning farmers,

including access to land, capital, and credit, and opportunities to learn

and develop skills in farm business planning. The number of incubator

farms is increasing nationally. A sub-sample of existing incubator farm

programs are described and compared side by side, providing evidence

of the variation in program design. Extension may serve alternative roles,

beyond the educator, in design and development of these programs.

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Shared-Use Facility Collaborations

In every community, public and privately held food-processing facilities

exist, but local food entrepreneurs are unable to access these

commercial kitchens. This model serves entrepreneurs unable to meet

co-pack minimum runs, local food brand programs, or producer

cooperatives in need of centralized warehousing. Partners can explore

the legal and governance structures necessary for local food and farm

entrepreneurs to access private or publicly held commercial processing

and distribution facilities; or to develop new leasing/co-packing services

with privately held enterprises.

In recent developments, more food hub are beginning to couple their

operations with education, incubation and processing to diversify

revenue streams and serve their stakeholder base. Again, Local Roots, a

community kitchen that allows farmers and entrepreneurs to create

licensed value-added products and commercial prepared food, is a

strong regional model that stakeholders in Portage County could review.

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Based on a small response from agricultural producers throughout the

project period, it is recommended that next stage funding be secured to

provide training, technical assistance and planning support to farmers.

Farmers interested in expanding their operations to wholesale markets

will need significant support and training to participate in any

aggregation model. New farmers or hobby farmers interested in

generating more income can also augment the mix of producers in a

food hub model. A secondary strategy should also focus on the

identification and recruitment of beginning farmers in Portage County.

The following programs could both provide direct funding to farmers

looking at expansion opportunities. Ohio Rural Development, OSU

Cooperative Extension, NCRS and Farm Services Agency staff could be

contacted and coordinated to deliver trainings and their assistance

services at workshops throughout the county. The focus groups and

surveys illustrate farmers’ interest in learning more about accessing

these programs, services and potential grants or loans.

Farm Loans: Microloan Program

The Microloan Program is for the financing needs of small or beginning farmers

and niche or non-traditional farming operations such truck farms, farms selling

direct to consumer, and farms using either hydroponic, aquaponics, organic and

vertical growing methods.

Direct Farm Ownership Microloans

These types of loans can be used to:

• Make a Down Payment on a Farm

• Build, Repair, or Improve farm buildings, service buildings, farm

dwelling

• Soil and Water Conservation Projects

• May be used as a Down payment Farm Ownership Loan

• May be used in Joint Financing

Direct Farm Operating Loans cover

• Essential tools

• Fencing and trellising

• Hoop houses

• Bees and bee equipment

• Milking and pasteurization equipment

• Maple sugar shack and processing equipment

6. Funding Resources

Funding Opportunities for Agricultural Producers

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• GAP (Good Agricultural Practices), GHP (Good Handling

Practices), and Organic certification costs

• Irrigation

• Livestock, seed, fertilizer, utilities, land rents, family living

expenses, and other materials essential to the operation

• Marketing and distribution costs, including those associated with

selling through Farmers’ Markets and Community Supported

Agriculture operations

• Pay for qualifying OSHA compliance standards (Federal or State)

Funding Available

There is no minimum amount for loan, but the maximum amount is

$50,000.

How to Apply

Loan applications should be filed in the administrative FSA county office

that maintains the farm’s records.

These loans must be approved by the local FSA state or county

committee before any site preparation and/or construction can be

started.

https://www.fsa.usda.gov/programs-and-services/farm-loan-

programs/microloans/index

Farm Storage Facility Loan Program

Farm Storage Facility Loan Program provides low-interest financing for

producers to build or upgrade commodity storage facilities.

Eligible commodities include: Grains, Oilseeds, Peanuts, Pulse crops, Hay,

Honey, Renewable biomass commodities, Fruits and vegetables,

Floriculture, Hops, Maple sap, Milk, Cheese, Yogurt, Butter, Eggs,

Meat/poultry (unprocessed), Rye, Aquaculture

Eligible facility types include:

Grain bins

Hay barns

Bulk tanks

Facilities for cold storage

Drying and handling and storage equipment is also eligible,

including storage and handling trucks. Eligible facilities and

equipment may be new or used, permanently affixed or

portable.

How to Apply

Loan applications for either Direct Farm Ownership or Storage Facility

Loans should be filed in the administrative FSA county office that

maintains the farm’s records. These loans must be approved by the local

FSA state or county committee before any site preparation and/or

construction can be started. https://www.fsa.usda.gov/programs-and-

services/price-support/facility-loans/farm-storage/index

FSA SERVICE CENTER OFFICE

PORTAGE-SUMMIT COUNTY FARM

SERVICE AGENCY

6970 STATE ROUTE 88

RAVENNA, OH 44266-9130

David Echols

County Executive Director

(330) 297-7633

(855) 842-4856 fax

David.Echols@oh.usda.gov

JACK W BARTHELS

Farm Loan Manager

(330) 297-7633 x 107

jack.barthels@oh.usda.gov

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Natural Resources Conservation

Service (NRCS) Programs

For Ohio Specific NRCS Programs view the following link:

https://www.nrcs.usda.gov/wps/portal/nrcs/main/oh/programs/

EQIP

High Tunnel System Initiative

Extend the growing season

Improve plant quality and soil quality

Reduce nutrient and pesticide transportation

Improve air quality through reduced transportation inputs

Reduce energy use by providing consumers with a local source

of fresh produce

Producers must submit a complete program application and other

documentation to support eligibility to be considered for financial

assistance through EQIP. NRCS accepts and processes EQIP applications

on a continuous basis. However, each state may establish deadlines for

one or more application periods in which to consider eligible

applications for funding.

Eligible applicants include individuals, legal entities, Indian Tribes, or joint

operations engaged in agricultural production. In addition, organic

producers who grow agricultural commodities on eligible land and have

natural resource concerns which may be addressed by a seasonal high

tunnel may participate in EQIP.

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Conservation Stewardship Program (CSP)

CSP offers enhancements to conservation stewardship practices.

For example, if you have been practicing prescribed grazing, CSP would

give you options to enhance that practice with activities such as grazing

management to improve plants for wildlife, or grazing management to

reduce soil compaction, or grazing management to improve riparian

function, just to name a few.

Program offers:

• One-on-one consultation with you to evaluate your current

management system and the natural resources on your land.

• CSP enhancement alternatives for you to consider implementing

on your land, based on existing conservation practices.

• Annual incentive payments for installing these practices on your

land.

• CSP also offers bundles where you can select a suite of

enhancements to implement and receive an even higher

payment rate.

How to Apply

Applications must include all agricultural or private forest land in your

operation that you will have control of for the 5 year term of the

CSP contract. Farm records must be established with the Farm

Service Agency for these lands for your application to be evaluated. You

should be prepared to provide maps or identify all land in your

operation on maps with an NRCS representative. The maps will help

you and NRCS determine the land that is eligible for enrollment,

payment, and if you have one or more operations to offer for

enrollment.

Applications are accepted throughout the year. Specific deadlines are set

for ranking and funding opportunities. The last application deadline

for funding consideration was February 3, 2017.

Ohio NRCS Conservation Program Contacts

https://www.nrcs.usda.gov/wps/portal/nrcs/main/oh/programs/

John Wilson, Assistant State Conservationist for Programs

200 N. High St., Room 522, Columbus, OH 43215, (614) 255-2480

Barbara Baker, Assistant State Conservationist for Natural Resources

(Easements)200 N. High St., Room 522, Columbus, OH 43215, (614)

255-2502

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USDA Agricultural Marketing

Services Programs

National Organic Certification Cost Share Program

Beginning March 20, 2017, organic producers and handlers can visit over

2,100 USDA Farm Service Agency (FSA) offices to apply for federal

reimbursement to assist with the cost of receiving and maintaining

organic or transitional certification. Available in all 50 states.

The maximum per certification scope (crops, livestock, wild crops and

handling) is $750. Funds are only available to certified organic or

certified transitional producers and handlers.

Eligible costs include application fees, inspection costs, fees related to

equivalency agreement/ arrangement requirements, travel/per diem for

inspectors, user fees, sales assessments and postage. Ineligible costs

include equipment, materials, supplies, late fees, and inspections

necessary to address National Organic Program regulatory violations.

Whole Farm Revenue Protection Program – part of Risk Management

Agency.

For additional support on organic transition contact OEFFA. The Ohio

Ecological Food and Farm Association (OEFFA) is a non-profit

organization founded in 1979 by farmers, gardeners, and conscientious

eaters who committed to work together to create and promote a

sustainable and healthful food and farming system. For more

information, go to www.oeffa.org.

Organic Certification--One of the oldest, largest, and most respected

programs in the nation, OEFFA's Certification program ensures that

organic crop and livestock producers meet the high standards

established for organically grown food. The process of documentation

and monitoring, strict production standards, and on-site inspections sets

organic products apart from all others. These standards protect farmers,

distributors, consumers, and the environment.

In Ohio Organic farmers and processors in Ohio can access the

reimbursement application from OEFFA’s website

at http://certification.oeffa.org/costshare or by calling (614) 262-2022.

Certified organic producers and handlers outside of Ohio can find the

contact information for their administrating agencies

at www.ams.usda.gov/NOPCostSharing

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Rural Development Programs

Value Added Producer Grants

The VAPG program helps agricultural producers enter into value-added

activities related to the processing and/or marketing of value-added

products. Generating new products, creating and expanding marketing

opportunities, and increasing producer income are the goals of this

program. You may receive priority if you are a beginning farmer or

rancher, a socially-disadvantaged farmer or rancher, a small or medium-

sized farm or ranch structured as a family farm, a farmer or rancher

cooperative, or are proposing a mid-tier value chain. Grants are awarded

through a national competition. Each fiscal year, applications are

requested through a notice published in the Federal Register and

through an announcement posted on Grants.gov.

Provides funding to farmers and groups of farmers to create or

develop value-added producer-owned businesses.

Helps agricultural producers enter into value-added activities

related to the processing and/or marketing of value-added

products.

Encourages generating new products, creating and expanding

marketing opportunities, and increasing producer income

Grant and matching funds can be used for planning activities or for

working capital expenses related to producing and marketing a value-

added agricultural product. Examples of planning activities include

conducting feasibility studies and developing business plans for

processing and marketing the proposed value-added product.

Examples of working capital expenses include:

Processing costs

Marketing and advertising expenses

Some inventory and salary expenses

Deadline and Award Amount info not currently available

Website: https://www.rd.usda.gov/programs-services/value-

added-producer-grants

Ohio Contact: Debbie Rausch - (614) 255-2425 -

deborah.rausch@oh.usda.gov

This program was utilized very successfully in southeastern Ohio to

catalyze grape growers and vineyards to expand their products and

direct marketing strategies. Since the funding ended 5 additional wineries

and meadaries have open in Athens and surrounding counties.

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The Village Bakery & Café Solar System through REAP

In southern Ohio farmers and local food retailers have used REAP awards and

USDA loan programs to install solar arrays, geothermal systems and conduct

energy efficiency assessments. The funding assists farmers to lower utility costs

for production and packing capabilities.

Rural Energy for America Program

Provides guaranteed loan financing and grant funding to agricultural

producers and rural small businesses for renewable energy systems or

to make energy efficiency improvements.

Funds may be used for renewable energy system and for the purchase,

installation and construction of energy efficiency improvements, such as:

Deadlines

• Grants of $20,000 or less: October 31, 2016 and March 31, 2017

• Unrestricted Grants (up to $500,000): March 31, 2017

• Loan Guarantees are competed continuously throughout the

year.

Funding Available

• Loan guarantees on loans up to 75% of total eligible project

costs

• Grants for up to 25% of total eligible project costs

• Combined grant and loan guarantee funding up to 75% of total

eligible project costs

Website: https://www.rd.usda.gov/programs-services/rural-

energy-america-program-renewable-energy-systems-energy-

efficiency

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Following the completion of the USDA Local Foods Promotion Program

grant, Portage County stakeholders are positioned to seek project

management funding that could provide the technical assistance to

producers to implement a food hub model. The following programs

could be utilized for both project planning and implementation to fund a

management staff position at the Portage County Regional Planning

Commission or in another non-profit or agency partner.

Rural Microentrepreneur Assistance Program

Program supports the development and ongoing success of rural

microentrepreneurs and microenterprises. Funding is available in the

form of loans or grants. Loans support capital improvements. Grants

may be used for technical assistance activities to rural

microentreprenuers to prepare them for self-employment or increase

capacity in a technical aspect of their business. Authorized activities

include feasibility studies, business planning, construction, land lease or

purchase, equipment purchase and training and technical assistance.

Funding Available

Minimum funding is $50,000 and maximum $500,000 for a single loan.

Technical Assistance only grants will be made competitively and shall not

exceed 10% of the total amount of TA funding available.

How to Apply

Contact local Rural Development Office

Ohio

Beth Huhn, Acting State Director

Federal Building, Room 507

200 North High Street

Columbus, OH 43215-2418

Voice: (614) 255-2400

Fax: (614) 255-2563

www.rd.usda.gov/oh

Food Safety Funding

On Farm Food Safety Project – FamilyFarmed

The organization FamilyFarmed provides technical assistance to small

and mid-sized farmers who are selling into wholesale markets. A project

of this organization, The On-Farm Food Safety Project (OFFS, helps

farmers learn about food safety, create personalized on-farm food safety

plan, and become food safety certified.

Their website: http://onfarmfoodsafety.org/ provides educational

resources on food safety issues and a free to use resource that

generates an on farm food safety plan specific to your operation.

The resources provided here will help generate a food safety plan to be

used in daily operations. Information on topics such as produce

traceback, worker health and hygiene training materials, and

packinghouse standard operating procedures for cleaning and sanitation

are also available to your operation. The food safety plan tool utilizes a

number of decision trees that help you assess and address areas of food

safety risk. This tool can also help prepare you for a food safety audit

B. Project Management Funding

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should you decide to pursue GAP certification. View their website to

begin creating your plan. http://onfarmfoodsafety.org/create-a-food-

safety-manual/

USDA Risk Management Education and Outreach

Partnership Cooperative Agreements Program

This program, administered by the USDA Risk Management Agency,

funds risk management strategies related to crop production, marketing,

legal, human, and financial issues. Funds can address risk management

training related to production practices, or funds may be used to train

and assist disadvantaged producers and create producer awareness of

other risk management tools and strategies.

Funding Available Ranges from $20,000 - $100,000

Contact: Lana Cusik: lana.cusik@rma.usda.gov

http://www.rma.usda.gov/aboutrma/agreements/

Beginning Farmer & Rancher Development Program

(BFRDP)

The Beginning Farmer and Rancher Development Program provides

grants to organizations for education, mentoring, and technical

assistance initiatives for beginning farmers or ranchers. There are two

types of awards with different funding amounts awarded for each type as

indicated below:

Standard Grants- Maximum Award: $200,000 per year for up to three

(3) years for large standard grants; $100,000 per year for up to three

years for small standard grants.

Educational Enhancement Team Awards - Maximum Award:

$200,000 per year for up to three (3) years

Website: https://nifa.usda.gov/program/beginning-farmer-and-

rancher-development-program-bfrdp

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Farmers Market Promotion Program (FMPP)

Farmers Market Promotion Programs have the purpose is to increase

domestic consumption of, and access to, locally and regionally produced

agricultural products, and to develop new market opportunities for farm

and ranch operations serving local markets by developing, improving,

expanding, and providing outreach, training, and technical assistance to,

or assisting in the development, improvement, and expansion of,

domestic farmers markets, roadside stands, community-supported

agriculture programs, agritourism activities, and other direct producer-

to-consumer market opportunities.

Amounts available range from Capacity Building Grants of $50K to

$250K and Community Development, Training, and Technical Assistance

grants from $250K to $500K.

Website: https://www.ams.usda.gov/services/grants/fmpp

Commonwealth, Local Roots and Lake to River Coop have effectively

utilized FMPP and LFPP awards to expand their models.

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Ohio Specialty Crop Block Grant

Specialty Crops are defined as “fruits and vegetables, tree nuts, dried

fruits, horticulture, and nursery crops (including floriculture).” The

purpose of this program is to enhance the competitiveness of specialty

crops.

Program funding is offered on a state by state basis. Applications are not

available in Ohio for 2017 your state department of agriculture will have

information on future opportunities when they are available.

Website:

https://www.ams.usda.gov/services/grants/scbgp/specialty-crop

Ohio contact: Lori Panda

Farm to School Grants Program

The purpose of the USDA Farm to School Grant Program is to assist

eligible entities in implementing farm to school programs that improve

access to local foods in eligible schools. On an annual basis, USDA

awards up to $5 million in competitive grants for training, supporting

operations, planning, purchasing equipment, developing school gardens,

developing partnerships, and implementing farm to school programs.

Planning grant awards will range from $20,000 - $45,000 and

implementation grants and support service grant awards will from

$65,000 - $100,000. Funding for training grants is expected to range

from $15,000-$50,000, and will be funded at the following levels: state

focused project awards will range from $15,000 to $25,000; and

regionally / nationally focused project awards will range from $25,000 to

$50,000.

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Website: https://www.fns.usda.gov/farmtoschool/farm-school-grant-

program

Community Food Projects (CFP)

The primary goals of the CFP are to: Meet the food needs of low-

income individuals through food distribution, community outreach to

assist in participation in Federally assisted nutrition programs, or

improving access to food as part of a comprehensive service; Increase

the self-reliance of communities in providing for the food needs of the

communities; Promote comprehensive responses to local food access,

farm, and nutrition issues; and Meet specific state, local or neighborhood

food and agricultural needs including needs relating to: Equipment

necessary for the efficient operation of a project; Planning for long-term

solutions; or The creation of innovative marketing activities that mutually

benefit agricultural producers and low-income consumers.

CFP projects cannot exceed $125,000 in any single year or more than

$400,000 over four years. Planning Projects (PP) cannot exceed $35,000

for the total project period. The maximum PP award period shall not

exceed three years since it is for planning purposes.

Website: https://nifa.usda.gov/funding-opportunity/community-food-

projects-cfp-competitive-grants-program

This program is useful for planning, implementation and capital needs.

ACEnet has utilized this funding many times to develop specific

marketing and training programs. Other partners have been able to

combine both programming and capital needs to expand existing

services to farmers and specialty food processors.

Roots Urban Farm

In 2011, Youngstown Neighborhood Development Corporation (YNDC)

acquired land that would be converted into a working farm - the Iron

Roots Urban Farm (IRUF) - to institutionalize food economy

development in low-income neighborhoods of Youngstown.

YNDC received a Community Food Project grant of $296,816 in to

train and encourage residents from neighborhoods across the city to

start new food-based businesses and market gardens on vacant land

through intensive production and marketing techniques. Successful food

business development and expansion employs low-income residents,

develop sustainable business opportunities over the long term, and

become fresh food sources. The Iron Roots Urban Farm has been

developed into a high-level training facility, including greenhouses, hoop

houses, high-value production fields, and a production center.

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Ohio Healthy Food Financing Initiative

In 2014, Finance Fund Capital Corporation (FCAP) with support from

the Ohio Regional Convergence Partnership, the United Way of Central

Ohio and the United Way of Greater Cleveland commissioned The Food

Trust to conduct a statewide quantitative research study to identify

Ohio communities that lack access to healthy food options.

Healthy Food For Ohio: This program provides loans, forgivable loans,

and grants to food retailers developing new or renovating existing fresh

food retail in underserved communities throughout Ohio. Funds may be

used for costs associated with land acquisition, predevelopment,

construction, equipment, infrastructure, and related expenses. Financing

can be used for capital projects to build new markets or expand existing

facilities. Applications are evaluated and approved on a rolling basis while

funds remain available. FCAP is also reviewing eligible healthy food

projects that are seeking funding. Those with projects or referrals should

contact Credit Officer Kelly Cook at kcook@financefund.org for details

on how to apply.

The application is a two-step process: 1) To determine whether a project

is eligible under the program guidelines, applicants must complete a Pre-

Application. 2) To apply for funding, eligible applicants must complete a

full Application for Financing.

Website: http://www.financefund.org/support/healthy-food-financing-

initiative

C. Capital Funding

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W.K. Kellogg Foundation

The Kellogg Foundation grantmaking supports thriving children, working

families and equitable communities.

Thriving Children: We support a healthy start and quality

learning experiences for all children.

Working Families: We invest in efforts to help families obtain

stable, high-quality jobs.

Equitable Communities: We want all communities to be

vibrant, engaged and equitable.

Embedded within all that we do is our commitment

to racial equity, to developing leaders and

to engaging communities in solving their own

problems. The foundation works nationally across the

United States.

Surdna Foundation

Sustainable Environments Program

The Sustainable Environments Program supports efforts to restore

regional aggregation and distribution of food that will strengthen urban

and rural connections and provide environmental, economic, and

community benefits. The first step for funding is to submit a Letter of

Inquiry. Follow the link to access the LOI portal:

http://www.surdna.org/grants/how-to-apply.html

Projects funded:

Create pilot projects or expand promising projects to spur the

growth of regional food infrastructure (e.g., food hubs, vertical food

supply chains, regional food shed planning initiatives linked to

regional transportation and economic development). In addition, we

want to support best practices on regional food supply business

models and innovative regional, state and local policies. We’re also

looking to highlight and help replicate food supply programs that

contribute to anti-poverty strategies and build strong local

economies.

Support the development of innovative financing strategies for

regional food infrastructure development.

Develop incentives and remove barriers to creating shorter food

supply routes. These activities might include advocacy at the federal,

state and local levels around food storage, processing, land-use

restrictions, etc.

Build capacity and collaboration among planners, economic

development officials, investors, community based organizations and

other key community leaders to integrate local food supply into

regional land use and economic decisions, projects and practices, and

to better understand the drivers for regional food system change.

D. Foundation Funding

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Ben and Jerry’s Foundation

The mission of the Ben & Jerry's

Foundation is to

engage Ben & Jerry's employees

in philanthropy and social change

work; to give back to our

Vermont communities; and to support grassroots activism and

community organizing for social and environmental justice around the

country.

Funding Available

The Foundation awards about $1.8 million annually to eligible

organizations across the country.

How to Apply

The foundation only consider proposals from grassroots, constituent-led

organizations that are using community-organizing and base-building

strategies to accomplish their goals.

Priority Strategies must include: Community & ally outreach, Leadership

development, Constituent empowerment & decision-making, Popular

education, Root cause analysis, Power analysis, Campaign development,

Mobilizing constituents & allies, Coalition building, Direct action

http://benandjerrysfoundation.org/the-grassroots-organizing-for-social-

change-program/

The Kresge Foundation

The Kresge Foundation awards operating

support, project grants and planning grants.

They also utilize a full complement of

program related investments, including loans,

deposits, equity and guarantees.

In collaboration with grantees and partners,

the foundation seeks to use grantmaking and

investing tools to help people improve life circumstances and the

economic mainstream. Six grant programs work to complete these goals.

Funding Available

Kresge awards between $120 million and $150 million in grants each

year.

How to Apply

Some programs accept applications on an ongoing basis. Others

proactively invite or solicit applications from individual organization. And,

on occasion, a program may make a national call for applications for

specific efforts through a request-for-proposal process.

http://kresge.org/opportunities

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Farm Aid Programs

Farm Aid is a nonprofit organization whose mission is to keep family

farmers on the land. Since 1985, Farm Aid has raised more than $50

million to promote a strong and resilient family farm system of

agriculture.

Farmer Resource Network

Farm Aid’s Farmer Resource Network offers many ways to connect

farmers with helpful services, resources and opportunities specific to

individual needs

Opportunities include:

Connect with an organization

Explore our resources

Talk with Farm Aid

Become a Farm Advocate

Website: https://www.farmaid.org/our-work/resources-for-farmers/

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Aggregation – The consolidation of products sourced from multiple

growers or producers to generate volumes to meet demands of a larger

market, a key ingredient for scaling up local and regional food systems.

The collection of agricultural products from a number of area farms at a

central hub. Delivery to customers from an aggregation hub can be

more efficient than point-to-point distribution from farms to customers.

Business Model – The manner in which a company or organization

conducts economic activity. This encompasses many aspects of the

business: products and services (offering), how they are delivered

(operations), the means through which they are sold (revenue model),

and how the company is structured (business entity). The Business

Model sections in this guide discuss offerings and operations, and

additional detail is provided in separate sections titled Business Services,

Revenue Models, and Business Entities.

Commercial Kitchen – A kitchen outfitted, certified, and inspected

by a health authority for the production or preparation of food for sale

to the public.

Community Kitchen – A commercial kitchen made available to local

users on a contract or time-share basis.

Consumer Cooperatives- Businesses owned and run by the

customers themselves with the goal being improved service rather than

improved profits. Members govern the cooperative, usually through a

democratic process. Profits generated by the cooperative are returned

to the members based upon their use of the cooperative's services.

Co-Packer – Outsourced production by an external party that

provides the labor, materials, and sometimes the raw ingredients for a

food product. It may be further defined as contract packaging that is the

assembly of food products, or contract packing and manufacturing (co-

pack, co-man) that is the processing of food products.

Distribution -- The methods of moving food to markets such as

restaurants, grocery stores, and institutions. Scales of distribution range

from on-site direct sales to wholesale transactions.

7. Glossary and Best Practices

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Food Hub – USDA defines a food hub as “a business or organization

that is actively coordinating the aggregation, distribution, and marketing

of source-identified locally or regionally grown food products from

primarily small to mid-sized producers.” A food hub may provide the

core services of a packing house (see below) and/or aggregate and

distribute farm-packed product.

Food Innovation Center -- Food Innovation Centers harness the

research and industry resources to assist food processors in business

development, market research, product and process innovation, food

science, workforce development and training, regulations and

compliance support, and quality assurance and food safety systems.

These centers are often housed or affiliated with a land grant University.

GAPS and GHP -- Good Agricultural Practices (GAP) and Good

Handling Practices (GHP) are voluntary audits program offered by the

USDA. These verify that fruits and vegetables are produced, packed,

handled, and stored as safely as possible to minimize risks of microbial

food safety hazards. Producers can use the Produce GAPs Harmonized

Food Safety Standard to structure operations in order to ensure

compliance with GAP standards.

HACCP - Hazard Analysis and Critical Control Points is a preventative

food safety system in which every step in the manufacture, storage and

distribution of a food product is scientifically analyzed for

microbiological, physical and chemical hazards.

Kitchen Incubator – Kitchen Incubators are licensed commercial

kitchens where food business startups can prepare their products using

shared space and equipment. Kitchen Incubators need to take a

comprehensive approach to preparing entrepreneurs for market. The

facilities should be licensable for food manufacturing, food-service, food

handing and aggregation with dedicated space for processing, packaging,

mixed-use operations, and warehousing. Local food entrepreneurs in an

incubator setting need comprehensive technical assistance to

comprehend the alphabet soup of FDA regulations: GAP (Good

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Agricultural Practices), GMP (Good Manufacturing Practices) and

HACCP (Hazardous Analysis Critical Control Points). They also need to

be sufficiently trained to operate commercial equipment and follow safe

food handling practices.

Local – Food that is grown within a limited radius from where it is

purchased. Definitions of local differ by customers and consumers, with

typical ranges beginning within 100 miles and extending to 300 miles or

more for regional food systems. In this report local refers to Wisconsin

grown.

Organic Certification -- While the USDA is responsible for Organic

Certification standards, it is not a food-safety issue. Organic certification

is essentially a branding initiative to guarantee product standards for

consumers who prefer to buy organic. “Organic certification verifies that

your farm or handling facility located anywhere in the world complies

with the USDA organic regulations and allows you to sell, label, and

represent your products as organic. These regulations describe the

specific standards required for you to use the word “organic” or the

USDA organic seal on food, feed, or fiber products. The USDA National

Organic Program administers these regulations, with substantial input

from its citizen advisory board and the public.”

Packing House – A facility that handles raw produce immediately after

harvest and prepares it for delivery to customers. The core services of

a packing house include cooling, washing, grading, packing, and storage.

Additional services may include harvesting, farm pickup, customer

delivery, sales, and marketing.

Processing – A post-harvest method of converting raw food into a

value-added product for consumption, cooking, or storage.

Altering fresh produce from its raw state by changing its form (e.g.

chopping, pureeing), through cooking or baking, or through

preservation techniques such as canning, freezing, pickling, and curing.

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Seasonal Extension Structure – Semi-permanent or permanent

housing for the production of fruits and vegetables during cold weather

seasons. Types of structures include hoop houses, greenhouses,

glasshouses and indoor warehouses. These structures and innovative

heating technologies can extend the growing season of some crops to

10 or more months per year.

Shared-use Kitchens -- For-profit, shared-use facilities provide

another model of easy entry for new food entrepreneurs. These

kitchens target start-up entrepreneurs needing licensed commercial

kitchens, with designated areas for preparing, packaging, catering and

baking. Many of the for-profit facilities run cooking classes, nutritional

training programs, and “pop-up” restaurants to attract aspiring food

entrepreneurs.

Social Entrepreneurship- Entrepreneurial approaches to organize,

create, and manage ventures to address social problems and make social

change. Social entrepreneurship focuses on creating social capital, but

need not be incompatible with making a profit.

Storage -- A post-harvest method of extending the life of products and

increasing the availability of produce and perishable food products.

Value-added Products -- Defined by the USDA as: A change in the

physical state or form of the product (such as milling wheat into flour or

making strawberries into jam). The production of a product in a manner

that enhances its value, as demonstrated through a business plan (such

as organically produced products). The physical segregation of an

agricultural commodity or product in a manner that results in the

enhancement of the value of that commodity or product (such as an

identity preserved marketing system).

Wholesale – A distribution channel between producers and consumers

comprised of intermediaries, which purchase goods to be sold to other

wholesalers or at retail outlets. These intermediaries include

distributors, processors, institutions, supermarkets, restaurants, and food

service companies. Wholesale is differentiated from direct-to-consumer

distribution channels such as farmers markets, community-supported

agriculture (CSA) programs, and farm stands where the customer pays

the farmer directly.

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The Wild Ramp began as the Capstone project of three Marshall

University students, Christa Galvin, Kelly Cox and Lauren Kemp. Almost

5 years later Lauren continues as a Wild Ramp board member and staff

of Unlimited Future Incorporated which played a key role in supporting

the development of the market model. The first meeting dedicated to

the concept of a local foods market was held in January 2012. A core

group of citizens quickly came together and some of those citizens

visited, Local Roots Market & Cafe, a local foods store located in

Wooster, OH. Tri-State Local Foods, a non-profit organization, was

formed and the search for a location began.

The entrepreneurial spirit at Heritage Station seemed like a perfect fit

for a local foods market. A lease was signed and renovations began.

Meanwhile public calls were put out to local farmers and producers and

interest meetings were held. A blog was started to document the

process and promote the concept of local foods and seasonal eating. The

Wild Ramp opened for business on July 12, 2012. Those first few days

The Wild Ramp was an open-air market as we awaited our final

renovations and occupancy permits.

In 2014, the Wild Ramp moved to their current location in Old Central

City, in the west end of Huntington. This location has provided the space

and customer support for significant growth. In 2016 the Wild Ramp

installed a commercial kitchen for additional food entrepreneurs to

operate from and provide prepared foods and beverages. The following

guidelines provide a detailed approach to their rules, fees and policies.

The Wild Ramp Market Model in Huntington West Virginia

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Wild Ramp Market Rules, Procedures & Guidelines

Please direct all questions to farmer@wildramp.org or 304.523.7267

The mission of the Tri-State Local Foods, Inc. (dba The Wild Ramp- a

local food market) is:

“To operate a year-round community-supported market that provides

a viable economic outlet for local food producers while providing

consumers access to locally grown agricultural products.”

The Wild Ramp (hereafter TWR) Board and Market Manager reserve

the right to review the producer guidelines on a regular basis and to

make changes as needed. Revised guidelines will be announced and

made available to producers. Producers are expected to remain current

with the revised guidelines. The market management reserves the right

to make exceptions to these rules and guidelines at its discretion.

Guidelines prior to applying to be a producer. If your product does not

meet our guidelines, but you feel it still supports the mission of TWR,

you may petition the market manager for a waiver. These requests will

be reviewed and decided on a case by case basis. Entry of new products

is dependent on the needs of the market and is up to the discretion of

the Market Manager.

General Producer Rules

Locally Sourced: Producers of all products sold through TWR must be

based either within a 250 mile radius from Huntington, WV, or within

the state of West Virginia. Closer to home is better.

No Reselling: Producers may only sell products they themselves have

grown or processed. Producers may not buy wholesale from someone

else and then retail through TWR. Value must be added to processed

food products by the producer; simply repackaging the ingredients is

not adding value. Co-operative members that grow/raise an agricultural

product as a group of farms cannot sell products through TWR as a

private individual.

Compliance with Health, Safety and Related Laws: All products must

comply with federal, state and local health regulations, licensing and

labeling requirements. Producers are expected to inform themselves on

issues governing the production, display, distribution, sampling and sale

of their products. Anyone wishing to sell through TWR should research

the rules and regulations regarding the products they are wishing to sell

prior to applying as a producer. See

http://smallfarmcenter.ext.wvu.edu/r/download/36641 (WV Farmers

Market Vendor Guide) for more information.

Application and Membership

Prospective producers wishing to sell should confirm that their product

is legal and compliant with all market guidelines before applying, and

then must submit a completed Producer Application for review by

market management to ensure that their products are eligible for sale.

All producers must provide the market manager with copies of all

relevant documents, including but not limited to, WV Egg Distributors

License, Proof of Product Liability Insurance, and Kitchen Certification,

and Registrations as required by product line.

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Producers wishing to use the term “organic” must submit a copy of

their certification with their application.

In-Market Prioritization

In-market retail space is limited. The amount of space given to each

producer is at the discretion of the market staff and will be based on

product mix and set up to provide the best overall experience for the

shopper. If at any time the market becomes too crowded (overall or

with any one type of product) the market staff may assign in-market

priority to certain vendors based on the following criteria:

1) Geographical proximity

2) Years as a producer

3) Local content of processed products (homegrown or otherwise

sourced locally)

4) Additional sustainable practices, including but not limited to: Small-

scale family operations, limited use of chemical inputs (pesticides,

fertilizers), and use of pasture production when seasonally available.

While TWR does not offer exclusive shelf space or rights to any one

producer to sell any one product, if the market manager believes the

number of producers offering the same or similar products within the

physical market is excessive, duplicate products may be rejected and

placed on a waiting list..

Payments and Fees

Anyone wishing to sell products is required to pay an annual fee of $50.

After the first year, the fee will be automatically billed in December by

TWR.

TWR will retain 20% of all consignment sales to put toward equipment

& renovations as well as to cover daily operating costs such as rent,

utilities, marketing, and other member benefits.

Producers will be paid for the items sold (minus 20% of all sales)

monthly. The sales period runs from the1st of the month to the last day

of the month. Direct deposit is available and encouraged. Check

payments are also available. Producer monthly sales reports are

available each month upon request. This report will include a list of the

items sold. Monthly payment statements will also be available after the

10th of the month, at the market.

Disclosure of Production Practices

Full disclosure of all production practices is required for all producers.

Buying local gives shoppers the benefit of knowing where their food

comes from, and how it was grown. TWR’s disclosure practice sets it

apart from other food grocers, giving local producers a marketing edge.

All products, including wild-crafted or foraged products should be

obtained in a way that does not deplete or endanger the species

collected and that insures a sustainable harvest for future generations.

To help shoppers and volunteers, the market will keep on file the

producer application to refer to when shoppers have questions that

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floor display information does not cover. If a shopper has questions that

are not answered by the information in the store, the manager will

request further information from the producer.

TWR reserves the right to visit and inspect the farm or business of any

producer. Visits will be made with prior notification when possible, and

farm visits/inspections will only be conducted with the producer

present. Failure to allow farm visits could result in termination or

suspension of the producer agreement.

We will consider false statements on a producer’s application about the

origin or production standards of products listed to constitute fraud. To

protect the integrity of our marketing system, The Wild Ramp reserves

the right to verify the claims of everything sold through our

marketplace.

Product Labeling and Barcodes

TWR tracks producer sales through the use of a point of sale

management system, cash register, and product labels. To ensure

producers are paid for their sales, each item must be properly labeled.

TWR provides barcode labels which must be used if the product does

not already have a UPC/barcode.

The producer is responsible for:

-providing basic labels that meet the county, state, and federal rules.

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-applying TWR barcode labels to all products. The producer may

choose to apply the barcode to a wand, which will then be placed in the

same basket as the product (for produce only).

-making sure the item is properly labeled before placing the product on

display, or storing in back stock as agreed upon by the market manager.

-requesting labels 24 hours in advance to dropping off product.

Items that are not properly labeled and barcoded will not be put on the

sales floor. Producers must email barcode label requests 24 hours in

advance to farmer@wildramp.org, or may call the store directly.

Labels will be filed in the producer’s individual file for pick up upon

arrival. TWR may also mail barcode labels to the producer if prior

arrangements have been made.

Product Delivery and Packaging

Producers are welcome to deliver products to the market during store

hours; however, producers should recognize that the first priority of

the market staff and volunteers is the customer. Producers needing

special assistance should call ahead. Monday and Tuesday are the

slowest day in the market and an ideal time to bring product.

Producers may leave additional product at the market for the staff and

volunteers to periodically restock, with approval from the market

manager. All products should be clearly labeled and put in the stock

area/cooler.

Producers may package products at their discretion; however, TWR

recommends against using units that can be easily altered or

misconstrued at the register and suggests selling items individually or by

weight.

TWR provides plastic produce bags and scales for items to be sold in

bulk (by the pound). Barcode labels for the item to be sold should be

clearly displayed with the product for the customer to take with them

to the register.

Eggs

All eggs will be delivered to the “backroom” for inventory and

acceptance, then placed in storage.

Producers will no longer stock the coolers directly. The staff will ensure

that an equal presentation is made of eggs from all producers.

Egg Cartons must be labeled in accordance with the WV Department of

Agriculture regulations, including the words “ungraded eggs” in ⅝ inch

font on each package. Failure to comply with labeling requirements will

result in eggs being removed from sale.

Eggs that are 30 days or more from the Packed On Date will be

removed from the display case. Producers have the choice of allowing

the eggs to be donated, disposed of, or held for pick up. Eggs will be

held no longer than 7 days.

Empty egg cartons that have been returned to TWR will be held for

producer pick up. Cartons will be held for a limited time, based on

availability of space. These cartons should be picked up weekly.

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Signage

TWR encourages all producers to create and display information about

their operation and products.

Producers should take care to not block other producer’s displays or

items. Offensive or distracting displays may be removed. Producers are

encouraged to post a personal biography with their products, including

details about their operation and production practices in the producer

Scrapbook. Keep in mind that shoppers may not have a lot of time to

read a lengthy full page to get the information they need.

Producers who wish to use their own display equipment should contact

the market management. Use of display equipment will be decided on a

case by case basis.

Inventory and Insurance

Beginning August 1, 2016, all producers will be required to provide an

invoice or inventory list of product being stocked at TWR for sale. The

invoice/inventory list must include the producer name, the item name,

quantity, sales price, and instructions for items pulled from display, such

as throw away or hold for pick up. All items pulled will be logged and

available for review by producers.

TWR works to track and protect all products while they are at the

market. However, ultimately products are left in the market at the

producer’s own risk. Discrepancies in inventory may be taken up with

market management and will be handled on a case by case basis.

TWR is not responsible for any loss, theft, or damage incurred by

producer’s products in the market. In the event of a lawsuit, the

market’s insurance will cover the market. However, individuals are not

covered under this policy. It is up to each producer to insure

themselves to the level they feel appropriate. TWR strongly encourages

producers to obtain their own personal liability insurance and product

liability insurance.

Customer and Producer Satisfaction

TWR strives to maintain fresh, appealing products for the customer.

Any unsuitable, spoiled or damaged product will be immediately

removed from the market and disposed of. Materials used for displaying

product, transporting product or product packaging itself, must be clean

and sanitary. Failure to do so will result in product being pulled from

sales floor. The goal of TWR is 100% customer satisfaction. Therefore,

we will accept customer returns on food items for refund or

replacement. Producers will be notified of nature of customer

complaint. TWR will accept returns on non-food (art/craft) items within

14 days with tag or receipt, and in original condition. The returned

amount will be deducted from producer’s future sales.

Complaints or problems should be directed to the market management

in a timely manner that is not disruptive to the market. Producers who

have concerns regarding product representation should inform market

management. Additional concerns may be submitted in writing. Each

submission will be reviewed by the market manager and/or TWR board

when appropriate. A producer may appeal any decision of the market

manager within 30 days. An appeal must be presented in writing to

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TWR board. A decision by the board shall be issued within 30 days of

receipt and constitute a final and binding decision of any further appeal.

Code of Conduct

All producers, vendors, staff, volunteers, and customers are bound by

the Wild Ramp Code of Conduct.

The market is a community space that will maintain a safe environment

for all. No violence, threats, harassment, or other inappropriate

behavior will be tolerated by anyone. Any instance of physical violence,

threatening behavior, or harassment will result in immediate suspension

from the market.

Additionally, no illegal activities will be tolerated in or around the

market.

Sales Tax

TWR will collect and pay the sales tax on all taxable items. The tax

amount will be automatically added at the cash register. The producer

does not need to include this amount in the selling price.

Wholesale Producer

At the discretion of the board, TWR will purchase items from

producers at wholesale for the overall good of the market, and to fill

gaps in product availability. Priority will always be given to producers

operating on consignment with TWR. TWR will pay the published

wholesale price with a minimum of 30 days net terms. Wholesale

producers must meet the following criteria:

-They have an established wholesale business.

-They can show proven availability of products.

- Meet the geographical guidelines stated above.

The use of a distributor is allowed upon producer request. TWR’s

primary relationship is with the producer. Distributors must offer a

minimum of 30 day net terms.

Please direct all questions to farmer@wildramp.org or 304-523- 7267

Wild Ramp Artisan Guidelines

Artisan Products

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An artisan product is a hand-made craft or original work of art. The

Wild Ramp seeks to support the use of original designs using

agricultural products. We also welcome products made from materials

found in nature (stone, wood, glass, natural fibers, clay, beads from

natural minerals, dried or live plant materials) and reclaimed/recycled

functional products. For an artisan to be eligible to exhibit creations at

The Wild

Ramp the following guidelines must be met:

1. Each artist or artisan group must become a current producer of The

Wild Ramp.

2. Each art/craft product must be of locally produced agricultural

products, local origin and/or hand-made by the applicant. Joint projects

must be identified as such.

3. The work must support the mission of The Wild Ramp:

“To operate a year-round community-supported market that provides a

viable economic outlet for local food producers while providing

consumers access to locally grown agricultural products.”

Work exhibited at The Wild Ramp should fall within one of the

following categories: Art from agricultural products, art from

recycled/reclaimed materials, 2 dimensional art, cards, clothing,

decorative art, fiber, functional items, jewelry, plant/natural art, and

seasonal art.

The Wild Ramp will not accept:

Crafts made from kits

Crafts that appear as if they are made from kits

Arrangements of mass-produced dried or silk flowers

Exhibiting at The Wild Ramp

- Each artisan must be accepted through the evaluation process.

- Each artisan accepted by the evaluation process must pay the vendor

fee of $50 per year

- 12% of an artisan’s consignment sales are retained by The Wild Ramp.

The Wild Ramp Artisan Selection Process

All applications and products will be evaluated by the Artisan

Committee. The committee will meet quarterly to consider new

submissions. The jury will consist of the Market Operations Committee

and at least one artisan.

The number of individuals selected for display will be based on the

availability of space in the market and the “mix” of products for sale in

the artisan area. If an existing producer would like to bring in new items

to sell, those items must also be juried by the Artisan Committee.

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Members of the Artisan Committee will independently rate a

producer’s items giving a numerical value in each of these categories:

1. Quality

2. Uniqueness

3. Support of mission

4. Market fit

5. Prioritization (see below)

6. Ability to meet customer demand

Those submissions with the highest scores will be selected for display in

the space available. Artisans will be notified by the committee of their

decision.

Prioritization

The Wild Ramp’s primary mission is to showcase local agricultural

products; therefore the following items will be used to prioritize

selection of artisan products.

1. Use of local agricultural products (ie. items made of local fibers would

have priority over items made of fibers accessed from outside the 250

mile radius from Huntington, WV or the state of West Virginia.)

2. Use of non-agricultural products in art created closest to The Wild

Ramp market.

3. Use of materials found in nature that are obtained within a 250 mile

radius from Huntington, WV or within the state of WV. (i.e.: items

made of wood, glass, or clay obtained locally would have priority over

items made of materials purchased outside West Virginia or the 250

mile radius from Huntington.)

4. Use of local reclaimed or recycled materials to create art by local

artists.

Displays

Space will vary by season. You will not have a specific permanent display

space or area. Your spot may be changed, and these changes will be

based on the needs of the market, fluctuations with other

artisans/producers and may reflect the desire to maintain a fluid look of

the storefront.

Artisans’ products may be rotated throughout the market for special

promotions or seasonal displays.

Sometimes promotional events occur offsite and products may be taken

to sell or be included in special displays showcasing samples of products

from the market.

Artisan works will be reviewed every 90 days while on display in the

market. The jury will make determinations on retention and removal of

items, based on sales, space available, and seasonal requirements.

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Application Procedures

Applications appear at www.wildramp.org, copies of the application are

also available at The Wild Ramp market. All applications and products

will be evaluated by the Artisan Committee and the artisan will be

notified if their work has been accepted or rejected.

Fees

Anyone wishing to sell products is required to pay an annual fee of $50.

After the first year, the fee will be automatically billed by TWR in

December for the following year.

TWR will retain 20% of all sales to put toward equipment &

renovations as well as to cover daily operating costs such as rent,

utilities, marketing, and other member benefits.

Producers will be paid for the items sold minus consignment fees. The

sales period runs from the 1st of the month to the last day of the

month. Direct deposit is available and encouraged. Check payments are

also available. Producer monthly sales reports are available each month.

This report will include a list of the items sold. Other reports are

available by request.

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Local Roots was established in 2009 by volunteers who, with

community support, turned an empty building into a vibrant

marketplace showcasing local food and handmade gifts.

Local Roots mission is: "To establish a year-round market place for the

purpose of connecting consumers and producers of locally grown foods and

other agricultural products. Our goals are to encourage healthy eating, expand

local economic development, and promote community involvement and

sustainable living."

The founders of Local Roots believed that improving access to food that

was grown close to home, by people who cared for the land, meant a

stronger community and a healthier, more sustainable world.

We have learned a lot about the emerging business of local food since

our beginning in 2009. As a cooperative, and part of the local food

movement, we consider sharing our successes, failures, finances and

plans with others essential to our mission.

Shoppers can browse our market of seasonal produce, frozen meat,

fresh baked goods and a large variety of beautiful artisan creations...

most sold directly from our network of over 150 Ohio

producers. The Café serves a daily lunch that highlights the good things

coming from local farms. An on-site commercial kitchen allows food

entrepreneurs to start and grow their businesses.

The Commercial Processing Kitchen at Local Roots was opened in 2014

as the final piece of the original vision for the Local Roots Market and

Café project. The Kitchen gives farmers and food entrepreneurs a place

to process, preserve, and add value to products to start or expand an

existing food business. The 2000 sq. ft. onsite facility houses the

equipment and licensing needed to make food products for sale at Local

Roots Markets…or around the country!

LOCAL ROOTS COMMUNITY/COMMERICAL PROCESSING KITCHEN

The Local Roots Commercial Processing Kitchen is a shared-use, fully

licensed, commercial kitchen facility. It provides kitchen space for local

farmers and food entrepreneurs to explore new food business ideas

with minimum capital investment, allows farmers to add value to their

raw agricultural products, and existing food businesses to sustain and

scale-up.

Under our current licensing with the ODA (Ohio Department of

Agriculture), processors can produce many items, such as fresh packed

pre-cut produce, prepared dips like humus, salsa (not canned), frozen

food items, and baked goods. Items made in this facility are legally

LOCAL ROOTS Market Model in Wooster & Ashland, Ohio

105

allowed to be sold at Local Roots or anywhere in the USA! Local Roots

does not currently have a canning and bottling license, however

processors with their own licenses may be able to process these

products in our kitchen. We will consider adding equipment and

licensing as demand grows. Please contact

betsy.anderson@localrootswooster.com to discuss your ideas.

Renting the Kitchen for Commercial Processing

Commercial Processors rent the kitchen to process their own products

that will be sold under their name. Once product and process is

approved, the producer is fully responsible for all aspects of production

and sale. Producers must provide proof of ServSafe certification and

insurance.

Cooperative processing under Local Roots name/license

As a co-op, Local Roots feels that it is important to support small, new,

and trial products and producers. To help the kitchen fit into the

business goals and budget considerations of even the smallest

producers, Local Roots also offers the option for producers to process

products under the Local Roots name and license. At this time, this

arrangement is only available for things like ready to eat foods or frozen

produce for off season sale. Other items may be considered, please

discuss your ideas with co-op management! These products are the

property of Local Roots, must be stored/sold only at Local Roots

(Wooster and Ashland), and will be labeled as a Local Roots product.

However, each product will also be sub-identified with the producer

information. Local Roots will track products through the bar code

system so that the producer can be paid upon sale. Local Roots makes

no guarantee of sale. Those wishing to preserve fruits/veggies for winter

sale may learn to process the products themselves, attend group

“processing parties”, or give product to another Local Roots volunteer

for processing (if one is available).

Local Roots has freezer bags and labels available for use. All products

must be packaged and labeled for individual sale by the producer, follow

co-op guidelines, and health safety rules. In addition, Ready-to-eat foods

must be labeled with a sell by date of 1 week (per Health Department

rules) and be approved by café staff so as not to conflict with café menu.

Producers will need to provide all ingredients, packaging, and labels.

Some of each product must be taken offsite to our Ashland market

facility for sale to comply with ODA regulations. Local Roots volunteers

will provide pick up & delivery of product to the Ashland store. This

arrangement allows the producer to preserve or “test the waters” with

no additional upfront cost (rent, insurance, etc) and is designed for

smaller quantities, seasonal products, and trial runs. Each producer will

need to work closely with, and under the supervision of, Local Roots

management or trained volunteers. Processing Options for Producers

Commercial Processing (as Individual) Cooperative Processing (as

Local Roots) Types of Products

Any approved product Ready to eat foods to be served on site or

preserved (frozen) produce with no additives Sell anywhere Sell only at

Local Roots (Wooster & Ashland)

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1. Membership All users must be current members ($50 per

year)

2. Food Safety & ServSafe Producer must provide proof of

ServSafe Level 1 Certification (Food Handler) Producer must

provide proof of ServSafe Level 1 Certification (Food Handler)

or work with ServSafe certified person onsite

3. Cleaning Deposit $50 $50 for individual users No fee for

group uses 4. Insurance Producer must have $1M product

general liability insurance, naming LR as additional insured N/A

5. Costs $10-$30/hr depending on equipment (see table below)

Commission to producer upon sale: 80% commission for fresh/ready to

eat foods, 75% for frozen foods If producer provides product to a LR

volunteer for processing: 50% commission upon sale

LOCAL ROOTS GENERAL RULES

1. Membership All processors must have an up to date membership of

the Wooster Local Foods Cooperative, Inc before using the commercial

kitchen. Cost of Membership is $50 or 10 hours of volunteer time

annually.

2. Food Safety of the product and processor is the top priority of Local

Roots. There must be a certified person onsite whenever processing is

taking place. Anyone wishing to use the kitchen for processing must

have completed Level 1ServSafe (Food Handler) training and provide

certificate of completion to be kept on file or schedule time to work

with a certified individual. A ServSafe certified member of co-op

management who is familiar with the kitchen will be present during the

initial use of the kitchen for training and to review and document

processes.

3. Cleaning Deposit All processors will be required to pay an upfront

deposit of $50 for extra cleaning time. In the event that the kitchen

requires extra cleaning after the processor leaves, all or a portion of the

deposit may be withheld. This deduction will be made at the discretion

of the Co-op Management after their inspection. The processor will be

required to re-pay the deposit upon scheduling the next visit.

ADDITIONAL RULES FOR INDIVIUAL COMMERCIAL PROCESSING

4. Insurance

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All tenants must provide proof of a $1M general liability insurance,

naming Local Roots as additionally insured, to be kept on file. Products

may be covered under the processors home/farm insurance. Processors

should contact their insurance agent and add Local Roots as an

additional insurer.

Kitchen Rental Rates Type of Kitchen Use Per Hour Cost Kitchen

Space/Small Equipment (prep tables, sinks, scales, vacuum sealer, etc)

$10 Large Equipment (stove, ovens, mixer, etc) $15 Whole Kitchen

Scheduled (all equipment, no sharing with other renters) $30 Fees are

negotiable based on agreement with each individual tenant.

Tenants who rent a set amount of time per week/month and pay in

advance are entitled to a discount. Reserving Kitchen Space Processor

should schedule kitchen use in advance to avoid conflicts. Set up and

cleaning time should also be considered. All rental fees must be prepaid.

Prioritization of Kitchen Use It is the goal of Local Roots to promote

locally sourced products as well as those that will be sold through the

Local Roots Market. If space becomes limited; LR will give these

processors priority. All efforts will be made to ensure the most efficient

use of the kitchen facility at all times.

OTHER INFO

Equipment/Tools LR provides basic equipment and consumables (gloves,

hairnets, aprons) as well as basic cleaning equipment (dish soap).

Everything else needed for processing must be supplied by the

processor such as chopping boards, tongs, tasting spoons, whisks,

mixing bowls, “hot” gloves/mitts, towels, and parchment

paper/foil/plastic wrap.

Processor should ID what will be needed to process prior to use.

Processor may bring their own small appliances for use. All appliances

must be inspected and approved by Kitchen Manger prior to use.

Processors may make agreements to borrow/rent equipment from each

other.

All agreements should be made in writing and submitted to the co-op

management. LR assumes no responsibility for such agreements or any

issues that may arise. Use of another renter’s personal equipment or

ingredients without consent may result in removal from the kitchen and

forfeit of any pre-paid fees.

Labeling is the responsibility of the processor to insure that all products

are labeled in accordance with the ODA requirements including:

statement of responsibility (name/address), ingredients and all sub-

ingredients, weights. Current labeling regulations do not include a

requirement for shelf life or freshness date (Best Before or Use By)

dates on labels. These may be voluntarily included as a way to

encourage retailers to rotate products and let consumers know when

the time is up for highest product quality.

(http://www.foodlabels.com/faq.htm) Products may qualify for Small

Business Nutrition Labeling Exemption. See

http://www.fda.gov/Food/GuidanceRegulation/GuidanceDocumentsRegul

atoryInformation/LabelingNutrition/ucm200686 7.htm for details.

Storage Space Processors wishing to leave, tools, equipment, or

ingredients on site must rent storage space. Processors must provide

tubs/boxes that can be closed and clearly labeled with the owner’s

name. Perishable contents must be labeled and dated. All other personal

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items must be removed upon leaving the facility. At this time, storage

space is available for those using the kitchen for processing at no charge.

Charges may be added as space becomes limited. Renters will be given

plenty of advanced notice.

Selling Products at Local Roots Market

Processors who would like to sell product through Local Roots must

follow the Market’s application procedure found at

http://localrootswooster.com/producers.

Production in the Commercial Processing Kitchen does not guarantee

sales opportunity in the market. Cooperation sharing a kitchen space

requires cooperation on the part of everyone involved! All users should

work to be understanding, flexible, and have an open cooperative

attitude to working with co-op management and other users.

All questions regarding operations should be directed to

Kitchen@LocalRootsWooster.com or call 330-263-5336.

By-Laws of Local Roots Wooster Cooperative, Inc.

Article One

Mission

To establish a year-round market place for the purpose of connecting

consumers and producers of locally grown foods and other agricultural

products. Our goals are to encourage healthy eating, expand local

economic development, promote community involvement, and

sustainable living

Article Two

Stock

This cooperative shall be a non-stock cooperative.

Article Three

Membership

Section 1. Qualifications Any person, family, firm, partnership, LLC,

corporation or association, who or which agrees to sign and abide by a

membership agreement with the Association, and meets such other

conditions as may be prescribed by the board of directors, may become

a member of the Association. Membership becomes effective upon

signing the membership agreement provided that all membership

requirements are met.

Section 2. Suspension or Termination In the event the board of

directors of the Association shall find that any member has ceased to be

an eligible member under Section 1, above, the board shall give the

member written notice of the violation and allow thirty (30) days to

cure the violation. If the violation is not cured, the board shall set a

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hearing date within sixty (60) days of the mailing notice. Following the

hearing, the board shall determine whether the member is eligible to

retain membership or whether a suspension or termination is required

in the best interests of the Association. If an affirmative vote of a

majority of the directors casting votes finds for suspension or

termination, the subject matter shall be suspended or terminated as the

case may be.

Written notice may be given using any of the following methods; by

mail, by electronic or telephonic transmittal. If mailed, the notice is

given when it is deposited in the U.S. Mail, with postage prepaid,

addressed to the person at the person’s address as it appears on the

records of the Association.

If notice is sent by electronic or telephonic transmittal, notice is given

when an electronic or telephonic confirmation of delivery is received by

the Association. A suspended or terminated member shall have no

rights or privileges, nor vote or voice in the management or affairs of

the Association other than the right to participate in accordance with

law in the event of dissolution.

Article Four

Meetings of Members

Section 1. Annual Meeting The annual meeting of the members of this

Association shall be held in the State of Ohio, during the month of

September or on such date as the board of directors may determine.

The board shall designate the time and place of meetings.

Section 2. Special Meetings Special meetings of the members of the

Association may be called at any time by order of the board of directors

and shall be called by the directors upon receipt of a written petition

signed by at least Fifty-One (51%) of the members entitled to vote. The

petition must state the specific business to be brought before the

Association and demand a special meeting at any time for consideration

of such business. The directors shall designate the time and place for a

special meeting.

Section 3. Notice of Meetings Written notice of every regular and

special meeting of members shall be prepared and mailed to the last

known post office address of each member at least ten (10) days before

such meetings. Notice is given when it is deposited in the U.S. mail. The

meeting notice may also be delivered by electronic means. Such notice

shall state the nature of the business expected to be conducted and the

time and place of the meeting. No business shall be transacted at any

special meeting other than that referred to in the notice.

Section 4. Voting Unless otherwise stated in the Articles of

Incorporation, or these Bylaws, or required by applicable law, all

questions shall be decided by a vote of a majority of the members voting

on the question. Each member shall be entitled to only one vote. Voting

shall be permitted by mail, e-mail, or in person. Proxy voting shall be

allowed. Each proxy shall be in writing, signed by the voting member

and no members shall vote more than one proxy. If a membership is

held by a household, partnership, LLC, or other legal entity, the

member shall designate in writing the person who shall vote on behalf of

the member. That designation shall remain in effect until written notice

of a properly authorized change in the designated voter shall be

received by the Association.

Section 5. Quorum Fifty percent (50%) of membership shall constitute

a quorum at any properly called annual or special membership meeting.

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Article Five

Directors and Officers

Section 1. Number and Qualifications of Directors The Association

shall have a board of directors of between five and twelve members;

provided, however, if the Association has fewer than five members, the

number of directors shall equal the number of members. Each director

shall be a designated voting member of this Association in good

standing. If a majority of the board of directors of the Association finds

at any time that any director or officer is so engaged or affiliated and has

failed to follow the provisions set forth in Article 14 of these Bylaws

dealing with conflicts of interest, the procedure for Removal of

Directors and Officers as set forth in Article Five, Section 10 shall be

followed, with the board requesting removal in the place of the member

petition.

Section 2. Election of Directors At the annual meeting of the

members of the Association, directors shall be elected to succeed the

incorporating directors. An approximately equal number of directors

shall be elected for one (1) year; two (2) year and three (3) year terms.

At each annual meeting thereafter, new directors shall be elected, for a

term of three (3) years each, to succeed those directors whose terms

are expiring. However, if the number of members of the Association is

five or fewer, all members shall serve as directors until the next annual

meeting held after membership has increased to more than five

members. 3 All directors shall be elected by secret ballot, and the

nominee(s) receiving the greatest number of votes shall be elected.

Voting shall be non-cumulative.

Section 3. Election of Officers The board of directors shall meet

within seven (7) days after the first election and within seven (7) days

after each annual election and shall elect by ballot a president, vice

president, secretary, and treasurer, each of whom shall hold office until

the election and qualification of a successor, unless earlier removed by

death, resignation, or for cause. The president and vice president shall

be members of the board of directors. The secretary and treasurer

need not be directors or members of the Association. The Secretary

and treasurer offices may be held by the same person, but no officer

shall execute or acknowledge any instrument in more than one capacity

if the instrument is required by law or by the Articles of Incorporation

or the Bylaws to be executed, acknowledged, or verified by two or

more officers.

Section 4. Vacancies Whenever a vacancy occurs in the board of

directors, other than from the expiration of a term of office, the

remaining directors, by majority vote, shall appoint a member to fill the

vacancy for the remainder of the term. If one or more officer positions

become vacant, such offices shall be filled by the board of directors,

through election by ballot, at either a regular or special meeting of the

board.

Section 5. Regular Board Meetings In addition to the meetings

mentioned above, regular meetings of the board of directors shall be

held monthly, or at such times and at such places as the board may

determine.

Section 6. Special Board Meetings A special meeting of the board of

directors shall be held whenever called by the president or a majority of

the directors. Only the business specified in the written notice shall be

transacted at a special meeting. Each call for a special meeting shall be in

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writing or electronic and delivered to the secretary, and shall state the

time and place of such meeting.

Section 7. Notice of Board Meetings Oral, written, or electronic notice of

each meeting of the board of directors shall be given each director by,

or under the supervision of, the secretary of the Association prior to

the time of meeting. But such notice may be waived by any director, and

their appearance at a meeting shall constitute a waiver of notice.

Section 8. Quorum A majority of the board of directors shall constitute

a quorum at any meeting of the board.

Section 9. Reimbursement and Compensation The Association may

reimburse directors for all reasonable expenses incurred in carrying out

their duties and responsibilities. The compensation, if any, of the

members of the board of directors shall be determined by the members

of the Association at any annual or special meeting of the Association.

No director of the Association, during the term of his office, shall be a

party to a contract for profit with the Association differing in any way

from the business relations accorded regular members.

Section 10. Removal of Directors and Officers Whenever any

director shall fail to meet qualifications as described in Section 1 of this

Article, or fails to attend three (3) consecutive board meetings either

regular or special without just cause and provided that notice of such

meetings has been given in accordance with these bylaws, then it shall

be the duty of the board to remove said director and to fill the vacancy

in accordance with Section 4 of this Article. Any member of the

Association may bring charges against an officer or director of the

Association by filing them in writing with the secretary of the

Association, together with a petition, signed by twenty percent (20%) of

the members, requesting the removal of the officer or director in

question. The removal shall be voted upon at the next regular or 4

special meeting of the Association and, by a majority of the members

voting, the Association may remove the officer or director and fill the

vacancy. The director or officer against whom such charges are brought

shall be informed in writing of the charges previous to the meeting and

shall have an opportunity at the meeting to be heard in person or by

counsel and to present witnesses, and the person bringing the charges

against him shall have the same opportunity.

Article Six

Duties of Directors

Section 1. Management of Business The board of directors shall have

general supervision and control of the business and the affairs of the

Association and shall make all rules and regulations not addressed by

law, the articles of incorporation, or bylaws for the management of the

business and the guidance of the members, officers, employees, and

agents of the Association.

Section 2. Bonds and Insurance The board of directors may require

the manager and all other officers agents and employees charged by the

Association with responsibility for the custody of any of the funds,

negotiable instruments, or other property of or for the Association to

give adequate bonds. Such bonds, unless cash security is given, shall be

furnished by a responsible company and approved by the board of

directors, and the cost shall be paid by the Association. The board of

directors shall provide for the adequate insurance of the property of the

Association, or property which may be in the possession of the

Association, or stored by it, and not otherwise adequately insured, and,

in addition adequate insurance covering liability for accidents to all

employees and the public.

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Section 3. Accounting System and Audits The board of directors shall

have installed an accounting system which shall be adequate to meet the

requirements of the business and shall require proper records to be

kept of all business transactions. At least once in each year the board of

directors shall secure the services of a competent and disinterested

qualified third party, who shall make a careful reconciliation of the

books and accounts of the Association and render a report in writing,

which report shall be submitted to the directors and the manager of the

Association, and an operating statement for the fiscal period under

review.

Section 4. Depository The board of directors shall select one or more

banks to act as depositories of the funds. The board of directors shall

also determine the manner of receiving, depositing, and disbursing the

funds, form of checks and the person or persons with signing authority

for such checks and accounts.

Section 5. Committees. The board may, at its discretion, appoint from

its own membership an executive committee of three (3) members, and

determine their tenure of office and their powers and duties. The board

may delegate to the executive committee all or any stated portion of

the functions and powers of the board, subject to the general direction,

approval, and control of the board. Copies of the minutes of any

meeting of the executive committee shall be available to all directors

within seven (7) days following such meeting. The board of directors

may, at its discretion, appoint such other committees as it deems

appropriate.

Article Seven

Duties of Officers

Section 1. President. The president shall (1) preside over all meetings

of the Association and of the board of directors; (2) call special

meetings of the board of directors; (3) appoint such committees as the

board of directors may deem advisable for the proper conduct of the

Association; and (4) perform all acts and duties usually performed by a

presiding officer. 5

Section 2. Vice President. In the absence or disability of the president,

the vice president shall perform the duties of the president; provided,

however, that in case of death, resignation, or disability of the president,

the board of directors may declare the office vacant and elect any

eligible person president.

Section 3. Duties of Secretary. The secretary shall keep a complete

record of all meetings of the Association and of the board of directors

and shall have general charge and supervision of the books and records

of the Association. The secretary shall sign papers pertaining to the

Association as authorized or directed by the board of directors. The

secretary shall serve all notices required by law and by these bylaws and

shall make a full report of all matters and business pertaining to the

office to the members at the annual meeting. The secretary shall

perform such other duties as may be required by the Association or the

board of directors. Upon the election of a successor, the secretary shall

turn over all books and other property belonging to the Association to

the successor.

Section 4. Duties of Treasurer. The treasurer shall be responsible for

the keeping and disbursing of all monies of the Association, and shall

provide for keeping accurate books of accounts of all transactions of the

Association. The treasurer shall perform such duties with respect to the

finances of the Association as may be prescribed by the board of

directors. At the expiration of the term of office, the treasurer shall

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promptly turn over to the successor all monies, property, books,

records, and documents pertaining to the office or belonging to the

Association.

Article Eight

Patrons and Patrons’ Net Margins

Section 1. Operation at Cost. The Association shall at all times be

operated on a cooperative service-at-cost basis for the mutual benefit of

its member patrons. The term “Patron” as used in these Bylaws and in

the Articles of Incorporation shall mean members doing business with

this Association. Each transaction conducted on a cooperative basis

between this Association and each Patron shall be a “patronage

transaction” and shall include as part of its terms each provision of the

Articles of Incorporation and Bylaws of this Association, whether or not

referred to in the transaction. Each Patron shall be entitled to a portion

of Patrons’ Net Margins (patronage refunds), as provided in these

Bylaws.

Section 2. Computation of Net Margins. The Net Margins shall be

computed on a tax basis as of the end of each fiscal year as follows:

Section 2.1 Gross Receipts. Proceeds of sales of products marketed

for Patrons, plus amounts received for supplies and services provided to

Patrons, plus amounts received from any other source, shall be “gross

receipts.”

Section 2.2 Net Margins. This Association shall deduct from gross

receipts the sum of all costs and expenses and other charges that are

excludable or deductible from this Association’s gross income for the

purpose of determining federal income or related taxes payable by this

Association, except the amount of such taxes, the amount of non-

qualified allocations redeemed, and the amount of the Patrons’ Net

Margins, as defined in 6.3 of these Bylaws. The gross receipts that

remain after the foregoing deductions shall be called “Net Margins.”

Section 3. Allocation.

Section 3.1 Association Net Margins. From the Net Margins, the

Association shall set aside “Association Net Margins” to be applied to

the Association’s federal income or related taxes. The funds to pay

taxes shall first come from Net Margins attributable to sources other

than patronage transactions (“non-patronage source margins”) to the

extent allocable under federal income tax law. Any non-patronage

source margins not so applied shall be set aside in the Capital Reserve.

The Association Net Margins shall also be applied to the dividends paid,

if any, on preferred stock.

Section 3.2 Patrons’ Net Margins. The balance of Net Margins after

deduction of the Association Net Margins shall be the Patrons’ Net

Margins. The Patrons’ Net Margins shall belong to the Patrons on the

basis of their respective patronage transactions and may be allocated on

the basis of their respective patronage of the Association and the Net

Margins that resulted from the operations of the Association.

Section 4. Distribution of Patrons’ Net Margins.

Section 4.1 Written Notice of Allocation. The Association shall

distribute Patrons’ Net Margins within eight and one-half (8 ½) months

after the end of each fiscal year by written notice of the allocation. The

written notice shall show the manner and amount of distribution, and

the exact amount distributed in cash, or in Capital Credits (or any

combination of the two). The Board of Directors may establish a plan

for financing the Association that relates Patron investment to

patronage transactions. Such plan may provide for the periodic

adjustment of Patron investment by the application of a Patron’s

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patronage refunds to additional investment requirements prescribed by

the plan.

Section 4.2 Events of Forfeiture of Refund. If the Association

distributes a patronage refund to a Patron who (a) does not consent to

include the patronage refund in income as provided in the Consent

Bylaw; or (b) is unable to receive distribution; or (c) cannot be located

for redemption of such patronage refunds, such patronage refunds shall

forfeit to this Association and be added to the Capital Reserve.

Patronage refunds of less than Ten Dollars ($10) shall be treated as

non-distributable Net Margins and added to the Capital Reserve.

Section 5. Capital Reserve. The Association shall maintain a Capital

Reserve for the purpose of providing a reserve against which it may

charge losses and other charges that could be charged against the

surplus of a business corporation for profit.

Section 6. Loss or Losses. If the Association incurs a net loss in any

fiscal year, such net loss may be charged against the Capital Reserve. If

the loss exceeds the Capital Reserve or, in any event, if the Board so

elects, the loss may be recovered from prior or subsequent years’ Net

Margins. The Board shall have no authority to make assessment for net

losses against Members. This section shall not be construed to deprive

the Association of the right to carry back or carry forward net

operating losses in accordance with the Internal Revenue Code or Ohio

taxing statutes.

Section 7. Consent Bylaw. Each person (including individuals,

partnerships, corporations, limited liability companies) who is accepted

to Membership in this Association and each Member of this Association

on the effective date of this Bylaw who continues as a Member shall, by

such act alone, consent to include in gross income (for federal income

tax purposes) the amount of any written notice of allocation (as defined

in 26 U.S.C. Section 1388, the Internal Revenue Code) received from

this Association with respect to his or her patronage transactions as

provided in 26 U.S.C. Section 1385.

Section 8. Records and Documentation. The books and records of

the Association shall be set up and kept in such a manner that at the

end of each fiscal year, the amount of capital, if any, so furnished by each

member is clearly reflected and credited in an appropriate record to the

capital account of each member.

Section 9. Fiscal Year. The fiscal year of this Association shall

commence on the first day of July and end on the last day of June.

Article Nine

Equity Redemption

Section 1. Regular Redemption. If at any time the board of directors

determines that the financial condition of the Association will not be

impaired by a redemption, capital credited to members’ accounts may

be redeemed in full or in part. Any such redemption of capital 7 shall be

made in order of priority according to the year in which the capital was

furnished and credited, the capital first received by the Association

being the first redeemed.

Section 2. Discretionary Special Redemptions. Notwithstanding any

other provision of these bylaws, the board, at its absolute discretion,

shall have the power to retire any capital credited to members’

accounts on such terms and conditions as may be agreed upon by the

parties in any instance in which the interests of the Association and its

members are deemed to be furthered thereby and funds are

determined by the board to be available for such purposes.

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Article Ten

Nonmember Business

This Association may conduct business with nonmembers on either a

patronage or non-patronage basis. However, this Association shall not

market the products of nonmembers in an amount the value of which

exceeds the value of the products marketed for members. It shall not

purchase supplies and equipment for nonmembers in an amount the

value of which exceeds the value of the supplies and equipment

purchased for members.

Article Eleven

Dissolution and Property Interest of Members

Section 1. Voluntary Dissolution. At any member meeting held for the

purpose of dissolving the Association, the members may adopt a

resolution of dissolution by the affirmative vote of sixty percent (60%)

of the members votes cast on the proposal. Notice of the meeting shall

be given to all members, whether or not entitled to vote.

Section 2. Involuntary Dissolution. The board of directors may adopt

a resolution of dissolution in the following cases:

Section 2.1 When the Association has been adjudged bankrupt or has

made a general assignment for the benefit of creditors:

Section 2.2 By leave of the court, when a receiver has been appointed

in a general creditors’ suit or in any suit in which the affairs of the

Association are to be wound up:

Section 2.3 When the Articles of Incorporation have been canceled for

failing to file annual franchise or excise tax returns or to pay franchise

and excise taxes and the Association has not been nor desires to be

reinstated: or

Section 2.4 When substantially all of the assets have been sold at

judicial sale or otherwise. The board of directors shall be responsible

for seeing the appropriate state filings are made and notices given

pursuant to Chapter 1729.

Section 3. Disbursement of Assets. Upon dissolution, the board of

directors shall disburse the Association’s assets in the following order;

first, to pay the Association’s debts and liabilities; second, to retire all

capital furnished through patronage (member capital accounts) without

priority on a pro rata basis; and third, to distribute the remaining

property and assets of the Association among the members and former

members in the proportion in which the aggregate patronage of each

member bears to the total patronage of all such members insofar as

practical, unless otherwise provided by law.

Article Twelve

Indemnification

The Association shall indemnify its officers, directors, employees, and

agents to the fullest extent possible under the provisions of the Ohio

Revised Code 1729, as it may be amended from time to time. The

Association may purchase liability insurance coverage for any person

serving as an officer, director, employee or agent to the extent

permitted by applicable Ohio law. The directors of the Association shall

be liable only as members of the Association, unless otherwise provided

by law.

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Article Thirteen

Amendment

If notice of the character of the amendment proposed has been given in

the notice of meeting, these Bylaws may be altered or amended at any

regular or special meeting of the members by the affirmative vote of the

majority of the member votes cast. Article Fourteen Conflict of Interest

Section 1. General policy. Recognizing that directors and officers have

a duty to loyalty and fidelity to the Association and must govern the

Association’s affairs honestly and economically, while exercising their

best care, skill and judgment for the benefit of the Association, to avoid

even the appearance of impropriety, the directors and officers of the

Association shall:

Section 1.1 Disclose to the Board any situation wherein the director or

officer has a conflicting or duality of interest that could possibly cause

that person to act in other than the best interest of the Association; and

Section 1.2 Follow the procedures stated in Section 2, below, governing

the participation on behalf of the Association in any transaction in which

the person has, or may have, a conflict of interest.

Section 2. Procedure. Any director or officer having a known duality of

interest or possible conflict of interest on any matter shall make a

disclosure of such conflict to the other directors. Such director shall not

vote or use his or her personal influence on the matter, but such

director may be counted in determining the quorum for the meeting.

The minutes of the meeting shall reflect the making of the disclosure,

the abstention from voting and the quorum situation. Any officer having

a known duality of interest or possible conflict of interest on any matter

before such officer for administrative action shall report the conflict to

the president or, in the case of the president, to the vice president.

Such officer shall abstain from taking any administrative action on the

matter. The requirements in this Section 2 shall not be construed as

preventing any director or officer from briefly stating his or her position

in the matter, nor from answering pertinent questions of the board or

other officers.

Adopted by the Board of Directors on June 24th, 2009.

Revised January 2011