The wholesale arm of local food is a growing business sector that walks a fine line between profitability and social change, according to a new study from the Wallace Center, home of the National Good Food Network.
The COUNTING VALUES: Food Hub Financial Benchmarking Study draws on financial and operational data from 48 of the nation’s more than 300 regional food hubs. Food hubs are social enterprises that combine the wholesale business of marketing local food with programs to strengthen community food capacity.
The benchmarks will help food hub managers analyze and adjust operations. Financial supporters also can use the benchmarks to evaluate and target investment opportunities, whether loan, grant, or equity.
“This study is an important step in attracting the market capital that’s essential for regional food systems to really take off,” said Teri Lowinger, co-founder of the Sustainable Local Food Investment Group. Since 2011 the angel investment group has moved more than US$1.2 million into food- and farm-related businesses in the Chicago region.
Most food hubs that Counting Values studied are at or near the breakeven point before grant or donation income.
This is arguably a good indicator for the social enterprises, said Tina Prevatte, co-founder of the North Carolina food hub Firsthand Foods. It sells pasture-raised meats from North Carolina farms to restaurants, cafeterias, and retailers.
“We’re building something that is very intentionally different than the traditional food industry,” she said. “Slim margins and operating near breakeven are actually signs of success when your intention is to make good food accessible to all while also paying farmers fairly and equitably.”
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