Nonstop: Two Approaches to Direct Store Delivery to Retail
This webinar presents two approaches to organizing farms taking their product directly to retail stores.
One of the many consumer interests in local food is that without having to travel 1000s of miles, local food can be fresher. To get food fastest from field to retail some operations are now removing a stop at an aggregation/distribution facility - farms are taking their product directly to the retail stores.
This webinar presents two approaches to solving this complicated logistical puzzle. One program is managed by a food hub, working with a retailer with whom they have built a strong relationship. The other program is managed by the retail chain itself.
You'll learn many of the details of these projects, including each company's thinking about if Direct Store Delivery (DSD) is worth the complexity. You will also learn some of the challenges that these programs have overcome, and some that still remain.
Responses to Additional Questions
Are there any resource guides you can recommend for farmers on how-to interact with retailers and vice versa including items such as pricing guides?
- Angel: We use the USDA terminal market reports to understand market trends by product line and by sourcing area (state, region, national, international). We compare the pricing in these reports to prices paid to growers and prices quoted to distributor customers. In terms of customer pricing, it is very dependent on the volume commitment of the customer and the logistics needed to meet their needs – especially in the case of direct delivery.
- Rebecca: The North Carolina Growing Together project has a series of guides for producers on exactly how to approach a grocery retailer and pitch a product. These include what to say in an exploratory email, tips on maintaining a good relationship, etc. We also have visual walkthrough documents with photos on how to do a DSD delivery, as well as steps for delivery at a warehouse.
How do you maintain day to day operations off season?
- Angel:We sell apples and microgreens almost year round so we are able to keep product in motion and sales staff working. However, we also use the off-season to meet with farmers and customers to plan for the following season. As well as invest internal systems and professional development to address any needs or gaps in service that were identified in the season debrief. We also do consulting and public speaking and more of this tends to fall in the winter.
Following up on Rebecca's comment on smaller retailers, do any of the panelists know of distribution models that link local farmers to corner stores?
- Angel:Boston Collaborative for Food and Fitness did extensive work exploring sales to corner stores. Not sure if the learnings were documented anywhere. The primary issue with corner stores is relatively small volume and in many cases unfamiliarity with handling produce. Without collective purchasing or a partnership with a distributor this is a very difficult market to serve
What are the food safety requirements for farmers to participate within either of these DSD programs? Does Red Tomato and Lowes Foods/CEFS assist farmers with the obtainment of any necessary food safety certifications? If so, how?
- Angel:Red Tomato growers are required to maintain a minimum of USDA GAP certification. MA growers may supplement a Mass Commonwealth Quality certificate.
- Rebecca: When the NC Growing Together (NCGT) project started in 2013, Lowes Foods was not yet requiring food safety requirements (GAP). But it let it's local growers know GAP would ultimately be required. The NCGT project offers 6-8 $20/person GAP workshops each year plus free one-on-one food safety plan assistance and mock audits. The NC Dept of Agriculture also administers cost-share programs to growers. Lowes Foods also accepts GroupGAP.
3% gross profit? what was net?
- Angel:This was a net profit stat.
We are working with a retailer who wants to expand local and work collaboratively with growers. If you hire a 3rd party to help work with growers at start up similar to the intern idea, what are some best practices to consider. and any key job description points?
- Rebecca: This is a great question. If you have a cooperating retailer, that is huge. We found that it was very important for the intern, and then project/Lowes staff, to be based within the company. They should have a desk, phone, etc, just like a 'real' worker. Then that person should spend some time learning what everyone does, especially the following: category managers and assistant managers, merchandisers, and those in the marketing dept. All those are at the retail-corporate level. At the store level, talk with the store managers and the produce, meat, etc. managers. From these initial conversations find out what will be the easiest small win. Do it as a pilot. Prove you can execute. Expand from there. As the intern, grow your reputation as someone who has the time and know-how to solve the complications of local. You'll recall that in the webinar, the Lowes Foods Local Purchasing Accounts Rep noted (several times) that creating a local program is tedious and time consuming--so your ideal person is steadfastly good humored, resourceful, likable, detail-oriented, and knows something about farming but does not necessarily need to be or have been a farmer. They need to e a good listener, to take notes, to keep track of various types of data and organize that data for easy retrieval. They need to be humble and acknowledge what they don't know about the grocery business.
What gives you the competitive edge? specifically, what is different about your approach from other food hubs? is it the self-loading system at night to facilitate timing?
- Angel: Our longevity – having been able to learn and grow when there was less competition. Also, our focus on working with a few talented/wholesale focused growers rather than the maximum number of suppliers possible help us maintain quality, without being hands on, and be more comprehensive in our response to feedback from our customers. Our investment in brand and marketing materials to support our programs also makes Red Tomato stand out against some of our competition.
Angel came to Red Tomato in 2002 as Warehouse Manager, after holding positions as Warehouse Manager for Boston Baby Superstores and T.V.I. for seven years. While working at Red Tomato, Angel earned a Bachelor’s degree in Finance and Accounting at Northeastern University. He is now Red Tomato’s Director of Operations, handling trade logistics, financial management and internal IT systems. Angel spends free time enjoying his family and summer mornings in his garden, which he calls his farm.
Rebecca Dunning is a sociologist and agricultural economist, and is a research assistant-professor at the Center for Environmental Farming Systems (CEFS) at North Carolina State University. She specializes in the social and economic aspects of food systems and food supply chains. Rebecca leads the Center’s work to strengthen the economic viability of small and mid-scale food producers through research activities and engagement with business entities across the food value chain. She manages the North Carolina Growing Together project (NCGT, ncgrowingtogether.org), a 5-year (2013-2017) USDA-funded initiative to link small and mid-scale producers of produce, meat, dairy, and seafood into grocery and food service supply chains. Rebecca’s work with Lowes Foods on their DSD program has been part of that work. Today she’ll talk about how a university begins a partnership with a mainstream food business, and the unique role that universities, including extension services, can play in supporting the farm to grocery store value chain.
Krista Morgan is the Locally Grown Account Representative at Lowes Foods and Liaison for NC Growing Together project. Her career has been focused on food and farming. Graduating with a BS in Horticulture from North Carolina State University she started NC State’s campus farmers market. She has traveled to Costa Rica to study farming there, and worked at a plant nursery as an administrative horticulturist. Her internship at the Old Salem Historical Museum and Gardens she learned that she wanted to work WITH farmers, rather than be a farmer herself. Krista will now tell us the ins and outs of her current work at Lowes.