Food hubs offer an exciting bridge between food producers and consumers, providing a mutually beneficial relationship across both ends of the food system. As defined by the National Food Hub Collaboration, “a food hub is a business or organization that actively manages the aggregation, distribution, and marketing of source-identified food products primarily from local and regional producers in order to satisfy wholesale, retail, and institutional demand.”
Food hubs present an opportunity for communities to make healthy and local food sourcing a profitable enterprise for producers, distributors, retailers, and other business types (e.g., worker-owned co-ops). Similar to more traditional food distributors, food hubs provide the wholesale infrastructure and often, the logistics needed to serve at-scale customers who are seeking to procure locally and regionally grown foods. Food hubs act as value-chain facilitators by adopting a values-based approach to moving food along a supply chain to ensure that all actors all the supply chain—from farmers and farmworkers to consumers—benefit from the business model. Food hubs often work under three models to better connect local food producers to distributors and/or consumers:
- Farm-to-business/institution model
- Farm-to-consumer model
- Hybrid model
Unlike farmers markets, in which farmers and other producers engage in direct sales to customers, food hubs typically operate to support wholesale customers like institutions (schools, hospitals, universities) that are able to purchase at scale. For example, food hubs can provide a single point of aggregation for small- to mid-sized producers that may otherwise not be able to access larger markets. Food hubs may also provide transportation of products, assume costly liability insurance requirements on behalf of their producers, and/or provide customers with education and marketing materials. Food hubs can improve access to healthy foods in low-income or underserved areas by making it easier for farmers to offer their products in these areas by assuming costs associated with infrastructure and logistics. Food hubs may also provide additional value-added services like fresh-cut operations for fruits and vegetables, or may serve as a business incubator for small-scale food producers.
To learn more about how “food hub” is defined, food hubs operating across the country, and to read about food hub best practices, visit The Wallace Center at Winrock International's Food Hub Collaboration and the USDA's Regional Food Hub Resource Guide.
Challenges to Establishing Successful Food Hubs
While food hubs can have a wide range of positive and equitable impacts, starting and operating a food hub comes with obstacles, even if you are reconfiguring a current farmers market or wholesale distribution center into a food hub.
- Start-up, administrative, and operational costs. Finding the capital to start and maintain a food hub can be challenging. Given the complex nature of food hubs, overhead costs can arise at all points on the operational chain, from the in-take of local produce to the sale of goods to distributors and/or consumers.
- Site development. Similar to supermarkets, food hubs require strategic site development to ensure that they efficiently and equitably connect producers to distributors and/or consumers in a specified geographic area. Food hubs often necessitate cold storage and space for processing, distribution, and marketing, so choosing a site suitable for a food hub requires knowledge of the local food system.
- Economic sustainability. Depending on the model, food hubs have to attract food producers, distributors, and/or consumers to be sustainable over time. Food hubs can take several years to achieve financial profitability.
Key Strategies for Successful Food Hubs
- Rely on proven and documented business strategies. Similar to other forms of healthy food retail, food hubs can benefit from comprehensive business plans. These enterprises can tap into targeted technical assistance programs that advise participants about how to increase their earning potential. Existing small business development training programs can also help food hubs improve their marketing strategies to increase their profitability.
- Develop unique financing/funding packages for each specific food hub project, with long-term stability in mind. Although support from any available funding source is critical at the early stages of development, food hub operators should also develop a plan for long-term sustainability. Nonprofit food hubs, in particular, often rely on multiple sources of funding in addition to revenue, including grants and contributions, and must anticipate potential changes in these funding sources. However, given that food hub financing tends to reflect long-term, slow, management growth, this structure sets up the stage for long-term sustainability of the sector as a whole. For more information on finding funding for your food hub project, see Financing.
- Collect high-quality operational and financial data. Investing in data systems and processes is important to track progress, evaluate performance, and make improvements each year. As food hubs grow over time and in experience, data can help to strengthen operations and inform decisions around pricing and staffing.
- Develop policies to support food hubs. In addition to city and statewide financing initiatives that support fresh food projects across the country, non-funding policies also support food hubs in underserved communities, see View Policy Efforts by State.
- Build support among local partners. Food hubs can work with various partners, including local farmers’ associations, schools districts, and established food distribution centers, to establish distribution agreements to increase their market footprint. These partners can also help with advertising and marketing efforts.
- Choose a space strategically. The location of a food hub matters for growers, buyers, and the communities it serves. Selecting a site for growing, processing, or distributing in a low-income neighborhood, or a community of color, will maximize the benefit for these residents. In addition to improved food access, locating your hub in a low-income community will facilitate local hiring, workforce development, and if done well a commitment from the community to support the hub.
- Find your spot in the market. Engage and remain engaged with residents of local communities, restaurants, and institutional buyers to find out which products are most desirable. Engaging the community will help you create a culturally relevant product line that attracts local customers, and creates a base of buyers who view themselves as partners in the food hub. The most profitable food hubs often reach a diverse customer base through a broad range of buyers, including small grocery stores, restaurants, and K-12 food services.
Grow Your Business with Equity
Food hubs have the potential to create a more equitable food system that values quality jobs, healthy food access, local economic growth, small business development, and sustainable agriculture. Food hubs designed with these equity considerations can provide opportunities for growers and producers, aggregators and distributors, and the consumer. Below are strategies for developing profitable, equitable food hubs that foster more just, fair, and inclusive food systems and local economies.
- Engage residents and community groups in the food hub planning process. Involve diverse community members in food hub planning from idea to implementation. Residents and stakeholders can provide crucial insight into issues such as location, hiring, and product mix. The following community engagement resource guides are helpful for thinking about how to engage your community:
- Community Engagement Resource Guide: What it is?
- Community Engagement Resource Guide: Why use it?
- Inclusive Engagement Toolkit for Community Food Projects Planning, New Entry Sustainable Farming Project
- Community Engagement & Participation Checklist, PolicyLink
- Connect to small- and mid-sized farmers and producers. Locate farmers and growers in the region who have had difficulty accessing broader urban markets, especially low-income farmers, because these growers may be looking for new aggregation, marketing, and distribution opportunities to scale their production.
- Prioritize local farmers of color. Identify and reach out to farmers and vendors of color to support historically marginalized producers and strengthen a diverse regional farm economy. Immigrant farmers and farmers of color may grow culturally appropriate foods that will meet consumer demand in their communities.
- Choose a location that maximizes equity benefits. Select a site in a low-income neighborhood, or a community of color, to maximize benefits for these residents. In addition to improved food access, siting your hub in a low-income community will facilitate local hiring, workforce development, and if done well a commitment from the community to support the hub.
- Employ members of the community. Local hiring can help unemployed or under-employed residents of underserved communities benefit from the economic development brought by the food hub. Food system jobs are often an opportunity to employ workers who have previously been excluded and overlooked.
- Invest in higher, family-sustaining wages for employees. The recent Counting Values: Food Hub Financial Benchmarking Study found that the highest-performing food hubs were those that paid their staff higher-than-average wages and benefited through overall better performance per full time employee. Higher wages translate into healthier and more productive workers, which has positive economic impacts for food hubs in the long run.
- Assess demand for different products. Engage residents of local communities, restaurants, and institutional buyers to find out which produce items and value-added products are most desirable. Understanding customers' product preferences and creating a culturally relevant product line ensures that food hub products will have a dedicated customer base.
- Make the food hub a community asset. Make the food hub an inviting, appealing asset to the community. In addition to offering healthy food, the physical appearance of the food hub can help revitalize a neighborhood. If possible, engage your community by providing broader services such as educational opportunities and community programming.
Tools and Resources
Key Resources for Funding Food Hubs
For additional information on funding for your food hub project, see Financing.
Other Key Resources
- Building Successful Food Hubs: A Business Planning Guide for Aggregating and Processing Local Food in Illinois
- Regional Food Hub Resource Guide, USDA
- Findings of the 2013 National Food Hub Survey
- Moving Food Along the Value Chain: Innovations in Regional Food Distribution
- Potential USDA Programs to Support Regional Food Hub Development
- Equitable Development Toolkit: Equitable Food Hubs, PolicyLink
- Growing and Funding Equitable Food Hubs Webinar, Healthy Food Access Portal archived webinar
- Counting Values: Food Hub Financial Benchmarking Study, Wallace Center and USDA
- Running A Food Hub: Lessons Learned from the Field, USDA
Food hubs are gaining momentum across the country. Learn more about the following innovative food hub efforts.
- Common Market, Philadelphia, Pennsylvania: With a mission of providing nutritious, affordable, locally grown food to all, including the most vulnerable communities, Common Market connects farmers to more than 150 public and private schools, colleges and universities, hospitals, workplaces, grocery stores, nonprofits, and faith institutions throughout the Delaware Valley. Common Market’s commitment to equity has been key to its growth: in the past five years, Common Market has sold more than $5 million in local, fresh food, 25 percent of which has been sold to institutions specifically serving low-income communities and communities of color. Check out this Profile here.
- Intervale Food Hub, Burlington, Vermont: This food hub works with more than 20 farmers in the Burlington area to distribute their goods in the region. Intervale Food Hub runs a year-round multi-farm CSA that accepts SNAP benefits and uses 1 percent of all food hub sales to subsidize shares for low-income individuals and families.
- Corbin Hill Food Project, New York City, New York: The Corbin Hill Food Project gives residents of Harlem and the Bronx direct access to high-quality, fresh produce grown by local farmers from New York State. Corbin Hill partners with farms and community organizations to distribute boxes of freshly harvested produce, known as Farm Shares, once a week. By offering flexible membership terms, affordable prices, SNAP money matching, and items that reflect the community’s diverse cultural and culinary traditions, Corbin Hill Farm Shares meet the needs of the community’s low-income residents. Read more about the Corbin Hill Food Project in this Profile.
- New North Florida Cooperative Association, Inc., Marianna, Florida: This producer-driven food hub aggregates, processes, and distributes fresh, chopped vegetables from primarily African American, small-scale growers. NNFC has a streamlined approach: it sells a limited line of produce to school districts and grocery stores within a day’s travel of its Marianna processing facility. This strategy enables NNFC to negotiate prices that sustain Black farmers’ livelihoods and meet school districts’ needs. The food hub serves more than 200,000 students in 30 school districts.
- Farm Fresh Rhode Island, Pawtucket, Rhode Island: This nonprofit’s Market Mobile Program, started in 2009, supplies products from 50 local farms and producers to more than 150 customers, including a multi-farm CSA, restaurants, grocers, caterers, schools, and hospitals in Rhode Island and Massachusetts. Market Mobile has created 46 local jobs, and had an annual economic impact of more than $1.75 million. Because Farm Fresh Rhode Island partners with a range of institutional, retail, and wholesale buyers, it can maintain profitability and financial growth while meeting the needs of the diverse communities it serves.
- ALBA Organics, Watsonville, California: This licensed produce distributor supports the sales, marketing, and training needs of beginning farmers and sells locally grown, organic, farm-fresh produce at competitive prices. The ALBA Organics food hub offers customers the opportunity to support small-scale, limited-resource, and beginning farmers, many of whom are former farmworkers.