Distributors Slow To Embrace Local Food Movement

Baby chicks at R&B Acres, a farm in Oregon, Wis., that supplies free-range chickens to consumers through the help of Local Dirt, a national online marketplace for local food.

Published: May 03, 2010

by Jay Field

Local produce and meat are projected to be the two most popular items on restaurant menus this year, according to the National Restaurant Association.

But as more institutions like schools and hospitals look to "buy local," they're finding themselves in a bind -- large food distributors may not carry items those customers are looking for. And fragmented networks of local farms don't know how to distribute the food efficiently.

Inside the cafeteria freezer at Sauk Prairie Memorial Hospital, near Madison, Wis., Amy Miller, the hospital's food service director, points at a pile of spindly thighs and breasts inside a Ziploc bag. Miller provides up to 200 meals a day, and a few months ago, she decided she'd served enough of this mass-produced poultry.

"We wanted to have a product we were comfortable with as far as not having the antibiotics -- all the additives that go into chicken today," Miller says.

Costly Distribution

Miller likes her one-truck-one-delivery-no-hassles relationship with her current supplier, Reinhart Food Service. So she asked the company if it could bring some local organic chickens on the truck. Reinhart told her that food safety regulations made that impossible.

"While these federal guidelines are voluntary, big distributors require them to minimize the risk of delivering contaminated food," Miller says.

Reinhart would not make someone available to speak to NPR despite repeated attempts. But Bob Golden, an industry analyst in Chicago, says that while food safety is a concern, it isn't the main barrier to offering more local food.

"The major distributors are trying to gauge demand, and adjust their orders and offers accordingly," Golden says. "It's very complex and complicated, adding a whole realm of locally sourced foods."

Food service distribution is all about speed, efficiency and keeping costs low. Adding large numbers of local products could force big distributors to open more warehouses and overhaul other operations to ensure timely delivery.

"If a company were going to jump in with both feet at this point, they would probably have to put a lot of upfront investment in," says Kyle Stiegert, a food systems economist at the University of Wisconsin. "That would cut into their profit margins for quite some time."

Stiegert says that for the foreseeable future, such an investment keeps the cost of local food prohibitively high.

"To me, the key is to make local food available, but also to make it price competitive," he says. "Without the price competition, it's going to be harder to get people engaged on this."

Local Initiative

In Dane County, Wis., an innovative effort is under way to reconcile these two issues.

Olivia Parry runs the Institutional Food Market Coalition out of the county's Office of Planning and Development. It began as a program to create more business for the small and mid-sized family farms in and around Madison, and targets institutional markets

At first, Parry had to beg businesses to show up at her meetings. But by last year, the program moved more than a million pounds of local food into institutions in southern Wisconsin.

One resource that she uses is Local Dirt, a national online marketplace for local food.

"We have found a chicken farmer through them that has free-range chickens," Miller says.

Miller is expecting a delivery of 100 birds in early May.

"We've had samples already, and they are fabulous compared to what we used to be getting," she says. [Copyright 2013 NPR]

TRANSCRIPT:

STEVE INSKEEP, host:

Now let's turn to another industry that's evolving. The demand for locally grown food is rising, and it's no longer just small restaurants ordering up organic tomatoes and free-range chickens. Large institutions, like schools and hospitals, are starting to look for locally farmed meat and produce. The problem for them is that big food distributors often don't carry the items they want. And local farmers cannot always deliver efficiently, in large quantities.

There are efforts to change that. Jay Field reports.

JAY FIELD: This story, at its most basic level, is about chicken. It starts inside the cafeteria freezer at Sauk Prairie Memorial Hospital, outside Madison, Wisconsin.

Ms. AMY MILLER (Food Service Provider, Sauk Prairie Memorial Hospital): We've got all our meat on this side. You know, you can see some chicken there.

FIELD: Amy Miller points at a pile of spindly thighs and breasts inside a Ziploc bag. Miller provides up to 200 meals a day in her job as food service director here, and a few months ago, she decided she'd served enough of this mass-produced poultry.

Ms. MILLER: We wanted to have a product we were comfortable with, as far as not having antibiotics, all the additives that go into chicken today.

FIELD: Amy Miller likes her one-truck, one-delivery, no-hassles relationship with her current supplier, Reinhart Food Service. So she asked the company if it could bring some local, organic chickens on the truck. Reinhart told her food safety regulations made that impossible.

Ms. MILLER: They want GAP certifications and all this trace-back methodology that a lot of farmers are not capable of getting because it's so expensive to do that.

FIELD: While these federal guidelines are voluntary, big distributors require them, to minimize the risk of delivering contaminated food.

Reinhart would not make someone available to speak with NPR, despite repeated attempts. But Bob Golden, an industry analyst in Chicago, says while food safety is a concern, it isn't the main barrier to offering more local food.

Mr. BOB GOLDEN (Analyst): The major distributors are trying to gauge demand, and adjust their orderings and offers accordingly. It's very complex and complicated, adding a whole realm of locally sourced foods.

FIELD: Food service distribution is all about speed, efficiency, and keeping costs low. Adding large numbers of local products could force big distributors to open more warehouses and overhaul other operations to ensure timely delivery.

Professor KYLE STIEGERT (Food Systems Economist, University of Wisconsin-Madison): If a company said that, we're going to jump in with both feet at this point, they'd probably have to put a lot of upfront investment in. They would cut into their profit margins for quite some time.

FIELD: Kyle Stiegert is a food systems economist at the University of Wisconsin. He says for the foreseeable future, that keeps the cost of local food prohibitively high.

Prof. STIEGERT: To me, the key is to make locally food available, but also to make it price-competitive. Without the price competition side, it's going to be hard to get people engaged in this.

FIELD: In Dane County, Wisconsin, an innovative effort is under way to reconcile these two issues. Olivia Parry runs it out of the county's Office of Planning and Development. It began as a program to create more business for the small and midsized family farms in and around Madison, and targets institutional markets.

Ms. OLIVIA PARRY (Director, Institutional Food Market Coalition): We've been engaged in systematic outreach and education to institutional buyers in the private and public sector, large-volume buyers, hospitals, hotels, universities, conference centers.

FIELD: At first, Parry had to beg businesses to show up at her meetings. By last year, the program moved more than a million pounds of local food into institutions in southern Wisconsin.

Ms. HEATHER HILLEREN (CEO, Local Dirt): So, let's see - so our searches are based off of miles. So you can narrow it down based off of miles. You can just search for - you can search for farms, you say, farmer's markets.

FIELD: CEO Heather Hilleren is guiding me through her national online marketplace for local food. It's called Local Dirt.

Ms. HILLEREN: This is a price list that works in real time. This is for pick-up at the farm. I can go, and I can look at which ones deliver.

Ms. MILLER: We have found a chicken farmer through them that has free-range chickens.

FIELD: Sauk Prairie Memorial and Miller got hooked up with Local Dirt at one of those Dane County meetings. Amy Miller is expecting a delivery of 100 birds in early May.

Ms. MILLER: We've had samples already, and they're just fabulous compared to what we used to be getting.

FIELD: Reinhart Food Service has reportedly been at many of the Dane County meetings, too. For now, the big distributor may be content to sit back and keep a close eye on the market while others experiment and do the heavy lifting to build a viable distribution system for local food.

For NPR News, I'm Jay Field. Transcript provided by NPR, Copyright NPR.