Local Food System Economics
October 2009
Ag-Bio Cluster EconomicsBusiness Model
Alex Osterwalder 2006, from Slideshare.com slide 2http://business-model-design.blogspot.com/2006/11/business-model-template-designing-your.html
Ag-Bio Cluster EconomicsBusiness Case
• A business case captures the reasoning for initiating a project or task.
• It is often presented in a well-structured written document, but may also sometimes come in the form of a short verbal argumentation.
Ag-Bio Cluster EconomicsBusiness Case
A Business Case Contains:• Reference - Project name/reference, Origins/background/current state• Context - Business objectives/opportunities, Business strategic alignment (priority)• Value Proposition - Desired business outcomes, Outcomes roadmap, Business
benefits (by outcome), Quantified benefits value, Costs/ROI Financial scenarios, Risks/costs of not proceeding, Project risks (to project, benefits and business)
• Focus - Problem/solution scope, Assumptions/constraints, Options identified/evaluated, Size, scale and complexity assessment
• Deliverables - Outcomes, deliverables and benefits planned, Organizational areas impacted (internally and externally), Key stakeholders, Dependencies
• Workload - Approach, Phase/stage definitions (Project (change) activities, Technical delivery activities, Workload estimate/breakdown, Project plan and schedule, Critical path)
• Required Resources - Project leadership team, Project governance team, Team resources, Funding
• Commitments (required) - Project controls, Reporting processes, Deliverables schedule, Financial budget/schedule
Consumers Spend $10
Today, You Will Spend $10 on Food;Do You Know Where It Goes?
Everything Else: $5
Distribution, Storage, Packaging, Labeling, Inspection, Certification, Wholesaling, Retailing, Marketing, Advertising
Food Processing: $1.50
Food Production$2
Food Preparation: $1.50
Consumers Spend $10
$4 of That $10 Is for Labor
Labor$4
Consumers Spend 20¢
2%, or 20¢, Will Be Spent on Locally Sourced Food (within 100 Miles)
Everything Else: 3¢ – 7¢ (15% – 35%)
0¢ – 4¢ (0% – 20%) more food for the money
Food Processing – 4¢ (20%)
Food Production5¢ (25%)
Consumers Spend 20¢
40%, or 8¢, of That 20¢ Is for Labor
Labor8¢
Food Consumption
The Differences Are Crucial!
Food Processing
Food Production
Food Preparation
Global Food System
Food Processing
Food Production
Local Food System
SubsidizedSustainable
Food Consumption
Global vis-à-vis Local Sourcing of Food
Food Processing
Food Production
Food Preparation
Global Food System
98%
2% Local Food System$3M / year Spent by 40,000 Linden Residents
$147M / year Spent by 40,000 Linden Residents
.9 Employed / 1000 residents = 36 Jobs @ $30K / year
Local Food System
Food Consumption
What if you choose more locally-sourced food?
75%
25%
Food Processing
Food Production
Food Preparation
Global Food System
Food Processing
Food Production
Local Food System
$37.5M / year Spent by 40,000 Linden Residents
$112.5M / yearSpent by 40,000 Linden Residents
.9 Employed / 1000 residents = 450 Jobs @ $30K / year
Food Processing
Food Production
Local Food System
Food Processing
Food Production
Local Food System
Food Processing
Food Production
Local Food System
Food Processing
Food Production
Local Food System
Food Processing
Food Production
Local Food System
Food Processing
Food Production
Local Food System
Food Processing
Food Production
Local Food System
Food Processing
Food Production
Local Food System
Food Processing
Food Production
Local Food System
Food Processing
Food Production
Local Food System
Food Processing
Food Production
Local Food System
Food Processing
Food Production
Local Food System
If sourced locally, 20% of the calories you consume each day come from
400 / 2000 Calories
Vegetables and Fruitswhich are seasonal and expensive
What if you choose more locally-sourced food?
Wider Variety of Food Products with More Calories
Season Extension and Year-Round Food Production
Integrated Processing and Preparation
+ +
New Harvest Financial Overview
Local Food Systems Economics—Jobs
• Today, 40,000 people in North and South Linden Spend $3M / year on locally sourced food (2%) $1.2M / year for labor (90% outside the community)
• What if you brought what’s outside, inside? $1.2M / year for labor (90% INSIDE the community) 36 MORE jobs paying $30K / year (livable wage)
• What if you spent $6M / year (4%)? $2.4M / year for labor (90% INSIDE the community) 36 MORE jobs paying $30K / year (livable wage)
Spend more on food locally sourced from the North and South Linden community and MORE
People arehealthier
and happier!Multiplier effect occurs spurring business growth
in green energy and distributed manufacturing
Money is spent, captured, and reinvested in the community
Jobs are created
Food processing and preparation operations
are established
Vacant, abandoned, and underutilized properties are put
into food production
Getting Involved in Local Food Systems—The Curriculum
• Introduction to Food Production in a Local Food System• Soil Production• Business Planning in a Local Food System• Seasonal and Extended Season Food Production• Branding / Reputation / Food Safety Standards / Compliance• Food Processing Incubation• Mobile Kitchen / Food Cart Operations• Year-Round Food Production Under Glass and Underground• Aquaculture: Tilapia, Yellow Perch, Freshwater Prawns
Get Ready for Business in 2010!
Workshops Begin in November 2009Enroll at the New Harvest Urban Arts Center
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