The local food movement is now spreading globally, yet is not well understood. To many, local food is exclusively about proximity, with discriminating consumers demanding higher quality food grown, caught, processed, cooked, and sold by people they know and trust. But an equally important part of local food is local ownership of food businesses. This report is about the full range of locally owned businesses involved in food, whether they are small or big, whether they are primary producers or manufacturers or retailers, whether their focus is local or global markets. We call these businesses community food enterprises (CFEs).
Some dismiss the recent rise of local food and CFEs as just a passing fad. We see it as the natural consequence of the improving competitiveness of CFEs. Not only are CFEs getting more market savvy, but they are also taking advantage of the growing diseconomies of global food businesses. Long, nonlocal supply chains, for example, are increasingly vulnerable to rising oil prices. It’s true that CFEs face special challenges from their modest scale in leadership, finance, secession, and technology, to name a few but they are also developing impressive ways of overcoming them.
This report provides a detailed field report on the performance of 24 CFEs, half inside the United States and half international. We show that CFEs represent a huge diversity of legal forms, scales, activities, and designs. From these case studies, we address four questions:
- What strategies are community food enterprises deploying to heighten their competitiveness?
- What are the major challenges facing these enterprises and the ways they are overcoming those challenges?
- How well are these enterprises meeting the triple bottom lines of profit, people, and planet?
- To what extent are successful CFE models capable of being replicated worldwide?
Many economists and economic developers are resolute about helping companies in their jurisdictions “go to scale.” What our case studies reveal is that CFEs actually are “going to scale” but using unusual strategies consistent with their community character. We identified 15 such strategies:
- Hard Work: CFE entrepreneurs like Judy Wicks, who for 25 years practically lived in her restaurant, the White Dog Café in Philadelphia, compensate for their limited resources with exceptional industriousness.
- Innovation: Lance Nacio, of Anna Marie Seafood in Louisiana, developed an appropriate technology to flash freeze shrimp onboard his fishing vessel and deliver an exceptionally fresh product. Sylvia Banda, founder of Sylva Professional Catering Services Limited and the impresario of local food in Zambia, invented and now manufactures for local farmers the Sylva Solar Food Dryer.
- Local Delivery: The Oklahoma Food Cooperative is showing how, through an Internet based distribution system, fresh food can be delivered regionally at roughly a quarter of the cost of mainstream food distribution.
- Aggregation: Locally owned businesses need not be small. Large producer cooperatives owned by local members, such as the Cooperative Regions of Organic Producer Pools (better known as Organic Valley), have improved the competitiveness of 1,300 farmers across North America by aggregating their market power. A nonprofit, Appalachian Harvest Network, also has helped aggregate 70 former tobacco farmers to grow and sell organic fruits and vegetables collectively.
- Vertical Integration: The annual sales of Zingerman’s Community of Businesses in Ann Arbor, Michigan, have mushroomed to nearly $30 million through a strategy of “growing deep.” Rather than create a nonlocal chain, Zingerman’s has stayed local and created eight businesses that localize its inputs and diversify its food products and services.
- Shareholder Loyalty: Like other consumer cooperatives, the Weaver Street Market has learned that broad local ownership increases the commitment of its 13,000 members to do their shopping at its supermarkets.
- Speed: Lorentz Meat in Minnesota provides affordable, mid scale processing that enables family scale ranchers to fulfill specialty meat orders with lightning speed.
- Better Access: Greenmarket in New York City demonstrates how CFEs are increasingly reaching low income consumers living in “food deserts” with relatively inexpensive fresh food.
- Better Taste: Emphasizing quality over quantity, Akiwenzie’s Fish in Ontario, run by a Native American family, sells award winning smoked fish at farmers markets in Toronto.
- Better Story: One similarity between the White Dog Café and the Cabbages & Condoms restaurants in Thailand is their menus, both of which contain extensive descriptions of where the good served comes from and who exactly was involved in growing, raising, and processing it. Such stories enhance consumers’ experience, and the market value, of local food.
- Better Stewardship: Many CFEs are becoming commercially successful without compromising their social performance, and have turned their superior social performance into compelling competitive advantages. The loyalty of consumers who buy strawberries from Swanton Berry Farm is deepened by their awareness that 100% of the farm’s employees are members of the United Farm Workers union.
- Better Service: The Self-Sufficient Organic Farm School in Paraguay, a high school for future farmers and CFE entrepreneurs, prides itself on giving—and teaching—exceptional service through its 16 student-run food enterprises, which help underwrite the institution.
- Revitalizing Local Economies: CFE entrepreneurs tap growing consumer interest in “buying local” to support local economies. The Intervale Center built a municipal compost company for Burlington, Vermont, and is now close to its goal of supplying 10% of the city’s food locally.
- More Community Spirit: CFEs touch consumers’ desire not just for good food but also for memorable experience and fun. One way the Mavrovic Companies have become ground zero for organic grain, bread, and meat production in Croatia is through its Eco-Center, which is an all-in-one research facility, education center, and community gathering place.
- More Social Change: Locals and tourists in Thailand descend in great numbers to one of a dozen Cabbages & Condoms restaurants and resorts not only for the excellent food and hospitality but also because the net revenues, currently about $2 million per year, support the country’s oldest public education campaigns concerning AIDS, safe sex, and reproductive rights.
To analyze the social performance of CFEs, we used a comprehensive survey-based tool designed by a nonprofit called B Lab. We found that each CFE put considerable investment into achieving social goals beyond private profit.
Seven community impacts in particular stood out for us:
- Greater Income: Driven by fairness, most of our CFEs are striving to put more income into the pockets of their farmers, workers, or suppliers. Kasinthula Cane Growers Limited in Malawi, for example, uses fair trade premiums not only to support its 282 sugar farmers but also to help their communities access clean drinking water, electricity, and medical services.
- Training: CFEs enrich their communities’ entrepreneurial resources through concerted workforce training. With 80% of its employees in their 20s, Cargills in Sri Lanka provides free, in-house classes to every employee through its Albert A. Page Institute of Food Business.
- Ecology: Unlike global companies that often exploit, exhaust, and then abandon a resource base, a CFE is tethered to a community’s assets in perpetuity. The Ajddigue Women’s Argan Cooperative in Morocco is thus committed to replenishing the fast disappearing argan trees through an aggressive replanting program.
- Local Economy: CFEs pump up their community economies by hiring locally, buying local inputs, and engaging in and contracting for local value-added production. The Panchakanya Agriculture Cooperative in Nepal, for example, is helping its women farmers grow organic fruits and vegetables using local inputs.
- Charitable Contributions: Local businesses typically contribute more to charity per employee than do global businesses. Some of the most successful CFEs in the United States—White Dog, Zingerman’s, and Weaver Street—actually have started their own community foundations. Sunstar Overseas Limited in India uses the fair trade premiums it earns from global basmati rice sales to support infrastructure improvements in its farmers’ communities.
- Women’s Empowerment: Almost all our CFE examples are empowering women. The leaders and members of the Ajddigue Women’s Argan Cooperative and the Panchakanya Agriculture Cooperative are exclusively women. Dulce Gozon has become a powerful female leader of the National Ongoing Growers’ Cooperative Marketing Association in the Philippines.
- Global CFE Solidarity: Most of our CFEs believe in local food as a movement, and are committed to supporting other CFEs worldwide. The African American farmers of the Indian Springs Farmers Association in Mississippi, for example, have reached out to producer cooperatives in Africa.
Are CFEs replicable in other parts of the world? We believe the answer is “yes,” especially if the successful strategies revealed in this study are widely communicated and adopted. The real key to improving the probability of the next generation of CFEs succeeding is networking and peer mentoring. We recommend creating an open-source model, perhaps a web-based Locopedia, where great business models can be posted from all over the world. A reliable, sophisticated database of small-business innovation could be invaluable. Ultimately, this network should include all kinds of local businesses, not just those linked to food. But food is a catalytic place to begin. For the world’s six billion people, our report suggests that CFEs can provide powerful, self-financing mechanisms for improving their
nutrition, health, and economic vitality.