Category Archives: Entrepreneurship

A successful local food hub – what it takes

A local food story – an apparent success story – is Mad River Food Hub. The Co.Exist article is a nice long read, but for those like me who want to get to the nub, here are the highlights.

After a long intro about unprofitable and failing farmers’ markets, we get to local food hubs, and the hope that a system of local “food hubs” can make local food work by processing and bundling foods and delivering them to us. Wonderful idea – but like farmers markets, most food hubs are not thriving.

The only way farmers are going to make more money is by getting more value out of their products.

It comes down to this:

How do you “value-add”? “Through processing. Through delaying the availability of a product until you can get a higher price–storage. By getting your product to places that you haven’t had it in the past–distribution. And by running your business better–incubation.”

That’s Robin Morris, the brains behind the Mad River Food Hub. But even with these value-adds, Morris couldn’t make the numbers work for a profitable – economically sustainable – food hub, until he did the numbers for meat. Meat is a year-round business, with potential for significant value-add from processing and curing, products selling for up to $24/lb for dry-cured prosciutto.

Now, meat raises ethical issues, especially if you’re vegetarian. Personally, since I know people will continue to eat meat, I’m happy to see any move away from massive factory farms which cause enormous suffering. There’s no guarantee that local artisans will treat animals less cruelly, but at least there’s a likelihood of free range and organic products, which can be a significant improvement.

Back to the article – a key takeaway is that Morris approached his hub with a tough business sense, to make the hub and its food food producers profitable. The hub invested heavily in facilities so that its food-producing entrepreneurs didn’t have to – the hub is an incubator, allowing local food entrepreneurs access to the (expensive) infrastructure for launching their business, in exchange for a cut of the sales.

Finding a niche for the hub has also been key – the hub doesn’t compete at cut-throat price points to sell to institutional clients such as cafeterias. Of course – a small or mid-sized operation could never compete on price, and could only profitably supply an unusually understanding institution that committed to supporting ethical food.

In making this work, Robin Morris’s business sense and careful thinking about numbers and scale are crucial:

Cutting out the middleman to get more of the customer’s money into the hands of the farmer may sound great in a TED talk, but the reality is that there is no way to challenge the economies of scale of industrial food production, which is propped up by subsidies, kickbacks, and money-saving environmental shortcuts…

As a result, businesses are growing that otherwise would have no hope, and Mad River Food Hub operates without grants. The hub produces salamis, soups and “Rookie’s Root Beer” among products, and also packs and distributes farm produce. This approach makes local food possible. 

Says a soup maker, the first anchor client of the hub:

Just to fit out a place like this and meet USDA regulations? Let’s say $250,000… Easily. This allowed me to skip that gray area where I’d take on a lot of debt to ramp up and expand, and basically gamble that I could meet all the monthly payments.

This soup maker is also a CSA farmer, using the hub to pack and distribute produce. He sees the power of the infrastructure to make CSA usable and attractive:

The share shows up at work, it’s boxed, it’s got their name on it, and they walk out the door with it. The potential is really big… if I can drop it off on their doorstep, they sign right up.

This takes local food beyond the eco-nuts, those of us who go out of our way and pay extra to support it. With its efficiencies and its distribution system, it might just make for local food that is actually sustainable – because driving miles out of your way to pick up your organic veggies certainly isn’t.

See How To Build A Local Food System, To Make Local Food Actually Work | Co.Exist.

More reading on local food: Locally Deliciousbuy from Amazon or read on Appropedia.

Women in startups

My friend Michelle is working with a startup incubator at her university, and asks:

  • Why are women under-represented in startups?
  • Why is this a problem?
  • What to do about it?

Please share your thoughts and/or relevant links in the comments. (If it’s directly relevant to Australia, that’s a bonus.)

Here is my friend’s message in full:

Hi there, My friend Chris and I have been having a discussion recently and he’s kindly agreed to bring some questions of mine to your online brains-trust – I hope you don’t mind me asking a few things that you probably discuss all the time. In the last year my University has begun supporting/funding an incubator for start-ups. I think it’s a great idea, and told them so – it’s the first in the country – but I also couldn’t help noticing that, in their last few rounds, *very* few of the leads on successful start-ups (or at least, those pictured to take place in the official photos shoots) were women. I took this up with them and, to their credit, they were very open to a discussion on the subject. I mentioned that I knew women were under-represented in tech and start-ups, and they acknowledged that there was more than one way for them to be a ‘first’ in this area. I also said that I knew there was a literature on this topic – although I wasn’t much familiar with it beyond that – and they asked if I could put something together for them. So at the moment I am knee-deep in opinion and stats and reports (much of it specific to North America, but useful nonetheless) from all over the web and beyond, and am pulling together what I have in three separate areas:

  1. Why are women under-represented in the start-up arena? (I know that the literature on women in STEM/IT has quite some history, and I will necessarily draw on that – but for the sake of readability I am trying to keep this focused.)
  2. Why is this a problem? (As mentioned earlier, this particular programme at my University is already open to acknowledging that the current male dominance is ‘a problem’, for various reasons – but I’m also well aware, from what I’ve already read, that there is a vein of argument that says, ‘an idea is an idea is an idea… who cares if a man or a woman has it? It should be judged on its merit alone’ and another that says, ‘look, if women don’t want to get involved in start-ups, for whatever reason, why force them?’. So any potential come-back along these lines I would like to disarm before it even has the chance to be raised.)
  3. What to do about it? (I am finding this question a particular challenge in this context, since a lot of what I’ve read so far says – unsurprisingly – that women’s career trajectories and breaks for child-rearing play a large part in the lack of (or loss of women from) tech careers and jobs. Given that here we’re talking, in the main, about undergraduate students (the programme is also open to postgrads and University staff, but what I see of the successful start-ups tells me that it’s mainly undergrads getting involved), the marriage-and-children element is not yet in play in a big way. I know that what this will likely leave instead is the ‘culture’ arguments – girls’ socialization to maths and science and IT, how far they are encouraged to pursue these, how much they want to get into an environment where they perceive there will be conflict, etc – and that these will be difficult to address… but I get a sense that the University wants to try and do that.

I guess you probably discuss this kind of thing all the time, and don’t necessarily want to trawl through it all again in this forum. If you do, I would be very appreciative! If not, I would be very pleased to have any suggestions for especially useful documents or stats or arguments you might have read and would like to share. I think this might be an opportunity to actually do something productive, since there is already a will to act: the why and what just need to be spelled out in such a way that action becomes both possible and as easy as possible. Thanks! Michelle