Building Regional Produce Supply Chains

EXECUTIVE SUMMARY

Whether the incentive is freshness, economic development, food safety, food resilience, healthy ecosystems, minimization of carbon footprint, or simply the desire for stronger community, the demand for regional foods is booming.

The increase in demand, however, is not being met. Obstacles to efficient regional distribution are numerous and incredibly complex, with dysfunctional and inefficient logistics, policies, and business operations all along the vertical.

While there are individual success stories along the supply chain, businesses, nonprofits and government agencies are still searching for ways to turn isolated achievements into replicable models of high-volume, regional food systems.

In August 2010, FarmsReach hosted the first Regional Produce Supply Chain Convening – a design workshop – to collectively envision and design practical solutions, whether or not they involved technology. Participants represented farms, aggregators (and food hubs), distributors, and end-business buyers.

The workshop revealed numerous systemic issues that must be addressed in order to create efficient regional logistics.The lack of capital available for small and medium-size farms, coupled with their lack of business skills, is a fundamental issue that has ripple effects down the supply chain. Meanwhile, regulations and policy imposed by end-buyers and the government have ripple effects back up the vertical to aggregators and producers.

We discovered many opportunities for innovation, investment and policy change for all stakeholders:

  • Technical assistance for farms to improve business operations and lower operating costs
  • Technical assistance and education to distributors and end-buyers to better understand seasonality, diverse varieties, growing practices, and true costs of food; and to pass this information to customers
  • Aggregation infrastructure
  • More efficient division of labor; focusing each stakeholder on their core competencies
  • Revised regulations and policies that enable, not inhibit, small and medium-size farms
  • Increased infusion of capital for all of the above

Based on these findings, FarmsReach is leveraging our experience, our existing software platform, and new alliance with St. Onge Supply Chain Engineering to focus on farms’ core business operations.

Rebuilding efficient regional supply chains will not be easy. It will require the combined effort of many players to turn the concept of regional food systems into a logistical reality. We hope our findings will assist other nonprofits, for-profit businesses, policy-makers, and funders to address these issues and rehabilitate this vital industry.