LESSONS

LEARNED

FROM THE

FIELD 

Running A

FOOD HUB

VOLUME ONE
Funding for this study was provided by VAFAIRS, a nonprofit co-op and small business development

office in Richmond, Va., and by the Cooperative Programs office of USDA Rural Development.

Mention in this report of company and brand names does not signify endorsement over other

companies’ products and services.

Service Report 77 

Issued April 2015

For questions or additional copies of this report, contact:

James.Barham@wdc.usda.gov or call 202-690-1411. This report and many others that may be useful

to food businesses are posted on the USDA Rural Development, Cooperative Programs website at:

www.rurdev.usda.gov/LP_CoopPrograms.html 

The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities

on the basis of race, color, national origin, age, disability, and where applicable, sex, marital status,

familial status, parental status, religion, sexual orientation, genetic information, political beliefs,

reprisal, or because all or part of an individual’s income is derived from any public assistance

program. (Not all prohibited bases apply to all programs.) Persons with disabilities who require

alternative means for communication of program information (Braille, large print, audiotape, etc.)

should contact USDA’s TARGET Center at (202) 720-2600 (voice and TDD). To file a complaint of

discrimination, write to USDA, Director, Office of Civil Rights, 1400 Independence Avenue, S.W.,

Washington, D.C. 20250-9410, or call (800) 795-3272 (voice) or (202) 720-6382 (TDD). USDA is an equal

opportunity provider and employer.

Rural Development
Running a

Food Hub

Lessons learned

from the field 

By James Matson, Jeremiah Thayer, and Jessica Shaw

Matson Consulting, Aiken, S.C. 

The authors thank James Barham of USDA Cooperative

Programs for his help in preparing this report. Thanks also

to Erin Foster West, a Tufts University graduate student

and intern at USDA, for editorial and graphic assistance.

They also extend their thanks to all of the food hubs profiled

in this report for allowing their staff to devote time to

participate in this study and for their dedication to building

robust regional food systems. 
Contents

7 Background and Approach

10 Customers

13 Products

14 Food Safety Certifications

17 Infrastructure

19 Viability and Success

20 Labor

4 RUNNING A FOOD HUB

Illustration by David James, courtesy of Capay Valley Farm Shop
23 Operations

24 Transportation

25 Software

26 Food Hub Insights and Recommendations

Appendix

30 Fifth Season Cooperative

32 La Montanita's Co-op Distribution Center

35 Capay Valley Farm Shop

37 This Old Farm

39 Greenmarket Co.

41 Sandhills Farm to Table Cooperative

42 Idaho's Bounty

44 Nashville Grown

46 Eastern Carolina Organics

47 Local Food Hub

49 Red Tomato

RUNNING A FOOD HUB 5

Cover: Ilustration by Sharon Szegedy Graphic Design, Inc. Cover and book

design by Stephen Hall, Kota Design.
6 RUNNING A FOOD HUB

Figure 1 — Location of Participating Food Hubs

l Fifth Season Cooperative

l La Montañita’s 

l Capay Valley Farm Shop GreenMarket Co.

Sandhills Farm to Table Cooperative

Nashville Grown

Eastern Carolina Organics

Local Food Hub l

Red Tomato

Idaho's Bounty l

l

This Old Farm l

l

l

l

l
RUNNING A FOOD HUB 7

IN RECENT YEARS, several surveys—including the 2013 National

Food Hub Survey1 and the Food Hub Benchmarking Study2—have

collected data on U.S. food hubs. What seems to be lacking from

the current research on food hubs is information on operations and

“lessons learned” from those involved in starting and operating food

hubs. 

 To help fill this void, interviews were conducted with the leaders

of 11 food hubs, using an open-ended, free-flowing format. This

allowed for maximum flexibility during each interview and the

ability to further capture the unique nature of each entity. The food

hubs, located throughout the United States, represent a diversity of

organization types, product offerings, operation structures, and

missions. 

 Food hub leaders were interviewed via telephone or email during

the early spring of 2013 and spring of 2014. The interviews were

guided by a list of pre-selected topics that were common to all the

interviews, but the goal was not to collect rigorous statistical data.

As new topics were identified, additional questions were asked to

further probe and capture the unique and individual nature of each

entity.

Locations

 As can be seen on the map in Figure 1, the food hubs that

participated in the study are located across the country, with a

generally higher concentration in the Midwest and East Coast,

reflecting the large number of such operations in those regions. In

many cases, the location of the food hub affected aspects of the

business, such as legal structure and customer focus.

Background and Approach

Map of USA courtesy of Nations Online Project

1 Fischer, M., Hamm, M., Pirog, R., Fisk, J., Farbman, J., and Kiraly, S. 2013. Findings of the

2013 National Food Hub Survey. Michigan State University Center for Regional

Food Systems and The Wallace Center at Winrock International. Retrieved from

http://foodsystems.msu.edu/activities/food-hub-survey. 2 Food Hub Benchmarking Survey: Report on Findings 2013. The Wallace Center at

Winrock International in partnership with Farm Credit East, Farm Credit Council,

and Morse Marketing Connections. Retrieved from

http://ngfn.org/resources/food-hubs. 
8 RUNNING A FOOD HUB

Food Hub Profiles

 Table 1 provides a general description and comparison of the

food hub businesses studied. These profiles cover basic points of

comparison, including location, legal structure, number of staff,

estimated number of participating producers, estimated sales

revenues, and the year the entity was established. Additional

information on the food hubs can be found in the appendix.

Food Hub Name Location Legal Structure

Fifth Season Cooperative Wisconsin Cooperative

La Montañita’s Co-op Distribution Center New Mexico Cooperative

Capay Valley Farm Shop California S-Corp

This Old Farm Indiana S-Corp

GreenMarket Co. New York Nonprofit

Sandhills Farm to Table Cooperative North Carolina Cooperative

Idaho's Bounty Idaho Cooperative

Nashville Grown Tennessee Nonprofit

Eastern Carolina Organics North Carolina LLC

Local Food Hub Virginia Nonprofit

Red Tomato Massachusetts Nonprofit

Table 1 — Participating Food Hub Profiles
RUNNING A FOOD HUB 9

Lessons Learned

 The use of the “open interview” format was intended to gather

general information in order to highlight any similarities or

differences in the operations of food hubs throughout the Nation as

well as “lessons learned” that could be shared with other entities. 

The remainder of this document groups these lessons learned by

the food hubs according to the following key areas:

 • Customers

 • Labor

 • Products 

 • Operations

 • Food safety certifications

 • Transportation

 • Infrastructure

 • Software 

 • Viability and success

 • Common ground

Personnel Estimated Sales Number of Date

Producers Established 

1 Full time, 1-3 Part time/ Seasonal $350,000-$400,000 (2014) 25 2010

8 Full time $5,500,000 (FY 2014) 700 2007

10 (FT and PT) $1,000,000 (2014) 45 2007

22 (FT and PT) $1,400,000 40-125 2009

6 Full time, 4 Seasonal $650,000 (Fiscal 2013-14) 30-55 2012

3 Full time, 5 Part time $460,000 (2013) 30-38 2009

3 Full time, 7 Part time $900,000 (2013) 70-100 2006

2 Full time, 2 Part time $60,000 (2013) 12-54 2012

13 (FT and PT) $3,800,000 (2012) 50 2004

10-12 (FT and PT/Seasonal) $985,000 (2013) 80+ 2009

6 Full time $3,750,000 (2013) 40+ 1996
Customers

Types of customer varied significantly. Ranging from individual

customers to large-scale foodservice operations, the targeted

customer often dictates other aspects of the venture, including

whether or not safety certifications were important, the level of

infrastructure necessary, and the type of marketing approach used.

 While all share a desire to increase local and regional access to

fresh local foods and promote the success of agricultural producers,

the food hubs took two distinct approaches to finding customers.

Some organizations choose to market themselves as “direct from

the farm.” They focus on the individuality of the farmer or the

unique aspects of the products. Others have chosen to focus on

freshness, flavor, and quality. They put a great amount of effort into

packaging, maintaining a consistent supply, and ease of ordering. 

Lesson Learned: Determine who your customers are

(retail, wholesale, organic, grass-fed, etc.), then tailor the food

hub’s products and approach to suit the identified market.

10 RUNNING A FOOD HUB

Small

Some smaller food

hubs focus on selling

primarily to

restaurants,

independently owned

or regional grocery

stores, and directly to

consumers. 

Medium

Mid-scale food hubs

sell to the same

customers as small

food hubs, but also

add institutions such

as schools, hospitals

and colleges, or

larger regional

grocery chains.

Large

Larger food hubs

often focus on

national chain

grocery stores and

distribution

warehouses with

limited sales to

individual customers.

A producer-member of the Sandhills Farm to Table Cooperative

(SFTC), in Whispering Pines, N.C., delivers a ‘thank you’ along

with food. Photo courtesy SFTC. 
RUNNING A FOOD HUB 11
Livestock on pasture that will be processed through a USDA-inspected facility and

marketed through This Old Farm (TOF) food hub. Photo courtesy of TOF. Below: Like many

of his fellow producer-members in Fifth Season Cooperative (FSC) in Viroqua, Wis., this

producer is proud of his deep roots in organic agriculture. Photo courtesy FSC. Opposite

page: This egg producer serves the local market around Charlottesville, Va., through

Local Food Hub (LFH). Photo by Justin Ide, courtesy of LFH. 

12 RUNNING A FOOD HUB
Products

Fresh fruits and vegetables are often the main staples of food hubs.

But many food hubs also offer additional product categories,

including dairy products, meats, and more shelf-stable items—such

as local grains and flours—to extend their operating season. This

helps to mitigate drops in revenue during non-production months. 

 Increasingly, value-added products are another avenue being

explored by many food hubs. A few of the food hub leaders

interviewed manufacture their own value-added goods or have

partnered with members who do. Many of the other food hubs are

reselling value-added products in order to expand their product

line. These products allow an opportunity for better margins than

some traditional food hub products and also help extend the selling

season. 

 A few of the food hubs also distribute non-local items that still

fit the core values of the food hub. These items were often products

not available locally, such as nuts, oils, or coffee, or which were

designated as a “specialty” in some way, such a “fair trade” or a

certified organic item. 

Lesson Learned: Seek to source and provide a mix of

product that will allow you to satisfy demand or an identified

need in the market. This may include distribution of products

that are not strictly “local,” but which still suit the mission of

the food hub.

RUNNING A FOOD HUB 13
14 RUNNING A FOOD HUB

Food Safety Certifications

While each of the entities contacted expressed varying levels of

concern and prioritization regarding food safety, every organization

was aware of the need to consider safety certifications, which they

expect to be even more important in the future. A few of the food

hubs have begun to require mandatory Good Agricultural Practices

(GAP) certification of their producers, while others simply help

producers become more aware of food safety practices in an effort

to prepare them for the future. 

 The general consensus among those interviewed was that if they

were not already required, safety certifications would soon become

About 80 producers have partnered with Local Food Hub to

provide a wide variety of produce and meats to customers,

including the Brookville Restaurant (seen here) in

Charlottesville, Va. Photo by Justin Ide, courtesy of LFH.
RUNNING A FOOD HUB 15

a mandatory part of doing business. Almost all of the hubs

contacted are actively working in some capacity to move their

producers and the business toward obtaining safety certifications. 

 The targeted customer base of a food hub has a large impact on

its level of concern with safety certification. Organizations that

focused on restaurant and direct retail customers were the least

concerned with safety certification because these organizations are

typically not pressured by their customers to offer GAP or other

safety-certified produce. Instead, they were able to rely on their

own assurances to customers regarding food safety.

 A hub’s level of compliance with safety certification is mostly due

to the variety in demand in its market. As the size of the food hub

increased, or as the hub became more focused on large-scale

customers and institutional buyers, the level of concern over safety

certification requirements increased. Those with institutional

customers—including hubs that sell to hospitals and school districts,

or those dealing with the sale of protein foods (such as meats, eggs,

and dairy)—are typically much more interested in food safety

certification and strongly encourage producers to be certified. In

other cases, the hubs used surveys and other methods to gauge the

readiness of member-growers to accept safety certification as a

condition for supply.

Lesson Learned: Allow the needs of the food hub

customers to dictate the certification requirements of the hub.

Whether required by customers or not, food hubs should take a

long-term view by maintaining awareness of the food safety

and regulatory environment in order to be prepared for future

demand.
16 RUNNING A FOOD HUB

Capay Valley Farm Shop (CVFS), Esparto, Calif., is a direct-to-consumer and wholesale

food hub in Central California. It does wholesale business with independent specialty

retailers, restaurants and corporate cafeterias. Photo courtesy CVFS. Below: A

Greenmarket Co. delivery truck makes its rounds. Photo by Vitaliy Piltser, courtesy of

GrowNYC.
RUNNING A FOOD HUB 17

Infrastructure

Infrastructure seemed to depend on two different approaches to

operations:

Approach 1—Food hubs that provide more services—such as physical

aggregation, grading, packing, sales, and delivery—often have a warehouse,

equipment, and other infrastructure. 

 Food hubs taking this approach use the equivalent of a medium-sized

warehouse (5,000-10,000 sq. ft.) that included sufficient room for truck parking,

loading, product storage, dry goods storage, and cooling capacity. When one of

these food hubs expands or begins to offer other services—such as light food

processing or freezing—supplementary warehouse space and additional

equipment are often necessary. 

Approach 2—Other food hubs provide fewer physical services and thus have

more limited infrastructure. They instead focus on coordination, payment,

marketing, and promotion.

 These food hubs tend to use much smaller warehouses (1,000-4,000 sq. ft.),

or a mix of owned and rented/borrowed warehouse space (the latter can

sometimes be supplied by food hub growers). While some hubs maintain longterm storage facilities, many use a “just-in-time” distribution approach that

minimizes the need for storage and cooling space. Food hubs that use larger

spaces often rent or lease excess space to producers or other entities for

storage to help offset costs.

Of the food hubs operating with infrastructure, nearly all used

company-owned trucks to do at least some local delivery to

customers. Local trucking resources typically consist of smaller

short-haul vehicles. However, based on their specific circumstances,

some hubs outsourced hauling to local trucking companies to move

large volumes of product over greater distances.

Lesson Learned: Infrastructure will be based on the

product handling and storage needs of the food hub, but food

hubs should incorporate a long-term view of infrastructure

and equipment to provide easier transitions through growth

periods in the future.
18 RUNNING A FOOD HUB

Greenmarket Co., a program of GrowNYC, was launched in 2012. It focuses on the

wholesale distribution of locally sourced farm products. Photo by Vitaliy Piltser, courtesy

of GrowNYC. Below: The Red Tomato food hub supplies much more than its namesake

food, including peaches and other fruits. Located in Plainville, Mass., Red Tomato is a

multi-structured nonprofit that partners with farmers and for-profit distributors. Photo by

Diane Stalford, courtesy of Red Tomato.
Viability and Success

Many of the food hubs studied were not yet profitable. To remain

in business, these food hubs exhibited some cost-saving advantage,

such as volunteer labor, logistics arrangements and partnerships, or

received outside funding, such as grants. Most have remained in

business by obtaining outside funds, whether in the form of

donations, grants, foundation funding, or by being part of a larger

organization or by obtaining some form of business advantage. 

 Long-term financial goals of food hubs almost always include

reaching a point where the business does not have to rely on

outside funding. While a few hubs plan for outside funding to be a

regular part of their operations for the foreseeable future, most

believe that grants and other sources of short-term funding were

necessary to begin operations or to reach a new plateau but were

not good options for the long term, since continuation of such

funding is not assured. Further, large amounts of time and effort

are required to apply for grants and other outside funding. The vast

majority of food hubs expressed a desire to cover operational costs

internally by increasing sales.

Lesson Learned: Use any available funding to get

started but have a long-term strategic plan to achieve

operational profitability, as this is necessary to ensure longterm viability of the business.

RUNNING A FOOD HUB 19
20 RUNNING A FOOD HUB

Labor 

Continuity of labor in management and sales is important because

frequent staff changes can have a negative impact on food hub

operations. Some food hubs experienced declines in sales volumes

during periods of employee transition because these hubs typically

rely on employee-customer relationship marketing. 

 Due to the specific skills needed to operate a food hub and

reliance on relationships with producers and customers, finding

good part-time labor is a common challenge. While some

employees may be part time or seasonal, they still need to possess

the skills necessary to communicate with growers, especially in

cases where there are product quality issues. Honesty and work

ethic are two other important traits needed in a labor force. 

 Nearly all the hubs had used volunteer labor in the past, or still

use it. But many hub operators cautioned that volunteer labor lacks

consistency and skill continuity. While volunteers are useful when

the food hub needs more help, a hub needs to maintain key skills

and a knowledge base to achieve stability in operations and sales. 

Lesson Learned: Volunteer labor can be useful,

particularly during startup or periods of growth. But longterm success will require regular employees and the continuity

of institutional knowledge and the relationships they bring.

These Eastern Carolina Organics (ECO) farmers are among the food

hubs’ 50 growers. Farmers own 40 percent of the business and retain

80 percent of total sales. Photo courtesy ECO. 
RUNNING A FOOD HUB 21

Idaho’s Bounty is a food hub in south-central Idaho that primarily

focuses on wholesale marketing to local and regional grocery chains

and restaurants. It also makes retail sales to individual consumers via

the co-op’s website and pickup locations. Photo by Paulette Phlipot,

courtesy Idaho’s Bounty.
22 RUNNING A FOOD HUB
Operations

Food hubs have proven to be innovators in dealing with, and

offsetting, costs. In an effort to sustain their operations, food hubs

have limited the scope of their initial operations or acquired sources

of outside funding and capital, formed partnerships, or gained

access to advantageous infrastructure. 

 One venture began operations by renting a truck daily and using

a cell phone to communicate with the driver. When the time came

to invest in infrastructure, efforts were made to source inexpensive

facilities and used equipment that met the basic needs of the

business. Another food hub manager said the operation could not

have been successful selling only local produce. The solution was to

work with a larger specialty manufacturer as a licensed distributor.

This provided the food hub with many new sales opportunities, as

well as a large amount of inventory, steady sales, and products that

could be sold year-round. 

 Instead of developing new distribution infrastructure and trade

networks, some food hubs have found ways to partner with

foodservice companies to take advantage of the already efficient

logistics network and large volume of sales and marketing. This

could also involve making arrangements with food hub members or

other nonprofit business entities for low-cost storage and cooling

facilities or transportation equipment.

Lesson Learned: Seek to find operational advantages

through partnerships or by working with existing

infrastructure in a region. Make sure the food hub has

sufficient funding to sustain operations until revenues are at a

sufficient level.

RUNNING A FOOD HUB 23

Local Food Hub’s (LFH) warehouse, handles incoming deliveries from

producers and out-going shipment to customers. Photo by Justin Ide,

courtesy of LFH.
24 RUNNING A FOOD HUB

Transportation

Transportation and delivery expenses were often identified as the

main costs for operating a food hub. In addition to purchasing or

leasing trucks, transportation costs include paying drivers and the

time spent in organizing the logistics of pick-ups from producers

and deliveries to customers—all of which contributes significantly

to the financial overhead of the food hub. Even food hubs that have

been able to acquire trucks, equipment, or other infrastructure

items through grants or other funding sources still have to deal

with the significant cost of ongoing maintenance. 

 Some food hubs have found ways to minimize the cost of

transportation. Use of out-sourced shipping and trucking often

alleviated some of the burden of maintaining a consistent method

of delivery. Many hubs established relationships that help a

trucking company fill empty loads while providing efficient

transportation for the food hub, thus lowering costs for shipping

and transportation.

Lesson Learned: Whether leased or purchased,

trucking and logistics will often be one of the largest costs of

operating the food hub. Know your costs to avoid delivery

expenses exceeding order values.
RUNNING A FOOD HUB 25

Software

The food hubs use a broad range of information technology in their

operations. Software used by hubs may include Microsoft Excel,

custom-designed software, off-the-shelf products, such as

Quickbooks, specialty food hub software, or a blend of all of the

above. In general, there is little consensus on the optimal software

for food hubs. Typically, food hubs use software to track:

 • Inventory

 • Finances

 • Orders

 • Customer and supplier information

 Food hubs that have dealt with the creation of proprietary

software have found that it is important to have the input of both

designers and of those familiar with the food hub’s intended

operations during the software’s design and implementation.

Including both of these perspectives during the early stages of the

process allows a software designer to benefit from the input of

farmer contacts and can avoid costly redesigns in the future. They

also note that custom software should be viewed as an ongoing

process; many hubs continue to change or add components for

years after an initial purchase at additional cost.

Lesson Learned: There is no “one size fits all”

software solution. Conscientiously choosing software to suit as

many needs of the food hub as possible will lead to the greatest

efficiency in operations, but will likely still not produce ideal

results.

Capay Valley Farm Shop (CVFS) trucks deliver to the food hub’s customers in

Central California. Photo courtesy CVFS.
26 RUNNING A FOOD HUB

Common Ground

Each of the food hubs included in this study had unique operations

and goals that reflect the local community environment. While

there is great diversity among them, the food hubs also share some

common ground, including: 

 n All felt their own market and sales levels were still in a growth

phase.

 n All were operating with minimal staff. All staff members were

fulfilling multiple roles in the organization.

 n Most had their own transportation infrastructure. However,

their vehicle fleets were limited. Many used local or regional

transportation firms to augment their transportation capacity. 

 n Many were interested in aggregating and selling value-added

products, often as a season-extending service.

 n Only a few hubs were directly engaged in processing activities.

Some of the hubs that attempted these activities in the past are now

outsourcing them to other firms. 

 n The time and costs of safety certifications and insurances were

of concern to all. They expressed keen awareness of the impacts of

new food-safety regulations, especially those stemming from the

Food Safety Modernization Act. 

 n Most hubs had access to a small- or medium-sized warehouse

(1,000-10,000 sq. ft.) for storage, as well as holding coolers or their

equivalents.

 n They rarely used formal advertising or media campaigns. The

food hubs depended mainly on relationship marketing and direct

contacts with producers and buyers.

 Because of their adaptability, no one measure can be applied to

all food hubs. Each one must be measured by its success or failure in

achieving its own underlying goals. From fulfilling a specific social

mission to achieving independent financial profitability, food hubs

are positively impacting both their member-producers and

communities in numerous ways. Though much remains to be

learned about them, food hubs continue to be one of the most

exciting innovations in the local foods supply chain. 
Food hub insights 

and recommendations

Many of the food hub operators interviewed offered insight into

issues they had faced or provided information that was not directly

related to the general categories covered by the interviews. These

recommendations and observations include: 

 n Seek partnerships. 

 n A local food bank, community kitchen, or retail store can

provide access to distribution resources as well as to storage space

and cooling facilities. 

 n Logistics partnerships will help offset high transportation

costs.

 n Be aware that if producers have already established direct

marketing relationships, it will be harder to convince them to

participate in aggregated distribution. The hub may have to work

to educate producers as to the need or benefit of joining the food

hub. 

 n Involve leadership that has the necessary business experience

and skill set to make decisions that will lead to long-term success.

While vision and passion are important, make sure decisions

include a solid business-oriented viewpoint. 

 n Maintain continuity of human resources to retain the

established relationships and institutional knowledge of the staff. 

 n No matter how well you think you know your market, you

will very likely have to be flexible in order to meet the actual

demand. Be willing to change. 

 n Building a food hub is like running a marathon with interval

sprints every mile. Training, focus, and perseverance are keys to

succeeding.

 n Lack of funding will constrain your growth. 

 n Volunteers can be hard to train and difficult to manage. 

 n Develop training materials and forms (order forms, contract

forms, etc.) early in the startup process. Lacking these documents

can cause inefficiency and take time to produce correctly.

RUNNING A FOOD HUB 27
These farmers (above and below) are some of the 700 producers that partner with La

Montañita’s Co-op Distribution Center in Albuquerque, N.M. This food hub’s operations

include retail stores and wholesale distribution services, as well as community

involvement work. Fiscal-year 2014 sales surpassed $30 million. Photos courtesy La

Montanita.

28 RUNNING A FOOD HUB
RUNNING A FOOD HUB 29

Appenddix

Food Hub

Profiles
30 RUNNING A FOOD HUB

Fifth Season Cooperative 

Location: Viroqua, WI

Organization: For Profit Co-op

Personnel: 4 

Est. Sales: $350-400,000 (Projected 2014)

Est. Producers: 25

Established: 2010

Headquartered in Viroqua, WI, the Fifth Season Cooperative was founded

in 2010 as a for-profit cooperative with six membership classes. The

cooperative began operations in 2011 by renting about 4,000-square-feet of

warehouse space and access to a 600-square-foot cooler from the Viroqua

Food Enterprise Center. The cooperative’s staff currently consists of a single

full-time operations manager, one part-time office worker, and two seasonal

workers. 

 The primary customer base for the cooperative is foodservice distributors

and industrial buyers. Voting buyer-members include two hospitals, one

university, and three school districts. The co-op also serves a large buyer

pool of over 100 accounts that include restaurants, K-12 schools, colleges,

and hospitals.

 Fifth Season focuses on moving regional foods to regional customers.

The co-op provides a well-rounded line of 140 products, including dairy,

frozen and value-added meats, shelf-stable products, refrigerated valueadded products, and a full line of frozen fruits and vegetables. The co-op

helps extend the season by offering a line of frozen, value-added vegetable

blends “with a regional flair.” While Fifth Season uses space at the Food

Enterprise Center in Viroqua for its offices and gathering point during the

season, the co-op plays the role of a broker for the frozen and refrigerated

meat and dairy products to avoid storage costs. It also sells its own processed

and frozen vegetable blends under the Fifth Season Label sourced from its

producer and producer group members. This allows the co-op to move food

efficiently across a 150-mile region. 

 Membership classes include:

• Producers: Growers in the region who sell produce, meat, or dairy; 

• Producer Groups: Agricultural businesses in the region that aggregate and

sell produce; 

• Processors: Businesses from the region that make value-added products;

• Distributors: Businesses from the region that transport agricultural

products; 
• Buyers: Institutions and retail stores in the region that purchase product

from the co-op; 

• Workers: Employees who contribute to the co-op’s success through their

labor. 

 The membership fee for producers and workers currently consists of a

$250 equity contribution, while producer groups, processors, and

distributors are required to pay a $750 equity contribution.

 Member expertise is used to assist with addressing specific functions of

the cooperative. One example is the relationship with one of the co-op’s

distributor members, Reinhart Foodservice, in La Crosse, WI. This broad

product-line foodservice distributor has made a commitment to purchasing

local foods for customers. 

 The membership of Reinhart provides several operational advantages.

The cooperative is able to access a large pool of ready customers by serving

as a vendor for Reinhart. Reinhart uses its established distribution network

to provide a platform for Fifth Season Cooperative products, actively

promoting its local food products to customers. 

 The cooperative currently has a full product line available for sale

through Reinhart, which accounts for 97 percent of Fifth Season’s sales. In

addition to serving as a distributor member for local products, Reinhart also

meets the cooperative’s transportation needs by backhauling cooperative

products from several pick-up points across Wisconsin. Fresh produce is

now aggregated solely in Viroqua and is back hauled twice weekly.

 Using Reinhart’s transportation service allows Fifth Season to forgo

having to purchase expensive delivery and transportation infrastructure and

reduces overall costs for the cooperative. The remainder of sales is made to

smaller accounts, which are delivered by local transport companies and the

co-op’s other distributor-member, Keewaydin Organics, on an “as-needed

basis.” 

 Fifth Season has developed the first two products in a value-added, frozen

vegetable line, geared toward K-12 schools and other institutional use.

These products are unique in that they are all grown in the Driftless Region

of Wisconsin and are processed by a family-owned business: Sno Pac Foods,

in Caledonia, MN. 

 Winter Moon and Wisconsin Potato Fusion–two vegetable blends that

are part of a line of seven products–have been well received by institutional

customers and restaurants. These tasty, nutritious vegetable blends–which

meet USDA menu color requirements to provide “eye appeal”–are proving

popular with institutional buyers.

 The relationship between the co-op and Sno Pac Foods quickly grew

RUNNING A FOOD HUB 31
beyond an initial processing run in 2013. It has bloomed into a processormember status for Sno Pac, which is also now represented on the board of

directors. By combining Sno Pac’s vegetable line with Fifth Season’s newly

created blend product line, the co-op can now offer a full line of frozen,

sustainably grown, regional vegetables. 

 Fifth Season has assisted producers with training, including one-on-one

work with a contracted auditor, to help them comply with Reinhart’s

established rules for vendor food safety. Reinhart’s regulations are largely

based on GAP certification requirements and are stringent enough to satisfy

the safety requirements of institutional customers without the costs of GAP

audits and fees. Yearly audits are conducted at all Fifth Season farms and

facilities via contracts with an independent food-safety auditor. The

cooperative works with processor-members of the cooperative to conduct a

HACCP (Hazard Analysis and Critical Control Point) audit or find

assistance to have HACCP plans written if necessary. 

La Montañita’s Co-op Distribution Center

Location: Albuquerque, NM

Organization: Co-op

Personnel: 8

Est. Sales: $5.5 Million (FY 2014)

Est. # Producers: 700

Established: 2007

La Montañita is a cooperatively structured grocery chain, which began

operations in 1976. Today, the food hub has grown to include multiple

activities, including retail stores, wholesale warehouse facilities, and

community involvement work. The cooperative sources more than 1,100

products from nearly 700 local producers. It services multiple areas in New

Mexico. La Montañita’s fiscal-year 2014 sales will surpass $30 million. 

 The co-op’s retail division sells local and national brands at five retail

stores in New Mexico. These include stores in Albuquerque, Santa Fe, and

Gallup. Additional customers include retail location, such as Whole Foods,

and local natural grocery stores that are unable to access the traditional

natural foods industry because of the low volumes needed. Customers also

include schools, universities, and Bon Appetite, which operates cafeterias in

the area.

32 RUNNING A FOOD HUB
 The co-op also offers revolving loan programs. One example is the La

Montañita Fund, through which co-op members can invest to assist farmers,

ranchers, and other food producers in the region.3

 In January 2007, La Montañita opened its Cooperative Distribution

Center (CDC) on Columbia Drive in Albuquerque. This center operates as

a food hub by supplying wholesale customers and retail stores. During its

first year, the CDC delivered more than $100,000 worth of meat, eggs, milk,

and produce from about 30 producers by engaging with Whole Foods,

Raley’s,4 Cid’s, Los Poblanos, and other grocery retailers to build the co-op’s

wholesale market.5 The CDC also sells to retailers and restaurants, which

extends La Montañita’s operations and allows increased market access to

regional producers.

 The CDC is now housed in a 17,000-square-foot facility, which includes

about 4,000 square feet of cooler space divided among four coolers. It also

includes 1,000 square feet of freezer space, with the remainder of the facility

used for general storage and handling, as well as administrative functions. 

 Until 2014, the CDC did not handle a significant amount of produce,

instead focusing on animal protein, dairy, shelf-stable items, and “hardy

vegetables,” such as potatoes and squash. Other seasonal items, including

apples, are offered, as available. A recent investment in a dedicated produce

cooler has allowed the co-op to scale up sales of more perishable produce.

 Using a grant recently awarded through the Wallace Center, the CDC

has been able to construct preparatory space within the facility, including

areas for washing, meat smoking, and cryo-packaging for meat products.

The grant also funded a dedicated produce cooler that is helping the co-op

to move more into produce brokering.

 Sales from the CDC will exceed $5.5 million for fiscal year 2014. The

CDC operates with minimal grant or foundation funding. While it has lost

money in each year of operation, the losses have declined steadily, and it is

approaching break-even status. During the most recent fiscal year, the loss

dropped from $100,000 to $50,000. The support of the cooperative’s

profitable retail stores has enabled CDC to continue to focus on

accomplishing its nonprofit mission, rather than on attaining a profitable

status. 

 The Co-op Trade and Food Shed Projects—the initiatives ultimately

responsible for procuring the warehouse facility—were started to create the

RUNNING A FOOD HUB 33

3 Community Development Financial Institutions Fund. Financing Healthy Food Options:

Implementation Handbook Case Study. “La Montañita Cooperative” 4This Raley’s store has since been closed, although the chain remains in operation. 

5 www.lamontanita.coop: “Food Shed”
opportunity for wholesale marketing and to facilitate pick-up, distribution,

supply delivery, and storage for local producers through warehouse and

trucking services.6 According to an article in “Cooperative Grocer”

magazine, the cooperative realized that breaking even by focusing solely on

local products would not be attainable. So, in 2007 it began sourcing

selected products–such as meat, eggs, and dairy products–from national

producers.

 The facility handles deliveries and pickups. Larger producers find it more

efficient to bring their own product to the center, while smaller producers

often use La Montañita’s refrigerated box trucks to handle their product

pick-ups. These trucks are primarily used for the delivery of product to

customers, running regular routes 5 days per week. Logistics are handled inhouse, with pick-up and back-hauling used whenever possible to mitigate

costs. 

 The CDC uses a mix of software programs for coordinating accounting

functions with the larger company. Sales and order processing, inventory,

and invoicing are handled with Quickbooks Enterprise, which has been

fairly adaptable to buying and selling operations and can use variable pricing

levels. 

 The CDC typically operates with about eight staff members. These

include warehouse workers, delivery drivers, an outside salesperson, a buyer,

a customer service representative, and a warehouse manager. 

 The CDC is encouraging producers to pursue food safety certifications.

A survey of producers was used to create awareness of the need for food

safety procedures and to gauge the reaction of participating farmers.

Responding to the survey was mandatory if a producer wanted to continue

to supply to the CDC. The next step involves finding ways to help groups of

growers become food safety certified. The center has worked on food safety

procedures individually with the larger producers, stressing the importance

of compliance. 

 Outside of its own proprietary retail stores, La Montañita’s CDC serves

about 100 wholesale customers, with sales of nearly $2.6 million. Other than

La Montañita’s own retail stores, the main customers are wholesale

purchasers looking for whole cases of items. There is no fee, other than the

cost of the items purchased, for buyers looking to purchase product from the

CDC.

34 RUNNING A FOOD HUB

6 www.lamontanita.coop: “About Us”
Capay Valley Farm Shop 

Location: Esparto, CA

Organization: S-Corp

Personnel: 10

Est. Sales: $1,000,000 

Est. # Producers: 45

Established: 2007

Capay Valley Farm Shop is a direct-to-consumer and wholesale food hub in

the Capay Valley of Central California. Established in 2007, the food hub

does wholesale business with independent specialty retailers, restaurants, and

corporate cafeterias. A CSA-style “FarmShares” program is available to

individuals and families. FarmShares members choose a size (bushel, peck,

or bite) and receive a mix of seasonal fresh fruits and vegetables. The food

hub website offers a wide selection of pasture-raised meats, eggs, and valueadded products, including olive oils, jams, honey, nuts, and herbs. These

products are sold as “add-ons” to the FarmShares or as a stand-alone

purchase. Website purchases can also be bundled into monthly mixes called

“MeatShares” and “PantryShares.”

 The fastest growing portion of the food hub is the wholesale program,

which surpassed CSA sales in 2013. The food hub prepares a list of

aggregated and source-identified products three times a week for wholesale

customers. As of October 2013, the food hub operates in 3,000 square feet

of a 4,000-square-foot dedicated warehouse adjacent to a USDA-inspected

meat facility. Plans call for a retail store to be established in the remaining

space. Previously, the food hub used space provided by member farms for

storage and aggregation activities. 

 The food hub makes deliveries using its own two refrigerated box trucks:

a 14-foot and a 16-foot truck. The food hub originally considered leasing

the trucks, but found that the rural location made it difficult to schedule

regular truck maintenance, due to the distance from where the trucks were

leased. California’s emissions rules and other regulations affecting the use of

refrigerated trucks have resulted in added costs for the food hub. 

 The hub’s wholesale business grew out of its CSA program. Many of the

CSA pickup sites were at corporate or commercial cafeterias in the San

Francisco Bay Area. So, it was a natural extension of the business to begin

selling in wholesale quantities to these entities. 

 The CSA portion of the food hub relies mostly on CSAware software to

manage orders and inventory. However, the food hub also relies on a mix of

RUNNING A FOOD HUB 35
Excel and Google documents, as well as Quickbooks online, for internal

tracking. Management is considering other software options to determine

the best program to upgrade the current software system.

 Capay Valley Farm Shop’s employees are all paid staff of the food hub.

The hub currently operates with a staff of 10. These include: a president

(who functions as the general manager), operations manager, assistant

operations manager, packing crew, delivery driver, and a purchasing manager

who communicates and coordinates with growers to determine availability

and product flow. 

 Sales staff consists of a director of business development, sales manager,

sales associate, and marketing and communications coordinator.

Administrative functions are handled by a bookkeeper and office manager. 

 The food hub works with 45 producers, with product pickup from

member farms 5 days per week. It uses a “just-in-time” system to purchase

products from member farms, pick up products, and deliver them to

customers. Member-farmers set their own prices for products, with a

markup percentage added to the cost, based on product availability and

demand. 

 The food hub manages some inventory items, such as dry goods and

shelf-stable value-added products. But these items represent a small portion

of overall sales. Meat sales are generally handled through a brokerage

arrangement with a nearby slaughter facility. Producers drop off their

animals for processing, with the slaughter facility handling the delivery of

the packaged meat. 

 The hub does not experience significant demand from customers

requiring GAP certification, but it is preparing for GAP and other food

safety certifications related to the Food Safety Modernization Act (FSMA).

The hub is currently reviewing the requirements for GAP certification and

working with member farms. 

 Prior to receiving a Wallace Center Food Hub Development grant in

2014, the food hub had not used any grants in its operations. It has instead

used private funding for startup and operations. Sales for 2014 are

anticipated to approach $1 million. The wholesale operation will continue to

be the primary driver for growth of the food hub. 

36 RUNNING A FOOD HUB
This Old Farm 

Location: Colfax, Darlington, IN 

Organization: S-Corp

Personnel: 22

Est. Sales: 1.4 Million (2013)

Est. # Producers: 40-125

Established: 2009

This Old Farm was started from the Smith family’s original 88-acre farm. It

has grown over time to include a USDA-inspected meat processing facility.

It oversees the processing of all the meat sold through the This Old Farm

food hub to ensure humane, clean handling of all meat products and that

there is consistent meat quality. While This Old Farm is formally organized

as an S-Corp, it partners with an informal alliance of producers to offer fresh

produce, meat, and value-added products. 

 The food hub typically only acquires 10 percent of sales from produce

items. In recent years, it has been focusing on building relationships with

producers, helping them to “scale up” their operations so it can broaden its

product line. In the past, the hub was able to function using various smallscale coolers. It is currently looking to expand its cooler space to

accommodate more of this type of product. Plans call for this new facility to

have about 2,500 square feet of cooler space, which would facilitate a sales

volume of $3 million–$5 million. 

 Most of the produce the hub offers moves directly from farms to

customers. It operates primarily by working with larger farms in the network

that have the facilities for aggregation and product handling. 

 The meat processing facility was purchased in 2009, at which time it was

a custom-slaughter facility. It was subsequently updated and readied for

USDA inspection. After a fire destroyed the facility, the owners chose to

rebuild on the existing site, where it has operated ever since. It is now a

10,000-square-foot facility. 

 The food hub seeks to work with producers who need help with quality

control and in producing consistent supply. The hub is experiencing

significant demand for GAP-certified production and is thus working with

producers on these certifications. The current producer base is a mix of

GAP-certified and non-certified farms, so the food hub must ensure the

separation of these products. The owners’ experience with the food safety

aspect of meat slaughter and processing has allowed them to successfully

work to acquire these certifications.

RUNNING A FOOD HUB 37
 The This Old Farm store accounts for about 10 percent of the hub’s meat

sales, while wholesale customers—primarily foodservice operations—

account for a large share of the meat and produce sold. Direct sales of

produce to consumers are limited due to the perishable nature of produce

and the rural location of the hub. So, the food hub has chosen to focus

primarily on wholesale channels. 

 Meat processing was seen as a need in the region, and the hub leaders felt

there was a good opportunity to make a meat business work. Most of the

meat products handled by This Old Farm are frozen, although its facility

can produce fresh cuts of meat for sale. The food hub owns two trucks that

can handle about six pallets each. One is used as the primary delivery vehicle

and the second functions as a “flex” vehicle used for emergency deliveries or

to accommodate seasonal sales. 

 The food hub handles deliveries for non-local sales by contracting with

less-than-truckload (LTL) carriers and works with a regional produce

company to arrange backhauling. While these arrangements have worked

well for the food hub, the owners still see a need to maintain their own

transportation vehicles to satisfy customer demand in a timely manner.

 This Old Farm uses custom-designed software to manage its operations.

The software continues to evolve, based on business needs. It currently is

used for traceability, bar-coding, labeling, and order fulfillment. 

 The food hub and slaughter/processing facility currently operate with 22

employees, including 5 managers. Four employees, including one driver,

handle the produce portion of the operation, while the remaining employees

work in the meat slaughter and processing business. The most difficult part

of the human resource needs was finding and training individuals for the

hub, because there were few in the labor pool with experience related to a

food hub. 

 The owners say volunteer labor has been essential to the successful

startup of the food hub, and it continues to use small levels of volunteer

labor. However, the owners now recognize the importance of maintaining a

paid staff of individuals who are able to accept longer term responsibilities. 

 Another significant challenge was the need to develop forms for the

business. There were few standard forms suitable for a food hub such as

theirs. Thus, many forms had to be developed in-house to facilitate

agreements, information capture, ordering, etc. 

 Producers were initially paid using an 80/20 split of sales (80 percent for

the producer, 20 percent for the food hub). This allowed the food hub to

build trust based on transparency and to solidify a consistent producer

network. The food hub currently negotiates prices with producers, based on

a balance between producer and hub needs.

38 RUNNING A FOOD HUB
Greenmarket Co. 

Location: New York, NY

Organization: Non-Profit

Personnel: 10

Est. Sales: $650,000 (FY 13-14)

Est. # Producers: 30-55

Established: 2012

Greenmarket Co. is a program of GrowNYC, a nonprofit entity established

in 1976 and now comprised of multiple programs, including the

Greenmarket farmer’s market program. Greenmarket Co., which began in

2012, focuses on the wholesale distribution of locally sourced farm products.

The wholesale food hub began with modest operations, using shared space

provided by City Harvest, a food rescue organization serving New York

City. 

 After about 16 months, the program outgrew the available space. In June

of 2013, it relocated to another shared warehouse where it uses about 1,500

to 2,000 square feet. That included about 1,000 square feet of cooler space,

with the rest used for dry storage and office space. Greenmarket Co. quickly

outgrew its original space and, in its second year, moved to a 5,000-squarefoot warehouse in the South Bronx, with 3,000 square feet of cooling space,

a freezer, and offices.7

 Greenmarket Co. does not offer any processing. It receives product that

is already washed, packed, and ready to sell in case quantities. During the

growing season, the hub makes deliveries to customers in two 16-foot

refrigerated trucks and one auxiliary van. One of these trucks was purchased

with a grant from the City of New York in 2013. In the winter and early

spring, a single truck is needed to make deliveries. 

 While the hub deals primarily in fresh produce, it is also seeing

significant growth in the sale of local grain products. GrowNYC’s

Greenmarket Regional Grains Project has worked with producers,

universities, and culinary partners in the region to promote local grains and

to test different varieties to determine the best products. Greenmarket’s role

in the project is to investigate strategies for accessing regional markets for

these grains and to promote their unique attributes to customers. The grain

sales have allowed the food hub to remain busy during slower winter periods

RUNNING A FOOD HUB 39

7The hub intends to utilize the extra space by renting to farmers for interim storage. 
and help to provide a more steady flow of revenue. 

 Greenmarket Co. employs six full-time and four seasonal, paid staff

members. This includes one to three drivers and one or two “picker”

positions, depending on the volume of deliveries. The food hub chose not to

use volunteer staff, even during startup operations. Because of the steep

learning curve involved in this type of operation, it did not want to make

volunteers responsible for key operations. 

 Continuity was considered a key aspect of human resources, and the

institutional knowledge built by the employees was considered to be an

important part of success and growth. The collective knowledge,

relationships with farmers, and overall experience was a valuable resource

that the food hub wished to retain in its employees. 

 In addition to wholesale distribution directly to customers such as

restaurants and retail stores, the food hub also supplies product to

GrowNYC’s Food Box and Youth Market programs, which operate

independently with their own dedicated staff. While these programs are operated by the same entity, they are also considered customers of the food hub.

 In the past, the hub managed orders and inventory by using Quickbooks.

But after consideration of what software would best suit the operations and

still mesh with the main organization’s financial reporting methods, a switch

was made to software designed by Food Connex. 

 The food hub works with about 55 producers, about 30 of whom are

consistent suppliers. The hub is not GAP certified, nor does it require its

producers to be. But records are kept to identify the producers who have

achieved these certifications. Very few of the food hub’s customers require

GAP certifications. Producers wishing to sell to the food hub provide a list

of their products. Greenmarket Co. staff selects product to purchase

outright from the producer, which is sold to the food hub’s customers. These

customers number from 30 to 40 per week in low-demand months and more

than 100 during peak season. For the food hub’s last fiscal year, it had about

$650,000 in gross sales. More than 60 percent of Greenmarket Co.’s sales to

date have been to buyers serving low- to mid-income consumers, including

senior centers, charitable food pantries, nonprofit organizations, and

GrowNYC’s food access programs. 

 The food hub has relied heavily on grant funding, especially during

startup, due to the significant infrastructure requirements to operate the hub

and the low margins that are typical of produce sales. The food hub received

several grants from foundations to begin operations and continues to use the

remnants of those grants. While distribution is seen as a continued growth

area, the food hub would not currently be profitable without grants.

40 RUNNING A FOOD HUB
Sandhills Farm to Table Cooperative

Location: Whispering Pines, NC

Organization: Cooperative (Multi-Stakeholder)

Personnel: 8

Est. Sales: $460,000 (2013)

Est. # Producers: 30-38

Established: 2009

Sandhills Farm to Table Cooperative is a multi-farm, community supported

agriculture (CSA) cooperative organized in late 2009. The goal of the

cooperative, set by founders Fenton Wilkinson and Jan Leitschuh, was to

create an entity to meet demand for locally produced food while also

benefiting the producers, consumers, and workers. They also wanted to

focus on strengthening the community through the cooperative by

connecting the people who were buying the food to the people producing it.

The cooperative is now exploring the idea of a commercial operation

focused on providing locally grown food to commercial kitchens. 

 Sandhills Farm to Table Cooperative (SF2T) has been formed as a multistakeholder cooperative. By including three different stakeholder groups

(producers, consumers, and employees) in the decisionmaking structure of

the operation, SF2T has been able to expand the scope of benefits and help

address some issues present in a traditional cooperative. It is one of the first

local food cooperatives in the country in which the farmers, consumers, and

staff are all equal owners. 

 The main products sold are produce-box subscriptions. For 18 weeks in

the spring and summer, and 10 weeks in the fall, SF2T members can receive

a weekly or bi-weekly box of produce. These feature a variety of between

seven and nine local products, depending on the season. Two sizes are

offered: standard, intended to serve two people, and family, which serves

four. 

 The co-op also sells bulk produce in standard case lots and specialty

produce, such as heirloom tomatoes, spring salad mix, etc. Along with fresh

produce, the cooperative also sells shelf-stable items, such as honey, jams,

dry pasta, and bread. It also handles meats, eggs, and dairy products. The

cooperative has about 1,400 consumer-subscribers.

 The subscription business model benefits both the consumer- and

producer-members. It helps producers plan future production so that they

are able to meet demand and determine if they will need to sell through

additional channels. Consumers are guaranteed a consistent supply of fresh,

RUNNING A FOOD HUB 41
in-season product. By allowing members to subscribe for a season, the

cooperative receives a monetary commitment, creating a more stable market

for both member classes.

 The cooperative relies on a strong pool of producers to provide a wide

variety of high-quality, local products. It sources products from producers

and farmers within Moore County and eight surrounding counties. Prices

are comparable to those of farmers’ markets and quality grocery stores.

Value-added products are priced according to their local retail price.

 Although the produce boxes tend to be the main source of revenue for

the cooperative, the other services provided by the business are often the

most important to the success of SF2T. These services include producer and

consumer education, product delivery, aggregation, training, and community

outreach. 

 The co-op’s business is growing, with steady sales increases. In 2011, its

second year in operation, sales had already increased by 48 percent, to

$425,000. In 2013, the cooperative delivered 22,000 boxes of fresh produce

to 1,500 members. Of the 2013 sales, about $320,000 went to farmers and

artisans, with $40,000 contributed directly to schools, churches, and

community organizations. 

 Farmers typically receive about 70 percent of retail price for their

products. Although this payment is less than they would receive at a retail

outlet, the cooperative still pays about 20 to 25 percent more than most

wholesalers.

Idaho’s Bounty 

Location: Boise, ID

Organization: Cooperative (Producer-Consumer) 

Personnel: 10

Est. Sales: $900,000 (2013)

Est. # Producers: 70-100

Established: 2006

Idaho’s Bounty is a food hub in south-central Idaho that primarily focuses on

wholesale marketing to local and regional grocery chains, restaurants, and

chefs. It also makes retail sales to individual consumers via the co-op’s

website and pickup locations. The food hub serves a three-valley region of

Idaho through three locations: in Boise, Buhl, and Hailey. 

42 RUNNING A FOOD HUB
 Idaho’s Bounty began as a cooperative buying club formed by a group of

residents interested in procuring fresh, local food. A CSA had recently

ceased operations, leaving behind a dedicated core of individuals looking for

a new way to buy local foods. Over time, growth resulted in the hub selling

increasing amounts of food through wholesale channels. 

 Because the food hub operates in three areas of the State, its facilities are

dispersed among the locations. The main warehouse in Boise is leased from

a member-producer; space in Buhl is also located at the farm of a

participating producer, while the Hailey location houses hub office space, as

well as some refrigerated storage and additional office space that is leased

from a local juice company. 

 In all, the food hub uses about 2,000 square feet of warehouse space,

spread among the three locations. While the food hub does have access to

cooler space, it is used primarily to hold product for a short period of time

prior to delivery to customers.

 The food hub uses its own trucks (two or three) to pick up product from

producers and for deliveries to customers. Product is received from

producers in a “ready for sale” condition. The food hub works with smaller

producers to ensure that their product arrives properly washed and in

consistent packaging. Producer pickups take place at designated points to

allow for easier product aggregation and consolidated pickups. 

 The hub’s primary product is produce, but it also sells large quantities of

meats and some value-added items. Individual customers place orders by

going to the Idaho’s Bounty website or mobile app., choosing the items they

want, then picking up their order at a designated pick-up location. 

 Most wholesale products are sold and transported in box or pallet

quantities. Wholesale customers include Whole Foods, Albertsons, a local

grocery chain, and a local consumer co-op. The food hub uses Local Food

Marketplace (LFM) software and Quickbooks, but it is currently working

with LFM to better integrate the two programs. 

 The hub operates with three full-time staff and seven part-time

employees, most of whom are drivers. Part-time workers also do general

labor. The food hub’s ability to enlist producers has been affected by the

large number of local producers already engaged in direct marketing. The

hub has had to work to attract producers through outreach and education. 

 The food hub currently sources product from about 100 producers, a

figure which fluctuates based on availability and the needs of the producers.

Management estimates that the co-op has about 50 active wholesale

accounts and currently services about 2,000 customer-members through a

mix of wholesale and online retail sales. 

 While the food hub relies on grants to sustain operations, the increase in

RUNNING A FOOD HUB 43
wholesale business has moved the hub closer to sustainability. Staff estimates

that the break-even goal is $1.5 million in annual sales. In addition to sales

revenue, the food hub charges membership fees, both for consumers and

producers. 

 Consumers–whether restaurants, retailers, or individual customers–pay a

$10-per-year co-op membership fee. Producers pay a membership fee of at

least $50 per year, or 5 percent of their sales through the food hub,

whichever is higher. But the fee is capped at a maximum of $5,500 annually. 

 The food hub does not currently face pressure from customers to achieve

GAP or other safety certifications. The only certification obtained by the

food hub is an organic handler certification, due to the large amount of

organic produce handled by the hub. 

Nashville Grown 

Location: Nashville, TN

Organization: Non-Profit (Pending)

Personnel: 4

Est. Sales: $60,000 (2013)

Est. # Producers: 12-54

Established: 2012

Nashville Grown is a recently organized food hub that primarily connects

local growers to restaurants in the Nashville area. The food hub uses very

little infrastructure, although it has recently acquired a grant to assist with

the purchase of a refrigerated truck, commercial coolers, and to lease a

warehouse facility. The food hub primarily sells fruits and vegetables, as well

as some eggs and grains. 

 The food hub’s producers include “backyard” gardeners and full-time

farmers. Product is picked up from among a rotating group of 54 producers

for immediate distribution among the hub’s 64 wholesale customers. 

 One unique feature of this food hub is its willingness to work with

backyard gardeners, who may over-produce a certain item that they would

like to market. To minimize overhead costs for low volume pick-ups, the hub

frequently arranges for small-volume producers to deliver their product to

the hub. 

 Filling wholesale orders usually requires repacking of produce to meet

the customer’s quantity and variety needs. The food hub strives to maintain

44 RUNNING A FOOD HUB
the producer’s identity throughout the process to ensure a strong link

between the producers and the wholesale buyers.

 The hub does not do any additional processing or cleaning of product

when assembling orders. Restaurant customers generally perform any

additional cleaning of the product. 

 In the near future, Nashville Grown will be moving into a rented

warehouse, where facilities will include a prep table and a three-phase

washing area. The food hub will be able to help with the washing and

preparation of certain items on an “as-needed” basis. The new warehouse

will also have additional storage space, with 280 square feet of cooler space

with two temperature zones, good for storing traditional “cooler items” and

for root vegetables, such as potatoes. 

 Producers take stock of their harvest for the coming week, then input the

information–along with their desired pricing—on a spreadsheet given to

food hub staff. The hub applies a mark-up percentage to cover operating

expenses. Nearly all the product ordering and tracking uses Microsoft Excel

and Google spreadsheets, as well as an e-commerce platform designed by

Core Commerce. 

 The food hub aggregates supply estimates and notifies customers of

product availability, then collects the orders. The ordering information is

relayed to the producers, who harvest the needed quantity and prepare it for

delivery. Almost all the product is harvested and delivered with little to no

storage in between. 

 Staff includes two full-time workers, with other individuals helping on an

“as-needed” basis. The food hub makes use of volunteers, but only for a

limited time during very busy periods. 

 Hub leaders are aware of the need for GAP and other safety certifications

to reach larger institutional customers. But at this time, the restaurants that

are the primary customers are not placing pressure on the food hub to

achieve such certifications. Nashville Grown thus has no immediate plans to

pursue the certification. 

RUNNING A FOOD HUB 45
46 RUNNING A FOOD HUB

Eastern Carolina Organics

Location: Durham, NC

Organization: LLC

Personnel: 13

Est. Sales: $3.8 Million (2013)

Est. # Producers: 50

Established: 2004

Eastern Carolina Organics (ECO) operates a food hub that specializes in

offering local organic foods. Founded in 2004 by the Carolina Farm

Stewardship Association, the hub works with 50 growers to provide yearround, fresh produce to local wholesalers. These farmers own 40 percent of

the food hub and retain 80 percent of total sales.8 The food hub is not GAP

certified, nor does it require its producers to obtain GAP certification. 

 The food hub started with a $48,000 grant in 2004. The only subsequent

grant it received was $50,000 to make building renovations when it moved

to Durham, N.C. In 2005, ECO reorganized as a grower- and managerowned LLC. By 2013, the food hub’s annual sales were about $3.8 million. 

 Infrastructure consists of a 26,000-square-foot warehouse and 12,000

square feet of office space. About 5,000 square feet of cooler space is

available for food hub use. The 13-member staff is divided nearly equally

between operational and administrative personnel. 

 The food hub uses two refrigerated trucks, owned by ECO, for deliveries,

which are conducted within a 3-hour radius of the warehouse. ECO also

contracts with freight carriers that can deliver as far north as Montreal and

as far south as Florida.

8 Matson, James, Martha Sullins, Chris Cook. The Role of Food Hubs in Local Food Marketing.

USDA. 2012.
Local Food Hub

Location: Charlottesville, VA

Organization: Non-Profit

Personnel: 12

Est. Sales: $985,000 (2013)

Est. # Producers: 80+

Established: 2009

Local Food Hub is a nonprofit food hub located in Charlottesville, Virginia.

Founded in 2009, the food hub specializes in food grown within a 100-mile

radius of Charlottesville. The hub grew out of growers’ need to better reach

large-scale customers. While many growers were able to target chefs and

smaller retailers, they were not able to meet the insurance, volume, food

safety, and traceability requirements to access institutional buyers. 

 Local Food Hub, which focuses mainly on aggregation, operates a central

warehouse as the center of its food-delivery system.9 From this facility it

distributes produce, meat, and value-added products for its more than 80

partner producers. The food hub carries a $3 million liability insurance

policy for the individual producers.

 The hub offers a diverse product mix that includes fresh fruits,

vegetables, ground beef, ground and cured pork, eggs, local honey, vinegar,

apple cider, bottled water, stone-ground grits, cornmeal, whole wheat flour,

pancake mix, hushpuppy mix, non-genetically modified organism (nonGMO) grains, and value added products not directly produced by hub

members.

 The hub addresses seasonality issues by educating consumers about when

different types of local foods are available and by carrying shelf-stable and

value-added product lines year-round. It also works with growers on ways to

extend their growing seasons, sometimes even through the winter. The hub

has formed a group of producers who help other growers find ways to

extend their growing season. 

 Local Food Hub had sales of $985,000 in 2013, and projects having $1.2

million in sales for 2014. Due to the high cost of infrastructure and the level

of service provided to its growers and buyers, the food hub is not yet

profitable, but it is in a growth phase and estimates that it will reach a breakRUNNING A FOOD HUB 47

9 Matson, James, Martha Sullins, Chris Cook. The Role of Food Hubs in Local Food Marketing.

USDA. 2012.
even point when annual sales are between $1.5 million and $2 million. 

 The hub is also supported by grants and donations from the community.

Local Food Hub donates generously to local hunger organizations, partners

with other nonprofits, and has a strong year-round presence in the schools.

The hub is also active in local food-policy discussions and provides food for

many local community events. During the region’s Farm to School Week,

the food hub coordinates with the public schools in five districts to provide

local produce and grass-fed beef for school lunches.

 The 80 producers the hub works with represent a wide range of farm

sizes and types. Some producers provide multiple crops, while others grow

just one or two crops. Local Food Hub requires growers to deliver product

to the food hub. The hub purchases products outright from growers and

then resells the product, adding a 15-25 percent service fee paid by

customers. 

 The customer base for the food hub includes more than 200 accounts,

with customers falling into three major categories: institutions (such as

universities, hospitals, and public schools), chefs and caterers, and retailers

and buying clubs.10

 The hub’s roughly 3,400-square-foot warehouse previously served as a

distribution center for Independent Grocers Alliance (IGA) stores. It is

comprised of refrigerated space, divided into multiple temperature zones,

and dock space. The temperature zones are maintained at 50 degrees, 38-40

degrees, and a walk-in cooler at 34-37 degrees. There is also a walk-in

freezer. 

 The food hub does all deliveries to end customers using a refrigerated

cargo van and two refrigerated box trucks (one 16-foot, the other 14-foot).

Delivery expenses are a major operational cost. One truck is leased for

$1,200 a month, and—added to the cost of fuel, mileage/maintenance, driver

labor, and other factors—it costs the hub $20-$30 per stop for deliveries. To

reduce delivery costs, the hub does backhauling for its foodservice buyers. As

a vendor for Sysco and US Foods, the food hub is able to fill its empty

trucks for the return trip, saving money on fuel and other costs. 

 Sales depend on building good relationships, so hiring and maintaining

good staff is key. The food hub employs 10 full-time employees and one or

two part-time or seasonal employees in its administrative office and

warehouse. The warehouse staff fluctuates between six and nine workers

during the course of the year. 

48 RUNNING A FOOD HUB

10The food hub currently serves 5 public school districts, equaling about 50 public schools, as well as

some private schools.
 Local Food Hub does not require that its producers be GAP certified, but

several have achieved safety certifications. It does require a water test

showing that any water used for washing or processing meets set standards.

The hub plans to partner with water-testing companies to provide reduced

testing rates for its members. 

 The hub’s warehouse is GAP certified, and it is working on an internal,

quality-assurance program for growers moving toward GAP certification.

While many customers do not require food safety certification, lack of

certification has affected the hub’s ability to supply some larger accounts.

 Local Food Hub is working to upgrade software used for its operations.

With regard to inventory, the hub uses a cloud-based, inventory-control

module created by Quickbooks that syncs with its accounting system. It

conducts monthly manual inventory counts. 

 The hub conducts a number of training workshops for its producermembers in such areas as sustainable production practices, season extension

techniques, and food safety, and helps them coordinate their planting

decisions to better meet local demand. The hub does a limited amount of

food processing, such as producing salad mixes, and provides off-season

storage for local producers. 

Red Tomato

Location: Plainville, MA

Organization: Multi-structured nonprofit

Personnel: 6

Est. Sales: $3.75 Million (2013)

Est. # Producers: 40-plus

Established: 1996

Red Tomato, founded in 1996, is another example of a food hub that focuses

on distribution to the traditional food chain. Located in Plainville, Mass.,

Red Tomato is a multi-structured, nonprofit that partners with farmers and

for-profit distributors.11 Its mission is to connect farmers and consumers

through its marketing, trade, and education efforts and through its

RUNNING A FOOD HUB 49

11 Matson, James, Martha Sullins, Chris Cook. The Role of Food Hubs in Local Food Marketing.

USDA. 2012.
“passionate belief that a family-farm, locally based, ecological, fair-trade

food system is the way to a better tomato.”12

 Red Tomato helps producers located in the same general area coordinate

their storage activities. The logistics of pickup and transport is outsourced,

which helps the food hub reduce its costs. This allows Red Tomato to return

up to 90 percent of revenue to its growers.13

 The organization currently operates with six full-time employees. Red

Tomato, which had about $3.75 million in sales in 2013, works with about

40 small-scale producers in the Northeast. It supplies about 200 retail and

foodservice customers. A large portion of its sales are made to about 10

distribution centers, from which product is shipped to many stores. 

 In addition to sales, the organization also receives what it refers to as

“development funds” that come from fundraising efforts, individual

donations, and foundation support. About 60 percent of its revenue comes

from these development funds, with the remaining 40 percent generated by

sale profits. 

 Until 2002, the company used a traditional approach to aggregating and

selling local product. It operated a warehouse and delivery trucks for

fulfillment of orders. However, the high cost of labor, coolers, insurance,

maintenance (for equipment and infrastructure), tight margins, and the high

product volume necessary to sustain the operation prevented sufficient time

from being devoted to marketing efforts. 

 Now, Red Tomato operates by coordinating the setup of clusters of from

two to five producers located in close proximity to one another. These farms

are spread from Vermont to Pennsylvania. The farms have different

infrastructures. Typically, only the larger farms have access to coolers,

trucks, and other equipment. Red Tomato thus sets up networks of farms

within a region which then work together to consolidate shipments at larger

farms. This ensures that the “cold chain” is maintained throughout the

process. 

 The entire operation uses a “just-in-time” inventory approach. A product

manager is responsible for maintaining contact with farmers. This manager

works with individual farmers to project produce availability about 2 weeks

into the future. This information is communicated to an account manager,

who then works with customers to procure orders. Orders are maintained

and tracked using an in-house designed Excel spreadsheet program. As of

50 RUNNING A FOOD HUB

12 www.redtomato.org 

13 Davis, Mandy and Sona Desai. 2007. Moving Food: How Farmers and Nonprofits Are Building

Localized Food Systems for the Twenty-First Century. Paper from the Intervale Center,

September 1, 2007.
2014, all order processing, invoicing, etc., were being managed using

EdibleTM software. 

 When orders are received, individual farmers are responsible for

packaging their products and consolidating them into pallets for shipment.

The packaging is the primary form of point-of-sale marketing. Packaging is

customized by each farm, which allows each farm’s own logo and

identification to be prominent. However, packaging standards stay

consistent throughout the Red Tomato network of farms. 

 Once packaging is complete, Red Tomato notifies one of its local or

regional trucking company partners. This company picks up the goods from

the designated farm, then delivers it to either a retail store or a regional

distribution center. 

 Red Tomato has developed relationships with trucking companies that

allow them to help fill partial loads, which benefits the trucking company

and results in lower shipment costs. Red Tomato offers 48-hour turnaround

for all products except stone-fruits, which are typically shipped even faster. 

 Red Tomato customers are increasingly asking for food safety

certifications. Even before the increase in such customer requests, most of

the hub’s growers anticipated this demand and were working to become

safety certified. Through its education and fundraising efforts, Red Tomato

is trying to help producers—especially small-scale producers—mitigate the

costs of safety certification.

RUNNING A FOOD HUB 51