The Role of Food Hubs in 

Local Food Marketing

USDA Rural Development 

Service Report 73

United States Department of Agriculture United States Department of Agriculture
The Role of Food Hubs in 

Local Food Marketing

By James Matson, Martha Sullins, and Chris Cook

USDA Rural Development

Service Report 73

January 2013

United States Department of Agriculture United States Department of Agriculture
The Role of Food Hubs in Local Food Marketing 1
2

Editor’s Note: James Matson and Martha Sullins are consultants with Matson Consulting, Aiken, SC. 

Chris Cook is executive director of the Virginia Foundation for Agriculture, Innovation and Rural Sustainability, Richmond, VA. Financial support for this research was provided via a Cooperative Development Research Grant from USDA Rural Development. 

The authors wish to acknowledge the editorial assistance provided by James Barham of the USDA Agricultural Marketing Service.
The Role of Food Hubs in Local Food Marketing 3

Contents

Food Hubs: Issues and Opportunities 4

Food hubs as rural development 5

Local foods “buzz” 7 

“Everywhere” is a local market 8

What is a food hub? 9

Food hub as a community entity 11

The Business Structure of Food Hubs 12

	 Food hubs as nonprofits	 13

	 The evolving nonprofit entity	 13

Cooperative-structured food hubs 16

	 For-profit food hubs	 18

Multi-structured food hubs 19

Virtual Food Hubs 20

	 Virtual food hub as an information source	 23

Varying Functions of Food Hubs 24

Market access for local foods 24

	 Information flow and sharing	 25

Transportation and distribution 25

Brokerage services 27

Increasing market share by bundling 27

Increasing market share by extending the season 27

Maintaining a consumer-producer connection 28

Technical assistance and producer development 29

Information Sharing and Reducing Risk 31

	 Product assurances	 32

	 Food hubs and community economic development	 33

Constraints on Food Hubs 34

	 Capitalization	 34

	 Liability	 35

	 Local food handling and processing capacity	 36

	 Human resources capacity	 37

Regulatory Environment for Food Hubs 38

	 Federal initiatives and grants	 39

	 Examples of USDA funding programs	 39

State, county, and community support efforts 41

	 Private financing initiatives	 42

Roadmap for Food Hub Development 46

Conclusions 48

References 49
4

Food Hubs

Issues and Opportunities

In the commodity food chain, agricultural products 

are mixed together and combined or aggregated 

into larger groups to be sold, usually with no identification of the farm where they were grown. The

large scale and lack of identification in traditional

commodities, coupled with the associated low 

margins, have led to the emergence of food value 

chains as an option for farmers and ranchers to differentiate their products and enter a market that is 

more financially viable.1

Local food sellers have determined that consumers are willing to pay a premium if they know 

1 Adam & Barham, 2011
The Role of Food Hubs in Local Food Marketing 5

about the origins of local and 

regional food.2

 However, a 

2010 report by the United 

States Department of Agriculture (USDA), Economic 

Research Service 

noted that one 

of the main constraints to the 

entry and expansion of local foods 

is the “lack of 

distribution systems for moving local foods 

into mainstream markets.”3

This need has spawned the 

creation of collaborative 

supply chains and to market 

these differentiated products.4

One emerging collaborative model is the food hub. 

USDA’s working definition 

of a regional food hub is “...a 

business or organization that 

actively manages the aggregation, distribution and marketing of source-identified 

food products, primarily from 

local and regional producers 

to strengthen their ability to 

satisfy wholesale, retail and 

institutional demand.”5

In the past few years, 

there has been increasing 

recognition of food hubs as 

a way for a group of producers to access local markets for 

their agricultural production. In many cases, food 

hubs share information with end users on where 

or how food was produced, providing a greater 

connection between producers and consumers. 

2 Day-Farnsworth et al. 2009

3 Martinez et al., 2010

4 Diamond and Barham, 2012

5 Barham et al., 2012

Recognition of the role of food hubs is occurring 

at many levels, from a growth in brick and mortar 

facilities and “virtual food hubs” to support from 

many programs, including local, State, and Federal 

grants and loans. 

The target 

markets for 

these services 

are typically 

wholesale customers – institutions, restaurants, and 

grocery stores – which have a harder time buying 

local product in the desired volumes. Food hubs 

can also provide greater delivery reliability than 

can be obtained through purchasing from many 

producers selling independently.

Food hubs have developed and evolved as 

highly localized businesses that are dependent on 

several factors. This report presents an overview 

of the myriad issues facing food hubs across the 

United States. It attempts to look for patterns and 

practices that are consistent enough to be used as 

models in a wider development process. The goal is 

to ascertain what food hubs need to do to serve as 

a viable solution for local food marketing.

The information presented includes defining 

a food hub, examining the rationale for food hub 

formation, and exploring the economic role of 

food hubs. This paper also presents some of the 

many organizational structures and services that 

are offered by food hubs, including the emerging 

area of virtual food hubs, and provides examples 

that represent some of the challenges and limitations faced by food hubs. The overall intent of this 

document is to help present food hubs within the 

context of the growing local foods movement.

Food hubs as 

rural development

Food hubs represent a strategy for producers, particularly small and mid-sized producers, to market 

their production locally. Food hubs create new 

marketing opportunities for rural food producers. 

One of the main constraints to 

the entry and expansion of local 

foods is the lack of distribution 

systems for moving local foods 

into mainstream markets. 
6

They help connect rural producers as directly as 

possible to rural, suburban, 

and urban markets. This 

creates a system of linkages, 

developed through food 

hubs, that enables both 

rural producers and urban 

consumers to learn from 

each other. 

Entry into local food 

markets can prove difficult 

for many farmers, particularly small and mid-sized 

farmers, with capacity constraints and the lack of 

distribution systems most often being the largest 

hurdles to overcome.6

 Food hubs are part of a 

growing local food system 

that strengthens rural 

economies by lowering 

entry barriers and improving infrastructure to 

create, as well as expand, 

regional food markets. 

They can also create rural 

jobs. This rural on- and 

off-farm employment 

can expand opportunities and encourage skilled 

people, including youth, to remain in rural areas.

6 Martinez et al, 2010

Consumer decisions to buy 

local or purchase items for 

specific product characteristics 

have proliferated into new marketing opportunities for farmers 

and ranchers.
The Role of Food Hubs in Local Food Marketing 7

Local foods 

“buzz”

Less than 2 percent of 

Americans today live 

on farms and ranches. 

Perhaps because 

of this disconnect, 

American consumers 

have a growing interest in learning more 

about where their 

food comes from 

and connecting with 

farmers and ranchers 

in their region. 

Local food is still 

a small portion of the 

total food market. A 

report by the USDA 

Economic Research 

Service shows that 

more than $77 billion worth of food 

was imported into 

the United States in 

2007,7

 while local 

food sales totaled 

slightly less than $5 

billion in 20088

 – but 

its share has grown 

steadily over the past 

several decades. 

Over the past 10 

years, there has been a 

surge in demand for locally produced foods. The 

availability and amount of local food products 

are unprecedented in recent history. Consumer 

decisions to buy local or purchase items for 

specific product characteristics have proliferated 

into new marketing opportunities for farmers 

and ranchers.

In addition, local direct marketing opportunities – such as farmers’ markets, retail food 

7 Brooks et al., 2009

8 Martinez et al., 2010

cooperatives and Community Supported Agriculture (CSAs) – have grown as consumers have 

been increasingly looking for local and regional 

foods. The 2007 Census of Agriculture reported 

that more than 12,500 farms participated in some 

form of CSA.9

 This is a dramatic increase from the 

handful of farms that used this direct marketing 

method in the mid-1980s.

A National Grocers Association survey conducted in 2011 (online at: www.supermarket guru.

9 http://www.nal.usda.gov/afsic/pubs/csa/csa.shtml

What is a local food?

The term “local food” is used often, and with various and sometimes contradictory interpretations. The new Oxford American 

Dictionary defines a “locavore” as a local resident who tries to eat 

only food grown or produced within a 100-mile radius.

Likewise, many consumers and policymakers define local as being within a 100-mile radius of one’s home, while others feel that 

200, 300, or 400 miles can still be considered a local food. Even 

the Federal Government varies its definition of local:

•	 The 2008 Farm Act defines a “locally or regionally produced 

agricultural food product” as one that is marketed less than 400 

miles from its origin.”

•	 The Food Safety Modernization Act, enacted in January 2011, 

defines local as food purchased within 275 miles or the same 

State where it was produced.

However, Martinez et al. say that the definition of “local” differs by region and climate, because a sparsely populated area will 

likely have a very different definition of local than a more heavily 

populated one. 

In short, local food may depend on both what food item you 

are discussing and where you are located. It may not be possible to 

have one definition that fits all circumstances. So local food should 

have a “flexible” definition that relies not only on the distance from 

which products are sourced, but also where the product itself was 

produced and how extensive a system is required to get it to the 

consumer.
8

com/public/pdf/Consumer-Panel-Survey-2011.

pdf ) found that 85 percent of consumers say 

they choose their grocery store based in part on 

whether it sources food from local producers. This 

supports a 2008 national survey of consumer buying patterns that found that 35 percent of consumers surveyed felt that buying locally produced fresh 

produce was of great importance to them, while 

another 44 percent said it was of moderate importance.

Social values also motivate consumer behavior. 

Many shoppers in the 2008 survey were concerned 

about whether or not 

their purchases helped 

to maintain local 

farmland and the local 

economy; 44 percent and 49 percent, 

respectively, indicated that these public 

benefits were of great 

importance to them.10

Those who tended 

to shop at farmers 

markets were most 

concerned with maintaining local farmland, 

with 70 percent indicating that this was of 

great importance to 

them, compared to 31 

percent of those who 

shopped at supermarkets. 

In a similar vein, 

nearly 80 percent of farmers’ market shoppers were 

most concerned that their produce purchases supported the local economy, compared to 43 percent 

of those who identified themselves as supermarket 

shoppers. 

Steve Stevenson, as part of the Agriculture of 

the Middle Project convened by Iowa State University, has described in a series of case studies how 

farmers, distributors, retailers, and food proces10 McFadden, Thomas and Onozaka, 2009

sors coordinate their actions for mutual economic 

benefit while advancing social and ethical values, 

such as agricultural sustainability and farm viability (Stevenson, 2009). 

“Everywhere” is a 

local market

The increased demand for local foods is evident in 

the growth of direct marketing channels and in the 

number of farmers using those channels to move 

their products. USDA’s Agricultural Marketing 

Service lists 7,864 U.S. farmers’ markets in operation in 2012, up from 

7,175 the previous year, 

for a 1-year increase of 

nearly 10 percent. This 

includes many markets 

that allow lower income 

consumers to purchase 

food through Federal 

nutrition benefits programs. 

Consumers are expected to continue this 

trend of purchasing locally produced products. 

According to a recent 

study by USDA’s Economic Research Service, 

local food sales through 

all marketing channels 

in the United States 

grossed $4.8 billion in 

2008.11

One example of such 

consumer-driven demand is from the Web site of 

the Weaver Street Market, a community-owned 

grocery store and cooperative located in Carrboro, 

NC. It notes that: “Almost half of the food we 

sell at Weaver Street Market is produced locally, 

including the breads, pastries, soups and salads we 

craft in our own kitchen. Local goods show up in 

every department, from fine wines and gourmet 

11 USDA Agricultural Marketing Service, 2012

Food hub definition

Roget’s Thesaurus (2010) defines a hub as 

a: 

1. point of origin from which ideas or 

influences originate; or 

2. place of concentrated activity, influence, or importance. 

In agricultural systems, hubs have 

emerged to coordinate some aspect of the 

production, processing and/or marketing 

of food to meet consumer demand for 

local, fresh, organic or other value-laden 

products.
The Role of Food Hubs in Local Food Marketing 9

chocolate, to shampoo 

and herbal remedies.”12

Farmers are producing more than ever to 

meet this burgeoning 

demand. The 2007 

Census of Agriculture 

reports that nearly 

137,000 farms sold 

products directly to 

consumers, totaling a 

little more than $1.2 

billion. Direct sales 

represented about 0.5 

percent of all sales in 

2007, a 50-percent increase from 2002, with 

an additional 20,000 

more farms each selling 

about $2,000 more per 

farm each year. Overall, 

from 2002 to 2007, 

average annual direct 

sales per farm increased 

from $6,958 to $8,853. 

These statistics do not 

include sales to regional 

grocers, restaurants, 

or institutions that in 

turn sell to consumers 

(so-called intermediated sales). An analysis 

by USDA’s Economic Research Service found that 

marketing of local foods via both direct-to-consumer and intermediated channels grossed $4.8 

billion in 2008—about four times higher than estimates based solely on direct-to consumer sales.13

 Many diners expect their restaurant experience 

to include a selection of dishes conceived from 

local products. The restaurant industry found that 

the rising demand for locally produced foods was 

the Number 1 dining trend of 2011. But restaurants, grocery stores, and other institutions – such 

12 http://www.weaverstreetmarket.coop

13 Low and Vogel 2011

as schools, hospitals, 

nursing homes and 

corporate cafeterias 

– face obstacles of logistics and information 

in sourcing their food 

products locally. They 

also frequently cite the 

difficulty in obtaining the local products 

needed in a sufficiently 

large quantity for their 

foodservice needs.

The abundance of 

farmers markets and 

the emergence of larger 

scale retailers carrying local products (and 

promoting them) is a 

healthy indicator of 

market responsiveness 

to consumer demand.14

Clearly, however, there 

is a coexisting uncertainty about how to 

develop markets that 

are typically supplied 

by larger scale, conventional producers with 

a distinct transportation and distribution 

structure built around 

moving and selling those conventionally produced 

foods. 

What is a 

food hub?

Around the country, both formally and informally, 

food hubs are facilitating the aggregation, marketing and/or distribution of products from local 

farmers and ranchers to consumers (households, 

retailers, restaurants, institutions, and wholesalers) by developing scale efficiency and improving 

distribution. 

14 Martinez et al., 2010

Community-based organizations

Several food hubs have developed out of 

what can be termed as community-based 

organizations (CBOs). Examples include The Intervale Center, Appalachian 

Sustainable Development, Agriculture 

and Land-Based Training Association 

(ALBA), The Minnesota Food Association, and numerous others. 

A CBO is a public or private nonprofit organization of demonstrated effectiveness that is representative of a community, 

or significant segments of a community. It 

provides educational or related services to 

individuals in the community (definition 

from the U.S. legal code). Perhaps most 

importantly, it plays a leading role in involving new or different groups of people 

in the civic life of local communities.

In agriculture, these organizations 

have made long-term commitments to 

developing the capacity of the producers 

they support, and creating infrastructure 

that supports and maintains market access for them.
10

20 or more years

9 percent

5 years or less

60 percent

15 to 20 years

16 percent

6 to 10 years

9 percent

Time food hubs have 

been in existence

Source: USDA Agricultural Marketing Service

This section will look at the emergence of food 

hubs, the range of centralizing and aggregating 

roles they provide, and their importance in building food system infrastructure in:

•	 Meeting growing consumer demand for fresh, 

locally produced foods that are less available 

through traditional markets, and 

•	 Catalyzing new marketing opportunities for 

producers and energizing local and regional 

economies. 

USDA’s working definition of a food hub is 

“a business or organization that actively manages 

the aggregation, distribution and marketing of 

source-identified food products primarily from 

local and regional producers to strengthen their 

ability to satisfy wholesale, retail, and institutional 

demand.”15 Although the definition focuses on the 

physical movement of goods, USDA notes that a 

food hub can also be defined by market efficiency 

functions, in addition to more abstract goals of 

building a diversified food culture. 

It is worthwhile to consider a broader definition of food hubs, in terms of function rather than 

form, for two reasons:

1. Many hubs have evolved from an educational 

or social mission to bring consumers and 

producers together in the marketplace. While 

selling local foods to consumers is one function, these hubs may also seek to educate their 

buyers about the importance of retaining food 

dollars in the local economy or keeping agricultural lands in production.

2. Second, some very functional hubs exist that do

15 Barham et al., 2012
The Role of Food Hubs in Local Food Marketing 11

Food Hub 

Legal Status

Number Percentage

Privately 

Held 

67 40 percent

Nonprofit 54 32 percent

Cooperative 36 21 percent

Publicly 

Held

8 5 percent

Informal 3 2 percent

Breakdown of Regional 

Food Hubs

Market 

Model

Number Percentage

Farm to 

business/

institution 

(F2B)

70 42 percent

Farm to 

consumer 

(F2C)

60 36 percent

Hybrid 

(both F2B 

& F2C)

38 22 percent

 not consist of brick and mortar facilities; rather, 

they “live” primarily in a virtual context and are 

thus able to transmit information quickly among 

buyers and sellers of local and regional food 

products. This is particularly pertinent in situations where lack of information is the key barrier 

to greater market efficiency. Virtual food hubs 

reduce the costs of access to local foods as well 

as allow for transactions to occur at any time. 16

Food hubs as a 

community entity

Michael Hand identifies supply chains based on 

the proximity of the producer’s transaction to the 

consumer, which may be: (1) direct producer to 

consumer or (2) intermediated with one or more 

middlemen handling the product before it reaches 

the consumer.17 What differentiates this new generation of community-based food hubs is the focus 

on shortening the supply chain and often delivering more than just economic returns. For some of 

these community-based food hubs, the intended 

benefits may extend to a social good, environmental stewardship or capacity building for a group of 

agricultural producers. 

Although food hubs still handle a small share 

of total food sales in the regions where they operate, they are able to reach a customer base that 

is typically far larger than that served by direct 

markets such as farmers markets and CSAs. For 

example, USDA found that, in the case of beef, the 

total volume of beef sold through an intermediate 

supplier in Minnesota was less than that sold to 

several retail supermarket locations, but 30 times 

more than that sold by the local direct market 

producer. While food hubs may not move the 

same volume of product as more conventional food 

channels, some feel that hubs are able to respond 

to changing consumer demand for innovation, 

quality, and variety more deftly than any single 

producer or any conventional retail outlet.18

Food hubs may also facilitate the transmission 

16 Matson, 2011

17 Hand, 2010

18 Tropp et al., 2008

of social values along with the sense of social connection, exchange and trust that many consumers 

purport to value in the direct marketing experience.19 One example is the Just Local Food Cooperative in Wisconsin. It notes that: “The cooperative’s mission is to provide local and fairly traded 

goods, taking care to assure that the producers and 

workers involved are compensated appropriately, 

and that consumers have access to quality products 

at fair and reasonable prices. This co-op currently 

has more than 50 suppliers.”20In that way, food 

hubs provide an important opportunity for rural 

producers, particularly small and mid-sized producers, to reach larger volume buyers in both rural 

and urban areas.

19 Martinez et al., 2010

20 Day-Farnsworth et al., 2009
12

The Business Structure 

of Food Hubs 

In general, the legal structure for a business provides specific mechanisms for management and 

decisionmaking within the business and delineates 

the manager’s ability to seek investors or other 

sources of capital. A legal business structure also 

defines income tax liability, general risk management, and liability exposure.21 In the case of food 

hubs, the legal business structure also keeps track 

21 Thompson and Hayenga, 2008

of who has invested which resources, determines 

the opportunities for growth and expansion available by leveraging capital investments, and controls 

how different types of information are managed 

and exchanged. 

In an environment where information helps 

facilitate efficiency in product development, 

production and marketing, and consumer feedback, legal structure is a critical aspect of a local 

food system. In other words, structure determines 

how the organization operates. This includes both 

internal operations – through the decision process 

among producer-members, managers, and other 
The Role of Food Hubs in Local Food Marketing 13

service providers – and how the 

hub relates to those outside the 

organization, such as its customers, lenders, and other producers.22

USDA’s Regional Food Hub 

Resource Guide divides the structure of food hubs into a few organizational categories. Based on 

a working list of 168 food hubs, 

the report finds that privately held 

businesses are the most common 

type of food hub, accounting for 

40 percent of the legal entities. 

Nonprofits – many of which are 

producer-owned and may function as a cooperative – are the 

next most common legal structure, 

accounting for 32 percent of all 

food hubs, followed by for-profit 

cooperatives at 21 percent. Other 

types of legal structure – publicly 

held food hubs and loosely organized food hubs – are relatively 

rare, representing 5 and 2 percent 

of all food hubs, respectively.23

Food hubs as 

nonprofits

One overview on the business 

organization of food hubs – in 

terms of ownership as a commercial entity or a nonprofit – points 

out that the organizing entity also defines the 

organization’s mission and evolution. For example, 

the goals of a nonprofit may be tied more to a 

social mission than to business profitability. Therefore, the nonprofit may emphasize products that 

are more expensive to source, such as organic and 

fair trade products, but are valued by its consumer 

base.24

One example of this is Red Tomato of Canton, 

MA. Its Web site notes: “Our work connects the 

22 O’Brien et al., 2005

23 Barham et al., 2012

24 Davis and Desai, 2007

innovation, practicality and (sometimes the sheer 

adrenaline) of business, with the deliberation and 

creativity of nonprofit social change. We connect 

local, family farm production with fair pricing and 

supermarket availability; fresh, in-season, perfectly 

ripe produce with high standards of ecological 

stewardship; beautiful packaging with sustainable 

materials; risk-taking with fair trade for farmers; 

and science-based research with deep respect for 

traditional agriculture.”25 Red Tomato says its nonprofit status allowed it to innovate, create, react, 

learn, and share what it knows with colleagues in 

the sustainable food community.26

The Intervale Center in Burlington, VT, provides an example of how a nonprofit entity can 

catalyze other food system businesses and be responsive to producer or other supply chain member needs. An analysis produced by the Wallace 

Center finds that the Intervale Center’s economic 

structure leverages revenue from its most profitable programs to underwrite other start-ups or 

initiatives with stronger social missions.27 In this 

model, new ventures often grow out of the direct 

needs of Intervale Center farms and the broader 

farm community, such as the identification and 

documentation of distribution and storage needs. 

The focus on, and ability to cultivate, programs 

that respond to community and producer needs 

isn’t as widely seen in other business models.

The evolving 

nonprofit entity

Over time, food hubs that started as projects or 

nonprofit entities may evolve to the point where 

a different business structure is more effective, 

especially when it becomes necessary to manage 

the complexities of contractual arrangements with 

third-party providers outside the hub’s membership. Eastern Carolina Organics (ECO) started as 

a project of the Carolina Farm Stewardship Association (CFSA) in 2004, with a $48,000 Tobacco 

Trust Fund Commission grant. The initial goal of 

25 www.redtomato.org (accessed Jan 2011)

26 Davis and Desai, 2007

27 Wallace Center, 2010
14

CFSA as a nonprofit association evolved into the 

mission of ECO as a private business to support 

emerging organic farmers and organic tobacco 

farmers while improving the supply of local organic produce.28 In 2005, ECO became a private 

grower and manager-owned limited liability corporation with 13 growers and two staff owners. 

Today, ECO works with more than 40 growers 

and 100 customers.29 ECO owns its own refrigerated truck, which runs on biodiesel, enabling 

the organization to pick up produce on farm and 

deliver it to buyers the same day. ECO has evolved 

into a year-round supplier of fresh produce that 

helps small, organic, rural farmers access urban 

markets while providing the infrastructure for 

chefs, grocers and families to support local, sustainable agriculture. ECO farmers own 40 percent 

of the company and retain 80 percent of sales, with 

20 percent going to three other non-farmer partners who manage the product brokering services. 

One notable farmer-owned distribution company is Grasshopper Distribution in Kentucky. 

Grasshopper, which grew out of Community Farm 

Alliance (a nonprofit project), distributes food that 

originates in Kentucky or from nearby farms in 

southern Indiana. It is an independent producerowned food hub that provides weekly service to 

restaurants, groceries, cafeterias, school systems 

and other food service clients. 

All of its products are source verified and 

grown without the use of chemicals or pesticides. 

As a producer-owned business, it has developed 

its own packaging standards and price lists. Grasshopper also has specific requirements that result 

in a supply of similar-quality products among its 

farmers. Requirements include following produce packing specifications, becoming “Kentucky 

Proud” label certified, becoming Good Agricultural Practices (GAP) certified, and shipping product 

in transient containers. Grasshopper’s goal is to 

pay fair prices to participating farmers, make payments to all vendors within 7 business days, and 

be transparent to its consumers by having a direct 

28 Wallace Center, 2010

29 http://www.easterncarolinaorganics.com

connection to the participating farms.30

The Agriculture and Land-Based Training 

Association (ALBA), a locally governed nonprofit 

organization in Salinas, CA, was incorporated in 

2001 to increase the success of small-scale minority farmers in central California. ALBA helps these 

farmers overcome language and cultural barriers, a 

lack of resources, institutional exclusion, a historical lack of government support, and other barriers 

to their engagement in agriculture. ALBA provides 

support to these farmers so they can learn organic 

farming techniques and access new markets. 

These sales outlets consist of institutional 

markets (such as schools, hospitals and retailers, including Whole Foods), distributors such 

as GreenLeaf Produce and the Growers Collaborative, and area restaurants. In 2002, ALBA 

established ALBA Organics as a licensed produce 

distributor to support the sales and training needs 

of ALBA farmers.31

ALBA Organics provides on-farm coolers 

and warehousing and delivery infrastructure at 

the ALBA farm near Salinas. It also connects its 

customers with locally grown products from smallscale, limited-resource, and beginning farmers. 

ALBA Organics also offers marketing education 

for farmers on use of different direct marketing 

outlets (farmers’ markets, community supported 

agriculture), as well as training on packing and 

sales for wholesale and retail distribution. In addition to providing business education and incubation, ALBA also operates a small-farm incubator 

that provides some graduates with land leases and 

access to tractors and equipment at ALBA’s 110-

acre Rural Development Center near Salinas. 

As another service, ALBA’s Community Food 

Systems Program connects communities with 

locally grown fruits and vegetables, expands opportunities for small farmers, and improves lowincome families’ access to healthy and diverse local 

foods by establishing new farmers markets and 

farm stands. 

30 http://www.grasshoppersdistribution.com

31 http://www.albafarmers.org
The Role of Food Hubs in Local Food Marketing 15

The Minnesota Food Association (MFA), 

northeast of Minneapolis/St. Paul, began in 1985 

as a coalition of urban and rural individuals who 

wanted to work together to build a more sustainable food system. MFA has a stated commitment 

to “re-localizing food systems.” It partners with 

other organizations and government entities to 

develop sustainable strategies that increase both 

the number of sustainable/organic farmers and the 

number of markets in which their products can 

be sold. These strategies include encouraging fair 

profits for the farmers, fair prices for the consumer, 

fair wages for the farm workers, good environment 

practices, good treatment of all people, and a positive influence to their community.32

32 http://www.mnfoodassociation.org

In 1998, MFA launched a New Immigrant 

Agriculture Project (the Big River Farms Training 

Program) to work with new immigrant and minority farmers on increasing their skills in producing certified organic vegetables, accessing and developing markets for those vegetables, and learning 

the business management practices necessary to 

help them develop and maintain successful small 

farm enterprises. The association is nonprofit and 

relies on donor support to provide the resources 

required to achieve these goals. 

In 2007, Big River Farms launched the Big 

River Farms CSA. Through the CSA, the farmersin-training gain experience in growing diversified 

crops for market while the community benefits by 

gaining access to fresh, organically grown vegeta-
16

bles. Participating farmers have the opportunity to 

sell their produce through the CSA or wholesale 

market channels provided by Big River Farms. 

To date, MFA has “connected” local produce 

from its immigrant farmers to eight wholesale 

vendors, including Chipotle, the Saint Paul School 

District and 

Whole Foods. 

It has trained 

140 farmers. 

The Minnesota 

Food Association also operates Harvest for 

the Hungry, a 

partnership with 

the Big River 

Farms CSA and 

other area CSAs 

to provide fresh, 

locally grown 

produce to lowincome Minnesota households.

Cooperativestructured 

food hubs

There are many 

examples of 

food hubs formed through cooperatives, whether 

producer-led, retailer-led, or with consumer members. There are several advantages to the cooperative business structure that make it a good fit for 

an emerging food hub. The cooperative structure 

is a well-known and established community entity 

with strong roots in agriculture that is owned and 

democratically controlled by its members. The 

membership fees provide working and investment 

capital for the food hub, and any surplus revenues 

are returned to the members. 

A co-op is managed by a board of directors 

elected by the members, which – in the case of a 

food hub – may be made up entirely of producers 

who will manage the organization to meet their 

members’ needs, such as providing a fair return on 

products sold, arranging transportation of goods 

to end consumers, promoting a certain production 

practice, or serving a certain geographic area. 

Many cooperatives – such as the Oklahoma 

Food Cooperative, the High Plains Food Cooperative in Colorado and the 

Weaver Street 

Market in Carrboro, NC – have 

evolved and currently operate as 

multi-stakeholder cooperatives. 

This business 

structure includes consumers, workers, and 

producers in 

the same business entity. An 

example of a 

more standard 

produce ownership structure is 

La Montañita, 

based out of Albuquerque, NM. 

Each of these 

examples has achieved different scales of impact on 

their respective local and regional food systems.

The Oklahoma Food Cooperative (OFC) is a 

producer- and consumer-owned cooperative that 

sources and distributes a variety of products across 

a 160-mile radius around Oklahoma City. OFC 

decided to use a cooperative structure to spread 

equity and create buy-in from its members. 

OFC began operating in November 2003, with 

60 members and 20 producers (only 15 of whom 

had products to sell during the first month). Since 

that time, OFC has grown to more than 125 producers who sell to the co-op and grow or manufacture a variety of goods, including fresh fruits, 

vegetables, grains, herbs and meats. They also 
The Role of Food Hubs in Local Food Marketing 17

produce value-added food products (breads, casseroles, cookies and cakes) and non-food products 

(body-care products, soaps and clothing). 

From initial sales of $3,500 the first month, 

sales now average $65,000 per month. OFC 

rents a 10,000-square-foot warehouse at which it 

receives all products sold online (under the co-op’s 

brand). Items are packed into trucks and delivered 

to pick-up sites across the State, including several 

hundred deliveries each month outside the cooperative for low-income people who do not have 

transportation.33

The High Plains 

Food Cooperative 

(HPFC) is modeled 

after the Oklahoma 

Food Cooperative and 

began with the latter’s 

support. HPFC is a 

member-owner co-op 

that started with 30 

members and has grown to 194 members (40 producers and 154 consumers). The advantage of this 

dual membership and governance structure is that 

it creates a vested interest on the part of both producers and consumers to ensure the co-op’s success.34 The co-op serves customers within a 300-

mile radius of northeastern Colorado, with the 

goal of providing locally grown food from northeastern Colorado to western Kansas and to Colorado’s more populated Front Range. Thus HPFC 

is able to help producers who are geographically 

dispersed and/or very small-scale to find a market 

for their products.

Like OFC, High Plains Food Cooperative 

operates primarily online and is minimally capitalized. It owns two delivery trailers and operates 

a warehouse that the co-op rents in Denver. As 

stated on the co-op’s Web site, the products that 

go through its distribution system are owned 

either by the producer, or by the consumer, who receives the ownership directly from the producer. 

In 2008, its first year in business, HPFC’s sales 

33 Wallace Center, 2010

34 http://highplainsfood.org

were $10,424. In 2011, sales climbed to $71,000 

and it anticipated achieving nearly $100,000 in 

sales for 2012.35 Although poised to grow, financing that growth – by purchasing a trailer and a 

freezer, and hiring several full-time employees 

– remains a challenge because it is a small, new 

business with a limited track record of managing 

debt.36

Other cooperatives with similar operations 

to the OFC and HPFC model include the Iowa 

Food Cooperative (Iowa), Crosstimbers Food 

Cooperative (Texas), Idaho’s Bounty Cooperative, 

Massachusetts Local 

Food Co-op, Nebraska 

Food Cooperative, Ottawa Valley Food Coop (Ontario, Canada), 

West Michigan Cooperative, and the 

Wichita Food Co-op 

(Kansas). 

Weaver Street Market in Carborro, NC, began 

operations in 1988. In addition to its own bakery 

and fresh food kitchen, Weaver Street Market 

offers a wide variety of natural and locally grown 

products. Milk comes from Maple View Farms, 2 

miles up the road. Eggs are delivered fresh daily 

from Latta’s Egg Ranch in nearby Hillsborough. 

Flour comes from Lindley Mills in Graham, NC. 

About a dozen local area farmers who sell their 

produce at the Carrboro Farmer’s Market also 

sell to Weaver Street Market. Keeping the market 

community owned and operated has proven to be 

a very popular idea. The 2011 annual report indicates that the cooperative made a profit of about 

$250,000 and nearly half of its $26 million in sales 

was sourced from local products. The co-op has 

nearly 16,000 households as member/owners. 

Founded in 1976, La Montañita currently 

stocks and sells more than 1,100 products from 

nearly 700 local growers in New Mexico and 

Colorado. Its 2008 sales were $2.8 million. La 

Montañita is a cooperative that supplies four retail 

35 June 18, 2012 phone interview with HPFC.

36 McFadden, Gunter and Dyer, 2010
18

stores in New Mexico, distributing both local 

and national brands through a co-op distribution 

center (the CDC). The CDC, in turn, also sells to 

other specialty retailers and restaurants.37 La Montañita started a distribution arm through the CDC 

in 2007 in order to extend the operation and create 

greater market access for the region’s producers. 

Products are now sourced from within 300 miles 

of Albuquerque (including southern Colorado) 

and distributed across New Mexico.

For-profit 

food hubs

Food hubs may also play a “matchmaker” role, 

helping farmers connect to a market outlet and 

37 McFadden, Gunter and Dyer, 2010

sell their food products. Entrepreneurs and established businesses have pursued local food hubs as a 

potential area for profits.

One such example is Lorentz Meats of Cannon Falls, MN, a family-owned meat processing 

and marketing business. It expanded with a new 

facility in 2000, based primarily on finding markets for local meat producers. The firm believes 

“helping farmers with direct marketing exponentially expands our [Lorentz Meats’] own business 

opportunities.”38 Lorentz Meats is looking for a 

“sweet spot” for a mid-scale meat processor that 

will yield profitability for both producers and its 

meat marketing business.

38 http://www.communityfoodenterprise.org/casestudies/u.s.-based/lorentz-meats

“Eco Apples” destined for sale through Red Tomato food hub of Plainville, MA.
The Role of Food Hubs in Local Food Marketing 19

Food hub functions

Food hub functions vary but may 

include the following:

•	 Market access for local producers;

•	 Information sharing;

•	 Transportation and distribution;

•	 Brokerage services;

•	 Product bundling and aggregation;

•	 Season extension;

•	 Maintaining producer-consumer connections; and

•	 Producer-oriented technical assistance.

Colorado Homestead Ranches (CHR) is a 

western Colorado meat and processed product 

company – a for-profit C corporation – that has 

invested in processing capacity. Although each of 

the six member ranches is responsible for cattle 

production, all beef processing flows through two 

plants CHR acquired to reduce processing costs 

and to ensure its access to processing throughout 

the year.39 The addition of two processing facilities 

in different small towns (Cedaredge and Delta) 

has also created new marketing outlets for CHR 

beef, as well as for the producers of other local and 

value-added products for which CHR creates shelf 

space.

Some large-scale retailers have also responded 

to their clients’ desire for local food and are stocking more local foods and goods. In some cases, 

these larger retailers are starting to create their 

own local food sales in a manner that resembles 

a food hub. Whole Foods Market – a national 

retailer of organic and natural foods – announced 

in February 2011 that it would use its stores in 

Florida as a drop-off location for local CSA deliveries.40

Multi-structured 

food hubs

Not all food hubs have one central structure that 

fits nicely in these “boxes.” Some food hubs are 

really a combination of several different businesses, where business functions of the hub have 

been divided into different legal structures. For 

example, Red Tomato is a nonprofit entity that is 

linked to for-profit, farmer-owned brokering and 

distribution entities. Red Tomato considered other 

business structures, but found that the nonprofit 

provides its producers with a sense of ownership in 

marketing that was more comfortable to them.41

Red Tomato evaluated the possibility of organizing as a farmer cooperative, but felt the co-op 

39 McFadden, Gunter and Dyer, 2010

40 http://www.bnet.com/blog/food-industry/

how-whole-foods-is-embracing-its-local-producerivals/2553

41 Davis and Desai, 2007

structure would entail a decisionmaking process 

that was too slow and risk-averse to address 

emerging markets for food products. Davis and 

Desai report that participating farmers trust Red 

Tomato to manage the planning, logistics, marketing and sales of their products. It uses grants to 

offer economic development support to its farmers, and maintain its focus on limited-resource 

and small-scale, local farmers. Looking towards 

the future, Red Tomato has the goal of increasing trading income (from marketing and logistics 

services) by 50 percent, with the remaining 50 percent originating from individual donor gifts, thus 

eliminating the need for government funding.42

Another example is the Sandhills Farm to 

Table Cooperative in North Carolina. This multitiered organization combines a farmers’ marketing 

cooperative with a CSA on the consumer side and 

uses a brokerage management team on the administrative side of the enterprise. It has more than 

1,400 members in one county in central North 

Carolina.

42 Local Food Research Center, 2012
20

Virtual Food Hubs

Some food hubs are located either primarily or 

uniquely online. Virtual hubs have the advantage 

of being able to transmit and receive information 

much more quickly than a traditional direct marketing outlet. This means that a fully functional 

virtual hub gives consumers and other food buyers 

instant access to information on product availability and price. It establishes the “information connection” and places the burden of completing the 

transaction on the two agents involved: the buyer 

and the seller. 

Internet-based transactions enable a vast array of products to be sold, usually at a price that 

is competitive with local retailers. Successful 

electronic marketing is based on “organized and 

centralized trading; widely dispersed buyers and 

sellers with remote access; and merchandising 

based on product descriptions. If the non-pricerelated terms of exchange, such as the logistics of 

bringing sellers and buyers together, and ways of 

describing products and concluding transactions 

are found, then the focus turns to a price-centered 

negotiation. Market success depends on a high 

trading volume, reliable grades and standards and 

reasonable charges.”43

Virtual food hubs leverage the Internet-based 

market by finding ways to add value to exchanges 

in areas of logistical, financial, and information 

services. These virtual food hubs can automate 

business processes that lower the costs of access 

to local foods. The biggest advantage of virtually 

based hubs is lowering the transaction cost of a 

sale of a particular agricultural item for both the 

producer and the consumer purchasing the product. 

Another potential advantage of Internet-based 

businesses that is sometimes overlooked is the 

ability to carry out the transaction at any time. This 

means that customers can place the order when 

they wish, and producers can update their sales 

items and pricing at their convenience.Electronic 

43 Ehmke, 2001

food hubs can also serve as a community development tool. To the extent that emerging communications technologies can partially offset the 

necessity of scale economies, rural communities 

may have a greater chance of maintaining service 

systems critical to viability.44

Lulus Local Food45 is a Richmond, VA -based 

virtual food hub software provider. Lulus’ Internet 

site serves as a connection point for approximately 

200 food producers and cooperatives with over 

2,000 customer-families. Currently, five food hubs 

– four in Virginia and one in Montana – are using 

software designed by Lulus Local Food. 46 Each 

hub has multiple pickup and drop-off locations. 

For instance, Fall Line Farms, one of the hubs 

using the Lulus Local Food software, has 10 site 

locations in and around Richmond. The software is 

designed to connect producers with retail customers as opposed to institutional or restaurant buyers.

The program works on a weekly cycle, where 

producers enter their available produce online on a 

Friday. Product is then “approved” by the food hub 

administrator, and the buying pages are opened to 

the buying public Saturday through Monday. Consumers select the products they wish to buy, place 

an order, and pay for their purchases. Producers 

deliver purchased products to the drop-off/pickup 

site locations on Thursday morning. Customers 

pick up their groceries Thursday afternoon. The 

food hub collects payments from the customer, 

including any sales tax, and pays the producer for 

products purchased, less a transaction fee. The hub 

also pays sales tax to the State on behalf of the 

producers.

Lulus Local Food is working on a new release 

of its software package that will allow producers 

to sell at multiple hubs and allow hubs to network 

with each other. It will also allow for institutional 

and restaurant purchases.

Farmer Girls47 is a software provider with 

similar functionality to Lulus Local Food, using 

44 Leatherman, 2000

45 www.luluslocalfood.com

46 Matson, 2011

47 www.farmergirls.net
The Role of Food Hubs in Local Food Marketing 21

Micro-greens ready for harvest at Manakintowne Specialty Growers in Powhatan County, VA. Produce 

from the farm and other suppliers are ordered by members on the Lulus Local Food Web site.
22

a weekly cycle to connect producers directly with 

retail customers. Its business model is different 

in that users of the software are not networked. 

Farmer Girls currently has hubs in Warrenton and 

Roanoke, VA.

Another such example is FoodHub,48 developed by Ecotrust. It grew rapidly from its launch 

in February 2010 and has obtained more than 

2,200 members throughout the greater Northwest 

and is open to food buyers and sellers in Oregon, 

Washington, Alaska, Montana, Idaho, and California, according to an article in Sustainable Business 

Oregon. 49

 In a June 2012 blog post, Ecotrust provided 

details on FoodHub’s membership: 

48 http://food-hub.org/

49 http://www.sustainablebusinessoregon.com/

articles/2011/07

•	 More than 

20 percent of 

FoodHub’s 

membership is 

based in counties 

in which at least 

30 percent of the 

population lives 

in rural areas.

•	 Fifty-five 

percent of rural 

FoodHub members are sellers, of 

which 82 percent are farmers, 

ranchers, or dairies. Other sellers 

include breweries, wineries, and 

fishermen.

•	 Thirty percent of rural 

Food Hub members are buyers, of 

which 27 percent 

are schools or school districts.

 This virtual food hub seeks only to connect 

local/regional food buyers and sellers, regardless of 

production methods used. 

There are myriad virtual food hubs offering a 

variety of services. Local Dirt,50 based in Madison, 

WI, connects local producers with a variety of customers, including institutions, restaurants, schools 

and buyers clubs, as well as individual families. Local Dirt provides the connection between producer 

and customer and creates invoices on the producers’ behalf, but it does not take part in the transaction (collect or pay money). It is branching out 

into other States and localities.

Fresh Fork Market51 “connects Cleveland, OH, 

area customers with local artisanal producers.” 

Fresh Fork Market is more like a CSA that offers 

baskets of food at fixed prices. What is in the bas50 http://www.localdirt.com/

51 www.freshforkmarket.com
The Role of Food Hubs in Local Food Marketing 23

ket depends on the season; however, the more the 

customer pays for the basket, the more choice the 

customer gains to select what will be in the basket.

Papa Spuds is a nascent e-commerce food hub 

based in Raleigh, NC, that was started by Rob 

Meyer and Ben Stone as a for-profit entity in 

2008. It has positioned itself as an Internet farmers’ market that partners with more than 20 producers from central North Carolina. The business 

offers online payment 

and home delivery of 

products within its service area.52

Most virtual farmers 

markets only sell localproduce and other products. A slightly different 

approach is taken by Relay,53 which currently operates in two cities: Charlottesville and Richmond, 

VA. Relay not only offers local produce, but also 

a vast array of goods normally found in a regular 

grocery store. Relay’s business model is to give the 

customer an experience closer to a one-stop shop 

at a regular grocery store. In certain areas, Relay 

also offers a “to your door” delivery service.

Virtual food hub as an 

information source

One advantage of a virtual hub is its positioning to 

create networks and link buyers that are typically 

much harder for smaller producers to reach. For 

example, OmOrganics began a farm-to-restaurant 

cooperative network to assist with sales and delivery direct from farmers to restaurant chefs, so 

restaurants, retail stores, and schools can find local 

purveyors of sustainably grown foods. In addition, it provides a sourcing directory for wholesale 

buyers for produce, meat, poultry, dairy, eggs, and 

seafood. To complement its online sourcing directory, it provides links to local distributors so that 

institutional buyers have multiple means to procure 

local foods. A recent post and video on the FoodHub.org Web site relates how the Oregon School 

52 http://papaspuds.com/

53 www.relayfoods.com

District Nutrition Services uses FoodHub to find 

local farms and source local products for their 

Farm-to-School program.

The negligible cost of participating on the 

Internet permits the rapid transmission of information for virtual food hubs, which can result in 

reduced transaction costs for spatially divergent 

consumer/producer situations. Several of these 

hubs clearly evolved due to the distance between 

farm production and 

the end consumer. For 

example, the Southwest 

Colorado Guide to Local 

Food and Fiber 54 links 

diverse producers in 

southwestern Colorado 

counties with institutional buyers as well as household consumers. Producers develop their own profiles where they write a 

statement describing what products they have for 

sale, how their products are unique, and how they 

are sustainably produced. 

A similar hub covers Gunnison County, CO,55

and offers information on buying and selling meat, 

eggs, and dairy products in the county. It also supports a list of Gunnison County producers that sell 

vegetables, beef, poultry, eggs, dairy products, pork, 

lamb, goat, honey, hay, and compost.

It has been recognized that easy access to the 

social and organizing potential of the Internet 

is one area where the local foods movement has 

benefited from new technology developed over the 

past few years. According to John Leatherman’s 

study of Internet-based commerce, the social/organizational function of the Internet can be used 

as a tool for rural community organization and 

goal attainment. Particularly in rural communities, 

where so much depends on voluntary efforts by 

community groups, this capacity would strengthen 

local institutions.56

54 www.mesaverdefood.org

55 http://www.gunnison.colostate.edu/agri/localag/

localagbeef.shtml

56 Leatherman, 2000

The negligible cost of participating on 

the Internet permits the rapid transmission of information for virtual food 

hubs.
24

Christy Talbott of Richmond, VA, a member of Fall Line Farms food co-op, picks up her produce at Bon Air 

United Methodist Church.

Varying Functions of Food Hubs

Any business must serve an economic function 

in order to continue to exist. In economic parlance, a business must serve the needs and wants 

of individuals to survive and prosper. A food hub 

must follow this rule: it must provide a value to 

its producers and local food buyers. Some of the 

market functions that a food hub may provide to 

its members and consumers are outlined in the 

proceeding section. 

Market access 

for local foods

A primary role of a food hub is to facilitate access 

for agricultural producers to market outlets (retail 

or wholesale) that would otherwise be less accessible or completely inaccessible due to scale or 

location of the food production with respect to the 

market outlet. 

Similarly, the food hub also addresses the 

consumer side of the equation by making it possible for local consumers to access local producers. 
The Role of Food Hubs in Local Food Marketing 25

A successful food hub often will link to a larger 

number of local food producers than a consumer 

could access individually.

For example, Fall Line Farms is “designed to 

connect family owned and operated farms in the 

central Virginia area with customers in search of 

local food year round.’’57 Fall Line Farms connects 

more than 75 local farms in the Richmond, VA, 

area58 with local food buyers and provides more 

than 2,000 customers with fresh, locally produced 

food on a regular basis.

Information flow 

and sharing

As illustrated by the existence of many online 

hubs, sometimes the food hub’s only role is to create and maintain a flow of information between 

the buyer and seller. Often, however, food hubs 

work with producers or markets that require more 

than just information or a distribution channel 

for products. When producers enter new markets 

through new mechanisms, their education and 

support needs may begin well before their products arrive at the warehouse. These facilitating or 

intermediary functions range from transporting 

products from the farm or warehouse to the buyer, 

to building capacity among participating producers. On the other hand, the rapid transmission of 

information permits certain hubs to reach into 

larger institutional markets (see Food-Hub.org). 

Pricing is based on information, and often the 

brokering function of a food hub helps farmers negotiate higher prices instead of being price-takers. 

However, farmers and their representatives must 

also receive information on what consumers are 

willing to pay for food in their area. Good Natured 

Family Farms (GNFF) in Kansas – a 40-member 

producer cooperative – and Balls Food Stores have 

developed a partnership that allows participating 

GNFF farmers to negotiate prices. GNFF adds a 

mark-up to cover packaging, labeling, administrative, and marketing costs. The final price for any 

product is negotiated between GNFF and the 

57 http://flf.luluslocalfood.com/

58 Matson, 2011

retail store, with the farmer being guaranteed the 

price that was initially determined.59

This process is transparent to all agents involved in each transaction. Additionally, GNFF 

has established this transparency through a written 

memorandum of understanding that outlines the 

responsibilities of GNFF, each farmer member and 

the retail stores. This process also creates liability 

protection for GNFF. Therefore, both efficiency 

and equity gains come from sharing information 

openly in these transactions.

Transportation and 

distribution

Getting product from a production or aggregation point to the designated market outlet(s) is 

one of the costliest and most complicated aspects 

of operating a food hub of any kind; as such, these 

arrangements need to be assessed carefully. A firm 

may need to consider spreading transportation 

costs in several ways to remain profitable on a per 

trip basis by putting more of a high-margin product on each load transported by truck. It can also 

reduce per unit fuel costs by moving larger loads of 

food over shorter distances.60

Backhauling is an option for creating more efficient transportation networks that moves produce 

to and from a hub. This entails arranging for product to be loaded into the transportation vehicle 

for either the initial or return leg of the delivery or 

pick-up trip, such that the vehicle is always carrying a revenue-generating load. For example, Los 

Poblanos Organics has delivery trucks traveling 

from its distribution warehouse in Albuquerque, 

NM, to the Los Alamos and Santa Fe areas. It 

is investigating the development of relationships 

with other firms to arrange for transporting that 

firm’s product from the Los Alamos and Santa Fe 

areas back to Albuquerque in order to decrease its 

transportation costs per trip. 

The Local Food Hub, based in Charlottesville, 

VA, has designed a food delivery system around a 

central hub aggregation point. The circuit-delivery 

59 Dreier and Taheri, 2008

60 Martinez et al. 2010
26

The Local Food Hub, in Charlottesville, VA, bases its delivery system around a central warehouse.

format was intended to reduce transportation costs 

for all the small-scale suppliers trying to meet 

growing demand for local, sustainably produced 

foods. A central warehouse was established to 

which all suppliers would deliver. The produce was 

then repackaged to form one delivery per restaurant or wholesale buyer, to be delivered by a third 

party. The Local Food Hub makes extensive use 

of its location near an interstate highway to have 

its product carried as a “backhaul” on other food 

wholesalers’ trucks, which would otherwise be returning empty. This can dramatically reduce shipping costs and provide access to more locations for 

members’ production. 

The third party was a transportation company, 

Lowhub, which uses electric and biodiesel vehicles. 

Pricing structure is designed to encourage customers to fill cargo spaces, making each journey as 

cost-effective as possible. A trial run of this system 

showed that while buyers were impressed with the 

efficiency of the delivery system, the tiered pricing 

and invoicing was too complicated for end users 

to manage (especially restaurants), and the thirdparty delivery added extra costs that buyers were 

unwilling to pay.61

61 Making Local Food Work, 2009
The Role of Food Hubs in Local Food Marketing 27

Brokerage 

services

Food hubs may also play the role of “matchmaker” 

by connecting farmers with the correct market outlet to fit their scale of production and their production practices. For example, Red Tomato evolved 

from the organizers’ desire to sell local produce 

fairly on a wholesale scale. Initially, Red Tomato 

tried to manage product handling and distribution to supermarkets and other wholesale markets 

throughout New England, but soon realized it 

didn’t have the physical and financial resources as a 

small nonprofit.62

Because storing and transporting products is 

costly, it instead decided to focus on brokering. 

This included creating product value, selling to 

retailers, coordinating transportation, providing 

customer service and developing point-of-sale 

materials, and packaging. By contracting out for 

storage and transportation, Red Tomato retains 

about 10 percent of sales, with the rest going to 

the farmers.63

Increasing market share 

by bundling

A growing type of food hub involves the bundling 

of product through a multi-farm CSA (Community Supported Agriculture). For example, in 

2008, the Intervale Center in Vermont launched 

a weekly food delivery program modeled after a 

multi-farm CSA. As its Web site notes: “Based 

on farm and market interest, we chose to focus 

on developing a farmer collaborative that would 

aggregate, market, and distribute local foods to the 

surrounding community in a way that ensures fair 

prices for farmers. By working together, farmers are 

able to benefit by providing the community with 

increased crop diversity and greater customer service that may not be possible with a single farmer. 

In addition, multiple farmers working together 

benefit from economies of scale in both marketing 

and distribution, allowing them more time to focus 

on production.”

62 Davis and Desai, 2007

63 Davis and Desai, 2007

In the case of the All Natural Beef Producers 

Cooperative, its goal in the late 1990s was creating 

a greater and more consistent beef supply. The beef 

cooperative eventually grew into Good Natured 

Family Farms, a cooperative of 40 farmers marketing 13 product categories, including beef, chicken, 

produce, eggs, jams and jellies. By 2000, the cooperative had expanded to include 20 members located in and around Kansas City, MO, the largest 

being Balls Food Stores, which is also the largest 

regional grocery chain in Kansas City. 64

Several other instances of multi-farm CSA that 

bundle locally produced meats and eggs and function as food hubs include:

•	 Grasshopper CSA in Kentucky;

•	 Wagbo Peace Center’s Providence CSA, MI;

•	 Alliance CSA, Nova Scotia;

•	 Sandhills Farm to Table Cooperative CSA, 

NC;

•	 Lancaster Farm Fresh in Lancaster, PA;

•	 Common Wealth CSA, MA.

The clear advantage of a food hub designed 

around a multi-farm drop box program is that the 

program allows small- and medium-scale farmers 

to reach a greater number of consumers directly. 

This type of hub also eliminates the need for each 

farmer to grow a diversity of crops to meet the 

customer needs of any one CSA. The disadvantage 

is that by involving an intermediary, such as the 

drop box consolidator, farmers lower their margins 

compared to what they would otherwise receive if 

they marketed directly to consumers at a farmers 

market or through their own CSA.

Increasing market share by 

extending the season

The food hub can extend the quantity of offerings 

to those consumers who expect a greater variety 

and/or less seasonality in the availability of products, as opposed to being a member of a specific 

CSA. Strategies to help producers increase their 

share of the local foods market include: extending 

64 Dreier and Taheri, 2008.
28

Pigs at Keenbell Farm in Rockville, Virginia, are pasture raised to organic standards. The high-quality products made from their meat are sold through the Lulus Local Food food hub website.

the season by coordinating existing product lines 

to guarantee more consistent supply of local foods 

over time (as does Sandhills Farm to Table Cooperative); providing resources for farmers’ greenhouse production to increase total supply (as does 

Indian Springs Farmers Association); and developing shared root crop storage (as does the Local 

Food Hub). 

Los Poblanos Organics in New Mexico has accomplished season extension through three mechanisms. First, it purchases organic products from a 

wide range of farmers to supplement its own farm 

production, including some in Colorado and California. Second, it increases its greenhouse production. Third, to grow more crops in the State, three 

additional acres for production have been added to 

the land owned by Los Poblanos in southern New 

Mexico, taking advantage of the State’s various microclimates to produce crops nearly year round.

Maintaining a consumerproducer connection

Increasingly, the food hub model is being adopted 

to establish and retain consumer connectivity to 

local farmers. These CSAs often strive to have a 

more personal touch with consumer-members. 

One example of this is San Francisco Bay 

Area-based OmOrganics, which has developed a 

flexible, multi-farm CSA that allows customers 

to choose a CSA from a particular farm (or a few 

farms working together). Food delivery contains 

produce only from the selected farm(s). Many 

people choose this type of CSA when they are 

familiar with a specific farm and know they like its 
The Role of Food Hubs in Local Food Marketing 29

crop variety and quality, according to OmOrganics.

OmOrganics also provides consumers with 

the choice of a CSA or delivery service that 

combines and delivers produce from a variety of 

farms during the course of a year, depending on 

product availability. These multi-farm CSA orders 

are packaged by a consolidator. This type of CSA 

offers consumers greater variety and flexibility in 

delivery (which can occur weekly, semi-weekly, 

monthly, or seasonally). 

The Sandhills Farm to 

Table Cooperative in Moore 

County, NC, incorporates 

this connection as part of 

its structure. It is a multistakeholder cooperative that 

has both 1,600 consumermembers and more than 40 

producers and staff members as joint owners. As 

part of its services, the cooperative sends weekly 

newsletters to its members with recipes, conducts 

cooking and education classes, looks for valueadded products that customers request, and organizes market days for its producers to meet directly 

with its consumers. 

John Blue, a producer-member, says this “consumer connection” is especially important for 

transitioning farmers – those who are too large 

to make a living by selling at farmers markets, 

but not big enough to access large-scale producer 

markets.”65 The interaction with consumers allows 

for the farmers to build strong relationships with 

consumers, which will be beneficial in regards to 

future growth.

Technical assistance and 

producer development

Some food hubs place particular emphasis on 

building production and/or marketing capacity 

among their producers. For example, Appalachian 

Sustainable Development (ASD), a nonprofit 

based in Abingdon, VA, developed Appalachian 

Harvest Network (AHN) to help local farmers 

transition from growing tobacco to organic fruits 

65 Matson, 2012

and vegetables to sell at independent health food 

stores, local grocers, and regional chains.66

A rural nonprofit, ASD provides pre-season 

planning to its 53 organic producer-members, as 

well as product aggregation, sorting, grading, packing, shipping, and other training and technical assistance. It offers support to growers to help them 

get the proper seeds; plant fields properly; get 

organic certification; and fulfill the buyers’ requirements for high quality. ASD 

also creates markets for 

useable “seconds” by raising 

money to purchase and distribute this still wholesome 

produce (which may have 

slight cosmetic blemishes 

or be of less than standard 

size grades) to a regional 

food bank. Spinoffs from AHN include wood 

products processing and a school-based gardening 

project, all overseen by the board of ASD. Eventually, ASD would like AHN to become a for-profit 

subsidiary.67

The Local Food Hub in Charlottesville, VA, 

works with more than 60 small and mid-sized 

farms within a 100-mile radius of Charlottesville. 

The hub provides an array of resources to help 

orient producers to new markets, including networking, liability, and traceability coverage, access 

to refrigeration and freezer storage space available 

for rent, discounted seeds, and discounted Web 

site development. The hub also educates consumers 

about local foods and participates in educational 

events and workshops. Producers say they have 

increased sales by an average 25 percent by working with the hub, which has reinvested more than 

$850,000 in the local farming community since 

inception.68

La Montañita in New Mexico provides producer-oriented services, such as carrying invoices 

centrally for producers who deliver to its warehouse, thus facilitating direct contact with the 

66 Wallace Center, 2010

67 Wallace Center, 2010

68 Barham et al., 2012

A food hub designed around a 

multi-farm drop box program 

allows small- and medium-scale 

farmers to reach a greater number of consumers directly.
30

buyer. It rents space for members’ use and buys 

raw products in bulk (on behalf of members) to 

help keep input prices low for value-added food 

producers; it also assists with product development 

and marketing.69

Incorporated in 1981, the Indian Springs 

Farmers Association, a 50-member cooperative based in Petal, MS, has grown to include a 

$500,000 packing facility where produce is prepared, boxed, and trucked to a wide variety of 

wholesale and retail buyers throughout North 

America. However, to use its packing facility to 

full capacity, Indian Springs needs to increase its 

capacity to grow product year round. Some of the 

cooperative’s farmers have winter greenhouses 

now, but many do not. To address this deficit, the 

cooperative is building a demonstration project 

and ultimately would like to build many more over 

69 McFadden, Gunter and Dyer, 2010

the next few years.

GROWN Locally is planning to adopt a postharvest handling program for some of its members 

that may involve third-party certification. Because 

member farms are small-scale operations, many of 

GROWN Locally’s members cannot afford the 

certification process and infrastructure necessary 

to formally comply with the requirements of institutional buyers. These certifications include Good 

Agricultural Practices (GAP), Good Handling 

Practices, and Good Manufacturing Practices. 

GROWN Locally has also found that pre-season 

production planning has helped its membership 

to better meet market demand. Its members plan 

production ahead of the growing season, based on 

customer demand. Prices are then set to reflect the 

membership’s costs of production.70

70 USDA Rural Development, 2010
The Role of Food Hubs in Local Food Marketing 31

Information Sharing 

and Reducing Risk

Some information is critical for building and 

maintaining relationships among partners in a 

value chain. 

•	 From a business management standpoint, 

producers and brokers need to understand 

the standard or acceptable conventions of the 

marketplace in 

terms of typical 

payment terms and 

evaluating potential partners in the 

supply chain.71 This 

is often an issue 

when smaller firms 

or producers engage 

in transactions with 

larger partners who 

are used to extending repayment terms 

beyond what a 

smaller operator can 

manage. 

•	 Another potential 

for miscommunication lies in partnerships where the broker or consumer may be 

looking for a supply greater than the vendor(s) 

can meet or a vendor may not be able to consistently meet certain production standards 

(quality of produce, husbandry methods or land 

stewardship practices). 

Information can sometimes act as a bottleneck to growth and change. For example, Floyd 

Boulevard Local Foods Market in Souix City, 

IA, wanted to expand its processing facility, but 

growers were unwilling to increase their vegetable 

production until they were assured that the Market would commit to buying from them in larger 

71 Iowa State, 2008

amounts. Furthermore, growers needed to communicate with the Market regarding the varieties 

they would grow, their costs of production, and any 

other conditions that might change their ability 

to deliver in the contracted amounts (Iowa State, 

2008).

To address these potential obstacles, it is recommended that all parties in a value chain be well 

matched in size and scale, and operate with similar 

goals and values in regards to future growth.72 In 

the circumstance of food hubs, a large hub may 

require a greater number of smaller farmers 

to supply the products 

required. The food hub 

and the farmers must 

be informed and in 

agreement as to how 

much each farm needs 

to supply, planned 

growth in the future, 

and the production 

capacity of the farms 

themselves. Therefore, the stakeholders 

involved need to be 

knowledgeable about 

all of the different markets being addressed. 

For example, the farmers who have worked with consumers in direct 

markets may not be used to – or may be unwilling 

to – produce the required consistency, volume and 

quality needed for wholesale markets.73

In a study conducted by Iowa State University in 2005 and 2006, farmers involved in direct 

sales noted that communication skills were highly 

important to their success in business “because 

they had to relate individually to each and every 

customer.” Furthermore, they recognized that 

they alone were the best representatives for their 

own products and could use customer contact for 

educational purposes. Producers said they needed 

72 Iowa State, 2008

73 Davis and Desai, 2007

Information can reduce risk

Information is both a constraint and an 

opportunity in developing and managing 

marketing opportunities through food 

hubs. In fact, every transaction is shaped 

and facilitated by the flow of information 

between producers, intermediaries and 

end consumers. The more efficient the 

flow of information through technology 

or through rapid person-to-person transmission, the more likely it is for problems 

to be averted and for risk to be reduced.
32

more information on how to access markets that 

buy large quantities, as well as training in cost control, risk management, and understanding the tax 

requirements of cooperatives and limited liability 

corporations.74

Product 

assurances

Consumers may be targeted with information 

about product quality, production or handling 

protocols, helping them distinguish between competing products in the marketplace and to make 

purchases based on environmental or social values 

important to them. 

These are voluntary protocols 

that, according 

to the Center for 

Fair and Alternative Trade, “must 

attract enterprise 

participation and 

consumer interest 

to be successful.”75

These claims can 

vary from informal assurances to 

standards-based 

certification 

programs such as 

USDA certified 

organic. Examples 

include Certified 

Humane and the 

World Fair Trade 

Organization. 

The Texasbased Cross Timbers Co-op says that producers 

may only sell products they themselves have grown 

or processed. Cross Timbers will not handle genetically modified (GMO) foods or products, nor 

market any meat, poultry, or egg products originating from confined animal feeding operations. The 

74 Hardy, Holz-Clause and Chase, 2006

75 Center for Fair and Alternative Trade, 2009

co-op also asserts that all raw materials have been 

produced, traded and/or distributed sustainably, 

equitably, and responsibly, in accordance with the 

ideals and principles of the co-op. As further assurance, producers must maintain documentation 

or other evidence of their products’ origins, such as 

certifications from TransFair USA, Smithsonian 

Institution, Rainforest Alliance, or ForestCare.

Good Natured Family Farms (GNFF) uses its 

Web site to provide informal consumer assurances 

through a list of all the products offered, which 

include general descriptions of how these products 

were produced. The GNFF Web site then allows 

consumers to search for producers within a 200-

mile radius of Kansas City, KS. Consumers can 

also find restaurants where chefs incorporate these 

products into their menus. The Oklahoma Food 

Co-op enforces a requirement that all products 

from new producer- members must be reviewed by 

the co-op’s Compliance and Standards Committee 

to ensure that they are eligible for sale through the 
The Role of Food Hubs in Local Food Marketing 33

cooperative. 

At La Montañita, the Beneficial Farms Eco 

Label is a project of the Co-op Trade Initiative. 

Originally a nonprofit collaborative of farmers 

and ranchers, the Beneficial eco-label became part 

of the Co-op Trade Initiative in 2007. According 

to La Montañita’s Web site: “The Co-op Trade 

Initiative collaborates with the New Mexico FoodShed Alliance, The New Mexico Agricultural Task 

Force of the Middle Rio Grande Council of Governments, The University of New Mexico Sustainability Studies Program, and others in an effort to 

push regional food-shed and sustainability forward 

into mainstream consciousness.”

When formalized, third-party verification provides assurances that may come from the product 

processor, or from a government or membership 

organization that is charged with creating measurable standards, “that require producers, retailers, 

consumers, or a combination of those groups, to 

adhere to social, environmental or some other 

specialized criteria that is not followed in traditional markets.”76 Red Tomato is a member of the 

Domestic Fair Trade Association77 and also has its 

own certification program, Eco, which is defined 

as: “grown on family farms by stewards of land, 

water and wildlife; using natural methods and 

minimal spray; closing the distance from farm to 

table. Ecological farming covers a spectrum of environmental and conservation practices including 

organic, biodynamic and advanced integrated pest 

management (IPM).” 

Red Tomato has a formalized production 

protocol to reduce the application of pesticides in 

apples and stone fruits grown for its program; all 

of its farmers are certified by the Integrated Pest 

Management Institute. It has also instituted a 

voluntary program to provide training, assessment 

and GAP certification for all Red Tomato growers. Red Tomato’s Web site states that, as of 2010, 

21 farms had been assessed and 17 more were to 

be GAP-certified within a year. Red Tomato’s 

Eco Apple brand is currently packaged with labels 

76 Center for Fair and Alternative Trade, 2009

77 http://www.thedfta.org/,

that provide consumers with information about 

where, how, and by who their food is produced.78

This brand is linking 40 farms with more than 

200 retail outlets in New England. The next steps 

in the program include the implementation of a 

recall and traceability system throughout the Red 

Tomato network.

Food hubs and community 

economic development

In an article written in 2000 about rural community development, John Leatherman, an agricultural economist at Kansas State University, said: 

“Among the ubiquitous economic trends that may 

be observed in rural areas are the consolidation and 

increasing scale of economic activity. Such consolidation has long been underway in agricultural 

production systems. Similar trends can be noted 

in the consolidation of retail sales activity as small, 

specialized proprietors are replaced by large retail 

discounters. Even at the scale of communities, 

retail and service activities continue to consolidate 

in regional trade centers as many small rural communities stagnate or decline.” 

Food hubs can have a strong influence on community economic development in both rural and 

urban areas. In rural areas, food hubs can support 

entrepreneurial agriculture that leads to retention 

of the rural population base. By providing new 

marketing opportunities for local producers and 

connecting the producers with buyers they could 

not reach individually, they may increase farm sales 

and encourage strong agriculture-based economies. 

They can also build community among a group 

of stakeholders interested in developing the local 

food system, although the structure of the community and potential for networking depends on how 

much of the interaction among hub members occurs in “virtual markets,” as opposed to “in person.” 

In urban areas, food hubs can bring fresh, locally 

produced foods into underserved communities and 

help consumers learn more about where their food 

comes from. 

78 Diamond & Barham, 2012
34

Food hubs can encourage economic development in both rural and urban areas. 

Constraints on food hubs

As the Wallace Center points out in its study of 

community food enterprises, the overall market 

environment for local foods is becoming more 

favorable, but the capital investment to support 

infrastructure development is still lacking. Like 

all nascent businesses, there are many potential 

constraints to the development and growth of food 

hubs. The primary constraints can be challenging 

for a new organization as they may involve the lack 

of sufficient financial resources and/or a robust risk 

management plan. Other constraints may take longer for a new entity to address, such as a staffing 

plan that includes human resource development, or 

having access to local food processing facilities.

Capitalization

Although there are many examples of well-planned 

and successful food aggregation and distribution 

systems, some food hubs struggle with undercapitalization. This in turn can lead to a relatively weak 

organizational and/or product delivery structure. 

Food hubs have addressed this challenge in 

a number of different ways. Some organizations 
The Role of Food Hubs in Local Food Marketing 35

choose not to rely on grants or loans (for example, 

the Oklahoma Food Cooperative) and try to grow 

their membership or sales revenue to capitalize 

their operations. Some reach a point where certain constraints (for example, distance to market) 

can be overcome only with further investment in 

transportation infrastructure; in these instances, 

the food hubs may be forced to seek outside funding. For example, the High Plains Food Co-op in 

Colorado cannot grow its sales until it can move 

more products to the co-op’s urban-based markets; 

this requires additional freezer capacity to store 

the product and a trailer to move the product. The 

co-op pursued grants to fund this sales market 

expansion.

Access to capital is a particular challenge for 

new food hubs. Operating expenses for the Appalachian Harvest Network (AHN) could not be 

covered by sales alone in its first years of operation. 

Therefore, it relied on grants and individual donations, with the goal of becoming financially viable 

in the near future.79

Floyd Boulevard Local Foods Market is a 

for-profit arm of Sustainable Food for Siouxland – a marketing initiative started by a group of 

consumers and farmers looking for ways to make 

local food sources available to the tri-state region 

(Nebraska, South Dakota and Iowa) around Sioux 

City, IA. It operates a commercial kitchen and 

processing facility that produces value-added products under a regional brand, Sioux City Sue.80 At 

the time of the case study reviewed for this report, 

the processing facility was not yet operating at capacity, nor had it attained its break-even point. To 

scale up the operation, the Market would need to 

make a capital investment in equipment and certified procedures. These involve some very detailed 

processes, including the development of a Hazard 

Analysis and Critical Control Points (HACCP) 

plan and standardizing commercial recipes. 

Floyd Boulevard derives 34 percent of its gross 

revenue from grants, donations, and memberships; and there is substantial debt financing on 35 

79 asdevelop.org

80 Schweser. 2009.

percent of its assets. Furthermore, the Market has 

encountered difficulties trying to obtain a standard 

bank loan, because it needs to finance more than 

25 percent of the expanded enterprise. Most of 

its farmer-suppliers are small operations with few 

assets.

These examples point to financing and growth 

issues for organizations that have relied heavily on 

grant funding but may wish to grow in scale based 

on debt financing. Often, there are few options, 

and such businesses may wish instead to solicit 

loans from their members. Furthermore, as evidenced by a case study of Colorado value chains, 

access to capital is frequently related to the scale of 

the operation, where the smallest operation studied was the most under-capitalized and the most 

constrained in terms of potential market expansion.81 This is further verified with a survey of food 

hub operators, as reported in USDA’s Regional 

Food Hub Guide, where only half of the reporting 

food hubs said that they were currently economically viable.

Liability

Liability is an issue that all agents in a value chain 

must consider. In general, there are two types of 

liability risk exposure: tort risk and contract risk. 

A tort is an intentional or unintentional harm 

to the person or property of another, and can be 

minimized using insurance products. Contract risk 

is the primary risk of a buyer abrogating a legally 

binding agreement. In regards to food hubs, this 

type of risk can be encountered by value chain 

agents who enter into financing contracts or contracts with brokers, vendors and customers. 

Some food hubs are designed to remove the 

potential for product liability claims or contract 

risk from the hub itself by having producers retain 

product ownership until the product is loaded 

into a truck for delivery to the end consumer. For 

example, both High Plains Food Co-op and Oklahoma Food Cooperative members retain product 

ownership, as well as the responsibility that all

81 McFadden, Gunter and Dyer, 2010
36

State and Federal food safety regulations have been 

followed. 

On its Web site, the High Plains Food Co-op 

notes: “At no time does the cooperative ever have 

title to any of the products. We have no inventory. 

The products that go through our distribution 

system are owned either by the producer or by 

the consumer who purchases “title” to the product 

from the producer. All complaints should first be 

brought to the attention of the producer, unless 

it is a situation where the cooperative itself is at 

fault.” 

Good Natured Family Farms uses a memorandum of understanding that outlines the responsibilities of all partners in each transaction to 

limit the organization’s exposure to contract risk. 

Another form of risk may arise when hubs rely 

on one or a very limited number of suppliers for 

a particular product; this introduces the risk that 

if a supplier is unable to meet production goals, 

the hub will not have the product to supply to the 

end customer. Mitigating this risk often involves 

spreading production over multiple producers, 

where possible.

Other hubs assume some or all of the liability 

risk by purchasing insurance to cover parts of the 

transactions made under their auspices. For example, Appalachian Sustainable Development (ASD) 

has a $2 million general product liability policy 

in addition to a $2 million umbrella policy that 

covers the handling and delivery functions of the 

hub.82 Producers who supply ASD are not covered 

under this policy, so they need to ensure they have 

adequate liability insurance for their own farm in 

the event that a health-related product safety issue 

is traced back to their on-farm growing or handling practices. 

Grasshopper Distribution has a $6 million aggregate policy that covers all farmers’ products that 

flow through Grasshopper’s channels, since most 

of its members would not be able to afford adequate coverage on their own. Red Tomato also has 

a policy that covers all growers who sell through 

the hub: a $4 million total policy, with $2 million 

82 Markley, 2010

for one occurrence and a $1 million umbrella policy. Any grower who sells through a channel other 

than Red Tomato must carry an applicable liability 

policy to insure his or her products. This coverage 

is similar to the umbrella policies carried by some 

farmers’ markets, where the transactions made by 

all vendors selling in that market are covered, but 

those same vendors need additional insurance for 

any transactions they make outside the farmers’ 

market venue.

In general, it is costly to determine who bears 

risk for product or contract liability and how those 

risks will be mitigated. Often, it is hard-won experience that helps the management team determine 

how to handle risk, given local conditions and the 

relationships between buyers and sellers. 

Local food handling and 

processing capacity

A lack of access to processing facilities or services 

is an impediment to increasing the supply of local 

products in many areas. Processing facilities may 

struggle to maintain a consistent schedule given 

variations in seasonal supply; will need robust food 

safety protocols; and may face costs associated 

with adherence to specific production methods or 

processing claims that producers use to market to 

consumers.

For example, organically produced meat can 

only be processed in a certified organic facility if it 

is to qualify for an organic certification. According 

to the Organic Trade Association, “In processing 

operations that handle both organic and nonorganic meat products, processors must segregate 

their handling of organic and non-organic meat.”83

Several co-ops and producer alliances have 

made significant capital investments in order to 

ensure adequate access to processing for their 

products. For example, the All-Natural Beef 

Cooperative initially required its producers to 

individually process and distribute the beef they 

produced. This resulted in high costs for individual 

farmers and inefficiencies for the co-op, especially 

83 OTA, 2010b
The Role of Food Hubs in Local Food Marketing 37

La Montañita Co-op in Albuquerque, NM, is an example of a food hub spurring economic development by 

investing in its food producers.

in transportation and scheduling.84 All-Natural 

decided to purchase a State-inspected plant in 

order to standardize meat quality and address 

scheduling issues for its member producers. One 

of the co-op’s largest producer-members (who also 

served as a co-op manager) obtained a personal 

loan to finance the plant’s purchase, and he retains 

ownership of the facility. The co-op then signed an 

exclusive marketing and delivery agreement with 

the processing facility. One co-op member handles 

all of the slaughter scheduling in order to ensure 

84 Dreier and Taheri, 2008

a consistent supply for its customers and to help 

producers adjust their cattle feeding accordingly.85

Human resources 

capacity 

Some food hubs face a challenge in hiring and retaining individuals skilled in areas such as recordkeeping, accounting, and financial management. 

This is especially true in producer-based organizations, where the key managers may have extensive 

knowledge of production agriculture, but less 

85 Dreier and Taheri, 2008
38

knowledge of business management. A University 

of Wisconsin report concludes that cooperative 

food hubs need to develop or hire skilled management: “The co-op model offers a horizontal leadership structure. Without clear responsibilities and 

delegation, however, this model can result in disorganization, leadership imbalance, and fatigue.”86

For example, GROWN Locally in northeastern Iowa determined it was more cost-effective 

to hire a professional manager than to rely on 

volunteer members, interns, or inexperienced staff 

to oversee its administrative 

tasks. In 2008, the cooperative 

hired a full-time coordinator 

with a background in business 

management and marketing 

to coordinate pre-season planning and pricing and 

distribution, which allows the growers to focus on 

production.

Appalachian Harvest Network, based in southwestern Virginia, recognized how important it 

was to monitor the organization’s financial health 

by keeping good records. This included hiring an 

accountant and using generally accepted accounting standards. Although AHN is still recording 

data by hand, it is updating its system to electronically assemble, track, monitor, and analyze business 

data, which should help identify strengths and 

weaknesses of the current business model.87

Regulatory Environment 

for Food Hubs

The Federal, State, and local regulatory environment governing food processing, manufacturing, 

packing, holding and transporting of food and 

food products destined for human consumption 

influences the costs of participating in certain 

markets – both directly and indirectly. There is 

the uncertainty associated with certain regulatory 

requirements, especially when they span multiple 

jurisdictions, such as local and State health agen86 Borst, Alan. USDA Rural Development.

87 The Wallace Center, 2010

cies that may intervene at different levels. For 

example, a county health department usually has 

more specific criteria for developing a commercial 

kitchen than does the State health agency. Other 

regulatory concerns for some food hubs may include the costs of continually monitoring production and processing to ensure ongoing compliance, 

as well as monitoring the status of local, State, and 

Federal regulations.

While the regulatory environment presents 

challenges to food hubs, there is still a great deal 

of opportunity for them to 

expand. Food hubs may be in 

a much better position to meet 

certain requirements than are 

individual farmers, thus once 

again showing how crucial food hubs could be to 

the growth of local and regional food systems. 

In general, it is costly to identify and analyze 

regulatory information pertaining to any form of 

physical food hub. These costs (in staff time and 

financial resources) increase as the hub engages in 

more complex processing and handling of food (or 

assumes more product liability). Producers working with the High Plains Food Co-op, for example, bear the burden of understanding and complying with regulations pertaining to food safety and 

handling, including meat processing. This lowers 

the operating costs for the co-op, but increases the 

costs for participating producers who must insure 

their own products and be certain that each product they market fully complies with Federal, State, 

and local health and food safety regulations. 

In addition, there is uncertainty surrounding the final rules under the Federal Food Safety 

Modernization Act (FSMA) and how it will affect 

farms and food businesses. FSMA will potentially 

affect recordkeeping practices, food safety planning and monitoring, and inspection protocols for 

certain farm and food businesses, including food 

hubs. 

Regulatory uncertainties such as those discussed above may offer an advantage for virtual 

food hubs, which facilitate connections between 

consumers and producers but do not physically 

One typical constraint faced 

by food hubs is a lack of 

skilled management.
The Role of Food Hubs in Local Food Marketing 39

handle or transport any food or food product. 

What remains to be seen, however, are the compliance costs for those food facilities that connect 

producers to consumers and play a vital role in 

making transactions that would be too difficult 

for individual agricultural producers to complete 

on their own. Compliance costs may involve the 

development of food safety plans, traceability protocols, or other recordkeeping systems.

In addition, for food hubs selling to institutional or wholesale buyers, their producers may 

need to be GAP-certified (under USDA Good 

Agricultural Practices guidelines) as a food safety 

assurance for the intermediary’s end customers. 

Compliance, recordkeeping, and the formal audits 

required for GAP certification may impose costs 

on small-scale producers which could, in turn, 

increase the prices at which they will have to sell 

their products through a hub.

Federal initiatives 

and grants 

Some food hubs have taken advantage of Federal 

resources to conduct research, develop their business models, purchase or upgrade infrastructure, 

or conduct trainings for their suppliers. USDA’s 

“Know Your Farmer, Know Your Food” initiative 

began in 2009 to provide information that helps 

community stakeholders identify some of these 

Federal resources for local food system development. It also shares information about successful 

food system models from around the country that 

have made use of Federal funds. 

The “Know Your Farmer, Know Your Food” 

Web site highlights a number of existing USDA 

programs that can fund local food system development projects.88 The initiative has also created the 

“Know Your Farmer, Know Your Food” Compass, 

which is an online multi-media narrative with 

stories, pictures, and video about USDA’s support 

for local and regional food systems. The Compass 

includes an interactive map of USDA-supported 

local and regional food activities in all 50 States. 

Grant and loan programs from nine other Federal 

88 www.usda.gov/knowyourfarmer

agencies that can be used for regional food systems 

development were added to the map in October 

2012.89

USDA also recently released the Regional 

Food Hub Resource Guide, which provides a comprehensive list of Federal and non-Federal grant 

and loans programs that could potentially fund 

food-hub-related activities.90

 In September 2010, the Vernon Economic 

Development Association (VEDA) and the City 

of Viroqua, WI, received a $2 million award from 

the U.S. Department of Commerce, Economic 

Development Administration, for a food processing and distribution center in Viroqua, a small 

rural community in the western part of the State. 

The project includes renovating a 100,000-sqarefoot manufacturing plant into a food processing 

and distribution center, in addition to providing 

much-needed storage for regional farmers. The 

center also includes rental space for local food 

businesses and a home for the newly incorporated 

Fifth Season Cooperative, which works to aggregate and market local food products. 

The executive director for VEDA explains: 

“This facility is a tremendous resource to the 

agricultural industry in our region. It provides the 

aggregation, processing, and distribution infrastructure to help small producers increase their 

market opportunities and business capacity. We’re 

creating jobs, increasing the tax base, and engaging 

our own local entrepreneurs to grow the economy.” 

The executive director also states that the project 

will create an estimated 120 jobs and generate $5.7 

million in private investment.

Examples of USDA 

funding programs

USDA Rural Development’s Community Facilities loan and grant program supports a wide variety 

of essential community facilities, everything from 

health clinics to fire stations to schools and daycare 

89 www.usda.gov/kyfcompass

90 This guide and other resources for food hubs 

can be accessed on USDA’s food hub portal at 

www.ams.usda.gov/foodhubs
40

centers in rural communities with a population 

less than 20,000. The program can also finance the 

physical assets of local food projects owned by municipalities or nonprofits including buildings and 

equipment for farmers markets, school kitchens, 

community kitchens, and food banks; food storage and distribution centers; and food preparation 

centers. As long as the infrastructure is based in a 

rural community (under 20,000 people), it could 

qualify for the program. Examples could include a 

cold storage facility, warehouse, processing facility, 

or greenhouse that facilitates sales to any market, 

urban or rural. 

USDA Rural Development’s Rural Business 

Enterprise Grant Program can also assist in local 

food efforts. Under this program, for example, 

$140,000 was provided to Shore Gourmet on 

Maryland’s Eastern Shore to help with start-up 

and operational costs, including marketing materials, product development, and other activities, to 

raise awareness of local food and promote agriculture in the region. Shore Gourmet, created by 

the Mid-Shore Regional Council, functions as 

a distributor for value-added agricultural products produced by farmers on the Eastern Shore. 

The grant will be used to gain expertise in food 

packaging design, pricing and marketing for local 

farmers and other food businesses.

USDA Rural Development’s Rural Cooperative Development grants have been used for cooperative development that can support local food 

systems infrastructure. For example:

•	 The Federation of Southern Cooperatives/Land 

Assistance Fund in Alabama received a grant 

to establish a vegetable processing and marketing cooperative and a regional goat processing 

and marketing cooperative. The Federation also 

trains and supports members involved in direct 

marketing activities, such as selling at urban 

farmers markets, redeeming nutrition assistance 

coupons and selling direct to schools. Part of 

the grant focused on business planning and 

training for community development credit 

unions. 

•	 The Virginia Foundation for Agriculture Innovation 

and Rural Sustainability (FAIRS) 

used a USDA rural 

community development grant funding 

to assist a number 

of local food hubs, 

including providing 

technical assistance 

to the Local Food 

Hub in Charlottesville, VA, and efforts 

to assist communitybased organizations 

in Floyd, VA. This 

funding helped to 

create virtual food 

hubs and sponsor 

several training conferences throughout 

Virginia.

The Value-Added 

Producer Grant Program (VAPG) is another USDA Rural Development program that 

can be used to fund intermediary food marketers 

that increase producer income – a nearly perfect 

definition of a food hub. Only producer-owned 

entities (independent producers, farmer-owned 

cooperatives or businesses) are eligible for VAPG. 

For example:

•	 Fertile Grounds of Noxen, PA, received a 

VAPG of $300,000 in 2012 to assist its work 

with small-scale family agriculture producers in 

Pennsylvania. The group operates a communitysupported agriculture program, which promotes 

Pennsylvania agricultural products and encourages buying and eating locally. The funds will 

be used to promote small business expansion 

and entrepreneurship opportunities in the local 
The Role of Food Hubs in Local Food Marketing 41

community by expanding its marketing campaign to reach an increased number of local 

businesses and farmers.

State, county, and community 

support efforts

Throughout the country, there are numerous ways 

to use State and local funding to support the 

development of local food efforts. For example, the 

New Mexico Food and Agriculture Policy Council 

is looking at numerous ways to improve the fresh 

food distribution system to under-served rural and 

urban communities around the State using State 

resources. This includes encouraging the use of 

vacant or under-utilized buildings in rural communities to catalyze economic activity and create 

community. It also supports expanding and modernizing kitchen facilities in schools, senior centers, 

and other institutions. The vision, in part, is to 

create commercial kitchens and other facilities that 

offer business development and marketing resources and outlets for more dispersed rural businesses.

The Fifth Season Cooperative grew out of the 

recognition that many small to mid-sized family farms in western Wisconsin have considerable capacity to produce high-quality foods, but 

lacked access to local markets, as well as structured 

coordination, processing and distribution infrastructure. Support for this new hub came because 

the community recognized that many dollars were 

flowing outside of the community for food purchases. An impact study estimated that consumers 

in western Wisconsin spent $208 million buying 

food from outside their region.91 This information convinced key stakeholders that developing a 

91 Fifth Season Cooperative is Launched. 2010.
42

cooperative with a diverse membership base (the 

cooperative is a multi-stakeholder group of producers, producer groups, food processors, distributors, buyers, and workers of the cooperative) could 

create the physical and organizational infrastructure and coordination needed to increase sales of 

local food in western Wisconsin.

The National Association of Counties 

(NACO)92 highlights several roles for county governments in helping to develop the infrastructure 

to support local food systems. These include: 

•	 Streamlining permit processes for storage, processing and distribution facilities; 

•	 Providing mini-grants toward their creation; 

•	 Donating county resources; and 

•	 Helping farmers establish partnerships with 

community stakeholders who can offer these 

services.

NACO also points out that counties can work 

with farmers and agriculture industry groups to 

support new products and certification standards. 

They can also offer incentives, such as tax rebates, 

to retain businesses that are critical to the local 

food system infrastructure. Counties and other 

local government entities can promote conservation easements, financial aid for farmers, economic 

success strategies for local agriculture and zoning 

as ways to encourage agricultural business to continue investing in the local economy.

La Montañita Co-op in New Mexico is an 

example of a food hub spurring economic development by investing in its food producers in unique 

and innovative ways. La Montañita grew out of 

a natural foods market that was incorporated in 

1976. It was managed for 3 years, largely as a collective, with the board of directors serving as staff. 

In 1987, the co-op obtained a loan from National 

Co-op Bank (NCB) for $284,000 and moved into 

a larger location. In 1999, La Montañita opened a 

second location in an under-served neighborhood 

in the North Valley of Albuquerque. By 2004, the 

co-op had more than 10,000 member-households 

92 NACO, 2007

and total sales exceeding $12 million. Later that 

year, the co-op bought out another co-op in Gallup, NM, and, in the transition, leased a larger 

location, purchased equipment, and hired and 

trained staff. At the same time, Santa Fe’s only 

independently owned natural foods grocery was 

struggling to compete against larger retail food 

chains, so it asked the co-op to buy it out. The 

co-op obtained a National Co-op Bank loan of 

$1.7 million in 2005 and purchased the Santa Fe 

location. 

As of 2011, La Montañita had more than 

13,000 member-households and employed about 

200 full- and part-time staff. The co-op encourages 

team management within each department, pays 

a living wage, and provides a generous employee 

benefit package. 

As part of its effort to build local food system 

infrastructure in New Mexico, the La Montañita 

began extending pre-payment for product loans 

that have gone to farmers, ranchers, and other local 

food producers who sell their products at the coop stores or through the Co-op Trade Initiative’s 

Co-op Distribution Center. The demand for these 

loans far outstripped the co-op’s ability to fund 

them. In response, it developed the La Montañita 

Fund, which allows all co-op members who reside 

in New Mexico to invest in the fund by purchasing interests at $250 each. In 2011, 400 units were 

offered for sale to raise $100,000 for the fund.

Private financing 

initiatives

At the local level, it is often difficult for beginning 

or unconventional farms and food-based businesses to gain financing from traditional lenders, which 

may be unwilling to work with businesses that 

have an unproven financial track record, produce 

unfamiliar products, utilize new or uncommon 

business models, or work with an unusual array of 

partners, including nonprofits. Food hubs are most 

often categorized under these headings, thus they 

can also face issues when attempting to obtain 

financing. The organizations highlighted below are 

examples of organizations that provide financing 
The Role of Food Hubs in Local Food Marketing 43

to small-scale, local and socially responsible agricultural ventures.

Finance for Food and Farming, located in New 

Mexico, is an example of a working group that is 

addressing the funding gap for small-scale businesses that are frequently otherwise undercapitalized. This group comprises organizations that 

create micro-financing opportunities directed at 

growing small food-based businesses across New 

Mexico. During the past 2 years, lending programs 

through the Permaculture Credit Union, the New 

Mexico Farmers’ Marketing Association, and La 

Montañita Co-op have generated $250,000 in 

micro-loans to farmers’ market vendors to invest 

in new production technologies and new products, 

and to support local food systems processors and 

distributors.

Another community infrastructure financing model relies on a mix of public and private 

investment. Pennsylvania’s Fresh Food Financing 

Initiative is a $120 million fund that has provided 

low-interest, long-term loans to finance more than 

60 locally owned food markets in neighborhoods 

and small towns that lacked places to buy fresh 

food. The fund was developed using $30 million 

from the State, leveraged with private investment 

guided by The Reinvestment Fund, The Food 

Trust, and The Urban Affairs Coalition. The objectives of the program include: improving health and 

nutrition outcomes for populations living in areas 

designated as food deserts; stimulating investment 

of private capital in low-income communities; and 

removing financing obstacles and lowering operating barriers for supermarkets in poor communities.
44

As a national trend with intentionally local 

roots, Slow Money93 is part of a groundswell of investors interested in socially responsible investing. 

These investors seek to lend capital to local food 

systems and small food enterprises to give them 

93 www.slowmoney.org

the necessary resources to meet demand for locally 

based foods and services, such as farming enterprises, food processing facilities, food hubs, and 

small value-added businesses. Although investors 

may make a 3- to 6-percent profit, the real goal is 

to revitalize local economies by supporting smaller 

scale agricultural businesses and direct market 
The Role of Food Hubs in Local Food Marketing 45

development. 

The Carrot Project, a New England-based organization, “is helping rebuild a food and agriculture system that creates opportunities for smaller 

farmers; provides healthful, locally produced food 

for citizens; and is good for the environment, as 

well as local and regional economies.”94

The Carrot Project creates, tests, and 

operates financing programs that support profitable, sustainable farm businesses that are unable to find traditional 

financing by partnering and leveraging 

the assets of community-based lenders, 

socially responsible investors, farm support organizations, and farmers. 

LION (Local Investing Opportunities Network) in Washington State 

facilitates private investment agreements between small business owners 

and investors who want to invest their 

money locally to promote economic 

self-sufficiency, job growth, and economic development.95 Business owners 

apply to the program to receive support 

from a local investor (via loans or equity shares), and LION coordinates the 

match with an appropriate investor. The 

investment agreement is then developed and agreed upon by the individual 

investors and owner/borrowers. LION 

also promotes citizen activism and 

involvement through community gardening with dedicated harvests for area 

food banks, farm to school programs, 

and waste reduction and recycling.

In addition to these notable examples of alternative community financing 

for developing local food systems, there 

are numerous innovative paths that 

small-scale food businesses are forging 

to create capital and build community 

support. These include creating community buy-in by selling subscriptions 

to a business (much like the investment 

CSA members make each year in the producer 

who grows the food share), or issuing gift cards 

for a new business that can be redeemed when the 

business opens, at greater than face value to compensate the “lender” for use of the money. 

94 www.thecarrotproject.org, 2011

95 www.l2020.org
46

In sum, the resurgence of interest in local food 

system development – combined with the recognition that the food system extends beyond food 

production and into its processing and distribution – has created some unique opportunities 

for stakeholders at all levels to pave the way for 

building the needed infrastructure in physical, 

environmental, and human resources. This includes 

fostering a policy environment that encourages 

business investment and retention in food production, processing and marketing, and looking 

at how an array of traditional economic development tools can be used to support newer business 

models, including food hubs, that actively connect 

producers with consumers interested in purchasing 

locally grown foods.

Roadmap for Food Hub 

Development

The development and evolution of food hubs are 

highly localized and dependent on several factors. 

Even so, there are some lessons that can be applied 

from reviewing examples from across the country. 

There appear to be some factors that contribute to 

success more than others, including:

1. Having a strategic plan with clear goals and 

a vision for developing the food system helps 

ensure that the hub’s original intents are maintained (for example, fair prices for farmers or 

sustainable agricultural production methods).

2. Getting all stakeholders engaged early on in the 

process and defining their interests and areas of 

expertise. This limits some risk that may arise in 

fulfilling contracts with vendors and buyers and 

involves:

a. Making sure there is a management or 

oversight team that is inclusive and that 

hears farmers’ concerns, as well as those of 

other businesses and investors. 

b. Ensuring that the team has individuals with 

skills and proven experience in financial 

management, the regulatory environment, 

marketing and packaging, inventory management and quality control, and that can 

engage meaningfully with farmer/business 

owners. 

c. Making sure that all parties are well 

matched in size and scale, and operate with 

similar goals and values. 

d. Enlisting producers and members with 

previous experience growing and supplying 

food for local markets.

3. Understanding the location of different direct 

markets and how to access them.

a. If the market outlet is geographically 

distant from the production unit, how will 

transportation occur and how can products 

be priced to cover those costs?

b. Is backhauling feasible to generate revenue 

on an otherwise empty return load? 

c. If the market is one with a customer base 

that is less familiar with purchasing and 

preparing fresh foods (some urban or atrisk populations, schools without scratchcooking experience), education may be vital 

to the hub’s success.

4. Providing an educational program that may 

be an integral part of the hub development. 

This may include partnering with an outreach 

entity, such as a university Extension Service or 

nonprofit, that can deliver information about 

what the hub provides and when the product 

can be delivered to the consumer. Producers 

may need training on post-harvest practices, 

such as quality control, packaging and delivery. 

Likewise, there may be a need for training in 

coordinated practices, such as common production practices or season-extension techniques.

5. Reducing risk on the buyers’ side in order to 

access markets. HACCP (hazard analysis and 

critical control points) are mandated by law in 

regards to certain products. In circumstances 

where a HACCP is not required by law, many 

end users may still request them to be implemented by producers or processors before 

receiving product. GAP (good agricultural 

practices) are also often required by end users 
The Role of Food Hubs in Local Food Marketing 47

prior to the purchase of 

products. While these 

plans are used to ensure 

consumers of the quality 

and safety of the products, they may necessitate 

additional costs in producer/business. Owner 

training and the development of specific protocols 

and quality assurance will 

most likely be required 

in order to meet the end 

user’s requests. 

Another type of producer support that may 

be necessary is securing 

affordable product liability insurance for individual vendors, or umbrella 

insurance coverage for 

vendors that can be purchased through the hub, 

since this is critical for hubs accessing institutional markets, such as schools or hotels. Such

requirements for accessing a market may also 

cause some business owners to withdraw from 

the supply pool.

6.	 Providing capital for supply chain infrastructure, such as vehicles, storage facilities, and 

retail locations. Capital availability can be a

significant barrier to starting local aggregation

and distribution businesses. A certain level and

type of infrastructure is necessary to operate a 

food hub, including: 

a. Technical infrastructure, such as billing 

protocols, Internet management systems 

and payment processes. 

b. Physical infrastructure may also be essential 

(such as product warehousing or processing capability) in order to ensure increased 

product quality and packaging control 

across suppliers. Distribution infrastructure 

may also be required. 

7. Exploring a variety of business structures. 

Whatever that structure is, it must be one that 

helps the stakeholders meet their goals for 

financial, marketing and production planning 

and growth. It appears that a certain initial flexibility is key, and the management team should 

identify the point at which a particular business 

structure constrains further investment. An 

alternative structure (such as incorporating one 

business function or outsourcing distribution) 

may sometimes be the only way the hub can 

maintain its market share or expand into new 

markets. 

8. Identifying all sources of technical and financial 

support, including those considered less conventional. 

a. There are emerging areas of public and 

private financial support for food hubs, 

including micro-lenders, private investors, 

economic development entities, and nonprofit community-based organizations. 

b. There are also businesses with technical 

expertise in processing, distribution, or 

transportation with which a hub could contract to more efficiently execute some of the 

more complex or cost-prohibitive functions 
48

of direct marketing through a hub. At issue 

here is how comfortable the stakeholders are with alternative lenders or certain 

subcontractors. This sort of “comfort level” 

assessment is an important component in 

developing a strategic business plan for a 

food hub.

c. Donated or shared equipment and facilities 

can substantially reduce the capital required 

to start and operate the food hub.

d. It is essential that members, producers, and 

owners have “skin in the game.” That is, all 

owners need to have a capital stake in the 

success of the venture.

9. Managing information efficiently. This is critical to the success of a food hub. 

a. Timely and accurate information flow 

between producers and consumers, or 

between producers and wholesalers, helps 

to minimize or avoid risks, such as price or 

marketing risk, production risk and some 

legal risks. 

b. Information management – supported by 

dedicated staff and technology – impacts 

the hub’s ability to manage orders accurately, to monitor product quality, and to 

convey product attributes to consumers and 

other vendors.

c. Information is needed to remain in compliance with certain Federal, State, and local 

food safety regulations, and to maintain 

transparent working relationships across 

multiple partners in a value chain.

Conclusions

Food hubs fulfill various roles, including functioning as aggregators, processors, distributors, and 

marketers of local food. In all of these roles, food

hubs provide a critical supply chain link for rural 

communities and farmers to reach consumers interested in purchasing local products. Food hubs are

also beneficial in creating new marketing opportunities for farmers and ranchers, allowing them to 

expand the scope of their consumer market.

Depending on their structure, business model, 

mission and customer base, food hubs can have additional benefits, including: increasing access to local foods in underserved communities and schools; 

providing farmers and ranchers with higher prices 

than they might receive through other wholesalers; 

developing human capital through producer training and capacity building; and strengthening the 

ties between producers and consumers in the same 

community. 

The success or failure of a food hub should 

not be measured solely in terms of its aggregating 

function or in terms of total volume of product 

moved. It should also be valued in terms of the 

places its products go and the people who benefit 

from it. With growing demand for local or regional food products, some conventional marketing 

channels may be ill-equipped to supply local food 

where and how people wish to purchase it. Food 

hubs can fulfill important roles that create new 

opportunities for producers and consumers. Many 

also fulfill social and other community functions.
The Role of Food Hubs in Local Food Marketing 49

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