To:         Albemarle County Board of Supervisors c/o Ella Jordan
From:      Kate Collier - C&G Products, LLC 
Date:       November 5, 2008
Re:          Business planning support for Local Food Distribution Hub
 
Introduction
 

The purpose of this memo is to respectfully request your approval of $80,000 in small business development funds to support planning for a not-for-profit local food distribution hub in Ivy.  This business is a key component of a vibrant local food system that will yield significant economic benefits for Albemarle County. In fact, a 2008 report by the Virginia Cooperative Extension finds that annually an additional $20,313,800 would be generated and reinvested in Albemarle agriculture and local independent businesses if households in Albemarle County spent just $10 a week of their food budget on local food.  $50,660,480 would be reinvested in the Thomas Jefferson Planning Region if those households did the same.

 
Background
 
A local food system is one in which consumers have access to healthy, affordable, locally-grown food, and farmers have reliable and efficient access to markets.  Institutions such as hospitals, schools, restaurants, and social service agencies are also able to count on a steady supply of local food.  The benefits of such a system include a stronger local economy, improved public health, better land use, and decreased fuel consumption.    
 
A key component of such a system is a “hub” where food can be aggregated and delivered or processed as needed.  Recent interactions with farmers and major food purchasers, through the Jefferson Area Board of Aging’s Harvest Now research project, indicates that the lack of a distribution system is one of the greatest obstacles to growing our region’s local food system. (This position was reinforced by site visits to communities in Ohio and Vermont where local food system production and consumption has succeeded.) It is most evident that neither farmers nor purchasers favor the time consuming routine of having to deal individually with multiple outlets and/or clients.
 
An excellent and timely opportunity has presented itself to create a food distribution and processing hub at the Dettor Edwards Building in Ivy, but thoughtful business planning is needed to make this a success.  This hub would be a not-for-profit business that would support our region’s for-profit businesses and non-profit institutions. Details of the proposal follow:
 
The Local Food Distribution Hub
 
Mission:  To provide efficient distribution and marketing infrastructure in support of primarily farms in Albemarle County (other farms in the Thomas Jefferson Planning District will be included) in order to increase local food supply, minimize food waste, and reduce fuel consumption via a centralized location.   
 
How we do it:
·               Buy all acceptable quality local produce from farmers and accept donations from citizen growers.
·               Pick up produce at central locations throughout the region and bring it to the Local Food Hub for consolidation.
·               Sell first quality fresh product to area produce distributors, groceries, restaurants and institutions.
·               Preserve second quality produce by freezing or basic cooking and supply to local institutions thus enabling year round access to local food products
·               Offer a line of non-produce, value-added local food so that product selection is diverse and available year-round, such as canned goods, eggs, cheese, and meat.
 
Phases of growth:

Phase 1 (2009):

1) Establish a network of local farms and negotiate arrangements to grow food for the Hub

2) Provide pick up service at centralized locations in the TJP District

3) Sell to a small number of established independent food distributors and partner institutions including:

Cavalier Produce, Standard Produce,

JABA, Darden, Albemarle County Schools and Head Start programs 

4) Offer basic processing services to preserve extra produce:

Peeler, chopper, flash freezer, kettles for sauce cooking

 

Phase 2 (2010):

1) Add bottling, canning and labeling equipment to processing facilities

2) Offer full co-packing services so food producers can realize value-added margins

3) Increase number of partner institutions supplied.

 

Phase 3 (late 2010):

Partner with the Local Food Center at the Jefferson School to incubate small farms and

value-added food producers in our area through education, mentorship, business services and marketing support.

 

Why the Dettor Edwards building: This 80,000 square foot warehouse located off Morgantown Road in Ivy is the ideal location for such a food hub.  It is zoned for such a use and it has existing refrigeration, freezer, dry storage, loading, and office space. Build-out requirements are minimal. A food hub is the best possible use for this building, which is located in a residential area, because the number and size of the trucks will be quite minimal compared to other businesses. (We are currently being proactive to discuss any concerns with neighbors.)
 
Timeline:   The goal is to have the hub operational for the May 2009 growing season.  For this to happen, the following timeline is proposed:
·               Immediate:  approval of $80,000 in county funds for business plan development, warehouse layout, and organizational administration.  
·               January 2009:  1) Business plan complete 2) Meet with partner buyers to establish product and pricing guidelines 3) Meet with farmers to negotiate growing contract for 2009 season 4) Begin raising capital for start up costs informed by business plan.
·               February 2009: 1) Send staff member to VA Tech to be trained in GAP (Good Agricultural Practices), so the Hub can be its own GAP certifier. 2) Send GAP trained staff member to partner farms to encourage approved growing practices.
·               March 2009: 1) Begin warehouse build-out 2) Send staff member to VA Tech to train in approved food processing practices. 
·               April 2009: 1) Set-up inventory and accounting systems. 2) Hire and train driver, sales and warehouse staff. 
·               May 2009: Open for business
 
Start-up Funds Budget:
1)      Business Plan development - $25 K
2)      Warehouse Design - $10 K
3)      Start up staff and professional consulting - $35 K
4)      Staff Training - $10 K
 
Why Kate Collier: Kate Collier is the founder and owner of Feast, a specialty food store and café in Charlottesville that emphasizes locally produced food.  Prior to opening Feast!, Kate worked with two specialty food distributors in the San Francisco Bay Area. She served as sales manager and buyer at Ulysses Foods and was involved in all aspects of start-up of The Cheeseworks– West, a business whose first year sales were over $5 million. Kate is a native of Fauquier County and an Alumna of UVA. She has a long background in food policy and preparation, strong relationships with many local farmers, and a keen business sense.  She has been a leader in the thinking around the local food movement in this area.  Her skills and network development with farmers and buyers will allow this business to launch quickly, successfully and make a significant contribution to our local economy.   
 

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