January 20, 2017

Growing interest in food distribution centers

Pew Trust - In New York City, where shoppers and diners can find delicacies from all over the world, there is hefty demand for food grown closer to home.

The taste for products from farms in the Northeast has led South Bronx-based Greenmarket Co., a nonprofit regional food distributor that serves as the middleman between farmers and buyers, to constantly expand the size and scope of its operation over the last half-decade.

The state of New York has taken notice of its role in the regional food supply chain and in August allocated $15 million of the $20 million needed to build Greenmarket’s new 20,000-square-foot distribution center, commonly known as a food hub. The hub’s staff, which is raising the remaining money from other public and private funders, expects to move in by 2019 and eventually sell $18 million worth of produce, grains, eggs, maple syrup and honey a year.

Like New York, other states such as Michigan, Minnesota, Ohio and Vermont, and the federal government are investing in food hubs as a way to connect small and midsize farmers, who may not have the volume or do not have the capacity to work with large food wholesalers, with businesses and consumers to increase sales.

“It’s not just about buying from local producers but being able to tell the consumer, ‘This is from Farmer Jane, and Farmer Jane has this much acreage, and she grows her food this way,’ ” said James Barham, an agricultural economist for the U.S. Department of Agriculture.

Today, there are more than 400 food hubs across the country, about 30 percent of which are nonprofits. Most are not as expansive or expensive as Greenmarket has become and only require a couple hundred thousand dollars to get off the ground.

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