Farm to Table Workshop Distribution Panel
Panel on Innovative Distribution Methods (start ahead of schedule)
- Marcy Ostrom, moderator
- John Butler, American Produce Express
- Clayton Burrows, Growing Washington
- Kim Lohse, Farmhouse Table
- Watershine Woods, OPMA
Marcy: This panel was developed out of the desires from last meeting to address distribution models.
John Butler: I’m a farmer not a public speaker
- Third generation farmer in Okanogan, on the property for 70 years
- Took over in 1984, which was his plan, to take over the family farm
- Apples and pears, 130 acres, now down to 30 acres
- Decided to take more control over what they’re doing
- Took fruit into Montana with roadside trailers to local customers
- Went down to Arizona to sell fruit
- Semi load of fruits, sold half in five days, brokered the rest
- Started going to local schools to find a new market (2000)
- Just started knocking on doors to try and sell to save the family farm
- 60-80 schools or districts on board
- Very receptive, understood what was happening in the farming industry
- 100% school sales!!!!!!!!!!!!!
- Moved from being a grower to more of a middle man (buys from neighbors)
- The trucking world ends in Wenatchee. To get product to market, they had to do it themselves
- Heard from schools that prior agreements with farmers didn’t work out.
- Mandated quality. Be there on time, have a quality product, reasonable price
- Made a commitment: never gonna give fruit away again. Never sell at a loss. If you sell quality, you can make a profit.
- In 2002, a product came out to slice apples. Fresh-cut, value-added business.
- Got a WSDA value-added grant
- Took two years before they saw money.
- Value-added market has TAKEN OFF
- For other “slicers”, the distributors were the quality concern
- Reinforced the focus to self-distribute
- Distribution has been a headache
- We spend a lot of nights in hotels, getting places from Okanogan
- Must adhere to trucking laws (less than 11 hours at a time)
- 15-20,000 lbs of product over the mountains
- You can’t just sell apples. You have to fill the truck. We buy apples, pluots, ORANGES, pears.
- I ask my neighbors what they need for a price. We’re not in the business to get the cheapest product, we’re in the business to get the best product.
- Communicate as best we can what the best product is, how long the window is open, very hands-on approach with customers
- Also available for education. There’s a face behind the produce that comes to the schools.
- Distribution is a manageable task, but a tough task
Georgine: John cares about the product and the schools. I could tell that he cared. That’s when the kids started eating the apples. Kids love them. John never gets so big that he doesn’t care. He’s always out there. I’ve never had to send a product back.
John Butler: When we started out, we had plastics boxes and a box credit system. When petro-chemical products became expensive, we had to move away from that. We want to give kids something better than a red delicious. It’s not uncommon to have fruit picked on Sunday, then delivered on Monday. Word-of-mouth travels fast, especially around quality.
Tiny’s: What was the grant?
John Butler: Value-added grant. We buy pre-sized fruit. When you slice a piece of fruit, you can use most of the culls and juicer apples. Tell your customers the truth. It can be educational. We don’t want to tell our customers that we can do something that we can’t do.
No school is too small. We don’t have a drop charge, we look at the total day sales. In Okanogan, no way to get product out there if we impose minimum purchases.
Watershine Woods, Okanogan Producers Marketing Association
I’m a farmer, I’ve always been a farmer. So you know we’re the luckiest people in the world. I learned most of my farming from my grandparents before I was nine years old. 1977, I was one of the back to the woods people. I wish it was true that if you grow it they will come…but it’s not. I’ve been direct marketing, everything from Pike Place to local farmers market. Our economic development council wanted to help local ag. The unanimous answer from farmers was to help with direct marketing. The marketing and distribution were the problems. Small, family farms were going under left and right. We decided to form a marketing association. We called everyone, and we got six farms together under the idea that small farms would be stronger as allies than as competitors. We got some help for how to form a cooperative. Then we were contacted by Farming and the Environment which got us grant support to help transport our product to the Des Moines farmers market. The biggest help from that was the PUSH. It forced us to get together and act.
We stayed away from the FM. Too much time away from the farm. What we decided to do was to ally ourselves with eachother. We had a good mix of products and skills (accounting, mechanics, direct marketing, a guy who goes out and looks at what’s happening at different markets). We started doing it on our own. I’m the marketing coordinator. When I can call a grocery store and offer 15 different product, they love that. They figure each invoice costs $15. If you can add diversity, they want to buy more more more. Streamline it and make it simple for the produce buyers. If local growers don’t achieve the quality and consistency that a distributor achieves, they won’t buy. Quality sells itself. Our greatest strength and our greatest weakness climate/distance. Working together has made it work. We’re all 5-10 acres. We’re something in between FM and large, commercial ag. I attribute a lot of the success to the personalities involved.
We’ve had a lot of people wanting to join, but I think multiple small coops is the answer. That enables us to be flexible and responsive to the market. Plus, we’ve worked together for a while and understand each other.
Try and find a good blend of products to offer.
Clayton Burrows, Growing Washington: It’s good to see Mr. Butler here, he’s gone to great extremes to make the distribution system work. TO see the growth of his business speaks to his ability as a trendsetter.
Growing WA is a collection of new generation and Latino farmers. We operate 5 farms in W. Washington, ranging from 1 acre to 50 acres. This season we attended 400 farmers markets, sell to restaurants, two CSA programs, sell to various schools. A lot of times it boils down to a lot of trucking.
Theme: multiple farms marketing and distributing products in an efficient, high-quality manner.
- How do you make it affordable for both farmers and schools? There’s plenty of support for farm-to-school programs.
- Peak farming coincides with summer break…not ideal match-up.
- Quantity, quality, consistency. Must meet all three every time. The food buyers are often used to a “click og the mouse, next day delivery” hard to compete with that.
- Farmers often don[‘t have time to go looking for sales outlets, flip the coin, schools often don’t have time or resources to go looking for farmers.
- It’s challenging for schools to manage multiple points of contact.
- Insurance and food safety are consistent barriers.
- Final thing: lack of basic resources on both sides of the equations. Example: most schools don’t have scratch kitchens. They take processed food and reheat it. Small infrastructure steps can help reduce that barrier.
- What we’ve done is try to tackle these barriers on a small scale. We have a long way to go. We’ve approached it by consolidating: one invoice, one truck, one insurance policy. By drawing on multiple farms, we can consistently offer quality and reduce problem areas.
- We can’t expect school buyers to WANT to buy local. The current system is very strong and they don’t have great resources to throw at the problem.
- Transportation and storage are big issues. When you get farmers together, they can feed of the group energy, which helps create a feeling of ownership. If you can piggyback efforts, you can make a lot happen. Simple, cooperative transportation system. Communal resources helps overcome lack of resources.
- We are fortunate to have state support for our efforts, but we have to try and create a system that is self-sufficient and not dependant on grant support.
- The majority of our production comes from a rural area. The biggest market is in Seattle. How do you efficiently and effectively get product from point A to point B? We use technology to help aggregate product. Buyers purchase by Tuesday, we deliver on Thursday. If you can fill a truck with 30-40 orders, you can economically justify going from point A to point B.
- Another strategy is to back-haul from point B to point A.
- An important part of the program is to keep the integrity of the small farm name from harvest to delivery, so that the small farms get credit.
- We’ve started to use farmers markets as distribution points. It’s a natural fit, because farmers stay within their normal routine, but can maximize their distribution.
- We focus on keeping it simple.
- This program reduces risk for both farmers and buyers.
Multiple Farm CSA
- We studied the Pike Place Market Basket. Biggest problems: didn’t allow farmers to set their price, required farmers to deliver product to PPM, didn’t focus on what’s best for the farmers.
- Allows farms of all sizes to participate. Doesn’t have the same risk as running your own CSA. We provide: marketing, staffing, cold storage, delivery. Small program is experiencing strong growth…will likely have the largest CSA north of Seattle
- Our approach is the same for each and every program: maximize overlap with trucking and keep it simple and easy to work with. By working this way, we’re opening up new markets for our farms and for other partner farms.
Farmhouse Table, coordinator for Farmhouse CSA
Under Community Farm Connection: to bring local consumers closer to local food while supporting local growers.
Farmers have identified distribution as the biggest barrier.
Idea: create a small storefront for local growers and to create a CSA to function as a distribution network.
Focused on growers that grow for a living, not backyard gardeners.
CFC submitted a grant to the Icicle fund to support local community enhancement environmental issues.
CSA is the first step to creating a larger food network in the region.
Space in Wenatchee donated. Commercial refrigerator was given by local food purveyor. Through an informal arrangement, given access to cold storage space, work space to put together the boxes, a professor, Bob Gillespee, volunteered to drive the school’s refer truck to all of the participating farms. College donated.
Because we’re not a traditional middleman, we’re just facilitating the movement of local food to local eaters. The CSA customers are philosophically dedicated to the endeavor, which helped generate GREAT volunteer support to help make the system work.
It’s been an amazing year: more demand then they could meet.
We didn’t know what to expect at the outset, which meant that we didn’t really know how to plan. We actually partnered with OPMA to buy row crops.
We were able to connect with growers and meet them half-way to smooth the distribution.
Offer a newsletter, which included recipes, growing updates, events calendar
Also included: flower shares, fresh bakery goods (Pretiolla bakery)
We decided that we needed a face/space for the project, so we opened Farmhouse Table market to sell additional products: cheese, locally made salsa, other local value-added products. Not everybody wants to get a CSA, the storefront is a way to accommodate a larger market.
Overall, we’ve had a great positive response from the community. We already have a lot of people signed up for 2009 CSA, we have a new, larger retail space, we’ve been conducting market research to try and accommodate our customers. We are exclusively local, so we are trying to figure out how to extend our growers seasons.
Reiterate Watershine: Stronger as allies than as competitors. Use that idea to get product from farms that grow earlier (geographic variety) and grow different products to coordinate our program to have enough food, variety and quality available for our customers.
We’re hoping to do more farm pickups, but we ultimately want to have our own truck. We’re working with local chefs to create pre-made products from local products.
We may institute online ordering.
CFC wants to increase Farmer-Chef connection. Chef from McGlenn’s is spearheading that effort. We can become the intermediary between chefs and growers.
Q & A
Sunny Pine Farm: How did you pay for the trucks?
Kim: we received a grant from the icicle fund to help pay for gas, small stipend for the drivers, plus we used other people’s trucks/vans. WE’ll probably apply for another grant.
John Butler: I have two trucks on the road everyday. I raided my kids college fund to save the farm to buy two refer trucks. As the business grew, we sought our financing. There’s a lot of local help, and it’s not always an easy sell, but you have to ask to try and generate interest.
Clayton: We leased two trucks, but they broke down. We purchased two with farm proceeds, then we lease one monthly.
Watershine: when we started, we had grant support. We ended up pooling our money at the end of the first year, taking minimal products to buy a truck. It’s too important. You’ve got to do it early.
CFC Lady: We’ve talked about not being the middleman…how do you finance the other, non’grower positions (i.e.marketing coordinator)?
Watershine: We split it up. Each grower pays 12% of the invoice, as well as a box fee. Then it evens out (zucchini vs. peaches, different price per product). The hope is that we’ll generate another pool of money to buy another truck.
Clayton: Subsidized through farm sales, but we use our non-profit to help pay for various expenses.
Jerrilynn(?): If a farm has extra product that’s not going to market, is there a tax credit for food donated to food banks? I encourage people to donate extra product to the food banks, because they need it.
Guy in audience: Once you deduct your expenses for inputs, you can’t deduct from the product created, because you’d double deduct.
John Butler: we often donate extras to food banks, but we’ve never taken the receipt. Re: oranges, I need to have a full truck, so I just started calling California growers to find a small, family grower. I’ve used Lawson bros. packaging exclusively. He’s honest and upfront with me, which allows me to keep the quality of product high. To cover our overhead, we have to keep the machines running. It’s tough to get folks to deliver up to Okanogan, unless you buy a semi load.
Patrice: One way to get a deduction for donating product: count it as marketing – business expense
Julie: All of the food banks provide a receipt for tax purposes, but it’s an individual, case-by-case decision.
Lady in hat with glasses: Is there any emphasis by schools to move away from conventional produce?
John Butler: We offer what the schools want. They haven’t asked for organic, so we don’t offer it. They’re just trying to get a high-quality, fresh, healthy product.
Blue shirt, beard: John, do you have any gaps in your product line?
John Butler: Right now, I’m selling every pluot that comes through my door. The schools, in my opinion, are open to anything so long as it’s a high-quality product. We’re now selling Asian Pears that a grower sent us, normally he juices them, but the schools just love them. Sometimes the schools don’t want a product because the kids use the pits or whole fruit to cause mischief.
Joan: The Wenatchee school district is interested in connecting with local growers, but they need samples and a product pitch. Food service staff is willing to work with whole foods!!!!
John Butler: The infrastructure is a tremendous cost. If I change my product line, it’s a whole new investment (i.e. the ideal holding temp for lettuce is different than the holding temp for apples, which would mean a different cold storage facility)
Alaskan fish guy: Concerning school systems: has anyone heard of Sodexho? They create a lot of hurdles to get through if you want to break into institutional markets.