Last year we highlighted LINC Foods’ work with Gonzaga University to overcome logistics challenges in order to get local produce into university dining halls. We’re big fans of LINC’s work, not just because they’re a Local Orbit customer – but because co-founders Joel Williamson and Beth Robinette are resourceful entrepreneurs who are developing one of the most innovative food hub business models in the country.
The New Food Economy published an inspiring story about LINC’s work within the Spokane foodshed to build “the infrastructure for truly local beer.” It quotes Carl Sagan: “If you wish to make an apple pie from scratch, you must first invent the universe.” — an on-point analogy for what we’re seeing across local food chains, and the kind of vision and effort it takes to change the way communities eat.
Local beer takes more than a taproom. Just as bakers need flour for bread, brewers need malted grains to brew. The problem is there’s a scarcity of local malthouses—the facilities that germinate grains, so brewers can use the starch to feed fermentation. If you want to make truly local beer, don’t start a brewery. You’d better get busy and build a malthouse.
Here’s an excerpt that focuses on the beginnings of LINC’s distribution business – and their continuing process of asking questions, bootstrapping, learning, experimenting and evolving.
Farming is a way of life in many areas outside the city of Spokane. But here, as is the case in much of rural America, there is very little connection between what people grow and what they eat.
photo by Chris Lozier via The New Food Economy
“I drove through seven miles of wheat hills to go to school,” says Beth Robinette, co-founder of LINC Foods, a worker- and farmer-owned for-profit that distributes everything from carrots to meat. And yet she remembers how astonished she was that, despite the fields she passed every morning, she could not get local flour in the grocery store.
Today, LINC Foods, which stands for Local Inland Northwest Cooperative, is in the malting business—but that came about almost by accident. It happened because Robinette met her business partner, Joel Williamson, through their shared interest in social change, which led each of them to the Bainbridge Graduate Institute in Seattle. As they finished their education, they decided to tackle something together in Spokane.
A city council member got a group of people together to investigate how local foods could drive the local economy. There was talk of forming a food policy council. Gonzaga University held a meeting with farmers, and the two were invited to that too, because they were gaining a reputation for being experts in the field, even if their expertise was mostly curiosity.
“We started asking what problems food servers and farmers were having,” Robinette says. She and Williamson thought about forming a cooperative business to help thread the food from farm to institutions and other potential buyers. They decided a small farms conference would be a good place to test the idea. At a lunchtime break during a small farms conference, they announced a meeting of their own, and at the end of a very long day, 35 farmers came to talk and listen.
“We thought that was a good indication that we should do this,” says Williamson. He and Robinette took the most interested farmers and got serious, figuring out what kinds of services to provide growers and buyers. They formed a board and incorporated as a co-op in August 2014.
The early stages were just filling up a Scion in a parking lot with produce, and helping to distribute it, figuring out how to overcome the barriers Gonzaga had for procurement, and seeing what public school districts could purchase.
“We were scrambling, trying to find supply for the demand we had, or meet demand for the supply we had. We learned a lot about what else we needed to do. Learning by doing is painful but it works,” he says.
Soon, LINC Foods started working out of the local food bank, which offered it access to cold storage for free. The food bank appreciated their effort, and had some extra space, so they set some ground rules for collaboration, and the cooperative relied on their infrastructure for two years.
In the meantime, the founders were still busy accumulating knowledge and tools, and were enrolled in a program at the University of Washington in Seattle, the Buerk Center for Entrepreneurship’s Jones & Foster Accelerator. This intensive mentoring process had a prize of $25,000 for completion. The cash was very alluring, an amount that could address the need for their own warehouse space and delivery truck. But the process itself proved at least as useful because that’s where they came up with the idea for the malthouse.
The accelerator forced them to get realistic about business plans. They saw they’d have to pad the financials to support the enterprise through what they predicted would be five lean years. Doing some type of food processing seemed like the way to add value to operations, but once they looked into processing carrots into baby carrots or coins for institutions, or making berries into jams, they realized the equipment was too expensive and the margins were too thin. Williamson, however, happened to be a home brewer. And they were surrounded by all that grain, so how about malting? The potential profits for malt were more attractive. And the panel of mentors at Jones & Foster loved the idea.
Less than a year after they’d incorporated the cooperative, the two went to their membership and proposed starting a malthouse. The idea was received with some skepticism. How would malt serve the cooperative, whose members were mostly growing fruits and vegetables? And did a startup—already precarious—really need another startup stacked on top? Robinette and Williamson were able to state their logical case, and began pursuing the secondary enterprise: a malthouse called Palouse Pint.
Read the full article on The New Food Economy.
The most significant cost of software has nothing to do with technology.
It’s the cost of user engagement and adoption within your organization once you choose the software.
Ease of use one of the most significant measures of success.
If your team (or your buyers, suppliers, and other partners) don’t find the software easy to use, it’s going to cost a lot to keep them engaged, and a lot to train new users.
As you scale your business, this gets increasingly expensive and could potentially limit your growth. When you’re evaluating new software it’s critical to ask:
- What will it cost to train our team – today and in the future?
- Will our team enjoy and use these tools to their fullest capacity to help our business?
Local Orbit’s highest priority is simplicity and thoughtful design – both when we make a decision about our own software development, and when we choose the services we use to run our business.
Complicated tools or clunky user experience are very costly over time.
Transparency is good for business. “The drivers of consumer value appear to have fundamentally changed, with far-reaching implications for the food and beverage industry. Traditional drivers (Taste, Price, and Convenience) no longer represent the dominant influence of consumer purchase decisions. Roughly half of consumers now weigh evolving drivers (Health & Wellness, Safety, Social Impact, Experience, and Transparency) with at least equal importance.” (Capitalizing on the shifting consumer food value equation)
Effective local food marketing can increase sales volume and profit margins. “Testing showed that when given a choice between local and non-local foods, the average sales for local products were higher than the non-local options, and consumers were willing to pay upward of 10% more for locally grown produce.” (The impact of local food marketing on purchase decision and willingness to pay in a foodservice setting)
90% of buyers in a recent Local Orbit survey want access to marketing materials to promote their local food sourcing to customers.
We are thrilled to add On-Demand Table Tents and Posters to Local Orbit’s growing list of tools to support transparency across the supply chain.
Any buyer or market manager can download table tents or posters in real-time, with producer and product stories for every order – as well as the food hub or distributor brand.
Tell the story of what’s actually on the menu this week – with a single click! On-Demand Table Tents and Posters are available on the newly released Accelerate Plan.
Current Local Orbit customers can lock in deeply discounted pricing by January 31.
Contact us for details.
As 2016 winds down, we’ve put together a shortlist of resources and organizations working on key issues related to building and maintaining sustainable local food economies.
If you’re looking for some end of year reading, or if you’re still thinking about where to make your donations, here’s a cross section of organizations that address and educate us about some of the most significant challenges facing food, farming, and the environment. (in no particular order)
No everyday decision has a bigger impact on our health—or the health of the planet—than what we eat. The Natural Resources Defense Council works to safeguard the earth – its people, its plants and animals, and the natural systems on which all life depends.
No Farms No Food: American Farmland Trust tackles the biggest threats to our nation’s farmland and family farmers.
The National Young Farmers Coalition supports practices and policies that will sustain young, independent and prosperous farmers now and in the future.
The Pollinator Partnership’s mission is to promote the health of pollinators, critical to food and ecosystems, through conservation, education, and research. Signature initiatives include the NAPPC (North American Pollinator Protection Campaign), National Pollinator Week, and the Ecoregional Planting Guides.
ReFED is a collaboration of over thirty business, nonprofit, foundation and government leaders committed to reducing food waste in the United States. 27 SOLUTIONS TO FOOD WASTE
Farmworker Justice is a nonprofit organization that seeks to empower migrant and seasonal farmworkers to improve their living and working conditions, immigration status, health, occupational safety, and access to justice. We work with farmworkers and their organizations throughout the nation.
Holistic Management is a process of decision-making and planning that gives people the insights and management tools needed to understand nature: resulting in better, more informed decisions that balance key social, environmental, and financial considerations.
Marion Nestle is one of the sharpest and most astute writers at the intersection of nutrition, food safety and policy. She also offers this list of useful resources.
Civil Eats is a daily news source for critical thought about the American food system. We publish stories that shift the conversation around sustainable agriculture in an effort to build economically and socially just communities.
image from http://www.keepcalm-o-matic.co.uk/
I’m sharing my response to a recent thread on the National Good Food Network Food Hub Collaboration Discussion Group, started by a question:
We are wondering what policies (and how strict) have been put in place by other food hubs regarding individual producers making sales to existing food hub customers outside of the food hub. How have these policies worked? How have you enforced them?
While there were replies about specific policies, of varying complexities, the best advice on this thread was the simplest: “We have talked openly with our producers about their concerns.”
If a producer is selling elsewhere around the hub and competing against you, it could be that they don’t perceive enough value in your services, or the relationship needs to be further nurtured and differentiated from other sales channels.
As food hubs face increased competition from other distributors, understanding and refining your value proposition to both suppliers and buyers is critical.
Since your suppliers are also your customers, talking to them before constructing excessive policies and contracts is likely the best strategy. Through this discussion, you can both increase the producer’s understanding of your business needs and refine your approach to working together as collaborators – ensuring that you have more than a transactional relationship.
Collaboration outperforms policy – similar to Peter Drucker’s often cited “Culture eats strategy for breakfast.” Everyone working to build healthier, transparent, local supply chains is working to change entrenched legacy systems. The only way this will happen is by creating a culture of collaboration among partners.
Collaboration can be hard to manage in the flurry of day-to-day operations. But for food hubs and producers, developing a clear understanding of shared value – and working together to maintain it – ensures viability in the evolving food market.
A note: It’s generally good business for producers (and any business) to diversify their sales channels. This might take different forms – a farmers market or CSA alongside wholesale channels through a food hub, for example. It could be selling some products directly to processors/makers, and other products through food hub channels.
It’s important to understand whether your producers do have appropriate diversification to ensure their ongoing viability, and to demonstrate that you care about and will work with them to support this.
Related reading: Dan Hobbs of the Colorado Food Hub Network discusses competition and collaboration among food hubs in this interview we published in September.