Dear NGFN Partner,
On July 14, the Wallace Center/National Good Food Network will announce the report of
financial benchmarks for local food hubs. (For reference please see
http://ngfn.org/resources/food-hubs/benchmarking-study/press-release-food-hubbenchmarking-study )
Localize It!
We would like to see you be able to profit directly – by leveraging the national story to bring
local media attention to your hub.
Below are study talking points and a customizable media release.
Please use these resources to help your organization gain regional coverage in tandem with
the Wallace Center’s national outreach. Your local efforts can introduce your work to more
people and also help spread the word about these valuable benchmarks.
Let us know if you’d like to pursue this and how we can help! Contact Jeff Farbman, Wallace
Center senior program associate, at 703-879-3007, jfarbman@winrock.org.
A. TALKING POINTS
You can use links to any national stories our work generates to pique the interest of local
reporters. Or a reporter just might call you if they see the news. In either case, you can use
the Counting Values study talking points below to provide national context for sharing your
own regional food system experience.

The benchmarks are a tool for food hubs to improve their business performance.
The study makes available—for the first time—comparative data on a sector-wide
basis.

The benchmarks can help capital flow to the sector because the data help answer
questions from lenders, grant makers, and other investors. They shed light on how
food hubs balance business operations (aggregation and distribution) and
programmatic activities (farmer capacity building, community outreach etc.).

The study itself is another indicator that the local and regional food sector is
growing. It represents a critical mass of both entrepreneurs and investors involved in
building food hubs as a marketing channel for smaller farmers and as a solution for
larger-volume retail, restaurant, and institutional food service buyers.
B. CUSTOMIZABLE RELEASE
You can also just push the news out there in your local area by customizing our national
release to share your local story. In yellow highlight are areas for you to provide your local
information.
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Embargoed For release: July 14, 2015
MEDIA CONTACTS
[insert local contact NAME, TITLE]
[insert local ORGANIZATION]
[insert local PHONE, EMAIL]
John Fisk, Director
Wallace Center at Winrock International
jfisk@winrock.org
Data dive explores financials at wholesale end of local food business
Entrepreneurs, investors will use new metrics to make local food more widely available
[YOUR LOCATION] Local food supplier ORGANIZATION says new data about its
groundbreaking business sector will help it grow.
The COUNTING VALUES: Food Hub Financial Benchmarking Study provides an in-depth look
at the growth—and growing pains—of wholesale intermediaries called food hubs. These
social enterprises combine food aggregation/distribution business services with programs
that strengthen farmer capacity to supply nearby markets such as restaurants, grocery
stores, schools, universities and hospitals.
What [ORGANIZATION] learned from study data and analysis. (Relate to your enterprise.)
Description: [ORGANIZATION] expects to generate $xxx in sales in 2015. Working with xxx
farms, food hub currently supplies xxxx customers including how many of each type
COUNTING VALUES draws on financial and operational data from 48 of the more than 300
regional food hubs in the nation. The analysis uses an established benchmarking practice for
comparing results within particular sectors to develop baseline performance measures.
Initially envisioned as a planning tool for hubs to improve themselves by benchmarking
their business performance against industry peers, the study is taking on an additional
larger purpose. Based on their review of preliminary findings, philanthropies, investors and
lenders recognize the study’s wealth of data as a starting point to guide the flow of capital
into the new local food sector.
Almost half of all hubs are less than five years old. During this time, many experienced
double digit annual growth rates. More key findings below.
Tool for managers, suppliers and investors
“This study provides the first set of financial and operational performance benchmarks in a
business sector that suffers from a lack of data,” Counting Values’ lead author Erin Pirro
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says. She is a farm business consultant with Farm Credit East, a Connecticut-based lender
serving New England.
“This comparative data is intended for food hub management,” Pirro says. “It can also be
useful to farmers and food producers as well as lenders, investors, and grant makers. All
need to understand where the risks are for each stage in the value chain and for the sector
as a whole.”
The financial benchmarks are designed to help food hub operators generate sufficient
revenue to achieve economic sustainability. Pirro contends only profitable enterprises will
be in a position to also achieve hubs’ unique social change goals.
One participating hub is Firsthand Foods—a sustainable meat marketing/distribution
company that connects a supply network of 60+ North Carolina farmers with a customer
base consisting mainly of restaurants, institutions and retail grocery co-ops. Last year, the
Durham, NC-based company generated $1.25 million in sales. Last winter, the company
reached breakeven point for the first time.
Co-CEO Tina Prevatte says study findings show that Firsthand Foods is in a similar place as
so many of the other start-up hubs around the country. “This study provides useful metrics
that will allow us to more effectively track our progress in a brand new industry. We’re
building something that is different from the traditional food industry. Slim margins and
operating near breakeven are actually signs of success when your intention is to make good
food accessible to all while also paying farmers fairly and equitably.”
Forward step for local food movement
The availability of this new sector-wide performance data may appear to be a mundane
development. However, Counting Values represents a significant advance in the business of
moving local food into high-volume sales channels.
“When we started almost seven years ago, we were hard pressed to find anybody willing to
share numbers or intelligence,” recalls Haile Johnston, co-founder and co-director of
Common Market. This year, the Philadelphia-based non-profit hub expects to generate $3
million in sales by supplying 250 customers—including 20 hospitals and 90 schools—with
products from 85 Delaware Valley farms.
The lack of reliable data has impeded local food sector investment, says Kate Danaher,
lending manager with RSF Social Finance. This three-decade-old, San Francisco-based
financial services organization makes investments, loans and grants to non-profit and forprofit enterprises—including more than $5 million in loans to 11 hubs.
“Over time RSF expects this study to act like a compass – a true north of sorts— revealing
the operational trends that will validate an organization’s business model and path to self3
sufficiency,” Danaher explains. “For funders, these trends will inform how we choose to
support and capitalize this movement.”
The United States Department of Agriculture also recognizes the strategic importance of
hubs in the growth and development of the wholesale end of the local food business. On
Wednesday July 15, USDA is releasing Running A Food Hub: Lessons Learned from the Field,
(http://www.rd.usda.gov/files/SR_77_Running_A_Food_Hub_Vol_1.pdf) the first in a series
of technical reports to help food hubs plan for success, address challenges and achieve
viability.
The United States Department of Agriculture also recognizes the strategic importance of
hubs in the growth and development of the wholesale end of the local food business. On
Wednesday July 15, USDA is releasing Running A Food Hub: Lessons Learned from the Field,
(http://www.rd.usda.gov/files/SR_77_Running_A_Food_Hub_Vol_1.pdf)
the first in a series of technical reports to help food hubs plan for success, address
challenges and achieve viability.
[ADD relevant quotes from your hub management or investors/funders]
National Good Food Network
Counting Values is a joint product of the Wallace Center at Winrock International and the
Farm Credit Council. The Wallace Center is a Virginia-based non-profit that hosts the
National Good Food Network (NGFN), a learning community of individuals and
organizations pursuing market-based approaches to a more sustainable food and farm
sector. NGFN partner Farm Credit is a nationwide network of locally-owned lenders to rural
communities and agriculture. Farm Credit has a specific focus on helping young, beginning
and small producers, who are vital the economic health of agriculture and rural industries.
Walmart Foundation support for the study builds on investments that other funders, such
as the Surdna Foundation, Kresge Foundation, and the U.S. Department of Agriculture, have
made in the Wallace Center’s work to support the larger-volume side of local and regional
food system development.
Wallace Center director John Fisk said: “Counting Values is designed to help values-based
food businesses be financially viable and grow, and to help capital flow. It offers a starting
point to better assess different enterprises throughout the entire food value chain. This
type of research needs to be continued over time, at the same level of detail, to support
overall growth of the good food sector.”
Phil Henderson, President of the Surdna Foundation, said: “Ensuring that low wealth
communities and communities of color are co-architects in improving their access to
healthy regional food, is critical to sustainability. A sector wide financial analysis of how
food enterprises are striking a balance between profit and social change, can serve as a
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valuable resource to local leaders interested in food hubs and other models as solutions for
their communities.”
Key Findings
To provide a clear financial picture across these social enterprises, Counting Values
separated food hubs’ business income and costs from grant and donation income and
related programmatic costs. This allows for comparison on a common gross profit margin
basis.
Counting Values found that most food hubs operate around the breakeven point, with some
higher capacity, experienced, and direct-to-consumer food hubs on the profitable side. The
study did not analyze food hubs’ other economic, social, and environmental performance.
Most have entered the wholesale business as a means for achieving these other outcomes,
and some seek philanthropic support for that part of their work. A complementary study,
the National Food Hub Survey, provides more across-the-board information. Results for the
most recent Survey are expected in the fall.
REVENUES: Net product sales account for 89 percent of participating food hubs’
revenues. Grants and contributions amount to 6 percent. Both for-profit food hubs
(62%) and non-profit food hubs use grants and contributions to cover missionrelated activities such as wholesale capacity training for farmers or youth
engagement programs.
Other activities such as equipment rental or events account for almost three percent
of revenues. Membership fees, delivery fees, and miscellaneous income each
account for less than one percent.
PROFITABILITY: The typical food hub operates at a breakeven level. The highest
performing 25 percent posted a 4 percent profit compared to the sector benchmark
of -2 percent. Within this relatively narrow spectrum, the most profitable food hubs
were larger, older, and for-profit operations. Those with sales greater than $1.5
million logged a profit of 2 percent while food hubs between five and 10 years in
operation earned 1 percent profit. For-profit food hubs earned a 1 percent profit
compared to not-for-profit food hubs, which posted -7 percent before consideration
of grant income or contributions.
EFFICIENCIES: The top 25 percent of hubs spent 39 percent more on labor (cost per
worker equivalent). Those workers outperformed their peers by 56 percent (sales
per worker equivalent). These factors can make a big difference in a thin margin
business. The gross margin of the typical food hub in the study was 14.5 percent.
That means only 14.5 cents of every sales dollar remained after selling the product
to cover overhead or leave profit.
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MANAGEMENT: Benchmarks’ true power is using data along with good management
records to focus on improvements for the coming year. Each participating hub
received an analysis of their financial performance compared to the benchmarks
reported in this study. Hubs that use the benchmark data in combination with
sound financial, operational, and marketing practices will enhance their capacity to
optimize value to all players in the regional food system. Farmers, food producers
and communities will benefit. So will lenders, investors, and grant makers. Sustained
profitability for regional food hubs is critical to the emergence of this new force for
community economic development throughout the United States.
NOTE: To provide a clear financial picture across these social enterprises, Counting Values
separated food hubs’ business income and costs from grant and donation income and
related programmatic costs. The social and environmental benefits that hubs generate are
the subject of a National Food Hub Survey that’s expected to be released in fall 2015. The
survey is a project of the Michigan State University Center for Regional Food Systems and
the Wallace Center at Winrock International. Together, these two studies provide the best
available data on intermediated market channels for good food products and practices.
ABOUT [ORGANIZATION]
Insert information here about your organization and its regional food work in the region.
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