Introduction

We are facing a complex set of food problems:

What is the solution to all these problems? As usual – people power.

Many assume there is no hope against the economic might of the food industry giants who are responsible for much of the problems we face today. But Raj Patel, author of Stuffed and Starved, says that there are things we can do. Here’s a  list of 10 changes he suggests:

  1. Transform our tastes – don’t eat processed food, eat slowly, prepare your own food, and savour it.
  2. Eat locally and seasonally.
  3. Eat agroecologically — try to eat food grown in harmony with its local environment, learn about your local environment and grow your own food.
  4. Support locally owned business.
  5. All workers have the right to dignity — freedom to organize and work without persecution.
  6. Profound and comprehensive rural change — build rural areas with economic opportunities and a quality of life that attracts families.
  7. Living wages for all.
  8. Support for a sustainable architecture of food — rethink open space and sprawl as we develop.
  9. Snapping the food system’s bottleneck — among other things, end subsidies to agribusiness, aggressively police their monopolies and tax processed food to a level where it reflects the harm it does.
  10. Owning and providing restitution for the injustices of the past and present — that rich countries of the Global North such as Britain forgive debts and pay reparations to countries exploited in the Global South.

The way those in the developed world eat is unsustainable:

  • based on global trade which incurs huge food miles
  • demands unsustainable levels of water and energy use
  • results in deforestration
  • contributes to global warming and provides fertile ground for disease

Mainstream supermarkets are the ground zero of the modern industrial food system which causes all these social ills and Patel advises hitting them where it hurts. Take your food dollars and support  your local producers, better yet, begin growing your own food.

As we have also concluded in our Small Is Beautiful page, a local economy is vital for creating resilient and independent communities. Industries suitable for regions may vary, but there is one need that all human communities have; food. Since food is such a basic need, it is clear that food supply can play a universally important role in the creation of a local economy around the world. In this section, we assess the community impact of creating such a local food economy.

Global vs Local Food System

According to food reformist Helena Norberg-Hodge and Steven Gorelick from the International Society for Ecology and Culture:

“the current global food system is based upon an economic theory: instead of producing a diverse range of food crops, every nation and region should specialise in one or two globally-traded commodities – those they can produce cheaply enough to compete with every other producer. The proceeds from exporting those commodities are then used to buy food for local consumption. According to the theory, everyone will benefit. The theory, as it turns out, is wrong. Rather than providing universal benefits, the global food system has been a major cause of hunger and environmental destruction around the world. The environment has been hit particularly hard. The global system demands centralised collection of tremendous quantities of single crops, leading to the creation of huge monocultures. Monocultures, in turn, require massive inputs of pesticides, herbicides and chemical fertilisers.

These practices systematically eliminate biodiversity from farmland, and lead to soil erosion, eutrophication of waterways, and the poisoning of surrounding ecosystems. Since global food is destined for distant markets, food miles have gone up astronomically, making food transport a major contributor to fossil fuel use, pollution, and greenhouse gas emissions.”

 

Figure 1: Global Food System Model (Source: Bringing the Food Economy Home, Helena Norberg-Hodge and Steven Gorelick, International Society for Ecology & Culture)

 

 Figure 2: Local Food System Model (Source: Bringing the Food Economy Home, Helena Norberg-Hodge and Steven Gorelick, International Society for Ecology & Culture)

 Figure 3: Comparison and winners and losers in each model (Source: Bringing the Food Economy Home, Helena Norberg-Hodge and Steven Gorelick, International Society for Ecology & Culture)

The 25% Study

In 2010,  Brad Masi, Leslie Schaller, and Michael H. Shuman authored an important study on the Local Food Economy called The 25% Shift,  The Benefits of Food Localization for Northeast Ohio & How to Realize Them in which they analyzed the impact of the 16-county Northeast Ohio (NEO) region moving a quarter of the way toward fully meeting local demand for food with local production. The result confirms the idea that local food economies can play a significant role in local economic empowerment.

The executive summary of the report summarizes the potential impact of this 25% shift:

  • Create 27,664 new jobs, providing work for about one in eight unemployed residents
  • Increase annual regional output by $4.2 billion and expand state and local tax collections by $126 million
  • Increase the food security of hundreds of thousands of people and reduce near-epidemic levels of obesity and Type-II diabetes
  • Improve air and water quality significantly
  • Lower the region’s carbon footprint
  • Attract tourists
  • Boost local entrepreneurship
  • Enhance civic pride

Of course, they found that this 25% shift also included a significant set of unique challenges:

  • New workforce training and entrepreneurship initiatives are imperative for the managers and staff of these new or expanded local food enterprises
  • Land must be secured for new urban and rural farms
  • Nearly a billion dollars of new capital are needed
  • Consumers in the region must be further educated about the benefits of local food and the opportunities for buying it

To overcome these obstacles, the study offered up more than 50 recommendations for programs, investment priorities, and policies. In a period of fiscal austerity, the authors conclude that the priority must be to create “meta-businesses” that can support the local food movement on a cash-positive basis. Some noteworthy recommendations are:

  • Mobilize consumers in the region to buy local food by creating local debit, credit, and gift cards, and purchasing platforms that better connect local food businesses to one another and to government  procurement agencies.
  • Increase the competitiveness of local food businesses through the creation of local business alliances that facilitate peer learning and new kinds of delivery services, local-food malls, and joint procurement cooperative
  • Provide more accessibility to capital to local food businesses by establishing new revolving loan funds, municipal food bonds, and a local stock market
  • Support a new generation of local food entrepreneurs by deploying a network of food-business incubators and “food hubs”operating in concert within a network of enterprise support
  • Create a North Eastern Ohio (NEO_ Food Authority, potentially owned and capitalized by thousands of shareholders in the region. This Authority might issue tax-exempt bonds and then provide seed capital for many initiatives. The next step should be to prepare a business plan for this idea.

Definition of Local Food

Proximity – to many, local food is about proximity—that is, discriminating consumers demanding higher quality food grown, raised, caught, processed, cooked, distributed, and sold by people nearby they know and trust.

Local Ownership – equally important is local ownership of the food businesses involved in a region’s value chains.

Proximity and ownership are naturally interrelated. Locally owned food businesses tend to focus on local markets, and locavores tend to favor locally owned businesses. But this is not always the case. As locally owned food businesses grow, they naturally begin to reach into non-local markets. Large, non-local businesses, including Wal-Mart and Sysco, who fully understand the growing market opportunity, are now attempting to provide local food to their customers.

The Purpose of the Study

This report seeks to determine the economic benefits that flow from reduced food miles that result from local food businesses growing, raising, processing, packaging, distributing, cooking, and serving  local customers. It assumes that nearly all the new businesses involved will be small and locally owned. However, involvement of non-local businesses as market partners or investors in these initiatives is welcomed and encouraged when it is beneficial to the local economy.

In particuliar, this study aimed to help the greater Cleveland area fully realize the benefits of the local food revolution. Its five sections aim to answer the following questions:

  1. What’s going on here already? – broken down by major regions
  2. How strong is the local food movement here? SWOT analysis—strengths, weaknesses, opportunities, threats of existing food businesses in the region
  3. What would be the impact of expanding the movement? – imagining a scenario of moving 25% of the way toward complete food localization, analyzing the benefits that would flow from it,  and highlighting the biggest obstacles that stand in the way.
  4. How would the local food movement strengthen itself? – datamine the affinity groups assembled for the study for suggestions on specific programs, investments, and policies
  5. What strategic priorities would most benefit the movement? -priority programs, investments, and policies, based on our assessment of which initiatives cost the least and leverage the most

Breaking  down the Local Food Economy into Logical Sectors

The study organized experts in the region into 35 “affinity groups,” each an important constituent part of the local food economy. The affinity groups, as shown in  Charts 2a-2e below and  fell into five broad sectors:

Agricultural Production – The bedrock of the local food system are farmers that use the region’s land

Figure 1 Agricultural Production (Source: The 25% Shift)

Markets – Markets represent the end-point in the local food cycle, the places where consumers buy most of their food

Figure 2: Markets (Source: The 25% Shift)

Food System Capacity – providing resources and other support to the local food economy

Figure 3: Food Capacity (Source: The 25% Shift)

Supply Chain Infrastructure –intermediaries that help connect producers with markets

Figure 4: Supply Chain  Infrastructure (Source: The 25% Shift)

Supporting Businesses – Many important businesses provide direct services to support farmers and food enterprises:

Figure 5: Supporting Businesses (Source: The 25% Shift)

Gathering the Information

To acquire the information required for the study, the team created a website called the North Eastern Ohio Food Web www.neofoodweb.org)  that would serve to:

  • Rally people around to form a viritual think-tank
  • Become an important portal for their input through surveys, discussion topics, and comments on early drafts of this paper
  • Provide an information clearing house of reports, previous regional food studies, and video vignettes highlighting diverse perspectives in the region about local food topics

After the website was created, the team sought input from:

  • Their steering committee
  • Members of the Ag-Bio Industry Cluster Leadership Council (an initiative between Ohio State University and the Fund for Our Economic Future)
  • Leaders in farming organizations and food policy councils

The team identified representatives for each of these groups and invited them to participate in several public events that were held between June and November 2010. About 200 people participated in the NEOFoodWeb. An analysis of their occupations, residencies, and interests revealed two important points:

  1. The majority of the participants were from Cuyahoga County, which is unsurprising given that this study was initiated by Cleveland-based organizations. Yet about a third came from outside Cuyahoga County, which demonstrates the breadth of regional interest in this work and the opportunities for future organizing.
  2. Half the participants were members of the food system capacity cluster, and a third were in agricultural production. There was relatively limited participation from those involved with markets, supply-chain infrastructure, and supporting businesses. To remedy this gap,the team conducted additional one-on-one interviews with key players in these clusters.

This work was not conceived as a academic study but rather as a strategic action plan that could be used to guide the community to:

  • immediately strengthen local networks
  • identify the most innovative efforts already taking place in the region
  • engage key stakeholders to seize new opportunities for food localization

The authors were confident that all the important stakeholders such as the steering committee overseeing the report, the members of their affinity groups, and the many leaders in the region who they interviewed will take these policy, programmatic, and investment recommendations, improve them, and grow the NEO region’s reputation as one of the nation’s local food pioneers.

Three Examples of Successful Local Food Enterprises and their Local Economic Impact

Vermount Food Venture Center, Hardwick, Vermont

Hardwick, Vermont created a food industry. A variety of food service and  producers including  restaurants, artisan cheese makers, and organic orchardists are some of the new businesses that have added up to a hundred jobs to Hardwick in recent years. Seeing the rapid growth in this sector, the state established a new Vermont Food Venture Center (VFVC) in order to further accelerate new businesses.

To lower the threshold of new business entry, the center provides:

  • fully equipped and licensed commercial kitchens for rent, including facilities for dry and cold storage
  • three kitchens – hot process, cold pack, bakery – for hourly or contract rent
  • co-packing opportunities in a state of the art facility
  • advice for start-up business practices, food science, distribution and kitchen health and safety
  • VFVC’s fully equipped kitchens are available for hourly or contract rent and can be tailored to meet specific needs for prep, catering, baking or teaching

The VFVC  understands the enormous costs  and intensive certification processes for food startups and provides assistance to local businesses in order that they can launch and grow without the overwhelming initial investments.

Güssing Austria

This is a small a rural European community of 4,000 had sustained itself on logging and farming. In recent decades, however, it was no match for global competition, which eventually decimated  its traditional industries. The mayor of Güssing was faced with a difficult decision; either close the town or make a bold move. The mayor took the later. He saw a potential opportunity and decided that the key to future prosperity was to shift to a a completely new market; improving energy efficiency in the local market. He built a small district heating system, fueled with local wood. The system worked far more efficiently than the existing system and the local money saved by importing less energy was reinvested in expanding the new energy business. Since then , 50 new firms have opened, creating 1,000 new jobs. This bold move not only saved the town, but expanded wealth while reducing the town’s carbon footprint by up to 90%.

Zingerman’s Community of Businesses, Ann Arbor, Michigan

Ann Arbor is home to the third local economy success story, the Zingermann franchise.

Zingerman started out as one deli in 1982 selling $100 worth of sandwiches in a day. Today, it is a group of 8 community   businesses all located in the Ann Arbor, MI area. Their mission is to share the Zingerman’s experience – selling food that makes you happy giving service that makes you smile in passionate pursuit of our mission showing love and caring in all our actions to enrich as many lives as we possibly can. It’s a formula that has worked, collectively employing 525 people and achieve annual sales of over $27 million.

Co-founder Ari Weinzweig and his partners conscientiously built a food cluster of community businesses from scratch. They carefully assessed the items going into the deli – bread, coffee, cheeses – and saw profitable opportunities for creating a corresponding businesses to supply these items – a bakery, a coffee roaster, and a creamery. They looked at the products being sold at the deli – fabulous coffee cakes and high-quality meats – and built new, value-adding businesses with these products, including a mail-order company and a restaurant called the Roadhouse.

Zingerman’s has become an Ann Arbor institution. In building on that success, the standard franchise model would dictate opening dozens, or even hundreds, of additional Delis all over the country. Instead of that, Zingerman’s pursued a more unusual and local plan that would retain it’s uniqueness. They chose to create what they dubbed the Zingerman’s Community of Businesses—a collection of Zingerman’s businesses, each with its own food specialty, all located in the local community, each working to help make the shopping and eating in every aspect of Zingerman’s more flavorful and more enjoyable than ever.


In each business they sought out a managing partner or partners so that there will be someone to bring the day to day passion and persistence that it takes to be really good at anything into play on a day to day basis. Ari and his partner Paul provide high level guidance, support, leadership and whatever else is needed.

They are now creating a brewery, a publishing company, and a hotel to add to their community of businesses. Their model has been so successful they created a consulting firm to meet the demand for advice and technical assistance from entrepreneurs and communities worldwide.

The Power of Cooperative Food Enterprises

Michael Shuman  is also a lead author in another important study through the Wallace Center at Winrock International and the Business Alliance for Local Living Economies entitled Community Food Enterprise, Local Success in a Global Marketplace

You can download it here:

  1. Executive Summary
  2. Findings
  3. Full Report (warning: 19 mbyte download)

Executive Summary

The local food movement is now spreading globally, yet is not well understood. To many, local food is exclusively about proximity, with discriminating consumers demanding higher-quality food grown, caught, processed, cooked, and sold by people they know and trust. But an equally important part of local food is local ownership of food businesses. This report is about the full range of locally owned businesses involved in food, whether they are small or big, whether they are primary producers or manufacturers or retailers, whether their focus is local or global markets. We call these businesses community food enterprises (CFEs).

Some dismiss the recent rise of local food and CFEs as just a passing fad. We see it as the natural consequence of the improving competitiveness of CFEs. Not only are CFEs getting more market savvy, but they are also taking advantage of the growing diseconomies of global food businesses. Long, nonlocal supply chains, for example, are increasingly vulnerable to rising oil prices. It’s true that CFEs face special challenges from their modest scale—in leadership, finance, secession, and technology, to name a few—but they are also developing impressive ways of overcoming them.

This report provides a detailed field report on the performance of 24 CFEs, half inside the United States and half international. We show that CFEs represent a huge diversity of legal forms, scales, activities, and designs. – The authors

Four Critical Questions Addressed:

  1. What strategies are community food enterprises deploying to heighten their competitiveness?
  2. What are the major challenges facing these enterprises and the ways they are overcoming those challenges?
  3. How well are these enterprises meeting the triple bottom lines of profit, people, and planet?
  4. To what extent are successful CFE models capable of being replicated worldwide?

15 Strategies that CFE’s are Using to Scale Up

  1. Hard Work—CFE entrepreneurs like Judy Wicks, who for 25 years practically lived in her restaurant, the White Dog Café in Philadelphia, compensate for their limited resources with exceptional industriousness.
  2. Innovation—Lance Nacio, of Anna Marie Seafood in Louisiana, developed an appropriate technology to flash freeze shrimp onboard his fishing vessel and deliver an exceptionally fresh product. Sylvia Banda, founder of Sylva Professional Catering Services Limited and the impresario of local food in Zambia, invented and now manufactures for local farmers the Sylva Solar Food Dryer.
  3. Local Delivery—The Oklahoma Food Cooperative is showing how, through an Internet-based distribution system, fresh food can be delivered regionally at roughly a quarter of the cost of mainstream food distribution.
  4. Aggregation—Locally owned businesses need not be small. Large producer cooperatives owned by local members, such as the Cooperative Regions of Organic Producer Pools (better known as Organic Valley), have improved the competitiveness of 1,300 farmers across North America by aggregating their market power. A nonprofit, Appalachian Harvest Network, also has helped aggregate 70 former tobacco farmers to grow and sell organic fruits and vegetables collectively.
  5. Vertical Integration—The annual sales of Zingerman’s Community of Businesses in Ann Arbor, Michigan, have mushroomed to nearly $30 million through a strategy of “growing deep.” Rather than create a nonlocal chain, Zingerman’s has stayed local and created eight businesses that localize its inputs and diversify its food products and services.
  6. Shareholder Loyalty—Like other consumer cooperatives, the Weaver Street Market has learned that broad local ownership increases the commitment of its 13,000 members to do their shopping at its supermarkets.
  7. Speed—Lorentz Meats in Minnesota provides affordable, mid-scale processing that enables family-scale ranchers to fulfill specialty meat orders with lightning speed.
  8. Better Access—Greenmarket in New York City demonstrates how CFEs are increasingly reaching low-income consumers living in “food deserts” with relatively inexpensive fresh food.
  9. Better Taste—Emphasizing quality over quantity, Akiwenzie’s Fish in Ontario, run by a Native American family, sells award-winning smoked fish at farmers markets in Toronto.
  10. Better Story—One similarity between the White Dog Café and the Cabbages & Condoms restaurants in Thailand is their menus, both of which contain extensive descriptions of where the good served comes from and who exactly was involved in growing, raising, and processing it. Such stories enhance consumers’ experience, and the market value, of local food.
  11. Better Stewardship—Many CFEs are becoming commercially successful without compromising their social performance, and have turned their superior social performance into compelling competitive advantages. The loyalty of consumers who buy strawberries from Swanton Berry Farm is deepened by their awareness that 100% of the farm’s employees are members of the United Farm Workers union.
  12. Better Service—The Self-Sufficient Organic Farm School in Paraguay, a high school for future farmers and CFE entrepreneurs, prides itself on giving—and teaching—exceptional service through its 16 student-run food enterprises, which help underwrite the institution.
  13. Revitalizing Local Economies—CFE entrepreneurs tap growing consumer interest in “buying local” to support local economies. The Intervale Center built a municipal compost company for Burlington, Vermont, and is now close to its goal of supplying 10% of the city’s food locally.
  14. More Community Spirit—CFEs touch consumers’ desire not just for good food but also for memorable experience and fun. One way the Mavrovic Companies have become ground zero for organic grain, bread, and meat production in Croatia is through its Eco-Center, which is an all-in-one research facility, education center, and community gathering place.
  15. More Social Change—Locals and tourists in Thailand descend in great numbers to one of a dozen Cabbages & Condoms restaurants and resorts not only for the excellent food and hospitality but also because the net revenues, currently about $2 million per year, support the country’s oldest public education campaigns concerning AIDS, safe sex, and reproductive rights.

Seven Community Impacts

  1. Greater Income—Driven by fairness, most of our CFEs are striving to put more income into the pockets of their farmers, workers, or suppliers. Kasinthula Cane Growers Limited in Malawi, for example, uses fair trade premiums not only to support its 282 sugar farmers but also to help their communities access clean drinking water, electricity, and medical services.
  2. Training—CFEs enrich their communities’ entrepreneurial resources through concerted workforce training. With 80% of its employees in their 20s, Cargills in Sri Lanka provides free, in-house classes to every employee through its Albert A. Page Institute of Food Business.
  3. Ecology—Unlike global companies that often exploit, exhaust, and then abandon a resource base, a CFE is tethered to a community’s assets in perpetuity. The Ajddigue Women’s Argan Cooperative in Morocco is thus committed to replenishing the fast disappearing argan trees through an aggressive replanting program.
  4. Local Economy—CFEs pump up their community economies by hiring locally, buying local inputs, and engaging in and contracting for local value-added production. The Panchakanya Agriculture Cooperative in Nepal, for example, is helping its women farmers grow organic fruits and vegetables using local inputs.
  5. Charitable Contributions—Local businesses typically contribute more to charity per employee than do global businesses. Some of the most successful CFEs in the United States—White Dog, Zingerman’s, and Weaver Street—actually have started their own community foundations. Sunstar Overseas Limited in India uses the fair trade premiums it earns from global basmati rice sales to support infrastructure improvements in its farmers’ communities.
  6. Women’s Empowerment—Almost all our CFE examples are empowering women. The leaders and members of the Ajddigue Women’s Argan Cooperative and the Panchakanya Agriculture Cooperative are exclusively women. Dulce Gozon has become a powerful female leader of the National Ongoing Growers’ Cooperative Marketing Association in the Philippines.
  7. Global CFE Solidarity—Most of our CFEs believe in local food as a movement, and are committed to supporting other CFEs worldwide. The African American farmers of the Indian Springs Cooperative in Mississippi, for example, have reached out to producer cooperatives in Africa.

Summary & Recommendation

CFEs are replicable in other parts of the world, especially if the successful strategies revealed in this study are widely communicated and adopted.

The real key to improving the probability of the next generation of CFEs succeeding is networking and peer mentoring

  • Create an open-source model such as web-based Locopedia that can become a reliable, sophisticated database of small-business innovation
  • Use it to share great business models posted from all over the world
  • Food business is a fundamental place to start because it is universal but once it’s up and running, expand the network to go beyond CFE’s and include all types of local businesses
  • For the world’s six billion people, the report suggests that CFEs can provide powerful, self-financing mechanisms for improving their nutrition, health, and economic vitality