Building Success of Food Hubs Through the Cooperative Experience - A Case Study Perspective
Severson, Roberta M.; Schmit, Todd M.
A regional food hub is a business or organization that actively manages the aggregation, distribution, and marketing of source-identified food products primarily from local and regional producers to strengthen their ability to satisfy wholesale, retail, and institutional demand (Barham, 2012). While food hubs, per se, have existed for many years, they are receiving renewed attention (and public and private support) as a promising tool through which farmers can market product grown on their farms to access various supply chains. These businesses can serve as a mechanism for small- and mid-sized farmers to access multiple market channels and for large volume buyers to access local or regionally-sourced foods. Fruit and vegetable cooperatives have had decades of experience in sourcing, marketing, and distributing produce on behalf of their members. The experiences in sourcing member product and meeting customer demands by these cooperative businesses, coupled with the social role that cooperatives play within their respective memberships, provides useful information in strengthening emerging food hub businesses so that they remain a viable market opportunity for small and mid-size producers. Findings of the 2013 National Food Hub Survey show that the most successful food hubs are for-profit and cooperative in structure (Fischer, 2013). Cooperative-structured businesses are formed when a group of people come together to overcome a challenge that each have experienced individually or to take advantage of an opportunity, which by working together will mutually benefit everyone. A cooperative acts in the interests of its member-owners and may reduce transaction costs through group action, improve bargaining power, and/or provide services to members that are not available elsewhere in the market. The cooperative is democratically controlled and a board of directors represents the interests of the members. Members own and control the cooperative as they vote for directors who represent them. A cooperative allows members to pool capital and to share risk with profits returned to individual members in proportion to use.