Diana is the founder and director of the Good Natured Family Farms’ alliance. Founded by farmers for farmers, the alliance aggregates products from 125 suppliers around Kansas City and provides it to CSA and wholesale customers. Diana will join us for Transparency, Collaboration & Shared Value in Local Food Economies Nov 7-9 in Ann Arbor, MI.
Diana also farms with her husband Gary on Rainbow Organic Farm, a 400-acre organic and 400-acre transitional farm in southeast Kansas. She is a recipient of the National Agriculture Hall of Fame’s Honor Acre and the SBIR Tibbetts Award.
We had the opportunity to discuss the organic growth of their business, initially by highlighting the difference in quality between their tomatoes and commodity tomatoes, and then using partnerships and existing infrastructure to market expand opportunities for other growers.
Diana Endicott
How did you begin aggregating food from other producers?
Well, it really just organically happened over the last 15 years. We were here at the farm raising greenhouse tomatoes, and we had an overproduction for the market we had nearby. We had a really good relationship with one of the country stores, and then one day I went there and they had a sale that they wanted us to meet. But we would have lost money on it. My husband basically said we should just throw them away rather than take the deal, because it’s not the same quality product and we’re not in the commodity business. We never sold to that market again, and we had all of these tomatoes.
My sisters lived about an hour away in Kansas City, and I asked them where they shopped. I had no background in marketing. I went to a Hen House store owned by Balls Foods with a box of product and found the produce manager. I just walked in and told them about our tomatoes, and he took one bite and said we’ll take all you have. I thought gosh, this is easy.
We put up 6 greenhouses to meet their demand. We were servicing all of their stores and then they started supporting us by doing all the delivery their central warehouse. During that time, everyone knew we were growing the tomatoes and getting them in the stores. Someone called up asking if we could get their honey in the same stores, and after a blind taste test Balls bought it and the honey was the fastest selling honey in four weeks.
So, that’s how it happened and we started bringing everything together and it was about working directly with the store and keeping the farmers calling. We had no infrastructure or ordering mechanisms except calls and emails. Now we work with 125-150 producers and we have about 100 SKUs.
How did you decide to dedicate the resources to moving this beyond a startup?
We started out just trying to cover our costs since we were profitable with sales from our own products. Before Balls Foods started supporting us, we had no resources and our margins were so small, because the idea was to get the farmers what they needed. So, when we started using Balls’ central warehouse that was our early distribution infrastructure. They store a lot of our products for us even for other projects we do, but initially we were just selling to their 30 stores. Why would we build any infrastructure when we had that?
When we started working with produce growers we realized we had too much product. And we realized we needed to sell to more grocery stores, but that we didn’t have any infrastructure and we didn’t want to sell to Ball’s competitors since they’d been so generous and supportive. Around that time, Sysco Kansas City contacted us and they didn’t sell much to grocery stores but focused on institutions. We were also able to use their infrastructure. We knew how to use other folks’ infrastructure to get what we needed done.
Now that’s changing, since we’ve grown and for longevity of the project if something happened to me we need a plan to continue it. So, we’re in the beginning stages of purchasing an existing building with a lot of freezer and cooler space that will be our own distribution center. This will be operated under our non-profit called the Food Conservancy.
What have been challenges to this growth?
Being able to afford the resources, the man-hour resources, to manage everything that needs to be managed while also moving forward before you’re generating enough income. That gap in growth and personnel can be very stressful for your management team. There are two of us managing the Kansas City effort and they we have other folks doing very specific jobs. In some ways that’s good, because you have the depth to understand what works and what doesn’t, but eventually that has to change.
What are the lessons you have to share for others doing this?
We went with the model where you can partner with existing infrastructure and move your food through partnerships, which has the advantage of no money upfront, but it’s limiting. We really needed to have a for-profit and a non-profit structure. The for-profit is the driving force growing the business, while the non-profit handles the training, the outreach, the marketing – all the things that have to be done but that are inefficient for the business to do. We can bring really good product to the marketplace and get good returns to the farmers, but it’s hard to support the training and marketing just through the for-profit’s sales.
Everyone who works to buy or sell local, sustainable food is reshaping the food system—and that’s no small task. Local Orbit works with large-scale buyers and small and mid-sized suppliers to streamline the work of sourcing, selling, and delivering local and sustainable food, and connecting regional food systems. We’resingularly focused on enabling transparent, safe, and fair supply chains.
Food supply chains are complex. Changing entrenched systems is challenging work. And it requires skills, patience, and the development of infrastructure that’s not the sexy face of the farm-to-table story — but it’s work that drives real change, and it’s often behind the scenes.
Julia Belluz wrote a terrific analysis of a quiet, patient change-making endeavor in Vox: How Michelle Obama quietly changed what Americans eat. If you care about changing the way we eat, this is an excellent case study in implementing complex change among multiple stakeholders at a massive scale – with patience and grace.I’m sharing some highlights here, and I encourage you to read the full article.
What people don’t understand is just how hard change really is, how hard every right and every victory comes — particularly in this day and age, with Congress deadlocked and cynicism at all-time highs.
Shortly after President Obama was elected to the White House in 2008, first lady Michelle Obama divulged some sensitive, personal details: The Obama children, Malia and Sasha, were gaining weight.
In interviews and speeches, she described her worry about her family’s health and a pediatrician’s warning that her daughters’ body mass index (BMI) was creeping up.
“Even though I wasn’t exactly sure at that time what I was supposed to do with this information about my children’s BMI,” the first lady said in 2010, “I knew that I had to do something. I had to lead our family to a different way.”
That personal struggle became political. Obama has spent the bulk of her time in the White House doing something unprecedented for a “mom-in-chief”: pushing hard against childhood obesity. Today, her Let’s Move campaign is her highest-profile endeavor, far better known than her Joining Forces campaign to support service members and their families, or Let Girls Learn to advocate for girls’ education around the world.
But I have to admit something: I was skeptical of the influence Obama could have on the nation’s health…
She wanted to both “create a space that anybody who was serious about becoming a part of the solution had a seat at the table” and move past the gridlock and finger-pointing that characterized many public health food fights.
…I wasn’t confident that FLOTUS, with no legislative power, could make a dent.
Then I spoke with a dozen people who worked closely on her campaign, as well as the health and food policy researchers who studied it. (Despite repeated requests, Obama’s office did not grant an interview with the First Lady on childhood obesity — and she has demurred from discussing the details of this work with other members of the press as well.)
I learned that some of the very things that made Michelle Obama sometimes appear soft — the industry collaborations, the emphasis on exercise — were part of the shrewd strategy that made her effective. Through her leadership, the Obama administration seized on a moment when America started paying attention to food, and made fighting obesity a top priority — both symbolically and legislatively.
Obama planted a garden, waged snappy social media campaigns, and worked behind the scenes with researchers, lawmakers, heads of government departments, schools, and food giants to quietly change what Americans eat.
Even observers who previously worried about Obama’s food industry partnerships now called her advocacy “brilliant,” “unprecedented,” and a “godsend.”
Saul Loeb/AFP/Getty Images Michelle Obama eating lunch with kids in Alexandria, Virginia, January 25, 2012.
They decided that rather than lambasting industry or criticizing industry, they should invite companies or the private sector to participate, and I think they made it clear the bar was going to be high in terms of what legitimate participation would look like.
“All that attention to the issue has really helped push the discussion forward,” said Kelly Brownell, a Duke University obesity researcher — and former critic. Observers said this administration — largely because of the first lady’s focus — will have more of an impact on obesity in this country than any other in recent history. (Obama is also the only modern FLOTUS after Hillary Clinton to have a major influence on policy initiatives.)
Marion Nestle, the longtime food policy researcher who was also previously skeptical of the first lady’s approach, is now among the impressed. “This was the first time in my life someone in the White House was interested in the same kinds of issues I’m interested in,” she recently told me. “We’re going to look back in 10, 20 years and wish she were still around.”
….So how did Michelle Obama manage such a contentious change?
Paul J. Richards/AFP/Getty Images Former White House chef Sam Kass, pictured here with the first lady and schoolchildren, did a lot more than plant the White House garden.
As owner and President of Schu’s Hospitality, Larry oversees restaurant development, hospitality management services for food, service/lodging, strategic consulting, and niche consumer food products for a variety of clients. From 2014-2016 he was the interim Business Development Director of Food, Beverage and Hospitality for The Henry Ford. Larry has a long family history of food and hospitality experience, including owning and operating Schu’s Grill and Bar for 24 years.
We spoke with Larry about how local food procurement has changed over the past several years, and how local food is both a challenge and opportunity to institutions.
Larry Schuler, Shu’s Hospitality
What’s the biggest challenge you see for large institutions purchasing local food?
The reality is that really maturing the farm to table model has been major challenge. Where do we source the product? How do we qualify it? How do we manage every farmer that comes to the back dock? How do we, as foodservice directors, stay in step with the rest of society? Sustainability is a big key word. But there are suppliers that have not been able to keep up with the trend. It takes a lot of time and effort to move juggernaut suppliers.
Tools that help you manage the farmers and connect to new farmers that are growing other things are important. There’s no way I’m going to be able to get in my car and drive around to every farm in the region to identify supply and pick up my radishes (or whatever). Flexibility and information about inventory are also necessary. If I’m normally buying 10 cases of something, and a supplier can easily say they only have 6 available, I can buy those 6 and find the other 4 somewhere else. That’s a big deal!
Our industry is still about relationships. We’re one of the last industries to get into technology. Now we’re starting to move at breakneck speed, but there’s no substitution for a warm handshake. And it gets right down to the final product that the guest or customer is eating. The product you represent provides a portal for relationship building with the end user and the supplier. You can create relationships with farmers, and if you’re willing to make a commitment to a supplier or farmer, they’ll grow more for you.
What has evolved in local food procurement over the past 5 years?
First of all, the big boys that have the resources, like Gordon Food Service and Sysco in our region, they’re all challenged with supplying to their end user the freshest product possible as well as the healthiest product possible. Those that realized this need some time ago are ahead, but are still challenged to meet the goal of local food. For the first time in many, many years, I’m seeing large suppliers that realize they need to be able to deliver the promise of local food if they want to compete. It’s one thing for a small restaurant – because of the volume you can source differently – but the need is growing in institutions as well. It has to be regionalized. Right now we get great products from California, but when it’s in season we should be able to get regional products.
Menu design is another big change. We need to design menus in a regional and seasonal fashion, and consumers are becoming more attuned to that. Now they’ll look at me and say, it makes sense that we serve pickled products in the dead of winter. The good restaurant companies have always been fairly attuned to this. Today even the fast food industry is waking up to this, just look at Chipotle or Qdoba.
What makes you hopeful about the local food system?
I’m not only hopeful but also excited about the expanding opportunity for agriculture today. Many years ago – 100 years ago – it was a way of life, but we got away from it. There was an emphasis on processed foods and the way of the farmer was pushed to the side and it was hard for a small farmer to make a living. I think there’s honor in that. It’s kind of like our industry for so many years. We were considered the burger flipping industry. If you were in the restaurant business people asked what you were going to do for your real profession. If you weren’t an owner you weren’t considered a real professional, but in Europe that’s not true. America has awakened to that, and I think television has helped with all the cooking shows.
I’m excited about what I’m seeing in the agricultural industry, it’s dedicated to healthier foods with fewer antibiotics and more humane meat. It’s going to change the way we’re buying; you’re going to see a more whole approach.
Is there one thing institutional foodservice operators can do today to increase local purchasing?
I am doing a lot of advising and consulting in that arena. Where do we go in the next ten years? How do we set up our kitchens and our receiving and our dining rooms to address this? Labor is a big challenge, not only finding it but training and paying for it. A full service model is expensive. As an independent operator, how can you handle that? I’m advising looking where your customer is now and where they’re going in terms of palate demands. Don’t think about the now, think ahead. The next 5 years are going to be a big opportunity for regional foods.
Over the past few months, Local Orbit has published several blogs with a similar theme: managing change. Change occurs in every business and organization – and it’s a sign of health, related to managing growth, embracing new opportunities – or taking action to fix a problem.
To address the changing needs of customers, markets, and suppliers businesses may change the products they offer, their pricing, or how they market and communicate. They may also change their internal processes and systems in response to external shifts and growth. But change can be difficult to manage, especially when your current work still requires your attention.
In a previous post, Local Orbit COO Eric Meister addressed how indecision – the failure to act on needed change – could be costly to a business. In a post on incremental change, Jackie Cohen discussed the iterative approach we take to building the Local Orbit platform. For software development, this means over time we implement smaller parts of large features without significant disruption to our customers. Any kind of business can apply a similar iterative approach to managing the process of change.
We work with a diverse range of businesses, with many different business models, to help them transition to new processes and systems. The most frequent shift we see with our current and prospective food hub customers is the addition of restaurant and/or institutional customers to an established consumer business model.
Adding to a new market segment involves many considerations. You need to identify new customers, understand their needs, and evaluate whether there are enough of them to create a viable revenue stream. You need to determine what product offerings will change; how to work with suppliers to manage new volumes and pack sizes; create processes for ordering, order management, and fulfillment; and re-think your marketing.
You’ll also need to examine whether the shift requires new staff or physical infrastructure, or whether to establish new supply chain partnerships to support these changes. And you’ll need to update your financial models and forecasts to understand how all of these variables play out with the fiscal health of your business.
If you tried to address all of this simultaneously, your existing business would suffer and you would almost certainly become overwhelmed. And, no matter how well you plan, you won’t get everything right.
Instead of investing all of your time and money developing a perfect, all encompassing plan and trying to do everything at once, you can set up some well-defined experiments that enable you to test. It may sound simple, but the key to tackling a project like this is to start with smaller changes that you can build on to achieve a larger goal.
For the example above, this may mean working with one or two suppliers and one new institutional customer for a limited time. Before you start, clarify your thesis (assumption) and establish a simple, measurable goal that can be achieved within this time frame. As you experiment, you can analyze and learn, then iterate, adding and expanding on the experimentation until you find what works.
When you implement change gradually, you alleviate the risks and stress of change – while also creating more valuable solutions to your customers’ problems and more effective internal business processes.
Using an iterative approach, you’ll not only tackle change in a manageable way, your business will become more agile overall, which becomes an advantage that will help you continue to change in order to meet the evolving needs of your customers and ensure long term success.
Ever struggled to get your organization to consider a change or have your organization evaluate a change and then stall on taking next steps? Identifying the cost of indecision can reduce the organizational inertia that prevents you from moving forward.
When evaluating change, most organizations focus on future benefits: increased revenue, reduced costs, improved customer satisfaction, or achieving organizational sustainability goals (increased local and sustainable food purchasing). Attention quickly focuses on the relative certainty (or uncertainty) of these benefits. And because every change involves some level of uncertainty, the risk of taking action and not achieving the proposed benefits quickly dominates the conversation. This is typically when the process slows down and indecision takes hold. In contrast, the potential outcomes related to not taking action tend to be more certain. This increased certainty can be used to reduce indecision.
The cost of indecision, or the opportunity cost of taking no action, is a combination of the size and probability of not changing and the conservative estimate of the future benefit.
An example:
A corporate dining director has experienced food cost increases of $50,000 over the last year with no changes in menu composition or meal volume. If no change occurs, it’s certain that they will increase by the same amount next year. Changing the menu composition will result in a 25% chance of $25,000 annual cost reduction and 75% chance of a $75,000 annual cost reduction.
The cost of indecision is $112,500 or $9,375/month calculated as follows:
[$50,000 X100%]+ [($25,000*25%) +($75,000 *75%)] = $112,500/12=$9,375 per month
This number represents the cost to the organization each month that no action is taken. This calculation could be used with any metric not just costs and provides a higher level of certainty than just using future benefits
Tips to creating a credible cost of indecision:
Identify the stakeholders in the change process – Who will be impacted by the change? – accounting, sales, operations, customers, partners, etc.
Identify the current measures and metrics that are impacted by the change – know the metrics for stakeholders outside your specific area of specialization.
Focus on incremental changes that reduce uncertainty and increase the probability of the outcome.
Make the cost of indecision visible from the beginning to the end of the evaluation process – recognizing that it will change as you get new information.
Having the cost of indecision visible to decision makers as the organization progresses through the evaluation process puts a value on the timeliness of the decision and can be a powerful incentive to take action. It’s an important part of managing change in your organization, and can help you commit to hard choices that will bring substantial benefit.
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Paul J. Richards/AFP/Getty Images Former White House chef Sam Kass, pictured here with the first lady and schoolchildren, did a lot more than plant the White House garden.
