ASSESSING

FINANCIAL VIABILITY

Running A

FOOD HUB

 VOLUME3
Service Report 77, Volume III

Issued March 2016

Reprinted May 2018

This report was prepared for the U.S. Department of Agriculture by Matson Consulting of Aiken, S.C., 

with the assistance of James Barham of USDA Cooperative Programs. Funding was provided by 

VAFAIRS, a nonprofit cooperative and small business development office in Richmond, Va., and by 

USDA’s Cooperative Research Grant Program, administered by USDA Cooperative Programs.

For questions or additional copies of this report, contact:

James.Barham@wdc.usda.gov or call 202-690-1411.

This report and many others that may be useful to food businesses are posted on the USDA Rural 

Development, Cooperative Programs website at: 

http://www.rd.usda.gov/publications/publications-cooperatives

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USDA is an equal opportunity provider, employer, and lender.

Rural Development
Running a

Food Hub

Assessing

Financial

Viability

By James Matson, Jeremiah Thayer, and Jessica Shaw

Matson Consulting, Aiken, S.C. 

The authors thank James Barham of USDA Cooperative Programs for 

his help in preparing this report. This manuscript and the financial models 

it contains were reviewed by a number of peers, some of whom compared it 

to their own experiences either running, or working with, food hubs. The 

authors thank the following reviewers for their assistance and insights:

• Olivia Blanchflower — GrowNYC’s Greenmarket Co.

• John Fisk and Jeff Farbman — The Wallace Center at Winrock International

• Malini Ram Moraghan and Darrow Isaacman-VanWertz — Wholesome 

Wave

• Kathy Nyquist and Saloni Doshi — New Venture Advisors

• Jesse Rye and Hannah Mellion — Farm Fresh Rhode Island

• Haile Johnston — Common Market Philadelphia

VOLUME THREE
Contents

4 RUNNING A FOOD HUB

Introduction ..............................................................................................................7

Methods of Analysis................................................................................................8

 Operational Models: Wholesale Food Hubs .......................................... 12

 Annual Sales by Business Operational Periods ..........................................13

 Figure 1: Annual Sales Levels by Operational Periods...............................13

Model Assumptions...............................................................................................14

 Product Lines.....................................................................................................14

 Table 1: Sales Distribution...............................................................................14

 Figure 2: Sales Seasonality .............................................................................14

 Product Pricing..................................................................................................15

 Payment to Producers......................................................................................15

 Figure 3: Sales Needed To Reach Breakeven .............................................16

 Certification Fees..............................................................................................16

 Location..............................................................................................................17

 Facility Operations and Delivery.....................................................................17

 Table 2: Time Requirements............................................................................19

 Table 3: Hourly Labor Calculations ................................................................21

 Table 4: Wholesale Labor Costs.....................................................................21

 Table 5: Salaried Labor Costs .........................................................................22

 Figure 4: Sales Required for Breakeven Additional Labor.........................23

 General Expenses.............................................................................................24

 Equity and Financing ........................................................................................25

Wholesale Food Hub Results...............................................................................26

 Figure 5: Annual Sales by Operational Period .............................................26

 Table 6: Wholesale Food Hub pro forma.......................................................27

 Operational Models: Direct-to-Consumer Food Hubs .......................... 29

 Annual Sales by Business Operational Periods ..........................................30

 Figure 6: Annual Sales Levels by Operational Periods...............................30

Model Assumptions...............................................................................................31

 Product Line.......................................................................................................31

 Location..............................................................................................................31
RUNNING A FOOD HUB 5

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

design by Stephen Hall, Kota Design.

 Table 7: Direct-to-Consumer Warehouse Lease.........................................31

 Operations..........................................................................................................31

 Table 8: Shares Sold.........................................................................................32

 Table 9: Pickup Locations................................................................................32

 Table 10: Direct-to-Consumer Full-Time Employees...................................34

 Table 11: Direct-to-Consumer Labor Costs ..................................................35

 General Expenses.............................................................................................35

Direct-to-Consumer Food Hub Results ..............................................................36

 Figure 6: Direct-to-Consumer Sales Levels and Operational Profit .........36

 Table 12: Direct-to-Consumer Pro Forma .....................................................37

 Operational Model Comparisons .............................................................38

 Table 13: Operational Model Summary Comparison ..................................38

 Figure 7: Prototypical Food Hub Expenses Comparison.............................39

 Table 14: Breakeven Operational Period Pro Forma Comparison ............40

 Table 15: Growth Operational Period Pro Forma Comparison ..................41

 Table 16: Viability Operational Period Pro Forma Comparison .................42

 Conclusion.................................................................................................... 43

 Appendix....................................................................................................... 44

Supplemental Tables: Wholesale Model...........................................................45

 Table 17: Prototypical Wholesale Food Hub Balance Sheet.....................45

 Table 18: Wholesale Expense and Revenue Summary Figures ................46

 Table 19: Wholesale Labor Summary............................................................48

 Table 20: Wholesale Transportation Summary............................................52

 Table 21: Wholesale Cash Flow......................................................................56

Supplemental Tables: Direct-to-Consumer Model ..........................................61

 Table 22: Prototypical Direct-to-Consumer Food Hub Balance Sheet ....61

 Table 23: Direct-to-Consumer Expense and Revenue................................62

 Table 24: Direct-to-Consumer Labor Summary ...........................................64

 Table 25: Direct-to-Consumer Transportation summary............................68

 Table 26: Direct-to-Consumer Cash Flow .....................................................72
6 RUNNING A FOOD HUB
RUNNING A FOOD HUB 7

This report is part of a multi-volume, technical report series 

published by USDA under the over-arching title of Running a Food 

Hub. This third volume in the series provides in-depth guidance on 

assessing the financial viability of food hubs.

The purpose of this report is to provide benchmarks for 

established and emerging food hubs to use as a comparison for 

assessing their own financial viability and for making strategic 

business decisions. The financial analysis can provide valuable 

insight into how changes in major costs and revenue affect the 

overall operations and profitability of food hub businesses.

There are many existing food hubs with operations that differ 

from the assumptions used for this analysis. Food hubs may be more 

or less efficient in key areas, such as size of operations, product cost, 

transportation or other areas. For the sake of brevity, this report 

attempts to focus on the most significant areas of concern that most 

often affect business viability. 

Economic analysis in this report is based on information from 

industry research, discussions and interviews with key food hub 

personnel from across the United States, and the knowledge of the 

consultants. Sections presenting key assumptions for the analysis 

are presented in narrative form to aid in understanding the logic 

used during the construction of the analysis. This report has been 

divided into these three major sections: 

The “Methods of Analysis” section introduces the Operational 

Model and Operational Period approach used for the construction 

of the financial analysis and comparisons of the models. 

The “Operational Models” section presents a closer look at 

different components of each operational model. It provides the 

details, narrative, and in-depth analysis of the assumptions that 

underpin the report. Readers can find the food hub type that most 

resembles their venture and compare points of similarity. 

The “Operational Models and Periods Comparison” section 

concludes the body of the document by juxtaposing some key 

financial and operational results of each operational model and 

operational period to compare the various types of entities. It is 

here that hub operators can learn lessons, compare results, and see 

the benefits and obstacles unique to the various food hub types.

Introduction

U. S. Department of Agriculture photo
8 RUNNING A FOOD HUB

Methods of Analysis

Categorizing common financial issues across a variety of 

food hubs is difficult because of the differences in operations. Some 

food hubs may enjoy advantages or resources in certain areas of operations, personnel, or business that enable them to perform more 

successfully than others, or achieve greater sales levels in a shorter 

period of time. Each food hub is unique and operates with a distinctive combination of expenses. There are also often environmental 

circumstances affecting the food hub’s ability to remain in operation.

Even with these variations in organization, many food hubs still 

encounter common issues at similar points in their development. 

This financial analysis uses a prototypical approach and provides 

points of comparison to create detailed financial operation 

statements. It is not intended to represent any specific food hub. 

Rather, the operational income and expenses for the food hub in the 

viability analysis are based on an amalgamation of several food hub 

examples. This information was subsequently vetted with a USDA 

review process to ensure numbers were representative of actual 

revenue and expenses experienced by similarly structured food hubs. 

Further, this analysis assumes that food hubs have access to a 

variety of producers and members, and is located within 50 miles 

of customers. It assumes that food hubs sell a mix of products that 

primarily include produce, but also may include dairy or other 

products, depending on the food hub’s operational model. 

This analysis is based on two common food hub Operational 

Models (Wholesale and Direct-to-Consumer) operating in three key 

Operational Periods (Breakeven, Growth, and Viability).Where 

applicable, considerations of a food hub’s Startup period is also 

discussed. 

Business Operational Models

Food hubs function under a variety of business operation 

models, which differ based on how and where the food hub sells its 

products. This document examines two models: a Wholesale Food 

Hub and a Direct-to-Consumer Food Hub. There are different 

types of the Direct-to-Consumer food hub model; we have chosen 

to use the Community Supported Agriculture (CSA) type. While 
RUNNING A FOOD HUB 9

there are numerous types of food hubs in existence, these two business 

operational models seem to be the most widely used among food hubs.1

Wholesale food hub

In general, wholesale food hubs often have the following characteristics: 

	 • May be more focused on retailers as the main customer base.

	 • Product offerings may include more of a variety of items that aid in

expanding the seasonality of sales.

	 • Delivers products to end customers and does not rely on volunteer

labor, instead relying on dedicated labor to repack items and deliver 

product.

The term “wholesale food hub” is an umbrella term that can apply to 

food hubs with a variety of target markets. Local restaurants, individual 

or regional grocery stores, large-scale grocery chains, and institutions — 

such as schools, hospitals, and corporate cafeterias — can all be considered 

“wholesale” markets. 

Direct-to-Consumer Food Hub

In general, direct-to-consumer food hubs often have the following 

characteristics: 

	 • Sales tend to focus on fresh produce. 

	 • Distribution is made directly to end consumers, with pick-up locations

at customer residences, workplaces, or other designated sites. 

	 • They are operated by a mix of staff and volunteer labor.

	 • They usually charge retail prices for their products.

The direct-to-consumer model highlights the use of an intermediary 

service provider to connect farmers with community members. For the 

purposes of our financial analysis, the direct-to-consumer model reflects 

what is commonly known as a Community Supported Agriculture (CSA) 

hub, though there are numerous ways to operate a direct-to-consumerbased food hub. The goal of this approach is to provide the most profit to 

the producers while also generating income needed for the continuation of 

the business. As an operation with low overhead, the sales levels needed to 

1

 More information on the different types of food hub operational models can be found in Volume 2 

of this series: Running a Food Hub: A business operations guide. This and other USDA reports can 

be downloaded at http://www.rd.usda.gov/publications/publications-cooperatives.
achieve the various operational periods are lower than those exhibited by 

the wholesale food hub model.

Business Operational Periods

Year-long snapshots, or operational periods, were chosen based on sales 

level and corresponding costs and activities to provide as broad a picture 

of a food hub’s typical operations as possible. While the analysis presents 

1-year pictures of a food hub’s operations, they do not necessarily represent 

consecutive years. It is likely that a food hub will experience several years 

of growth with neutral cash flow, then experience a loss that will cause the 

food hub to only cover its operating expenses. The operational periods, 

therefore, are meant as a guide and correspond to a snapshot of operations 

and sales levels at a particular period in time, along with corresponding 

expenses. 

This financial analysis focuses on the core food hub commercial 

activity of procuring food from producers and selling it to buyers, or food 

aggregation and distribution. The analysis does not incorporate costs for 

other important mission-based food hub activities. The costs of providing 

additional services may increase the amount of sales necessary to achieve 

specific operational periods from those presented in the financial analysis.

Likewise, the analysis does not include any grant funds or donations. The 

income from these sources would decrease the amount of sales necessary to 

achieve a specific operational period presented in the financial analysis.

Breakeven

Attaining the breakeven point represents a milestone for a food hub. 

Prior to this point, the food hub loses money on every unit sold. Achieving 

breakeven in this analysis indicates a hub is a workable business and is able 

to satisfy the needs of its customers. It can begin to look toward future 

financial stability.

While attaining the breakeven stage is necessary for a food hub to 

achieve long-term sustainability, it is by no means an endpoint. Remaining 

too long at this point presents serious risks to the hub because sufficient 

profits are not being generated to cover items such as interest expenses, 

depreciation, and taxes. Nor will there be a return from operations to the 

owners. The food hub at this stage is still under tremendous risk from 

unforeseen circumstances, such as equipment or other infrastructure failure.

Growth

Achieving the growth level means that not only are operational costs 

10 RUNNING A FOOD HUB
RUNNING A FOOD HUB 11

being covered, but the entity is generating enough income to reach cashflow neutrality and to cover any additional expenses over the course of the 

year (on a cash-flow basis). There is still a need for outside cash to cover 

seasonal shortfalls, but, on an annual basis, the food hub would reach a level 

of income generated that is sufficient to cover all expected needs. During 

the growth operational period, the food hub is covering its fixed and variable 

costs and is producing a profit on a net income basis. However, the focus 

now shifts to covering the hub’s cash flow needs. The food hub shows a 

positive net income for the first time at this point.

The growth operational period represents a tipping point. Next to the 

startup period, the growth period is often the most dangerous crossroads for 

the food hub. If the hub is not managed properly from a financial point of 

view, it can easily slide back and progress can be reversed. If the hub is able 

to continue its success, it can move to a viable level of operations that allows 

it to begin expansion for future activities rather than merely sustaining its 

current level of operations. 

Viability

This level represents the hub’s ability to be sustainable in the long term, 

where the organization is making enough net income to fund possible 

expansion or additional operations. The food hub is a mature business that is 

able to set aside reserves for unexpected problems and is better equipped to 

weather bumps in the road. For our financial models, viability is defined as 

the point at which the food hub retains about 5.5 percent of sales revenue as 

operating profits over a year. 

When the food hub becomes viable, no outside cash is needed to 

maintain adequate cash reserves at any point during the year. At this level, 

the hub is able to generate sufficient cash through operations to fund 

expenses and normal equipment replacement, as well as generate reserves 

for future activities. 

If the food hub is a for-profit entity, it may consider beginning to provide 

a return to investors or owners; if it is a nonprofit entity, it may begin to 

expand its involvement in community activities or be able to internally fund 

activities that have previously relied on outside funding sources, such as 

grants or community funds. 

Even at this level of sales, the food hub should continue to look toward 

the future, as this represents only the cusp of long-term viability. The sales 

level needed to reach viability may need to be higher to cover some nonrevenue-generating, mission-based activities of the food hub.
12 RUNNING A FOOD HUB

Operational Models:

Wholesale Food Hubs

This analysis outlines the scope and daily operations 

of a prototypical wholesale food hub. The goal of this 

section is to present an analysis that is as adaptable to 

as many similar ventures as possible. Every attempt was 

made to be realistic while still permitting ease in interpretation and application. A more in-depth discussion of 

the numerous factors for operating a food hub has been 

included in volume 2 of this series, the Food Hub Operations Guide.

2

 

This section begins by estimating annual sales by 

business operational period based on the financial 

modeling; it then continues by “unpacking” the model 

assumptions or factors that result in the sales needed 

to reach the breakeven, growth, and viability stages of 

business development. 

2

 The food hub operations guide can be downloaded at http://www.rd.usda.gov/

publications/publications-cooperatives
RUNNING A FOOD HUB 13

Annual Sales by Business Operational Periods

To reach a breakeven level of operation, the typical wholesale food hub 

would be required to generate an annual sales level of around $1.2 million. 

During the time between breakeven and the food hub beginning to enter an 

earnings level that leads to long-term financial viability, the venture would 

need to generate around $1.75 million in sales in a year. 

With about $2.4 million in annual sales, the food hub would begin 

to earn sufficient revenue to provide longer term viability. Even at this 

sales level, an unexpected expense could detrimentally affect growth and 

operations. The food hub should strive to grow sales beyond this point to 

reap profits that may be needed to cover unexpected costs.

$3,000,000

$2,500,000

$2,000,000

$1,500,000

$1,000,000

$500,000

$0

Figure 1—Annual Sales Levels by Operational Periods

Breakeven Growth Viability

$1,210,000

$1,750,000

$2,400,000
14 RUNNING A FOOD HUB

Model Assumptions

Product Lines

Product lines for wholesale hubs vary widely, often including a broad 

mix of produce, meats, dairy foods, shelf-stable foods, and other items. The 

typical wholesale food hub has three sales channels: a produce line, a dairy 

line and an “other” line. This other line includes items such as meats, eggs, 

jellies, and other shelf-stable items not categorized as produce or dairy. 

Table 1 outlines sales distribution, by percent 

of sales, included in the financial analysis. 

A wholesale hub will assist farmers in crop 

planning activities, which aids in expanding 

the production season of produce and 

helps ensure a consistent supply of produce 

throughout the growing season. Dairy 

and “other” product lines are typically less 

impacted by seasonality than are produce 

items, the latter being mainly available during the summer. 

Fresh produce is the largest income generator for the food hub, but sales 

of dairy foods and other products allow for a steady source of year-round 

income, which is especially important during the slower winter months. 

Additionally, products falling under dairy and other groups can be sold at 

a higher markup percentage, generating more profit per pound of product 

sold than does produce. Figure 2 outlines the annual seasonality for each of 

the three product lines. 

Table 1

Sales Distribution

Fresh Produce 70%

Dairy Products 10%

Other 20%

16%

14%

12%

10%

8%

6%

4%

2%

0%

Figure 2—Sales Seasonality

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Percentage of Sales

n Fresh Produce

n Dairy Products

n Other
RUNNING A FOOD HUB 15

Though the hub strives to maintain a minimal amount of inventory at 

any one time, loss of products during transport, storage, and delivery is 

unavoidable. As a result, the hub will experience increased product losses 

for both of these categories during the fall and winter months, as well as a 

decline during the spring and summer.

Product Pricing

To account for the variety of products sold through the food hub, as well 

as the price variation exhibited with product lines (lettuce versus spinach 

versus cucumbers), a weighted average value for a 25-pound box of product 

was determined for each product line. These products were combined to 

provide an overall average for the value of the food box. This value increases 

over the life of the project as demand grows and as a larger amount of higher 

valued products — such as meats and shelf-stable items — are sold through 

the food hub. On average, the price of the products sold through the food 

hub will increase by around 7 percent per year. 

A wholesale food hub should expect to work with buyers who wish to 

purchase items on an account and pay a monthly invoice or statement. 

The food hub should also accept credit card payments, which smaller 

establishments, such as restaurants or local grocery stores, are likely to 

prefer, rather than paying by cash or check. For each credit card sale, it 

is assumed that the food hub will incur a 2-percent fee. While food hubs 

dealing with smaller clients may encounter more credit card sales, we 

dedicated about 10 percent of purchases to be made via credit card in the 

financial analysis. 

Once a customer has purchased items, the food hub should expect an 

average lag of 23 days (typical range is 15-30 days) to receive payment. A 

5.5-percent interest rate has also been applied to this accounts receivable 

timeline to capture the carrying costs a food hub will experience. This 

interest expense arises from a hub using short-term loans or a credit card 

to cover production costs — including labor and packaging — until the 

business is able to collect sales revenue. 

Payment to Producers

Farmers and producers will require that payments they receive from the 

food hub cover the cost of producing the items as well as generate a profit. 

The wholesale hub will provide a 70/30 split, with 70 percent of sales dollars 

collected from customers being returned to farmers and 30 percent being 

retained by the food hub. These funds cover the costs of operating the 

business. 
16 RUNNING A FOOD HUB

There can be a slight variation from this 70/30 split. But based on the 

scenario results presented in the chart above, for a food hub to retain 25 

percent of sales revenue to cover operations, it would need to obtain about 

$1.75 million in sales to achieve similar earnings before interest, taxes, 

depreciation, and amortization (EBITDA) to reach the breakeven operations 

level. To increase return to farmers only by 10 percent and continue to be 

financially viable, the hub would have to more than double sales. In this 

model, when the return to farmers increased to above 85 percent, the food 

hub could not maintain enough residual revenue to cover costs and remain 

in operation. 

Correspondingly, reducing the price paid to producers would reduce the 

sales necessary to achieve breakeven, but that may not be in line with the 

food hub’s mission or be acceptable to the food hub’s producers.

Certification Fees

The wholesale hub discussed in this document will undergo a Good 

Handling Practices (GHP) audit, while the farmers themselves will be 

required to obtain and maintain Good Agricultural Practices (GAP) 

$3,500,000

$3,000,000

$2,500,000

$2,000,000

$1,500,000

$1,000,000

$500,000

$0

Figure 3—Sales Needed To Reach Breakeven

65% Baseline: 70% 75% 80%

$1,210,000

140%

Increase

$2,901,000

42%

Increase

(23%)

Decrease
RUNNING A FOOD HUB 17

certification. These requirements will provide access to customers 

who prefer, or require, these certifications. Larger customers, such as 

hospitals and school systems, also often require food safety and production 

certifications prior to their initial purchases. Additionally, regulatory bodies 

may require a food hub and its producers to receive certain certifications 

before they are allowed to sell food items to the public. A portion of the 

food hub’s sales will be used to pay for these necessary certifications. 

Location 

The food hub’s location is chosen to facilitate the transportation of 

goods, both from producers to the hub, as well as from the hub to end 

customers. The expenses related to transportation — such as the cost of 

diesel fuel, driver wages, and the monthly lease or interest loan payments on 

vehicles — results in a major cost category for the food hub. 

For the purposes of this analysis, the food hub is situated in a semi-urban 

area. This setting allows the hub to be centrally located between the hub’s 

farmers and customers. If the hub is located in a rural area, some costs may 

be reduced, such as lease rates and employee wages.

Using an average cost of leasing space in various semi-urban areas around 

the country, we calculate an annual lease expense of around $22,000 for 

a 6,500-square-foot facility. While this space seems to be large initially, 

it provides the food hub with space for growth as business and inventory 

increases.

The wholesale hub will operate with the least amount of “on-hand” 

inventory possible by turning around products within 2 days of receiving 

them from producers. Because there will not be large amounts of inventory 

on hand, the food hub will not require an extensive storage area. 

Facility Operations and Delivery

The food hub facility will operate 6 days per week and conduct deliveries 

3 days per week. This allows a day of prep time between deliveries, while 

still frequent enough that customers receive sufficient product in a timely 

manner. While the number of delivery days included in the analysis remains 

constant at 3 days per week, the number of stops per delivery will increase 

over time.

Producers are required to drop off their product appropriately packaged 

and ready for sale. Prior to being sent out for delivery, products are 

grouped to fulfill orders. A 5-cent packaging cost for every $25 of product is 

included, covering the cost of boxes and for general handling and storage. 

All 3 years of operations in the analysis also assume an expense for 
forklift rental of about $800 per month. Leasing the forklift allows the food 

hub to mitigate some risks for a more specialized piece of equipment and 

covers the more specialized maintenance and upkeep that may be required. 

The financial models assume that delivery trucks were purchased and in 

operation at the start of the breakeven period; there is not a significant 

difference between leasing and purchasing in the average costs over the 

lifetimes of the vehicles.

Truck Costs 

We assume that the food hub will be replacing vehicles during the 

breakeven period of operation. The model food hub for this study will 

purchase a used 20-foot refrigerated truck for about $45,000 and a used 

supplementary delivery truck for $40,000. This assumes that increased 

sales will provide the funds to qualify for loans. The second truck, slightly 

smaller than the first, allows the food hub to have a second vehicle on hand 

during times of peak sales and to serve as a backup if the primary truck has 

mechanical issues. The financing section of this document includes details 

on the loan acquired to purchase these vehicles. 

The hub has an established customer base at this point. Since 

dependability is key to retaining customers, vehicles must be properly 

maintained. An annual repair and maintenance contingency allotment of 

$2,500 has been budgeted. During the life of the food hub, maintenance cost 

will increase as higher sales levels and product volume will place additional 

strain on the equipment. 

An additional overhead charge of about 30 cents per mile driven is 

included in the economic analysis to cover additional expenses — such as 

insurance and wear — associated with owning a vehicle. Because of the 

nearby urban setting and assumed population density, it is not anticipated 

that mileage will significantly increase to accommodate additional stops 

as the hub seeks to “in-fill” its delivery routes, rather than increasing the 

geographic delivery area. During the peak sales season, the average miles 

traveled per truck is 80 miles round trip, increasing to 100 miles during the 

growth period and 120 miles by the end of the viability period.

Fuel Costs

Based on the average price of diesel fuel during the winter of 2014, the 

food hub will pay about $3.30 per gallon. If the trucks average 10 miles per 

gallon, the hub will spend between $300 and $700 monthly on fuel. The 

variation in fuel prices accounts for lower sales months when the food hub 

will not require the use of both trucks and will be driving slightly fewer 

miles. 

18 RUNNING A FOOD HUB
RUNNING A FOOD HUB 19

Fuel is an extremely volatile cost category, as indicated by the 60-centper-gallon decline in diesel cost from the spring to winter of 2014. If the 

food hub were to pay the higher spring price, total fuel costs would grow to 

$8,000 in the first year, compared to $6,800 if the cost of fuel remained at 

$3.30 per gallon. The food hub should have a contingency plan in place to 

counteract unexpected changes in fuel prices. 

Driver and Delivery Costs

Deliveries are conducted by drivers employed by the food hub who 

unload and deliver the products to individual customers along established 

routes. Hours often have to be limited during portions of the year when 

sales and deliveries are lower, and the wholesale hub limits driver hours to 

part-time during these periods. The number of hours required to deliver the 

food hub’s products will increase and necessitate a second driver during peak 

seasons. The driver positions are hourly and are paid $13.50 per hour during 

the first year, with small pay increases each following year. 

During the breakeven period, the food hub will employ one driver during 

the first and last 2 months of the year. For the remaining 8 months, two 

dedicated drivers will be required for deliveries. In total, the food hub will 

spend about $22,000 on driver wages during this period. Beginning in the 

growth period, the hub will employ two year-around drivers at a cost of 

about $28,000, increasing to $38,000 during the viability period.

While product delivery is constrained by the capacity and load 

capabilities of the delivery vehicles, the analysis shows that the main 

constraint for deliveries is the time available for drivers to deliver product, 

assuming they work an 8-hour shift. The following table shows the time 

requirements for transporting 

product from the food hub to the 

customer. 

Total truck capacity is assumed to 

be about 22,500 lbs. A single driver 

delivering to smaller wholesale 

customers would likely not be able 

to deliver this amount of product 

in one day. This is an understood 

inefficiency in operating a mediumscale food hub. By contrast, a larger commercial-size venture can better 

maximize truck capacity for bulk deliveries. 

Consider the example of a driver who unloads 450 lbs. (about 18 boxes 

of product at 25 lbs. each) per stop and makes 3 stops in 1 hour. This 

would result in an average delivery amount of 675 lbs. per half hour. After 

Table 2

Transportation Time Requirements

Load Time (Hours) 0.67

Drive time (Hours) 2.29

Delivery Admin. (Hours) 0.50

General Admin./Driver (Hours) 1.00
20 RUNNING A FOOD HUB

deducting time spent driving a roundtrip of 80 miles at an average speed 

of 35 mph (2.29 hours) and taking care of miscellaneous activities such as 

paperwork (.5 hours), the driver only has about 5.21 hours left of actual 

delivery time (during an 8-hour shift). 

Actual delivery time of 5.21 hours, multiplied by the 3 deliveries per 

hour, allows for about 15 deliveries of 450 lbs. each, resulting in a total 

of 6,750 lbs. per day delivered by 1 driver in an 8-hour shift. For our 

calculations, this was rounded to an average of 7,000 lbs. An additional cost 

per delivery equal to one-half hour of pay per delivery day has been added 

to account for time spent in administration (such as for paperwork and 

customer interaction) during the deliveries. 

While some inefficiency is to be expected, changes in efficiency can 

directly impact a food hub’s profits, because transportation costs can account 

for a significant portion of an entity’s expenses. Decreasing the efficiency 

of delivery stops by reducing the number of pounds of product delivered 

per half hour by just 20 percent (equal to 540 lbs. per half hour) can require 

additional sales of more than $16,000 at the breakeven point, more than 

$22,000 for the growth level, and more than $29,000 in the viability level to 

reach similar EBITDA and net income figures.3

Labor Requirements

The wholesale hub approaches its labor requirements from a more 

functional view, as opposed to dedicated employees’ positions. This analysis 

considers that individual hub employees often fulfill multiple roles. While 

an individual may earn a specific wage while fulfilling the responsibilities 

of multiple positions, such as a general manager or sales manager, the same 

individual may also aid in other activities. 

The “full-time equivalent” (FTE) chart in the following table provides a 

comparison point when assessing the role-based labor approach; it translates 

staff-hours required to fulfill each role into a number of FTEs. To calculate 

the FTE, it is assumed full-time employees work 40 hours per week.

For example, in the table below, the general manager will become a 

full time employee during the viability operation level, when the food hub 

requires a full-time employee to adequately fulfill this role. Across all labor 

positions in the first year, the food hub will require staff-hours equivalent to 

three and two-thirds full-time employees. By the end of the viability period, 

this figure will increase to around six and a quarter full-time employees. 

The general, sales and production managers are salaried positions. 

3

 A detailed table outlining transportation costs can be found in the appendix.
RUNNING A FOOD HUB 21

The remaining four labor categories are hourly. Office and administrative 

labor is considered fixed and does not vary directly with sales, while driver, 

general labor, and line supervisor hours are directly determined by sales 

levels. 

Salaried labor will transition over the 3-year period from part-time to 

full-time jobs. This is a result of the role-based approach. In years when 

management positions are considered part time, these individuals will 

likely be fulfilling other roles, such as delivering or receiving packaging. 

The following table shows the annual costs for hourly and salaried labor, 

including the overhead expense for salaried labor.

For the purposes of the analysis, staff is paid on the last day of the month, 

and fringe benefits and overhead is directly calculated as 30 percent. Fringe 

and overhead on salaried 

employees is included 

as part of the fixed sales 

and marketing expenses 

reported in the expense 

and revenue portion 

of the model. Figures 

for various positions 

were chosen based on 

information taken from 

Bureau of Labor Statistics average wage figures, then adjusted when specific 

positions/roles were not available. Actual food hub wage and salary rates will 

vary based on a variety of factors.

The hub employs a general manager who is responsible for organizing, 

overseeing, and directing all food hub operations, as well as coordinating the 

supply of products for orders that have been placed. He or she also addresses 

customer service issues and, in some cases, assists in delivering product 

during the slow months of operation. This role reaches a full-time basis 

Table 4

Annual Wholesale Labor Costs

Breakeven Growth Viability

Hourly $60,765 $76,952 $106,324

Salary $98,475 $127,075 $180,700

Growth

Phases

Gen.

Mgr.

Sales

Mgr.

Prod.

Mgr. Driver

General 

Labor

Line 

Super.

BookkeeperTotal

FTE

Table 3

Hourly Labor Calculations

Full-time Equivalent (FTE) Calculator

Breakeven 0.65 0.40 0.50 0.68 0.48 0.79 0.17 3.67

Growth 0.85 0.50 0.65 0.91 0.51 0.77 0.36 4.55

Viability 1.00 1.00 0.85 1.19 0.83 0.80 0.61 6.27
22 RUNNING A FOOD HUB

during the viability period. 

The hub also employs a sales manager to oversee the acquisition of new 

customer accounts and related activities in order to grow the sales of the 

food hub. A production manager coordinates farmers with each other and 

the food hub to maximize their ability to meet the demand of customers and 

to prevent the oversupply of products during the peak growing season and 

to minimize waste during slower periods. This role is critical for interacting 

with producers and establishing solid, trusting relationships. 

General laborers will conduct daily activities, including product 

reception, storage, packaging, and handling. They also assist the delivery 

driver by loading the truck on designated days. A warehouse manager is 

needed full-time, year-round, to oversee the daily warehouse operations. 

This is a more senior role than the general labor positions and is responsible 

for overseeing other laborers without the direct oversight of management. 

Finally, a part-time office worker assists with any administrative and 

accounting duties not handled by an outside accounting firm. 

Salary and wage rates vary, based on the location of the food hub, the 

local labor market, and labor costs. They are another major factor affecting 

the food hub’s profitability. For example, a driver position (Standard 

Occupational Code (SOC) 53-3031) has a national mean wage of $13.33 per 

hour, while the same position in California has a mean wage of $15.27 per 

hour. While overtime has not been used in the analysis, the food hub will 

Table 5

Salaried Labor Costs

Salaried Labor

General Manager Salary $55,000

% Involvement Breakeven 65% $35,750

% Involvement Growth 85% $46,750

% Involvement Viability 100% $55,000

Sales Manager Salary $50,000

% Involvement Breakeven 40% $20,000

% Involvement Growth 50% $25,000

% Involvement Viability 100% $50,000

Production Manager Salary $40,000

% Involvement Breakeven 50% $20,000

% Involvement Growth 65% $26,000

% Involvement Viability 85% $34,000
RUNNING A FOOD HUB 23

likely have to address this issue at some point in its growth and expansion. 

Hourly paid personnel will receive overtime equivalent to time and a half for 

any pay period in which their work hours exceed 40 hours per week. 

If the food hub is faced with higher labor costs, it will require substantial 

additional sales to cover these costs. The following chart shows how adding 

$40,000 in annual labor costs can affect the sales levels required for the 

wholesale hub to achieve breakeven. It would require more than $180,000 in 

sales to cover this cost. Doubling this annual labor figure to $80,000 would 

require an additional $370,000 in sales to cover the extra costs. Adding 

$120,000 of increased labor costs requires acquiring more than $560,000 in 

additional sales to reach breakeven.4

$1,800,000

$1,600,000

$1,400,000

$1,200,000

$1,000,000

$800,000

$600,000

$400,000

$200,000

$0

Figure 4—Sales Required for Breakeven Additional Labor

Baseline $40,000 $80,000 $120,000

$1,210,000

$1,392,347

$1,580,748

Sales ($)

$1,773,508

4

 A detailed table outlining labor costs can be found in the appendix.
24 RUNNING A FOOD HUB

General Expenses

The following section outlines some of the other general expenses that a 

food hub of this size and sales strategy may incur in the course of operation. 

For simplicity in reporting, some expense categories have been grouped 

together. 

Food hubs need a promotional campaign to create awareness. But many 

wholesale food hubs do not use traditional promotion and marketing 

campaigns. Instead, they focus on lower cost efforts — such as word-ofmouth or social media — to build customer awareness. About $5,000 is 

needed annually to cover this cost. 

The analysis includes a fixed expense of $250 per month for business 

insurance. Insurance premiums for the food hub were based on costs paid 

by a food hub of similar size and scope to the typical food hub. The policy 

includes occurrences, general aggregate, product liability, and combined 

single-limit auto insurance coverage. 

The reporting of non-cash expenses can vary; the analysis incorporates 

some information regarding taxes but does not outline specifics, such as the 

Federal income tax liabilities. 

	 • Business Personal Property Tax is assumed to be expensed at a rate

of 55 cents per $100 valuation. This tax rate applies to real estate and 

personal property.

	 • Due to variations in tax handling strategies, income taxes are not dealt

with in the analysis. Tax strategy may be quite important as the food 

hub approaches viability. 

Depreciation expenses are accounted for using the straight-line method. 

The food hub will take out a $150,000 loan during its initial startup year for 

operating equipment with a collective salvage value of $15,000 and a useful 

life of 15 years. A second loan of $55,000 will be taken during the third 

year of this analysis to fund the purchase of additional equipment with a 

collective salvage value of $5,500 and a useful life of 7 years. 

The following cost categories are included to represent the remaining 

general costs that most businesses will incur over the course of operation. 

This category includes allocation for items such as office supplies, software 

maintenance, phones and other telecommunications equipment, legal and 

accounting fees, certification fees for Good Handling practices (GHP) or 

other annual food safety certifications, as well as for unforeseen and bad debt 

expenses. See the appendix for more details. 
RUNNING A FOOD HUB 25

Equity and Financing

The financial analysis includes a $150,000 carryover loan from the start 

of business operations used to purchase equipment. The terms of this loan 

are for 10 years at an interest rate of 6.5 percent, which is a “loaded rate” 

that includes interest and fees charged by the lender. Examples of equipment 

are tables, pallet jacks, cooling systems, fire extinguishers and other safety 

equipment, as well as office and breakroom items. The hub continues to 

make principal and interest payments on this loan over the course of all 

three operational periods.

Additional equipment, such as two refrigerated trucks, will be purchased 

at the start of the breakeven phase. Equipment needs vary depending on 

the type of product handled, customer and producer requirements, and 

services offered by the hub. A term loan for $75,000, of which 75 percent 

(or $56,000), will be financed, will be carried over 6 years at a 7-percent 

financing rate. 

In addition to the equipment loan, the food hub will also take out and 

repay three short-term loans to assist in covering expenses and to provide 

adequate cash reserves during the first breakeven and growth periods. 

During the viability phase, sales have grown to a point where the business 

no longer requires outside funding to supplement the cash generated by the 

food hub itself. The following are the details of these loans; all three loans 

are assumed to be for 1 year at 7-percent interest. 

	 • A line of credit for $89,000 obtained in January of the breakeven phase.

	 • A second short-term loan of $15,000 in October of the breakeven phase.

	 • A final $80,000 line of credit in January of the growth phase.

In addition to lines of credit, 

the food hub will require about 

$100,000 in owner equity to 

cover cash flows and allow for 

adequate amounts of cash on 

hand. It is assumed that equity 

will be provided by the owners, 

although it could originate 

from various sources, including 

grants or third-party capital 

investments.

Photo courtesy of 

Fifth Season Cooperative
26 RUNNING A FOOD HUB

Wholesale Food Hubs

RESULTS

n Sales of $1.21 million result in the food hub’s ability to reach a 

breakeven level, meaning that it can cover all its variable and fixed 

expenses, including management salaries. However, at this level the 

food hub does not have residual money to produce a profit. Once 

depreciation and interest have been subtracted from EBITDA, the 

food hub will experiences net losses. 

n At the growth level – based here on annual sales of $1.75 million — 

the venture is able to produce an operational profit of around $67,000, 

or 3.8 percent of annual sales. 

n The food hub reaches a sales level that would indicate long-term 

economic viability, with annual sales of about $2.4 million. This point 

of viability is based on about 5.5 percent of sales being retained as 

profits. 

$2,500,000

$2,000,000

$1,500,000

$1,000,000

$500,000

$0

Figure 5—Annual Sales by Operational Period

Breakeven Growth Viabilty

$1,750,000

$1,210,000

$2,400,000

$429 $67,220 $132,604

n Annual Sales

n Operational Profit
RUNNING A FOOD HUB 27

As a reminder, the figures for each operational period represent revenue 

and corresponding costs for a typical food hub at a particular point in time, 

not for consecutive years of operation. Food hubs in specific regions of the 

United States will experience variations in costs that are unique to their 

location. In addition, operations and the types of product costs will also vary, 

based on a food hub’s product line. 

The analysis shows that the main costs influencing profitability are food 

costs, labor, and transportation expenses. These expenses are highly variable, 

depending on the food hub’s location and levels of service. A portion of 

these costs may be mitigated through careful planning of transportation 

logistics and by optimizing labor efficiency. 

The above pro forma shows the individual components that comprise 

the summary figures, presented above. Greater detail can be found in the 

“Expense and Revenue” table in the Supplemental Tables section of this 

report. 

The breakeven level only generates enough revenue to cover operational 

costs. But because it is operating at a negative net income basis, a food hub 

at this stage would need to continue to grow to maintain viability for any 

period of time. On a cash-flow basis, the hub would require outside cash of 

about $70,000 to maintain positive cash flows and adequate cash reserves.

Table 6

Wholesale Food Hub pro forma

Breakeven Growth Viability

Revenue $1,210,000 $1,750,000 $2,400,000

Total Variable Operating Costs ($950,252) ($1,351,977) ($1,857,308)

Variable Margin (Loss) $259,748 $398,023 $542,692

Total Equipment Costs ($34,377) ($38,649) ($44,693)

Total Facilities Costs ($43,280) ($44,578) ($45,916)

Total Selling and Marketing Costs ($5,000) ($5,150) ($5,305)

General and Administrative Expenses ($128,263) ($172,425) ($218,175)

Unforeseen and Contingency Expenses ($48,400) ($70,000) ($96,000)

Wholesale Baseline Earnings EBITDA (Loss) $429 $67,220 $132,604

Interest Expense ($4,252) ($6,149) ($8,433)

Depreciation Expense ($9,000) ($9,000) ($16,071)

Net Income (Loss) ($12,823) $52,071 $108,099
28 RUNNING A FOOD HUB

At the growth level of operation, a food hub is able to cover operational 

as well as other costs — including depreciation and interest expenses — 

and generates enough net income to provide a small return to owners. 

Additionally, on a cash-flow basis, the food hub is reaching a breakeven level 

of cash on hand by the end of this period. Outside cash of $50,000 is still 

required for necessary cash reserves. 

The viability level of operation is the minimum point at which a typical 

food hub becomes a sustainable business. This includes generating enough 

net income to make investments needed to grow the business and to provide 

a significant return to the owners. Even at this stage, the food hub may well 

require more funding, especially if higher costs are experienced than were 

used for our analysis.

Photo courtesy of Red Tomato
RUNNING A FOOD HUB 29

Operational Models:

Direct-to-Consumer Food Hubs

The direct-to-consumer hub model involves the 

use of an intermediary service provider to connect farmers with community members. The goal of this model 

hub is to provide the most profit to the producer-farmers while also generating enough income to remain in 

business. As an operation with low overhead expenses, 

the sales levels needed to achieve the various operational 

levels are lower than those needed for wholesale food 

hubs.

This section begins by estimating annual sales for 

business operational periods, then “unpacks” the model 

assumptions (or factors) that impact the sales levels 

needed to reach the breakeven, growth, and viability 

phases of the business.
30 RUNNING A FOOD HUB

Annual Sales by Business Operational Periods

To reach a breakeven level, a typical direct-to-consumer food hub needs 

to generate annual sales of around $314,000. In the time between breakeven 

and long-term financial viability, the venture would need to generate around 

$422,000 in annual sales. 

With annual sales of about $566,000, the food hub would begin to earn 

sufficient revenue to provide longer term viability. It should be noted that 

even at this sales level, an unexpected expense could detrimentally affect the 

business. The food hub should strive to grow beyond this point of annual 

sales to achieve the higher profits that could be needed to cover unexpected 

costs.

$600,000

$500,000

$400,000

$300,000

$200,000

$100,000

$0

Figure 6—Annual Sales Levels by Operational Periods

Breakeven Growth Viability

$314,400

$422,710

$566,604
RUNNING A FOOD HUB 31

Model Assumptions

Product Line

One primary factor that allows a direct-to-consumer food hub to operate 

at a smaller volume level is that produce is the only “product line” carried. 

Many small food hubs grow past the startup phase, but have not begun to 

sell other product lines that require significant capital investment in items 

such as coolers and delivery trucks. 

For the direct-to-consumer hub used for our model, the produce growing 

period falls into a median “seasonality range,” rather than the longer or 

shorter growing seasons of some regions of the country. 

As a result of this median growing season, sales will occur from March 

through October, with the majority of sales taking place in June. A directto-consumer hub will usually cease operations from November through 

February, resuming sales in March. The exception to this is during the 

viability phase, when growth in sales necessitates a longer season to pay 

for additional products available outside of the typical spring and summer 

seasons.

Location

Unlike the wholesale 

model, the direct-toconsumer model hub 

needs a minimal amount 

of warehouse space. 

The facility used for our 

analysis is a 1,000-squarefoot warehouse, located in a suburban area and leased for $2.20 per square 

foot annually. The warehouse will simply serve as the central point where 

produce is received and repacked into boxes for delivery to consumer pickup 

points. The business employs a just-in-time method for inventory, so it will 

only hold product long enough to aggregate and repack for delivery.

Operations

The direct-to-consumer hub operates by sourcing product from a group of 

farmers who agree to provide a variety of produce during a certain period 

of the year. Their shipments to the food hub are scheduled by the farm 

coordinator, who assists with production planning and logistics. 

The direct-to-consumer hub collects subscription orders from individuals 

who pay an upfront fee to receive produce during a set period. Consumers 

Table 7

Direct-to-Consumer Warehouse Lease

Expected Rent (per square foot) $2.20

Estimated Size of Warehouse (sq. feet) 1,000

Rent (per month) $183

Rent (per year) $2,200
32 RUNNING A FOOD HUB

have the option of purchasing a full share for $420 in the spring, or $540 

in the summer. The price of shares will grow in later years as the summer 

season expands to include additional weeks. Individuals may also buy 

smaller half shares, which contain less produce and may be more suitable for 

individuals or smaller families. These half shares cost $210 for the spring 

season and $270 for summer. 

Securing an adequate number of subscriptions is, of course, vital. Because 

customers pay an upfront fee, the hub needs to pay special attention to 

managing this “up-front” revenue. It must ensure that the funds are not 

exhausted before services are complete. 

Over time and from season to season, the hub may find that it must 

work harder to maintain a steady level of subscribing customers; previous 

members may not renew. New subscribers may only replace those who 

have dropped out, requiring even more effort to actually increase total 

subscriptions. 

This analysis assumes that 60 percent of subscribers will pay for 

full shares, the other 40 percent for half shares. In rural areas, a higher 

percentage of subscriptions will typically be for a full share, while half shares 

may be more common in urban and suburban areas. 

The balance of full versus half shares greatly affects the food hub’s 

profitability. Reversing the percentages used above (so that 40 percent buy 

full shares and 60 percent half shares) will reduce revenue by nearly $40,000 

during the breakeven phase. This would require an additional 70 spring and 

70 summer customers to generate 

the same profits as are predicted the 

original model. 

For our projection, the food hub 

maintains a healthy member base, 

selling slightly more summer shares 

each season than spring shares. The 

table below provides the numbers 

of subscribers assumed at each 

operations period. 

Pickup locations are operated 

mostly by volunteer labor, with hub 

employees handling some of the 

more heavily trafficked sites. The 

food hub will partner with local 

organizations, such as churches and 

schools, to use their facilities for the 

pickup sites. These partners will be 

Table 8

Number of Shares Sold

Breakeven — Spring 370

Breakeven — Summer 440

Growth — Spring 510

Growth — Summer 565

Viability — Spring 605

Viability — Summer 685

Table 9

Number of Pickup Locations

Breakeven 10

Growth 15

Viability 25
RUNNING A FOOD HUB 33

compensated through donations from the food hub, which are calculated as 

3 percent of sales.

Because the direct-to-consumer food hub relies on pickup locations to 

distribute boxes of produce, establishing reliable, convenient locations is 

critical. Fostering good-will within the community and forging a longterm relationship with the pickup site hosts can help a food hub gain a solid 

reputation in the community and contribute to the hub’s long-term success. 

To progress to the growth period, sales need to increase, requiring a 

corresponding increase in pickup locations. At this point, the hub will 

likely begin to exhaust initial market advantages for its core customer base. 

Greater creativity in attracting and retaining customers will be necessary 

during this important period. The viability stage will require significantly 

greater number of pickup locations, increasing to 25, and the number 

of delivery days will increase to 4 times per week. The hub’s unique 

circumstances and the size of the community served will determine if this 

goal is achievable.

Labor Requirements

Similar to the wholesale food hub, the direct-to-consumer hub’s human 

resource needs are based upon functional roles, with individual employees 

often fulfilling multiple roles. Each employee is assigned tasks, but will also 

likely aid in other activities. 

Our direct-to-consumer food hub model incorporates the use of 

volunteer labor as well as paid staff. Volunteers primarily help with general 

(less skilled) labor and typically can help reduce labor costs. Because 

volunteers can lack consistency and may not be available when needed, they 

are not always a reliable source of help and can often lead to greater costs 

in other areas of operation. A volunteer coordinator is generally required to 

oversee these individuals and coordinate training activities and schedules. 

Though this study primarily focuses on the cost factors, there are 

multiple reasons a food hub may decide to use volunteer labor. These 

may include finding individuals with a specific skill set that would not be 

available for hire. Volunteer labor also gives the food hub a stronger tie to 

community.

Finding a qualified general manager and farm coordinator is key to the 

success of a food hub. The general manager oversees the overall operation, 

while the farm coordinator deals with the producers. All non-driver 

employees should be available to assist the part-time driver in making 

deliveries, as needed. 

A volunteer-driven workforce has obvious advantages in terms of 

cost savings, but it may create disadvantages, especially in the area of 
organizational challenges. These issues may become more apparent during 

the growth stage as the scale of operations increases. Without community 

support and proper management of volunteers, a food hub will struggle to 

succeed. 

With enough reliable volunteers, a direct-to-consumer hub can rely on 

part-time, as opposed to full-time, paid staff. The table above presents the 

FTEs required for the various operational levels. The general manager will 

come closest to a full-time job, reaching 60 percent of full-time work during 

the business viability phase. 

Because the direct-to-consumer food hub is a substantially smaller 

business, compared to the wholesale model, the amount of FTEs for the 

former will be lower. At viability, the direct-to-consumer hub will need the 

equivalent of 1.81 full-time equivalent workers. This results in each FTE 

earning around $33,000 annually. 

The managers and volunteer coordinator are salaried positions, all others 

are hourly. Driver, general labor, pick-up point labor, and volunteer labor 

hours are all directly based upon sales levels. The pick-up point laborers are 

employees of the hub, while volunteers are unpaid community members 

who want to aid the food hub.

Volunteer labor is especially helpful in reducing labor costs during the 

startup period. Volunteer programs can help food hubs gain community 

involvement and be a source for permanent staff. However, volunteer 

laborers can be less reliable than paid staff. There are indirect costs in 

using volunteers that should not be overlooked. As the food hub grows, the 

availability of volunteer labor becomes less important to overall profitability. 

The following table shows the annual costs for hourly and salaried labor, 

including the overhead expense for salaried labor. Drivers working for our 

model food hub will use their personal vehicles to move product; they will 

be compensated at the standard mileage rates, as set by the U.S. Internal 

34 RUNNING A FOOD HUB

Year

Gen.

Mgr.

Farm

Cord.

Prod.

Mgr.

Retail

Labor

General 

Labor

Drive

Labor

Total

FTE

Table 10

Direct-to-Consumer Full-time Employees

FTE Calculator

Breakeven 0.40 0.00 0.25 0.19 0.10 0.10 1.04

Growth 0.50 0.15 0.30 0.19 0.21 0.16 1.52

Viability 0.60 0.20 0.40 0.20 0.21 0.20 1.81
Revenue Service. The number of miles driven will increase over time as 

the food hub adds new pick-up locations. The number of delivery days also 

increases from 2 days in the breakeven period to 4 days during the viability 

phase. 

General Expenses

Our direct-to-consumer hub model will operate on as lean a basis as 

possible, meaning that many of the costs included in the wholesale food 

hub model have been reduced or eliminated. For example, this hub will 

require substantially less sales to reach the three profit phases of business 

development. The promotional budget has thus been reduced to $4,000 per 

year, versus $5,000 for the wholesale hub model.

The direct-to-consumer food hub strives to provide returns to farmers, 

allowing them to receive dividend income or patronage (in the case of a coop) above wholesale prices for their crops. For each full share sold, which is 

produced over about an 18-week time span, the hub pays the farmer $360. 

A half share is purchased from the farmer for $180, or half the cost of a full 

share, and the farmer provides product for 14 weeks. Each year, the business 

spends around 67 percent of its sales revenue to purchase produce from 

farmers, making this the hub’s single largest expense.

Photo courtesy of Common Market Philadelphia
36 RUNNING A FOOD HUB

Direct-to-Consumer Food Hub

RESULTS

n In order to reach the breakeven stage — when the food hub is able 

to cover its variable and fixed expenses — the hub must generate 

about $314,000 from sales. Even then, it will report a net loss (as will 

the wholesale hub).

n In the growth phase, the hub’s sales grow to about $423,000, yielding 

an operational profit of just under $7,800, or around 1.8 percent of 

sales. The food hub also produces a small net income of $2,900. At 

this point, the business reaches cash-flow neutrality. 

n When the venture is able to reach viability, it is generating more 

than $566,000 per year in sales and producing an operational profit 

(EBITDA) of more than $24,000, or 4.4 percent of sales. The venture 

also generates a positive net income of nearly $19,000.

$600,000

$500,000

$400,000

$300,000

$200,000

$100,000

$0

Figure 7—Direct-to-Consumer Sales Levels and Operational Profit

Breakeven Growth Viabilty

$422,710

$314,400

$566,604

$627 $7,780 $24,742

n Annual Sales

n Operational Profit
Our direct-to-consumer model hub will not require farmers 

to become members in order to sell to the venture, which reduces the 

amount of equity flowing to the business. However, because this is a lowcost business for which funds are obtained at the beginning of the season, 

additional equity from outside sources is not required to maintain positive 

cash flows. Business growth in the growth and viability phases provides 

enough cash to maintain adequate reserves without the use of additional 

equity. 

This business has substantially smaller sales than does the wholesale hub 

model examined earlier. Thus, less sales revenue is required to achieve the 

breakeven, growth, and viability business stages. The hub is able to cover 

operational costs during the breakeven phase with annual sales of $314,000, 

about $896,000 less than required for the wholesale hub to reach the same 

point. 

To generate about $8,000 of operational profit during the growth phase, 

the food hub would need annual sales of about $423,000. At the viability 

stage, the business is generating a profit of more than $24,000, equivalent to 

4.4 percent of sales of $566,000. At the viability stage, sales are about $1.8 

million less than for the wholesale hub model. 

RUNNING A FOOD HUB 37

Table 12

Direct-to-Consumer pro forma

Breakeven Growth Viability

Revenue $314,400 $422,710 $566,604 

Total Variable Operating Costs ($255,524) ($341,005) ($451,705)

Variable Margin (Loss) $58,876 $81,705 $114,899

Total Equipment Costs ($6,957) ($9,902) ($14,033)

Total Facilities Costs ($12,420) ($12,793) ($13,176)

Total Selling and Marketing Costs ($4,000) ($4,120) ($4,244)

General and Administrative Expenses ($28,585) ($38,656) ($47,372)

Unforeseen and Contingency Expenses ($6,288) ($8,454) ($11,332)

EBITDA* (Loss) $627 $7,780 $24,742

Interest Expense ($1,707) ($2,296) ($3,077)

Depreciation Expense ($2,549) ($2,549) ($2,549)

Net Income (Loss) ($3,630) $2,935 $19,116

* Earnings before interest, taxes, 

 depreciation, and amortization
38 RUNNING A FOOD HUB

Operational Models Comparisons

Table 13 summarizes the major differences between the wholesale and direct-to-consumer food hub models.

This analysis shows that the wholesale food hub provides the 

most return — as a percent of sales dollars — to farmers. But the 

wholesale operation also requires the highest sales levels to reach 

the breakeven or long-term viability stages. It also requires the most 

resources to achieve these sales levels, including the need to lease a 

larger warehouse and procure two delivery trucks.

While the direct-to-consumer model provides lower returns to 

farmers than does the wholesale model, it also requires lower annual 

sales to attain long-term viability and does not require owner equity 

during the breakeven stage to prevent negative cash flows. The use 

of volunteer labor helps offset the lower sales.

Table 13

Operational Model Summary Comparison

Wholesale Direct-to-Consumer

Products Produce, Dairy & Other Produce

Facility (Ft.2) 6,500 1,000

Delivery Vehicles Pruchase Two Trucks Personal Vehicles

with Mileage

 Reimbursement

Staff Levels at Viability (FTE*) 6.3 1.8

Breakeven Sales $1.21 Million $314,000

Viability Sales $2.4 Million $567,000

*Fulltime Equivalent

As the single largest expense for both hub operational models, 

payments to producers will have the greatest impact on whether 

a food hub can progress through the operational phases used in 

this analysis. Figure 7 compares the product-cost variable to other 

typical expenses.
RUNNING A FOOD HUB 39

Operational Models at “Breakeven”

Increasing sales to achieve the 

breakeven business stage will often 

require an accompanying increase 

in equipment, human resources, 

or other resources. While some 

food hubs may be able to bear 

the cost of addressing these needs 

simultaneously, acquiring these 

resources will create a cash-flow or 

financing constraint for other hubs, 

which will instead have to prioritize 

the needs. 

While an increase in subscribers 

is necessary for the direct-toconsumer hub to achieve breakeven, 

far less revenue will be needed 

than for the wholesale hub. The 

wholesale hub requires a substantial 

amount of additional staff hours 

compared to the smaller direct-toconsumer hub.

Figure 8—Typical Food Hub Expenses Comparison

Payments to Producers

76%

All Other

Payments

24%

General and

Administrative

37.4%

Other 

Variable

Costs

30.4%

Unforseen

and

Bad Debt

16.3%

Infrastructure

Costs

14.9%

Marketing Costs

1.2%

ALL OTHER PAYMENTS
40 RUNNING A FOOD HUB

Operational Models at “Growth”

At this stage, the food hub will likely be faced with “trade-off” issues. 

Many will need to increase personnel. But because of sales and production 

seasonality, it is difficult to decide whether to retain employees year-round 

or continue with seasonal or part-time help. 

Because they have achieved significant sales at this point, the hubs will 

need to formalize operational procedures and processes. Activities that 

were improvised during startup and breakeven, or cost-cutting measures 

in areas such as marketing and branding, will need to be re-examined and 

more strategic plans implemented. Supply or sales arrangements that were 

previously conducted “on a handshake” basis will need to transition to legal 

contracts. 

The increase in sales and need for reliability and consistency at this stage 

will likely require additional investment for technology or training for the 

hub’s employees or producers. At this point, the hub will also likely need 

to institute business systems and fix some operational concerns that were 

improvised during startup or breakeven. Such steps will be necessary to 

progress to the business viability phase. 

Because of the need to diversify and attract new customers, wholesale 

food hubs are attracted to the higher gross margins of direct-to-consumer 

sales. These hubs then begin to engage in activities that move them closer 

to a hybrid operational model. In general, hybrid food hubs incorporate 

Table 14

Breakeven Operational Period Pro Forma Comparison

Wholesale Direct-to-Consumer

Revenues $1,210,000 $314,400

Total Variable Operating Costs ($950,252) ($255,524)

Variable Margin (Loss) $259,748 $58,876

Total Equipment Costs ($34,377) ($6,957)

Total Facilities Costs ($43,280) ($12,420)

Total Selling and Marketing Costs ($5,000) ($4,000)

General and Administrative Expenses ($128,263) ($28,585)

Unforeseen and Contingency Expenses ($48,400) ($6,288)

Baseline EBITDA* (Loss) $429 $627

Interest Expense ($4,252) ($1,707)

Depreciation Expense ($9,000) ($2,549)

Net Income (Loss) ($12,823) ($3,630)

*Earnings before interest, taxes, depreciation, and amortization
RUNNING A FOOD HUB 41

some of the characteristics of both wholesale and direct-to-consumer hubs. 

Direct-to-consumer operations often achieve a scale and capability that 

makes them attractive to wholesale customers, and they too may evolve into 

a hybrid hub operation. 

A direct-to-consumer food hub usually serves a smaller area or region, 

so it does not necessarily require the use of large trucks nor (if only selling 

produce) a refrigerated truck; a wholesale hub likely would need such 

equipment. 

Though this financial analysis does not consider income from grants 

and donations, hubs that have previously benefited from donations or 

other outside funding may begin to experience “donor fatigue.” The hub 

will appear to be of sufficient size and scale that it does not appear to need 

further community support, or supporters simply move on to other projects. 

It is also important to note that many nonprofit and mission-driven food 

hubs purposely remain at a smaller operational stage. A hub that chooses to 

remain at the growth phase of operation may need continued donor support. 

At the growth stage, the wholesale hub may have an advantage, because 

its customers are more likely to remain loyal. Direct-to-consumer hubs 

often experience customer loss from season to season, and must strive 

just to replace these losses, rather than actually grow the customer base. 

Though they may be harder to attract at first, wholesale customers, with 

their increased focus on price and reliability, often stay with their suppliers 

longer. 

Table 15

Growth Operational Period Pro Forma Comparison

Wholesale Direct-to-Consumer

Revenues $1,750,000 $422,710

Total Variable Operating Costs ($1,351,977) ($341,005)

Variable Margin (Loss) $398,023 $81,705

Total Equipment Costs ($38,649) ($9,902)

Total Facilities Costs ($44,578) ($12,793)

Total Selling and Marketing Costs ($5,150) ($4,120)

General and Administrative Expenses ($172,425) ($38,656)

Unforeseen and Contingency Expenses ($70,000) ($8,454)

Baseline EBITDA* (Loss) $67,220 $7,780

Interest Expense ($6,149) ($2,296)

Depreciation Expense ($9,000) ($2,549)

Net Income (Loss) $52,071 $2,935

*Earnings before interest, taxes, depreciation, and amortization
42 RUNNING A FOOD HUB

Each of the food hubs will see increases in human resources, either in 

number of employees or in wage rates. This is especially true of salaried 

employees.

Even during the growth stage, additional delivery equipment will likely 

not be needed by direct-to-consumer hubs, and their paid staff will continue 

to be minimal, with most labor performed by volunteers.

Operational Models at “Viability”

With higher gross margins and a focus on lean operations and use of 

low-cost resources, direct-to-consumer hubs can achieve viability at a much 

lower sales level than the wholesale model. 

The hub models also differ in their ability to acquire and maintain 

customers, especially at the viability level. While a concern during any 

operational phase, this is a major concern for direct-to-consumer hubs at the 

viability stage, which is often a period of high customer turnover. The hub 

will need to find a way to keep current customers engaged and returning, 

while simultaneously attracting new customers. Because of the nature of 

wholesale operations, these hubs are much more likely to have an easier time 

maintaining customers, providing that the hub’s commitment to quality and 

customer service remains high. 

Table 16

Viability Operational Period Pro Forma Comparison

Wholesale Direct-to-Consumer

Revenues $2,400,000 $566,604

Total Variable Operating Costs ($1,873,858) ($451,705)

Variable Margin (Loss) $526,142 $114,899

Total Equipment Costs ($44,693) ($14,033)

Total Facilities Costs ($29,366) ($13,176)

Total Selling and Marketing Costs ($5,305) ($4,244)

General and Administrative Expenses ($218,175) ($47,372)

Unforeseen and Contingency Expenses ($96,000) ($11,332)

Baseline EBITDA* (Loss) $132,604 $24,742

Interest Expense ($8,433) ($3,077)

Depreciation Expense ($16,071) ($2,549)

Net Income (Loss) $108,099 $19,116

*Earnings before interest, taxes, depreciation, and amortization
RUNNING A FOOD HUB 43

Conclusion

It is clear from the analysis conducted in this report that various 

operational model food hubs can be viable businesses. Sufficient 

sales can be achieved at reasonable levels to provide enough revenue 

to cover the costs of supporting activities, personnel, and infrastructure. 

Regardless of the operational model, each venture must carefully 

consider the details of its operations. Small changes in costs can 

have a large impact on the finances of a food hub, due to the 

relatively low operating margins inherent in such ventures. 

Product expenses are the largest single cost category. Changes 

in prices paid to producers can significantly affect profitability and, 

in some cases, even impact the hub’s ability to remain in operation. 

Based on scenarios presented in this analysis, labor costs can also 

impact the sales levels required to achieve the various operational 

phases outlined in this report. 

Outside financial support (e.g., grants, low-interest loans, 

community funds) can be critical to helping food hubs achieve 

success. Such outside funding can greatly reduce the sales revenue 

required to achieve financial stability. 

Increasing the amount of money financed for purchasing 

equipment or investing in infrastructure produces little effect on the 

entity’s overall finances. Food hubs often find it difficult to qualify 

for loans and financing, particularly when they are just beginning. 

Each food hub will face different circumstances and goals, based 

on its unique mission. From a financial viewpoint, there is no “best” 

hub operational model. As food hubs grow, they typically begin 

to expand activities that more closely resemble other operational 

models, including hybrid operations which engage in both 

wholesale and direct-to-consumer sales. Regardless the evolution 

of the model, food hubs should seek to organize — including their 

operational and financial activities — around their core mission, and 

then strive to make sound financial choices.
44 RUNNING A FOOD HUB

Appendix

Supplemental Tables: Wholesale Model .................................................................. 45

Table 17: Prototypical Wholesale Food Hub Balance Sheet................................... 45

Table 18: Wholesale Expense and Revenue Summary Figures .............................. 46

Table 19: Wholesale Labor Summary.......................................................................... 48

Table 20: Wholesale Transportation Summary.......................................................... 52

Table 21: Wholesale Cash Flow.................................................................................... 56

Supplemental Tables: Direct-to-Consumer Model .................................................. 61

Table 22: Prototypical Direct-to-Consumer Food Hub Balance Sheet .................. 61

Table 23: Direct-to-Consumer Expense and Revenue.............................................. 62

Table 24: Direct-to-Consumer Labor Summary ......................................................... 64

Table 25: Direct-to-Consumer Transportation summary.......................................... 68

Table 26: Direct-to-Consumer Cash Flow ................................................................... 72

Photo courtesy of New North Florida Cooperative
RUNNING A FOOD HUB 45

Table 17

Prototypical Wholesale Food Hub Balance Sheet

Breakeven (B/E) Growth (GR) Viability (VI)

Assets

Cash and Equivalents ($9,818) ($7,039) $100,007 

Accounts Receivables $77,306 $111,806 $153,333 

Total Current Assets $67,487 $104,766 $253,341 

Buildings And Equipment, Net $141,000 $132,000 $123,000 

 Total Assets $208,487 $236,766 $376,341 

Liabilities and Members’ Equity

Current Liabilities

Accounts Payable and Accrued Expenses ($11,999) ($24,568) ($33,693)

Accrued Interest $4,252 ($6,149) ($8,433)

Current Maturities of Long-Term Debt ($4,463) ($3,939) ($3,382)

 Total Current Liabilities ($12,210) ($34,657) ($45,508)

Long-term Debt

Senior Debt $60,607 $52,027 $42,889 

Less Current Maturities of Long-Term Debt ($4,463) ($3,939) ($3,382)

Members’ Equity

Member Equity and Equity Equivalents $327,377 $171,265 $274,243 

Retained Earnings (Losses) ($162,823) $52,071 $108,099 

 Total Liabilities & Members’ Equity $208,487 $236,766 $376,341 

n Supplemental Tables

Wholesale Model
46 RUNNING A FOOD HUB

n Supplemental Tables: Wholesale Model

Table 18 

Wholesale Expense and Revenue Summary Figures

Percent 

Annual Total of Revenue 

Wholesale Baseline Breakeven Breakeven 

Income

 Fresh Produce ($) 847,000 70.00% 

 Dairy Products ($) 121,000 10.00% 

 Other ($) 242,000 20.00% 

 Grant Funds ($) 0 0.00% 

 Total Sales All Types 1,210,000 100.00% 

Variable Costs

 Product Lost in Transport/Handling & Returns (38,557) (3.2%) 

 Revenue to Farms (0.7) (844,600) (69.8%) 

 Credit Card Processing (2,420) (0.2%) 

 Packaging Material Expense (2,881) (0.2%) 

 Variable Labor & Delivery Expense (61,794) (5.1%) 

Total Variable Costs (950,252) (78.5%) 

 Variable Margin 259,748 21.5% 

Fixed Costs

 Equipment Loan Interest Pmnts (8,401) (0.7%) 

 Business Personal Property Tax (554) (0.0%) 

 Tools, Dies, Fixtures, Maint/Repairs (10,100) (0.8%) 

 Fixed Vehicle Expenses and Forklift Rental (15,322) (1.3%) 

Total Equipment Costs (34,377) (2.8%) 

Facilities

 Rent Expense (22,100) (1.8%) 

 Facility Expenses and Insurance (5,580) (0.5%) 

 Utilities (15,600) (1.3%) 

Total Facility Costs (43,280) (3.6%) 

Fixed Sales and Marketing

 Promotional Costs (5,000) (0.4%) 

Total Selling and Marketing Costs (5,000) (0.4%) 

General/Administrative

 Mgmt./Admin. Support/Fringe and Ovhd. (105,963) (8.8%) 

 General Expenses & Fees 

 (Software, Legal, Phone, OFC Supplies etc.) (22,300) (1.8%) 

Total General/Administrative Costs (128,263) (10.6%) 

Unforeseen/Contingency

 Unforeseen Expenses and Bad Debt (48,400) (4.0%) 

Total Fixed Costs (259,320) (21.4%) 

 Wholesale Baseline EBITDA* 429 0.0% 

Equipment Depreciation (9,000) (0.7%) 

Receivables Interest (23 days @ 0.085) (4,252) (0.4%) 

 Net Wholesale Baseline Income (12,823) (1.1%) 

* Earnings before interest, taxes, depreciation, and amortization
RUNNING A FOOD HUB 47

Percent Percent 

Annual Total of Revenue Annual Total of Revenue 

Growth Growth Viability Viability

1,225,000 70.00% 1,680,000 70.00%

175,000 10.00% 240,000 10.00%

350,000 20.00% 480,000 20.00%

0 0.00% 0 0.00%

1,750,000 100.00% 2,400,000 100.00%

(56,913) (3.3%) (78,052) (3.3%)

(1,212,431) (69.3%) (1,670,875) (69.6%)

(3,500) (0.2%) (4,800) (0.2%)

(4,167) (0.2%) (5,714) (0.2%)

(74,966) (4.3%) (97,867) (4.1%)

(1,351,977) (77.3%) (1,857,308) (77.4%)

398,023 22.7% 542,692 22.6%

(7,326) (0.4%) (6,180) (0.3%)

(765) 0.0%) (1,020) (0.0%)

(18,128) (1.0%) (22,792) (0.9%)

(12,430) (0.7%) (14,701) (0.6%)

(38,649) (2.2%) (44,693) (1.9%)

(22,763) (1.3%) (23,446) (1.0%)

(5,747) (0.3%) (5,920) (0.2%)

(16,068) (0.9%) (16,550) (0.7%)

(44,578) (2.5%) (45,916) (1.9%)

(5,150) (0.3%) (5,305) (0.2%)

(5,150) (0.3%) (5,305) (0.2%)

(143,291) (8.2%) (187,662) (7.8%)

(29,134) (1.7%) (30,513) (1.3%)

(172,425) (9.9%) (218,175) (9.1%)

(70,000) (4.0%) (96,000) (4.0%)

(330,803) (18.9%) (410,088) (17.1%)

67,220 3.8% 132,604 5.5%

(9,000) (0.5%) (16,071) (0.7%)

(6,149) (0.4%) (8,433) (0.4%)

52,071 3.0% 108,099 4.5%
n Supplemental Tables: Wholesale Model

48 RUNNING A FOOD HUB

Table 19 

Wholesale Labor Summary

 Breakeven (B/E)

 Jan Feb Mar Apr May 

Driver # Emp. 1 1 2 2 2 

Rate/Hr. Total Hrs. 62 75 103 142 168 

$13.50 Cost $830 $1,015 $1,388 $1,922 $2,270 

Admin Cost $174 $174 $347 $347 $347 

 Total Cost $22,469

General 

Labor # Emp. 1 1 1 1 1 

Rate/Hr. Total Hrs. 42 77 79 101 101 

$10.50 Cost $441 $809 $833 $1,058 $1,058 

 Total Cost $10,433

Warehouse

Manager # Emp. 1 1 1 1 1 

Rate/Hr. Total Hrs. 86 86 171 171 171 

$15.50 Cost $1,329 $1,329 $2,657 $2,657 $2,657 

 Overtime 

 Hours – – – – – 

Cost $0 $0 $0 $0 $0 

 Total Cost $25,575

 Total Cost Production $2,600 $3,153 $4,878 $5,638 $5,985 

Office/

Admin. # Emp. 1 1 1 1 1 

Rate/Hr. Total Hrs. 30 30 30 30 30 

$16.00 Cost $480 $480 $480 $480 $480 

 Total Cost $5,760

 Total Labor Cost B/E $55,005
RUNNING A FOOD HUB 49

Jun Jul Aug Sep Oct Nov Dec

2 2 2 2 2 1 1

174 151 141 120 117 86 69

$2,347 $2,039 $1,899 $1,614 $1,575 $1,159 $938

$347 $347 $347 $347 $347 $174 $174

1 1 1 1 1 1 1

101 101 101 101 79 56 56

$1,058 $1,058 $1,058 $1,058 $833 $584 $584

1 1 1 1 1 1 1

171 171 171 171 107 86 86

$2,657 $2,657 $2,657 $2,657 $1,661 $1,329 $1,329

– – – – – – –

$0 $0 $0 $0 $0 $0 $0

$6,062 $5,754 $5,614 $5,329 $4,069 $3,072 $2,851

1 1 1 1 1 1 1

30 30 30 30 30 30 30

$480 $480 $480 $480 $480 $480 $480
50 RUNNING A FOOD HUB

n Supplemental Tables: Wholesale Model

Growth (GR)

Table 19 (Continued) Wholesale Labor Summary 

Q1 Q2 Q3 Q4 

Driver # Emp. 2 2 2 2 

Rate/Hr. Total Hrs. 311 661 556 362 

$14.00 Cost $4,359 $9,257 $7,777 $5,073 

Admin Cost $360 $360 $360 $360 

 Total Cost $27,907 

General Labor # Emp. 1 1 1 1 

Rate/Hr. Total Hrs. 220 302 302 236 

$11.00 Cost $2,417 $3,325 $3,325 $2,593 

 Total Cost $12,720 

Warehouse Manager # Emp. 1 1 1 1 

Rate/Hr. Total Hrs. 321 450 514 321 

$15.50 Cost $4,982 $6,975 $7,971 $4,982 

Overtime 

Hours - - - - 

Cost $0 $0 $0 $0 

 Total Cost $24,911 

 Total Cost Production $12,118 $19,917 $19,433 $13,009 

Office/Administrative # Emp. 1 1 1 1 

Rate/Hr. Total Hrs. 126 252 252 126 

$16.50 Cost $2,079 $4,158 $4,158 $2,079 

 Total Cost $12,474 

 Total Labor Cost GR $64,478 
RUNNING A FOOD HUB 51

Viability (VI)

Wholesale Labor Summary

Q1 Q2 Q3 Q4

Driver # Emp. 2 2 2 2

Rate/Hr. Total Hrs. 398 874 729 470

$14.75 Cost $5,874 $12,893 $10,754 $6,937

Admin Cost $379 $379 $379 $379

Total Cost $37,975

General Labor # Emp. 1 1 1 1

Rate/Hr. Total Hrs. 425 431 495 367

$11.75 Cost $4,999 $5,062 $5,818 $4,307

Total Cost $21,904

Warehouse Manager # Emp. 1 1 1 1

Rate/Hr. Total Hrs. 321 386 514 450

$16.00 Cost $5,143 $6,171 $8,229 $7,200

Overtime

Hours - - - -

Cost $0 $0 $0 $0

Total Cost $26,743

 Total Cost Production $16,395 $24,506 $25,180 $18,823

Office/Administrative # Emp. 1 1 1 1

Rate/Hr. Total Hrs. 252 378 378 252

$17.00 Cost $4,284 $6,426 $6,426 $4,284

Total Costs $21,420

Total Labor Cost VI $106,324
Business 

Per

n Supplemental Tables: Wholesale Model

52 RUNNING A FOOD HUB

Table 20 

Wholesale Transportation Summary

 Transportation Expense for Breakeven (B/E) ($)

Jan Feb Mar Apr May 

Number of Delivery Days per Week 3 3 3 3 3 

Number of Delivery Days per Month 12.9 12.9 12.9 12.9 12.9 

$ Value of Produce Per Delivery Day $1,976 $2,635 $4,282 $7,247 $9,223 

$ Value of Dairy Per Delivery Day $471 $565 $706 $894 $894 

$ Value of Other Per Delivery Day $941 $1,318 $1,506 $1,694 $1,976 

Lbs. of Product Per Delivery Day 3990 5274 7710 11867 14573 

Total Truckload Capacity 22500 22500 22500 22500 22500 

% of Total Truck Capacity Utilized Per Load 18% 23% 34% 53% 65% 

Number of Trucks Required 1.0 1.0 2.0 2.0 2.0 

 Total Average Miles Traveled per Delivery-All Trucks 80 80 160 160 160 

Variable Vehicle Expenses

 Diesel Expense/Month $339 $339 $679 $679 $679 

 Mileage Expense Per Mile Driven $0 $0 $0 $0 $0 

 Reefer Unit Expense $0 $0 $0 $0 $0 

 Total Variable Vehicle Expense $339 $339 $679 $679 $679 

Fixed Vehicle Expense

 Overhead Expense $298 $298 $597 $597 $597 

 Total Fixed Vehicle Expense $298 $298 $597 $597 $597 

Personnel Expense

 Load Time (hr.) (Gen Labor) 6.9 7.3 8.6 8.6 8.6 

 Drive Time (hr.) (Driver) 23.5 25.0 29.4 29.4 29.4 

 Unload Time (hr.) (Driver) 38.0 50.2 73.4 113.0 138.8 

 Delivery Admin (hr.) (Gen Labor) 5.1 5.5 6.4 6.4 6.4 

Total Time (hr.) 73.5 88.0 117.9 157.4 183.2 

Driver Pay $993 $1,188 $1,591 $2,126 $2,473 

Driver Overtime Pay $0 $0 $0 $0 $0 

Loader Pay $120 $128 $150 $150 $150 

 Total Personnel Expense $1,113 $1,316 $1,742 $2,276 $2,624 

 Total Delivery Expense $1,751 $1,954 $3,017 $3,551 $3,899 
RUNNING A FOOD HUB 53

Jun Jul Aug Sep Oct Nov Dec Total

3 3 3 3 3 3 3

12.9 12.9 12.9 12.9 12.9 12.9 12.9

$9,882 $7,905 $6,917 $5,270 $5,270 $3,294 $1,976

$847 $847 $941 $941 $847 $753 $706

$1,788 $1,882 $1,882 $1,694 $1,506 $1,318 $1,318

15166 12774 11685 9470 9166 6392 4671

22500 22500 22500 22500 22500 22500 22500

67% 57% 52% 42% 41% 28% 21%

2.0 2.0 2.0 2.0 2.0 1.0 1.0

160 160 160 160 160 80 80

$679 $679 $679 $679 $679 $339 $339 

$0 $0 $0 $0 $0 $0 $0

$0 $0 $0 $0 $0 $0 $0

$679 $679 $679 $679 $679 $339 $339 $6,789 

$597 $597 $597 $597 $597 $298 $298 

$597 $597 $597 $597 $597 $298 $298 $5,966 

8.6 8.6 8.6 8.6 8.6 7.3 7.3

29.4 29.4 29.4 29.4 29.4 25.0 25.0

144.4 121.7 111.3 90.2 87.3 60.9 44.5

6.4 6.4 6.4 6.4 6.4 5.5 5.5

188.9 166.1 155.7 134.6 131.7 98.6 82.3

$2,550 $2,242 $2,102 $1,817 $1,778 $1,332 $1,110

$0 $0 $0 $0 $0 $0 $0

$150 $150 $150 $150 $150 $128 $128 

$2,700 $2,393 $2,253 $1,968 $1,929 $1,459 $1,238 $23,010 

$3,976 $3,668 $3,528 $3,243 $3,204 $2,097 $1,876 $35,764 
Business 

Per

n Supplemental Tables: Wholesale Model

54 RUNNING A FOOD HUB

Table 20 (Continued) 

Wholesale Transportation Summary

 Trasnportation Expense for Growth (GR) ($) 

GR Q1 GR Q2 GR Q3 GR Q4 

Number of Delivery Days per Week 3 3 3 3 

Number of Delivery Days per Quarter 39 39 39 39 

$ Value of Produce Per Delivery Day $4,288 $12,704 $9,687 $5,081 

$ Value of Dairy Per Delivery Day $839 $1,270 $1,316 $1,112 

$ Value of Other Per Delivery Day $1,815 $2,631 $2,631 $1,996 

Lbs of Product Per Delivery Day 8,183 20,057 16,357 9,752 

Truckload Capacity 22,500 22,500 22,500 22,500 

% of Truck space Utilized Per Load 36% 89% 73% 43% 

Number of Trucks Required 2.0 2.0 2.0 2.0 

 Total Average Miles Traveled per Delivery—All Trucks 200 200 200 200 

Variable Vehicle Expense 

 Diesel Expense/Quarter $2,622 $2,622 $2,622 $2,622 

 Mileage Expense Per Mile Driven $0 $0 $0 $0 

 Reefer Unit Expense $0 $0 $0 $0 

 Total Variable Vehicle Expense $2,622 $2,622 $2,622 $2,622 

Fixed Vehicle Expense 

 Overhead Expense $2,304 $2,304 $2,304 $2,304 

 Total Fixed Vehicle Expense $2,304 $2,304 $2,304 $2,304 

Personnel Expense 

 Load Time (hr) 22.7 25.8 25.8 24.6 

 Drive Time (hr) 78 88 88 84 

 Unload Time (hr) 233.8 573.1 467.3 278.6 

 Delivery Admin (hr) 17.0 19.3 19.3 18.3 

Total Time (hr) 351.1 706.4 600.6 405.3 

 Driver Pay $1,638 $9,889 $8,409 $1,891 

 Driver Overtime Pay $0 $0 $0 $0 

 Loader Pay $407 $463 $463 $439 

 Total Personnel Expense $2,046 $10,352 $8,871 $2,331 

 Total Delivery Expense $6,972 $15,278 $13,798 $7,257 
RUNNING A FOOD HUB 55

Trasnportation Expense for Vitality (VI) ($)

VI Q1 VI Q2 VI Q3 VI Q4

Number of Deliveries per Week 3 3 3 3

Number of Deliveries per Quarter 39 39 39 39

$ Value of Produce Per Delivery Day $5,880 $17,422 $13,284 $6,969 

$ Value of Dairy Per Delivery Day $1,151 $1,742 $1,804 $1,524 

$ Value of Other Per Delivery Day $2,489 $3,609 $3,609 $2,738 

Lbs of Product Per Delivery Day 11,223 27,507 22,432 13,375

Truckload Capacity 22,500 22,500 22500 22500

% of Truck space Utilized Per Load 50% 122% 100% 59%

Number of Trucks Required 2.0 2.0 2.0 2.0

Total Average Miles Traveled per Delivery—All Trucks 240 240 240 240

Variable Vehicle Expense 

Diesel Expense/Quarter $3,241 $3,241 $3,241 $3,241

 Mileage Expense Per Mile Driven $0 $0 $0 $0 

 Reefer Unit Expense $0 $0 $0 $0

Total Variable Vehicle Expense $3,241 $3,241 $3,241 $3,241

Fixed Vehicle Expense

Overhead Expense $2,848 $2,848 $2,848 $2,848

Total Fixed Vehicle Expense $2,848 $2,848 $2,848 $2,848 

Personnel Expense

 Load Time (hr) 22.7 25.8 25.8 25.8

 Drive Time (hr) 78 88 88 88

 Unload Time (hr) 320.6 785.9 640.9 382.1

 Delivery Admin (hr) 17.0 19.3 19.3 19.3

Total Time (hr) 437.9 919.2 774.2 515.4

 Driver Pay $2,153 $13,558 $11,420 $2,534

 Driver Overtime Pay $0 $0 $0 $0 

Loader Pay $417 $474 $474 $474 

Total Personnel Expense $2,570 $14,032 $11,894 $3,008 

Total Delivery Expense $8,659 $20,121 $17,983 $9,097 
n Supplemental Tables: Wholesale Model

Table 21 

Wholesale Cash flow

 Ongoing Jan Feb Mar Apr 

Operating Activities 

 Net Income (loss) (11,349) (11,987) (10,906) 1,327 15,249 

 Non cash charges to net income (loss) 0 0 0 0 0 

 Depreciation 750 750 750 750 750 

 Tax Credit 0 0 0 0 0 

 (Increase) Decrease in current assets 0 0 0 0 0 

 Accounts receivable 10,761 (1,855) (11,132) (19,481) (32,932) 

 Inventories 0 0 0 0 0 

 Increase (decrease) in current liabilities 0 0 0 0 0 

 Accounts payable and accrued expenses 0 0 0 0 0 

 Accrued interest 145 153 204 293 444 

 Net Cash Provided by (Used in) 

 Operating Activities $306 ($12,940) ($21,084) ($17,110) ($16,489) 

Investing Activities 

 Purchases of property and equipment (75,000) 0 0 0 0 

Financing Activities

 Member contributions (distributions) 18,750 0 0 0 0 

 Other contributions 0 153 204 293 444 

 Grants 0 0 0 0 0 

 Net borrowings (payments) 

 on short-term loans or notes 0 0 0 0 0 

 Principal payments on long-term loans 0 (1,327) (1,327) (1,327) (1,327) 

 Proceeds from long-term debt borrowings 56,250 0 0 0 0 

Net Cash Provided by (Used in) 

 Financing Activities 0 (1,174) (1,123) (1,033) (882) 

 Net Increase in Cash $306 ($14,113) ($22,207) ($18,144) ($17,371) 

Cash — beginning of period $20,000 $20,306 $6,193 ($16,014) ($34,157) 

 Cash — end of period $20,306 $6,193 ($16,014) ($34,157) ($51,529) 

56 RUNNING A FOOD HUB
May Jun Jul Aug Sep Oct Nov Dec B/E

Annual

18,158 13,864 626 52 (7,526) (3,774) (13,720) (14,187) (12,823)

0 0 0 0 0 0 0 0 0 

750 750 750 750 750 750 750 750 9,000 

0 0 0 0 0 0 0 0 0 

0 0 0 0 0 0 0 0 0 

(22,264) (4,175) 18,553 8,813 18,090 2,783 22,264 13,451 (7,885)

0 0 0 0 0 0 0 0 0 

0 0 0 0 0 0 0 0 0 

0 0 0 0 0 0 0 0 0 

546 565 480 440 357 344 242 181 4,252 

($2,809) $11,005 $20,410 $10,055 $11,671 $103 $9,537 $195 ($7,457)

0 

0 0 0 0 0 0 0 0 (75,000)

0 0 0 0 0 0 0 0 0 

546 565 480 440 357 344 242 181 4,252 

0 0 0 0 0 0 0 0 0 

0 (2,000) 0 0 (1,000) 0 (11,000) 3,000 (11,000)

(1,327) (1,327) (1,327) (1,327) (1,327) (1,327) (1,327) (1,327) (15,920)

0 0 0 0 0 0 0 0 56,250 

(780) (2,761) (846) (887) (1,970) (982) (12,084) 1,854 (22,668)

($3,590) $8,244 $19,563 $9,168 $9,701 ($879) ($2,548) $2,049 ($30,125)

($51,529) ($55,118) ($46,874) ($27,311) ($18,143) ($8,441) ($9,320) ($11,868) $20,306 

($55,118) ($46,874) ($27,311) ($18,143) ($8,441) ($9,320) ($11,868) ($9,818) ($9,818)

RUNNING A FOOD HUB 57
n Supplemental Tables: Wholesale Model

Table 21 (Continued)

Wholesale Cash flow

 

GR Q1 GR Q2 GR Q3 

Operating Activities 

 Net Income (loss) (19,994) 87,520 16,982 

 Non cash charges to net income (loss) 0 0 0 

 Depreciation 2,250 2,250 2,250 

 Tax Credit 0 0 0 

 (Increase) Decrease in current assets 0 0 0 

 Accounts receivable (28,999) (95,258) 29,293 

 Inventories 0 0 0 

 Increase (decrease) in current liabilities 0 0 0 

 Accounts payable and accrued expenses 0 0 0 

 Accrued interest (941) (2,251) (1,848) 

 Net Cash Provided by (Used in ) Operating Activities ($47,684) (7,739) $46,678 

Investing Activities

 Purchases of property and equipment 0 0 0 

Financing Activities

 Member contributions (distributions) 0 0 0 

 Other contributions 941 2,251 1,848 

 Grants 0 0 0 

 Net borrowings (payments) on short-term loans or notes 0 0 0 

 Principal payments on long-term loans (4,248) (4,248) (4,248) 

 Proceeds from long-term debt borrowings 0 0 0 

Net Cash Provided by (Used in ) Financing Activities (3,308) (1,998) (2,401) 

 Net Increase in Cash ($50,991) ($9,736) $44,277 

 Cash — beginning of period ($9,818) ($60,810) ($70,546) 

 Cash — end of period ($60,810) ($70,546) ($26,269) 

58 RUNNING A FOOD HUB
Annual Annual 

GR Q4 VI Q1 VI Q2 VI Q3 VI Q4 Total GR Total VI

(32,438) (24,883) 133,914 36,612 (37,544) 52,071 108,099

0 0 0 0 0 0 0 

2,250 4,018 4,018 4,018 4,018 9,000 16,071

0 0 0 0 0 0 0 

0 0 0 0 0 0 0 

53,667 (13,116) (130,640) 40,173 73,600 (41,298) (29,983)

0 0 0 0 0 0 0 

0 0 0 0 0 0 0 

0 0 0 0 0 0 0 

(1,110) (1,290) (3,087) (2,534) (1,522) (6,149) (8,433)

$22,368 ($35,272) $4,205 $78,269 $38,551 $13,624 $85,754

0 0 0 0 0 0 0

0 31,000 0 0 0 0 31,000

1,110 1,290 3,087 2,534 1,522 6,149 8,433

0 0 0 0 0 0 0

0 0 0 0 0 0 0 

(4,248) (4,535) (4,535) (4,535) (4,535) (16,994) (18,141)

0 0 0 0 0 0 0 

(3,139) 27,755 (1,449) (2,001) (3,013) (10,845) 21,293

$19,230 ($7,517) $2,756 $76,268 $35,539 $2,779 $107,047

($26,269) ($7,039) ($14,556) ($11,799) $64,469 ($9,818) ($7,039)

($7,039) ($14,556) ($11,799) $64,469 $100,007 ($7,039) $100,007

RUNNING A FOOD HUB 59
Appendix (Continued)

Supplemental Tables: Direct-to-Consumer Model ................................................. 61

Table 22: Prototypical Direct-to-Consumer Food Hub Balance Sheet ................. 61

Table 23: Direct-to-Consumer Expense and Revenue............................................. 62

Table 24: Direct-to-Consumer Labor Summary ........................................................ 64

Table 25: Direct-to-Consumer Transportation summary......................................... 68

Table 26: Direct-to-Consumer Cash Flow .................................................................. 72

60 RUNNING A FOOD HUB

Photo courtesy of The Agriculture and Land-Based Training Association
Table 22

Prototypical Direct-to-Consumer Food Hub Balance Sheet

Breakeven (B/E) Growth (GR) Viability (VI)

Assets

 Cash and Equivalents 16,836 19,890 38,967 

 Accounts Receivables 20,087 27,006 36,200 

 Inventories 0 0 0 

Total Current Assets 36,923 46,897 75,167 

Buildings and Equipment, Net of Depreciation 39,941 37,391 34,842 

Other Assets, Net of Amortization 0 0 0 

 Total Assets $76,864 $84,288 $110,009 

Liabilities and Members’ Equity

Current Liabilities

 Accounts Payable and Accrued Expenses 0 0 0 

 Accrued Interest 1,707 (2,296) (3,077)

 Current Maturities of Long-Term Debt (1,264) (1,116) (958)

 Total Current Liabilities $443 ($3,411) ($4,035)

Long-term Debt

 Senior Debt 17,168 14,737 12,149 

 Less Current Maturities of Long-Term Debt (1,264) (1,116) (958)

Members’ Equity

 Member Equity and Equity Equivalents 214,147 71,143 83,737 

 Dispersed Member Equity 0 0 0 

 Retained Earnings (Losses) (153,630) 2,935 19,116 

 Total Liabilities and Members’ Equity $76,864 $84,288 $110,009

n Supplemental Tables

Direct-to-Consumer Model

RUNNING A FOOD HUB 61
n Supplemental Tables: Direct-to-Consumer Model

62 RUNNING A FOOD HUB

Table 23 

Direct-to-Consumer Expense and Revenue

Percent 

Annual Total of Revenue 

 Direct-to-Consumer Baseline Breakeven Breakeven 

Income

 Fresh Produce ($) 314,400 100.00% 

 Grant Funds ($) 0 0.00% 

 Total Sales All Types 314,400 100.00% 

Variable Costs

 Product Lost in Transport/Handling & Returns (7,531) (2.4%) 

 COGS Produce ($) (209,600) (66.7%) 

 Donations To Pickup Sites (9,432) (3.0%) 

 Credit Card Processing (2,830) (0.9%) 

 Packaging Material Expense (12,960) (4.1%) 

 Variable Labor & Delivery Expense (13,171) (4.2%) 

Total Variable Costs (255,524) (81.3%) 

 Variable Margin 58,876 18.7% 

Fixed Costs

 Equipment Loan Interest Pmnts (1,264) (0.4%) 

 Business Personal Property Tax (233) (0.1%) 

 Tools, Dies, Fixtures, Maint/Repairs (2,600) (0.8%) 

 Fixed Vehicle Expenses and Forklift Rental (2,859) (0.9%) 

Total Equipment Costs (6,957) (2.2%) 

Facilities

 Rent Expense (2,200) (0.7%) 

 Facility Expenses and Insurance (6,020) (1.9%) 

 Utilities (4,200) (1.3%) 

Total Facility Costs (12,420) (4.0%) 

Fixed Sales and Marketing

 Promotional Costs (4,000) (1.3%) 

Total Selling and Marketing Costs (4,000) (1.3%) 

General/Administrative

 Mgmt./Admin. Support/Fringe and Ovhd. (23,725) (7.5%) 

 General Expenses & Fees (Software, Legal, Supplies etc.) (4,860) (1.5%) 

Total General/Administrative Costs (28,585) (9.1%) 

Unforeseen/Contingency

 Unforeseen Expenses and Bad Debt (6,288) (2.0%) 

Total Fixed Costs (58,250) (18.5%) 

 Direct-to-Consumer Baseline EBITDA* 627 0.2% 

Equipment Depreciation (2,549) (0.8%) 

Receivables Interest (23 days @ 0.085) (1,707) (0.5%) 

 Net Direct-to-Consumer Baseline Income (3,630) (1.2%) 

*Earnings before interest, taxes, depreciation, and amortization 
RUNNING A FOOD HUB 63

Percent Percent 

Annual Total of Revenue Annual Total of Revenue 

Growth Growth Viability Viability

422,710 100.00% 566,604 100.00%

0 0.00% 0 0.00%

422,710 100.00% 566,604 100.00%

(7,873) (1.9%) (10,630) (1.9%)

(281,807) (66.7%) (377,736) (66.7%)

(12,681) (3.0%) (16,998) (3.0%)

(3,804) (0.9%) (5,099) (0.9%)

(17,200) (4.1%) (23,220) (4.1%)

(17,640) (4.2%) (18,021) (3.2%)

(341,005) (80.7%) (451,705) (79.7%)

81,705 19.3% (451,705) (79.7%)

(1,116) (0.3%) (958) (0.2%)

(218) (0.1%) (204) (0.0%)

(2,678) (0.6%) (2,758) (0.5%)

(5,890) (1.4%) (10,112) (1.8%)

(9,902) (2.4%) (14,033) (2.5%)

(2,266) (0.5%) (2,334) (0.4%)

(6,201) (1.5%) (6,387) (1.1%)

(4,326) (1.0%) (4,456) (0.8%)

(12,793) (3.0%) (13,176) (2.3%)

(4,120) (1.0%) (4,244) (0.7%)

(4,120) (1.0%) (4,244) (0.7%)

(33,150) (7.8%) (41,600) (7.3%)

(5,506) (1.3%) (5,772) (1.0%)

(38,656) (9.1%) (47,372) (8.4%)

(8,454) (2.0%) (11,332) (2.0%)

(73,925) (17.5%) (90,157) (15.9%)

7,780 1.8% 24,742 4.4%

(2,549) (0.6%) (2,549) (0.5%)

(2,293) (0.5%) (3,077) (0.5%)

2,935 0.7% 19,116 3.4%
Business 

Per

n Supplemental Tables: Direct-to-Consumer Model

64 RUNNING A FOOD HUB

Table 24 

Direct-to-Consumer Labor Summary

 Breakeven (B/E)

Jan Feb Mar Apr 

Volunteer Labor # Emp. 0 0 8 8 

Rate/Hr. Total Hrs. 0 0 47 47 

$0.00 Cost $0 $0 $0 $0 

 Total Cost $0

Driver # Emp. 0 0 1 1 

Rate/Hr. Total Hrs. 0 0 20 31 

$13.00 Cost $0 $0 $265 $397 

 Total Cost $2,646

General Warehouse Labor # Emp. 0 0 1 1 

Rate/Hr. Total Hrs. 0 0 17 34 

$10.00 Cost $0 $0 $171 $343 

 Total Cost $2,057

Pickup Point Labor # Emp. 0 0 2 2 

Rate/Hr. Total Hrs. 0 0 42 59 

$10.50 Cost $0 $0 $882 $1,235 

 Total Cost $8,467

 Total Cost Production: $0 $0 $1,318 $1,975 

 Total Labor Cost B/E $13,171
RUNNING A FOOD HUB 65

May Jun Jul Aug Sep Oct Nov Dec

8 8 8 8 8 8 0 0

47 47 47 47 47 47 0 0

$0 $0 $0 $0 $0 $0 $0 $0

1 1 1 1 1 1 0 0

31 31 31 20 20 20 0 0

$397 $397 $397 $265 $265 $265 $0 $0

1 1 1 1 1 1 0 0

34 34 34 17 17 17 0 0

$343 $343 $343 $171 $171 $171 $0 $0

2 2 2 2 2 2 0 0

59 59 59 42 42 42 0 0

$1,235 $1,235 $1,235 $882 $882 $882 $0 $0

$1,975 $1,975 $1,975 $1,318 $1,318 $1,318 $0 $0
n Supplemental Tables: Direct-to-Consumer Model

Growth (GR)

Table 24 (Continued) Direct-to-Consumer Labor Summary 

GR Q1 GR Q2 GR Q3 GR Q4 

Volunteer Labor # Emp. 13 13 13 13 

Rate/Hr. Total Hrs. 373 142 142 111 

$0.00 Cost $0 $0 $0 $0 

 Total Cost $0 

Driver # Emp. 1 1 1 1 

Rate/Hr. Total Hrs. 38 129 129 41 

$13.25 Cost $500 $1,704 $1,704 $539 

 Total Cost $4,446 

General Labor # Emp. 1 1 1 1 

Rate/Hr. Total Hrs. 34 167 206 34 

$10.25 Cost $351 $1,713 $2,109 $351 

 Total Cost $4,966 

Pickup Point Labor # Emp. 2 2 2 2 

Rate/Hr. Total Hrs. 67 126 126 84 

$10.75 Cost $1,445 $2,709 $2,709 $1,806 

 Total Cost $9,072 

 Total Cost Production: $2,296 $6,126 $6,521 $2,697 

 Total Labor Cost GR $17,640 

66 RUNNING A FOOD HUB
Viability (VI)

Direct-to-Consumer Labor Summary

VI Q1 VI Q2 VI Q3 VI Q4

Volunteer Labor # Emp. 20 20 20 20

Rate/Hr. Total Hrs. 70 175 175 70

$0.00 Cost $0 $0 $0 $0

 Total Cost $0

Driver # Emp. 1 1 1 1

Rate/Hr. Total Hrs. 36 122 122 41

$13.50 Cost $484 $1,649 $1,649 $550

 Total Cost $4,331

General Labor # Emp. 1 1 1 1

Rate/Hr. Total Hrs. 34 167 206 34

$10.50 Cost $360 $1,755 $2,160 $360

 Total Cost $5,076

Pickup Point Labor # Emp. 2 2 2 2

Rate/Hr. Total Hrs. 76 126 126 84

$11.00 Cost $1,663 $2,772 $2,772 $1,848

 Total Cost $9,467

Total Cost Production: $2,507 $6,176 $6,581 $2,758

Total Labor Cost VI $18,021

RUNNING A FOOD HUB 67
n Supplemental Tables: Direct-to-Consumer Model

68 RUNNING A FOOD HUB

Table 25 

Direct-to-Consumer Transportation Summary

 Trasnportation Expense for Breakeven (B/E) ($)

Jan Feb Mar Apr May 

Number of Delivery Days per Week 2 2 2 2 2 

Number of Delivery Days per Month 9 9 9 9 9 

$ Value of Produce Per Delivery Day $0 $0 $2,934 $4,402 $5,502 

$ Value of Dairy Per Delivery Day $0 $0 $0 $0 $0 

$ Value of Misc. Per Delivery Day $0 $0 $0 $0 $0 

$ Value of Other Per Delivery Day $0 $0 $0 $0 $0 

Lbs. of Product Per Delivery Day $0 $0 $0 $0 $0 

 Total Truckload Capacity 11250 11250 11250 11250 11250 

 % of Total Truck Capacity Utilized Per Load 0% 0% 0% 0% 0% 

Number of Drop Off Points Per Delivery 10 10 10 10 10 

Amount of Product Left at Each Point (Lbs) 0 0 0 0 0 

# of 25 Lb Boxes Per Point (Units) 0 0 0 0 0 

Number of Trucks Required 0.0 1.0 1.0 1.0 1.0 

 Total Average Miles Traveled per Delivery 0 75 75 75 75 

Fixed Vehicle Expense

Vehicle Reimbursement Expense $0 $0 $357 $357 $357 

 Total Fixed Vehicle Expense $0 $0 $357 $357 $357 

Personnel Expense

Load Time (hr) (Gen Labor) 0.0 4.9 5.7 5.7 5.7 

Drive Time (hr) (Driver) 0.0 31.0 36.4 36.4 36.4 

Unload Time (hr) (Driver) 0.0 0.0 0.0 0.0 0.0 

Delivery Admin (hr) (Gen Labor) 0.0 3.6 4.3 4.3 4.3 

Total Time (hr) 0.0 39.5 46.5 46.5 46.5 

Driver Pay $0 $0 $604 $604 $604 

Driver Overtime Pay $0 $0 $0 $0 $0 

Loader Pay $0 $0 $100 $100 $100 

 Total Personnel Expense $0 $0 $704 $704 $704 

 Total Delivery Expense $0 $0 $1,062 $1,062 $1,062 
RUNNING A FOOD HUB 69

Jun Jul Aug Sep Oct Nov Dec Total

2 2 2 2 2 2 2

9 9 9 9 9 9 9

$6,602 $5,869 $5,135 $4,035 $2,201 $0 $0

$0 $0 $0 $0 $0 $0 $0

$0 $0 $0 $0 $0 $0 $0

$0 $0 $0 $0 $0 $0 $0

$0 $0 $0 $0 $0 $0 $0

11250 11250 11250 11250 11250 11250 11250

0% 0% 0% 0% 0% 0% 0%

10 10 10 10 10 10 10

0 0 0 0 0 0 0

0 0 0 0 0 0 0

1.0 1.0 1.0 1.0 1.0 0.0 0.0

75 75 75 75 75 0 0

$357 $357 $357 $357 $357 $0 $0 

$357 $357 $357 $357 $357 $0 $0 $2,859 

5.7 5.7 5.7 5.7 5.7 0.0 0.0

36.4 36.4 36.4 36.4 36.4 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0

4.3 4.3 4.3 4.3 4.3 0.0 0.0

46.5 46.5 46.5 46.5 46.5 0.0 0.0

$604 $604 $604 $604 $604 $0 $0

$0 $0 $0 $0 $0 $0 $0 

$100 $100 $100 $100 $100 $0 $0 

$704 $704 $704 $704 $704 $0 $0 $5,634 

$1,062 $1,062 $1,062 $1,062 $1,062 $0 $0 $8,493 
Business 

Per

n Supplemental Tables: Direct-to-Consumer Model

Table 25 (Continued) 

Direct-to-Consumer Transportation Summary

 Trasnportation Expense for Growth (GR) ($) 

GR Q1 GR Q2 GR Q3 GR Q4 

Number of Delivery Days per Week 3 3 3 3 

Number of Delivery Days per Quarter 13 39 39 13 

$ Value of Produce Per Delivery Day $13,495 $6,407 $0 $0 

$ Value of Dairy Per Delivery Day $0 $0 $0 $0 

$ Value of Misc. Per Delivery Day $0 $0 $0 $0 

$ Value of Other Per Delivery Day $0 $0 $0 $0 

Lbs of Product Per Delivery Day 0 0 0 0 

Truckload Capacity 11250 11250 11250 11250 

% of Truck space Utilized Per Load 0% 0% 0% 0% 

Number of Drop Off Points Per Delivery 15 15 15 15 

Amount of Product Left at Each Point (Lbs) 0 0 0 0 

# of 25 Lb Boxes Per Point (Units) 0 0 0 0 

Number of Trucks Required 1.0 1.0 1.0 1.0 

 Total Average Miles Traveled per Delivery 100 100 100 100 

Fixed Vehicle Expense 

Vehicle Reimbursement Expense $736 $2,209 $2,209 $736 

 Total Fixed Vehicle Expense $736 $2,209 $2,209 $736 

Personnel Expense 

Load Time (hr) 7.6 25.8 25.8 8.2 

Drive Time (hr) 70 238 238 75 

Unload Time (hr) 0.0 0.0 0.0 0.0 

Delivery Admin (hr) 5.7 19.3 19.3 6.1 

Total Time (hr) 83.0 283.0 283.0 89.6 

Driver Pay $367 $3,750 $3,750 $396 

Driver Overtime Pay $0 $0 $0 $0 

Loader Pay $136 $463 $463 $146 

 Total Personnel Expense $502 $4,212 $4,212 $542 

 Total Delivery Expense $1,239 $6,421 $6,421 $1,279 

70 RUNNING A FOOD HUB
Trasnportation Expense for Vitality (VI) ($)

VI Q1 VI Q2 VI Q3 VI Q4

Number of Deliveries per Week 4 4 4 4

Number of Deliveries per Quarter 17 51 51 17

$ Value of Produce Per Delivery Day $12,162 $6,860 $0 $0 

$ Value of Dairy Per Delivery Day $0 $0 $0 $0 

$ Value of Misc. Per Delivery Day $0 $0 $0 $0 

$ Value of Other Per Delivery Day $0 $0 $0 $0 

Lbs of Product Per Delivery Day 0 0 0 0

Truckload Capacity 11250 11250 11250 11250

% of Truck space Utilized Per Load 0% 0% 0% 0%

Number of Drop Off Points Per Delivery 25 25 25 25

Amount of Product Left at Each Point (Lbs) 0 0 0 0

# of 25 Lb Boxes Per Point (Units) 0 0 0 0

Number of Trucks Required 1.0 1.0 1.0 1.0

Total Average Miles Traveled per Delivery-All Trucks 125 125 125 125

Fixed Vehicle Expens 

Vehicle Reimbursement Expense $1,264 $3,792 $3,792 $1,264 

Total Fixed Vehicle Expense $1,264 $3,792 $3,792 $1,264 

Personnel Expense 

Load Time (hr) 10.1 34.5 34.5 11.5

Drive Time (hr) 64 219 219 73

Unload Time (hr) 0.0 0.0 0.0 0.0

Delivery Admin (hr) 7.5 25.7 25.7 8.6

Total Time (hr) 81.8 278.7 278.7 92.9

Driver Pay $368 $3,763 $3,763 $418

Driver Overtime Pay $0 $0 $0 $0 

Loader Pay $185 $632 $632 $211 

Total Personnel Expense $553 $4,395 $4,395 $629 

Total Delivery Expense $1,817 $8,187 $8,187 $1,893 

RUNNING A FOOD HUB 71
n Supplemental Tables: Direct-to-Consumer Model

Table 26 

Direct-to-Consumer Cash flow

Ongoing Jan Feb Mar Apr 

Operating Activities 

Net Income (Loss) (3,428) (4,518) (4,285) 88,815 (33,324) 

Non cash charges to net income (loss) 

Depreciation 212 212 212 212 212 

Tax Credit 0 0 0 0 0 

 (Increase) Decrease in current assets 

Accounts receivable 0 0 0 (95,312) 95,312 

 Inventories

 Increase (decrease) in current liabilities 

Accounts payable and accrued expenses 

Accrued interest 0 0 0 675 0 

 Net Cash Provided by (Used in) 

 Operating Activities ($3,215) ($4,306) ($4,072) ($5,609) $62,200 

Investing Activities 

Purchases of property and equipment 0 

Financing Activities 

Member contributions (distributions) 0 0 0 0 0 

Other contributions 0 0 675 0 

Grants 0 0 0 0 

Net borrowings (payments) on short-term 

 loans or notes 0 0 0 0 

Principal payments on long-term loans (190) (190) (190) (190) 

Proceeds from long-term debt borrowings 0 

Net Cash Provided by (Used in) 

 Financing

 Activities 0 (190) (190) 485 (190) 

 Net Increase in Cash ($3,215) ($4,496) ($4,263) ($5,124) $62,010 

Cash — beginning of period $20,000 $16,785 $12,289 $8,026 $2,902 

 Cash — end of period $16,785 $12,289 $8,026 $2,902 $64,912 

72 RUNNING A FOOD HUB
May Jun Jul Aug Sep Oct Nov Dec B/E

Annual

(40,001) 127,354 (42,227) (37,119) (30,442) (19,314) (4,285) (4,285) (3,630)

212 212 212 212 212 212 212 212 2,549 

0 0 0 0 0 0 0 0 0 

0 

0 (145,728) 145,728 0 0 0 0 0 0 

0 

0 

0 1,032 0 0 0 0 0 0 1,707 

($39,788) ($17,130) $103,714 ($36,906) ($30,230) ($19,102) ($4,072) ($4,072) $627 

0 

0 

0 

0 0 0 0 0 0 0 0 0 

0 1,032 0 0 0 0 0 0 1,707 

0 0 0 0 0 0 0 0 0 

0 0 0 0 0 0 0 0 0 

(190) (190) (190) (190) (190) (190) (190) (190) (2,282)

0 

(190) 842 (190) (190) (190) (190) (190) (190) (575) 

($39,979) ($16,288) $103,524 ($37,097) ($30,420) ($19,292) ($4,263) ($4,263) $52 

$64,912 $24,933 $8,646 $112,170 $75,073 $44,653 $25,362 $21,099 $16,785 

$24,933 $8,646 $112,170 $75,073 $44,653 $25,362 $21,099 $16,836 $16,836 

RUNNING A FOOD HUB 73
n Supplemental Tables: Direct-to-Consumer Model

Table 26 (Continued)

Direct-to-Consumer Cash flow

 

GR Q1 GR Q2 GR Q3 

Operating Activities 

Net Income (Loss) 117,195 69,142 (146,676) 

Non cash charges to net income (loss) 

Depreciation 637 637 637 

Tax Credit – – – 

(Increase) decrease in current assets 

Accounts receivable (44,558) (18,909) 63,468 

Inventories

 Increase (decrease) in current liabilities 

Accounts payable and accrued expenses 

Accrued interest (947) (1,349) – 

 Net Cash Provided by (Used in) Operating Activities $72,327 49,522 ($82,571) 

Investing Activities

Purchases of property and equipment – 

Sale of Property and Equipment 

Financing Activities

Member contributions (distributions) – – – 

Other contributions 947 1,349 – 

Grants – – – 

Net borrowings (payments) on short-term loans or notes – – – 

Principal payments on long-term loans (608) (608) (608) 

Proceeds from long-term debt borrowings – 

Net Cash Provided by (Used in ) Financing Activities 339 741 (608) 

 Net Increase in Cash $72,666 $50,263 ($83,178) 

Cash — beginning of period $16,836 $89,503 $139,766 

 Cash — end of period $89,503 $139,766 $56,587 

74 RUNNING A FOOD HUB
Annual Annual 

GR Q4 VI Q1 VI Q2 VI Q3 VI Q4 Total GR Total VI

 (36,727) 139,399 117,859 (192,414) (45,728) 2,935 19,116 

– –

637 637 637 637 637 2,549 2,549 

– – – – – – –

– –

– (53,831) (37,136) 90,967 – – –

– –

– –

– (1,144) (1,933) – – (2,296) (3,077)

($36,089) $85,061 $79,427 ($100,809) ($45,091) $3,189 $18,589 

– – –

– – –

– – – – – – –

– 1,144 1,933 – – 2,296 3,077 

– – – – – – –

– – – – – –

 (608) (647) (647) (647) (647) (2,430) (2,588)

– –

 339 485 1,269 (647) (647) (135) 489 

$72,666 $85,558 $80,713 ($101,456) ($45,738) $3,054 $19,077 

$56,587 $19,890 $105,448 $186,161 $84,705 $16,836 $19,890 

$19,890 $105,448 $186,161 $84,705 $38,967 $19,890 $38,967 

RUNNING A FOOD HUB 75
76 RUNNING A FOOD HUB
Photo courtesy of Common Market Philadelphia
Running a Food Hub: Lessons Learned From the Field, Vol. 1, SR 77

Running a Food Hub: A Business Operations Guide, Vol. 2, SR 77

Running a Food Hub: Learning From Food Hub Closures, Vol. 4, SR 77

These reports are part of multi-volume, technical report series: Running 

a Food Hub. The first volume compiles a number of best business 

practices for starting or expanding a food hub enterprise. It includes 

operational profiles of the food hubs profiled in the report.

 Volume 2 focuses on operational issues faced by food hubs, including 

organization, infrastructure, and logistics, among others.

 Volume 4 examines factors that led to the closure of six food hubs. It 

identifies lessons learned from each case, helping other food hubs avoid 

similar pitfalls.

 For hard copies (please indicate title, publication number, and 

quantity needed), e-mail: coopinfo@wdc.usda.gov, or call: (202) 720-

7395. Or write: USDA Co-op Info., Stop 0705, 1400 Independence Ave., 

SW, Washington DC 20250. To download from the Web, visit: www.

rurdev.usda.gov/rbs/newpub.htm.

Ne w Te c hni c a l Re p ort Seri es

Running A

FOOD HUB

VOLUME TWO

VOLUME FOUR

VOLUME ONE