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Accessing Wholesale Supply Chains: Best Practices for Small-Scale Farmers in New England

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This article comes from the NOFA/Massachusetts 2013 May Issue Newsletter

By Kyle Foley, Lesley Sykes, and Eva Agudelo Winther

As part of the Enhancing Food Security of the Northeast (EFSNE) project (a USDA Agriculture and Food Research Initiative grant-funded project involving universities and researchers from around the Northeast), co-investigators Dr. Tim Griffin and Dr. Christian Peters of Tufts University led a directed study course for graduate students in the Agriculture, Food and Environment program. Students chose research topics that would complement EFSNE, and we (Kyle Foley and Eva Agudelo Winther) chose to investigate the specific technological or operational innovations and best practices required of small and mid-scale fruit and vegetable producers interested in accessing regional supply chains in New England.

While there are many activities focused on rebuilding the needed infrastructure for a regional food system, not as much emphasis has been placed on how producers can change their management and operational practices to meet the needs of wholesale markets. Increasing the capacity of small- and mid-scale producers to access regional markets through produce aggregators and distributors has the potential to increase the availability of healthy food to a wider range of people through traditional retail and institutions, and hence, the potential to increase the food security of the region.

Our hypothesis was that the businesses that are involved in transporting, storing, and distributing produce as it moves from farm to store (or institution) would have information and insight into what producers can do on-farm to improve efficiency and better serve or access regional supply chains. Lesley Sykes, co-presenter, is Product and Account Manager at Red Tomato, which was one of the interviewees. Red Tomato coordinates marketing, sales, and wholesale logistics for a network of family-scale, ecological fruit and vegetable farmers in the Northeast. With the knowledge gained from one-hour interviews with Red Tomato and 11 other produce aggregators, distributors and retailers from across New England, recommendations for producers emerged from the results under the broad categories of infrastructure and equipment (i.e. packing, labeling, food safety, storage) and management issues (i.e. product availability, communication, labor capacity). We spoke at NOFA/Mass and other conferences to disseminate our results and recommendations as much as possible to audiences of farmers in New England, as well as those working in other ways to strengthen the region’s food system.

Infrastructure and Equipment Recommendations

Packing & Labeling:

• Most importantly, invest in a packing line/equipment (an opportunity for shared infrastructure among farms).

• Invest in uniform, sturdy, durable packaging.

• Communicate with distributors/buyers about what packaging is preferred/expected.

• Invest in a basic labeling machine.

Key infrastructure/equipment to invest in individually or cooperatively:

• Labeling equipment

• Cold/temperature-controlled storage (critical for creating some flexibility and quality control that will allow you to work with wholesalers)

• Loading dock

Food safety (on the producer end):

• Consider what markets you might be trying to enter and whether you will need to be GAP (Good Agricultural Practices) audited down the line; if so, start taking the steps to move towards those practices and/or requirements.

• Have sufficient liability insurance as defined by intermediate and end buyers.

Industry/Region-wide:

• Develop good reusable packaging (industry-wide).

• Develop and promote uniform standards across the Northeast region in terms of information needed/wanted on labels by distributors, aggregators, wholesale buyers, etc.

• More industry-wide coordination amongst regional distributors/aggregators for increased efficiency with trucking, backhauling etc.

Management and Communication Recommendations

The second major area where interviewees saw efficiencies or room for improvement was around “management issues.” This term refers to best practices surrounding volume and consistency of product availability, labor and management capacity, the use of technology to stay in touch with distributors, and overall communication and professionalism when dealing with buyers. These issues have more to do with operational practices than access to capital-intensive processing or packing facilities and require a certain amount of business acumen and other “soft” skills to navigate efficiently.

Product availability:

• Specialize in a smaller number of products to grow appropriate volume for wholesale markets.

• If you can’t grow enough volume for wholesale buyers, create farmer cooperatives to increase the volume of deliveries to wholesale distributors and buyers.

• Ensure product availability when promised and deliver consistently and on time.

If you cannot meet your commitments, you must communicate this as soon as possible and offer alternatives.

• Give your buyers conservative estimates of what you will have available to ensure your capacity to deliver on your commitments.

• Some wholesale buyers seek out local sources of product that may not be available from other local growers either early or late in the season. Practice season extension to meet this demand.

Labor and Management Capacity:

• Invest in skilled employees with middle management capacity to ensure timeliness and product quality. No one person can be responsible for all the operations on a farm at the scale necessary to meet wholesale demand, therefore you must be able and willing to delegate tasks as needed.

• Invest in sufficient number of staff to deliver product on time and as promised, and plan ahead for seasonal surges in workload. A large volume of product is of no use to anyone if you don’t have the human power to get it out of the field, washed, and on a truck.

• Delegate administrative tasks such as bookkeeping, customer service, human resources, marketing, packaging product sourcing, etc.

Communication and Professionalism:

• Communicate regularly, honestly, and well in advance with buyers about product availability and conditions in the field. If you cannot deliver a promised shipment, you must communicate as soon as possible with your buyer so they can find other ways to meet their obligations.

• Use email, smart phones, and online ordering systems to facilitate communication and timely product deliveries. You, or someone you employ, must be available for communication with buyers and be able to respond quickly to calls and emails.

• Practice professionalism (flexibility, trustworthiness, consistency, and civility) with buyers and distributors. This builds a functional, pleasant, and ideally long-term relationship based on trust – an indispensable tool in any product-based business.

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