New York Food Hub Shows Promise, Growth for Area ProducersDate: 06/28/13 | Source: Specialty Food News
Categories: Industry Operations; Volume Retail; Foodservice; Suppliers; Retailers; Distributors; Brokers; Importers | Tags: Store Expansions; Farming; Fruit; Investor; New York; New Business News; NYC; Vegetable
by Robyn Pforr Ryan
Thanks to a state matching grant, a partnership between two Kingston food companies—a co-packer and a distributor—will continue to grow as a burgeoning food hub in New York’s Hudson Valley, bringing the region’s produce, meat and value-added food products to the New York City food market and the tri-state area—even nationally, through such products as Rick’s Picks artisanal pickles and pickled vegetables.
In February, the state awarded $3.6 million in funding to develop four food distribution hubs to provide additional funding for a hub in Riverhead in Long Island, N.Y. Of this amount, Kingston will receive $775,000 to expand the infrastructure of the partnership of Farm to Table Co-Packers and Hudson Valley Harvest, which has been operating since 2011 in the large former IBM facility in Kingston, mostly empty since massive layoffs in the early 1990s.
“This is really important. This money is helping us grow,” says Paul Alward, who had farmed 15 acres for livestock in New Paltz before co-founding Hudson Valley Harvest. “And for the people in this region, it provides them with great-quality, traceable, sustainably raised food. You know where our food is from, and you know it’s fresh, great food.”
Food hubs—a relatively new and thriving business model—provide the infrastructure and logistical and marketing support that small and midsize farms and producers cannot achieve on their own to get their products to market. Nationwide, as of May, the USDA lists 223 food hubs; the median number of small and midsize suppliers for these hubs is 40.
Vast Selection, Immediate Impact
In 2012, the two Kingston companies worked with more than 60 farms, ranging in size from a 4-acre mixed-greens farm to the 1,200-acre Gill Farms, and 45 private-label food companies, says Jim Hyland, president of Farm to Table Co-Packers. He says more than a million pounds of produce and meat went through its facility that year.
“There are a lot of spokes in the hub. It’s opening up a lot of different markets for these farmers,” Hyland says. “With hubs, farmers bring their produce in and there’s aggregation and a new market to sell into. The value is added here and the distribution starts from here. There is an increasing interest and awareness in where food comes from. This concept is just blossoming.”
The hub handles everything from vegetables and fruits to eggs, meat (including beef, pork, lamb, turkey and chicken), honey and grains, says Alward. The prices farmers are paid for their raw materials are often above standard wholesale market prices, though less than retail. Hudson Valley Harvest gets meat and produce from local farmers, then flash-freezes the items for sale to a long list of grocers, butcher shops and restaurants in the Northeast and New York City. At Farm to Table Co-Packers, farmers like Ken Migliorelli, from Migliorelli Farm in Tivoli, have gained a new market for value-added products. The line of Migliorelli Farm products, including tomato juice, tomato sauce, apple sauce and frozen vegetables, is now sold to local buyers in the New York City Greenmarket.
Support to Fuel Growth
The two companies operate in 30,000 square feet, which includes a processing line, bakery, incubator/test kitchen, freezer and cold storage and several loading docks. Hyland, with the help of Todd Erling, executive director of Hudson Valley Agribusiness Development Corporation, sought state funding assistance for a $1.8 billion growth plan for the food hub.
State funds will be used to help increase the hub’s freezer and cold storage space by 5,000 square feet, buy additional equipment, including a forklift and processing equipment, buy 2 to 3 more trucks, and retrofit a second location closer to the city to serve as a satellite cold storage and distribution facility.
To supplement these funds, the HVADC helped the Kingston Food Hub secure private investment, including $500,000 private funding through Imprint Capital, a San Francisco based impact investment firm, with strategic support from the Local Economies Project of the New World Foundation.
According to a recent report on the Hudson Valley and food hubs, the food industry in New York City and the Hudson Valley is a $30 billion industry, but less than 2 percent of it is locally sourced. The report, commissioned by the Local Economies Project, calls for a manifold investment in the food industry infrastructure and support services for farmers, such as helping them to navigate food safety certification requirements and liability insurance.
“We need anchors like the food hub in Kingston, and we need a network of food hubs throughout the region centering on areas of production,” says Bob Dandrew, director of the Local Economies Project, which makes grants available to foster economic growth in local communities.
The report, authored by Sarah Brannen of Upstream Advisors, based in Poughkeepsie, N.Y., identifies the need for greater development in four key areas: local grains, beef, dairy and value-added produce processing. Within a 250-mile radius of the New York food market, Dandrew says, there are fewer than a dozen meat-processing plants, many of which have a waiting list, resulting in farmers driving to Pennsylvania for processing.
“In some instances we already have the infrastructure and relationships in place to build on. Instead of pouring all of our resources into one facility, it makes better sense to have a more decentralized web of networks,” said Brannen. For the report, Upstream Advisors interviewed 113 farm and other food businesses, convened an advisory group, and held seven listening sessions attended by more than 200 people, and conducted a best-practice review of 12 food hubs nationally.
A Promising Future
Dandrew says the Hudson Valley is ideal for further food industry development.
“This region has the biggest available amount of farm land, a strong tradition of agriculture, lots of young people and a great interest on the part of state and county governments,” he says. Dandrew speaks from firsthand experience—he grew up on a farm in Messina, N.Y.
The LEP is planning more investment in the Hudson Valley, including gathering groups of food producers to explore future processing facilities. The LEP recently gave a $750,000 grant to the Cornell Cooperative Extension that funded two new advisors, one on grain and the second on organically raised livestock.
“For a truly resilient food system we need to do our own processing,” Dandrew says. “Every time we cut down the number of food miles from processor to consumer … it decreases the amount of fossil fuels and it’s less expensive and the food is fresher and better for you.”
Food hubs are bringing innovation and new vitality to modern-day farming. John Gill has developed a strong business growing sweet corn on his family’s 1,200-acre farm in Hurley, N.Y., distributing the corn along the Eastern corridor and as far west as Texas and as far south as Puerto Rico. Gill’s grandfather started the farm in 1937, along with two partners, after he lost his Long Island farm during the depression after missing a few mortgage payments.
For the past three years, Gill has sent some of his corn—which would be rejected as too short for USDA Fancy Grade A, which requires 6-inch ears—to Farm to Table, where it is dehusked, dekerneled and then cryovac-ed for sale. John Gill's corn is now found on the shelves of Whole Foods in 10-ounce Hudson Valley Harvest bags and 16-ounce jars of Rick’s Picks Handy Corn relish. Under the Winter Sun Farms/ Gill Farms label, the corn sold in 25-pound boxes to SUNY New Paltz, Bard College, SUNY Albany and other institutional settings, including the Hudson Valley Hospital Center.
“It’s been going real well,” Gill says. “Each year it grows. The first year I did 100 containers, 20 boxes per container. Last year we did 300 containers, and this year we hope to do a heck of a lot more.”