The business of building a better food system

October 12, 2017

Source: In Good Tilth
Author: Alex Taylor

In the outskirts of Detroit, three small food companies, Marcia’s Pickled Munchies, Scotty O’Hotty hot sauces and Premier Foods, are converting an old hummus factory into a cooperative packing facility called FEAST. This way, these small companies can own and operate a large-scale, modern, up-to-code packing plant that none of them could have afforded alone. And there’s room for more food startups to join them.

Finding this kind of space presents a hurdle to food businesses as they start to expand.

“You start in these incubator kitchens, you get some orders. When you start to scale, two out of five companies go out of business because they don’t have the capital to get to the numbers that they need,” explained Scott Owens, chairman of the board at FEAST and co-owner of Scotty O’Hotty, with his wife Suzie. “FEAST is filling that void.”

And FEAST is just one more link in a network of businesses and nonprofit organizations that bolster the vibrant local food business community here.

The incubator kitchens that Owens mentioned, such as Detroit Kitchen Connect, do much more than just provide food entrepreneurs with kitchen space.

 

“The first part is to walk them through the licensing,” said Anika-Kafi Grose, director of Detroit Kitchen Connect. “We have a head chef who works with folks on how to scale their recipes. We make sure that they have the information to know how to manage packaging, what needs to be on the label, to make a product that’s not just delicious but also eye-catching to the customer.”

If needed, Grose can connect business owners with organizations like Michigan State University’s Product Center to identify what they need to grow. That’s not too difficult, because both the Product Center and Detroit Kitchen Connect operate out of Detroit’s Eastern Market, a farmers market that’s been operating as a food hub in the city for more than 125 years.

“I can’t say enough how much these organizations and resources are there to help,” said Michal Nodel, business development manager at Marcia’s Pickled Munchies.

 

The support doesn’t stop with space and consulting, either. Part of the financing for FEAST came from the Michigan Good Food Fund, a $30 million loan fund administered in part by the nonprofit Fair Food Network. The fund is devoted to financing socially and environmentally responsible small food businesses, particularly those focused on healthy food access in low-income neighborhoods.

“FEAST is a collective food enterprise that’s creating new jobs for the community, and also building the capacity for other food entrepreneurs to process, co-pack and develop their product,” said Jean Chorazyczewski, program director for the fund.

“These are local businesses that are procuring their ingredients from large and small farms, creating relationships with local farmers and giving them an opportunity. They’re producing healthy food and creating opportunities for others to do so.”

 

At first blush, it may seem strange that for-profit food businesses would get financial and logistical support from nonprofit organizations like the Fair Food Network, Eastern Market, MSU’s Product Center, FoodLab Detroit or Tilian Farm Development Center. But it’s all part of a wider strategy to build strong, resilient local food economies, and ultimately to remake America’s food system from the bottom up.

A System Failing Too Many

In many ways, the United States is a food powerhouse. American farmers and ranchers produced more than $350 billion worth of food in 2015, and exported $133 billion. Most Americans shop in palatial supermarkets boasting a huge selection of foods delivered at low prices by large corporations. In these air-conditioned aisles, the U.S. food system can seem to be in rude health.

 

But this image of bounty obscures a food system that is failing marginalized communities, and exacting a heavy toll on our environment and our health. The industrial monoculture farms of large agribusinesses degrade soil, belch out greenhouse gases and choke waterways with pesticide and fertilizer runoff. Federal subsidies favor these farms, which can then sell staples like corn and soy below the cost of production. Excess quantities of these “cheap” staples become feedstock for highly processed, unhealthy foods like soft drinks and fast foods, produced at massive scale. Rates of obesity, diabetes and other diet-related diseases are skyrocketing as too many Americans eat too much cheap, unhealthy food loaded with salt, sugar and fat.

In many low-income communities, particularly communities of color, these unhealthy foods are the only options available. The USDA has mapped these “food deserts,” revealing an image of a country riddled with disease. Food deserts are created by the complex interactions of many different forces, including health education, foodways, poverty and structural racism. In 2015, 15.8 million U.S. households, about one in eight, had financial difficulty providing adequate food; for these families, unhealthy processed food is the most affordable diet.

Racism in zoning laws, public transport infrastructure and corporate use of demographic data in locating stores also shape the food landscape in black and latinx neighborhoods. A 2006 study found that availability of chain supermarkets in black neighborhoods is about half that of white neighborhoods. Lack of access to healthy foods has measurable health consequences; African-Americans have higher rates of diet-related illnesses like diabetes, hypertension and obesity.

On a Mission

Cassandria Campbell frames her goals explicitly in terms of addressing these injustices in our food system.

“In the neighborhood I live in, a lot of people are sick from the food that they eat. It’s sad to see people struggling from diet-related illnesses,” said Campbell, co-owner of Fresh Food Generation, a cafe, food truck and catering business in Boston that received assistance from the Fair Food Network’s Fair Food Fund for its commitment to irrigating the food deserts of Boston.

“We started with the goal of improving access to healthy, affordable food, particularly in low-income neighborhoods. We really just wanted to create an alternative to fast food restaurants, liquor stores and corner stores where people are grabbing a quick bite to eat because there aren’t any alternatives.”

New business models like Campbell’s can provide access to healthy, affordable food in low-income communities of color across the country, where corporate America has failed to do so.

 

“I think that a lot of times corporations have a formula for deciding what communities they want to exist in,” said Campbell. “A lot of companies don’t think that they’ll be able to survive in low-income neighborhoods, but maybe it’s that they just need to make a few adjustments so that they’re appealing to the customer base there. But they’re not willing to do that. As a small business, we are able to do that. We are able to listen to our customers and hear exactly what they want and then make it happen.”

Just as the injustices in the food system are intertwined, so are the solutions. A simple business practice like sourcing vegetables locally can holistically address several issues at once, recycling food dollars back into the local economy, creating job opportunities for local residents, providing healthy food and encouraging more environmentally responsible farming practices.

“We’re going to get food from farms around the Boston area, and we’re going to distribute it to Boston, no matter where you live, at a price that is affordable to you, and we’re going to hire locally,” said Campbell. “I want to see people healthier, want to see the environment healthier, and these small farmers are using more sustainable practices.”

The Whole is more than the Sum of its Parts

In supporting these good food entrepreneurs, nonprofit organizations are betting that a vibrant marketplace of local food enterprises, each experimenting with a new way of doing business, will create a more responsible food system. These nonprofits want to see companies provide healthy food in a way that is more socially conscious, and less damaging to the environment. But they recognize that these companies must turn a profit for any of that to happen at a large scale.

“If good food enterprises don’t get the business model right, there will be no social or environmental impact in the long run,” said Alex Linkow, program director of the Fair Food Network’s Fair Food Fund.

Responsible decisions like local sourcing make good business sense for these food entrepreneurs, differentiating their products on the supermarket shelves and catering to modern tastes.

“Consumers are leading these trends, and the popularity of these smaller batch products have caused so much interest and raised awareness about healthier and more responsible ways of producing food. That has led stores to turn towards these products,” said Nodel, of Marcia’s Pickled Munchies. “We’re sourcing them responsibly. We’re staying true to traditional ways of making pickles, we’re keeping them tasting good, and of course healthy.”

The futurist Buckminster Fuller once said, “You never change things by fighting the existing reality. To change things, build a new model that makes the existing model obsolete.” This quote appeared in the first few pages of “Fair Food,” the 2010 cri de coeur of the Fair Food Network’s founder, Oran Hesterman. All across the country, local food entrepreneurs are busy building that new model, tinkering with new ways to grow, prepare and deliver food, and turn a profit while they do. These food entrepreneurs are building responsible business models that can expand and proliferate, and make the existing food system and its injustices obsolete.

First posted on In Good Tilth October 12, 2017.