Entrepreneurship Through Local Food Systems

2011 Wisconsin Conference on Downtown RevitalizationThursday October 20, 2011

Fond du Lac, Wisconsin

Photo credits:Left: “Deering Oaks Farmers Market” by Corey Templeton

Middle: “Le Cordon Bleu Ottawa Culinary Arts Institute" by Ottawa TourismRight: “Michael Pollan at UBC Farm-In Defense of Food-IMG_3043” by Roland Tanglao

• The Wisconsin Local food EconomyLaura Brown, UW-Extension Center for Community and Economic Development

• A Retail Perspective on Food EntrepreneurshipMichelle Schry, General Manager, People’s Food Co-op

• The Role of Business Incubators, Mary Pat Carlson, Executive Director, Farm Market Kitchen

Today’s Presentation

• Learn how food production systems, incubators, coops and local eateries can take root downtown and create new entrepreneurial opportunities.

• Also learn how these ventures support the local food economy, encourage local healthy living, and attract culinary tourism dollars.

Today’s Presentation

What is local?

• What is local? No formal definitions

May be based on geography or socio-political boundaries (i.e. county lines)

• Foodshed - “A foodshed is everything between where a food is produced and where a food is consumed.”

• 2008 Farm Act- A “locally or regionally produced agricultural food product” is less than 400 miles from its origin, or within the state in which it was produced.

YIKES!

Who is involved?

• Producers and other entrepreneurs– Higher prices, direct feedback, consumer support,

social connections, support for local economy• Consumers

– Freshness, nutrition, safety, appearance & taste, connection to food source

• Communities– Local economy, community building, health and

wellness, maintaining rural character, ecological health (soil, water, habitat, biodiversity) (http://www.entrepreneur.com/article/220357 )

• Local foods account for a small but growing share of total US agricultural sales

• Production of locally marketed foods is more likely to occur on small farms in or near metro counties

• Consumers who value high quality foods produced with low environmental impact are willing to pay more for locally produced food

• Federal, State, and local government programs increasingly support local food systems

• As of 2010 there were few studies on the impact of local food on economic development, health, or environmental quality.

According to a USDA literature review…

Martinez, Steve. et al. Local Food Systems Concepts, Impacts, and Issues. ERR, 97, USDA. Economic Research Service, May 2010

The Big Picture

How do we typically measure the economy?Jobs * Income (Labor as well as total income) * Industry

Sales

Economic Development- “Process of retaining, expanding, and attracting jobs,

income and wealth in a manner that improves individual economic opportunities

and the quality of human life.”

The Big Picture

Slide courtesy Steve Deller, Department of Agricultural and Applied Economics, UW Madison.Extension. “The Role of Agriculture in the Wisconsin Economy.” Presented October 2011.

Wisconsin’s Local Food System

Production

Processing

Distribution

Consumption

Waste Manage

ment

FARMERS- Urban & rural

Entrepreneurship Opportunities

PROCESSORSFOOD PRODUCT ENTREPRENEURS

NETWORKERSAGGREGATORSDISTRIBUTORS

TRANSPORT

MARKETSRESTAURANTSSPECIALTY RETAILFOOD & CULINARY TOURISM

COMPOST/SOIL PRODUCERS

Wisconsin’s Local Food System

Production

Processing

Distribution

Consumption

Waste Manage

ment

Employment in farmingSize and type of farmsNumber farms selling for local marketsRestaurant trends

Culinary tourism trendsDirect salesNumbers of farmers markets

A look at the data..

Sales of value-added products

Size and Types of Farms

Status of Wisconsin Agriculture 2011, Wisconsin’s Farm Economy Accessed at http://www.aae.wisc.edu/pubs/status/docs/status2011.pdf

1994 1996 1998 2000 2002 2004 2006 2008 2009 2010 20110

50

100

150

200

250

0

1000

2000

3000

4000

5000

6000

7000

8000

Number of Farmers Markets in Wisconsin and US

Wisconsin United States

Farmers Markets

Farms Selling Direct

Number of Farms Selling Direct to Consumers

2002 % Total 2007 % Total % Increase

Wisconsin 4,918 6.4% 6,243 5.5% 26.0%United States 116,733 5.5% 136,817 6.2% 17.0%

Value of agricultural products sold directly to individuals for human consumption. This item represents the value of agricultural products produced and sold directly to individuals for human consumption from roadside stands, farmers‟ markets, pick-your-own sites, etc. It excludes non-edible products such as nursery crops, cut flowers, and wool but includes livestock sales. Sales of agricultural products by vertically integrated operations through their own processing and marketing operations were excluded.

Value of Products Sold Direct to Consumers ($1000)

2002 (adj) % Total Sales 2007 % Total

SalesOverall % Change

Wisconsin 33,433 0.52 43,491 0.48 30%United States 934,035 0.40 1,211,270 0.40 30%

Value-Added Products

Farms Selling Value-Added Products

2007 % Total Farms

Wisconsin 2,821 3.6United States 78,418 3.6

USDA Agricultural Census 2002-2007

Restaurant Trends

Top culinary themes: Local, sustainable, fresh, healthy 2011 What’s Hot survey-

• locally sourced meats and seafood• locally grown produce• sustainability

“Americans are looking for more healthful options at restaurants and other foodservice outlets but define healthy eating based on quality features rather than fewer calories.”

“Consumers place a high importance on taste regardless if they are eating healthfully or not, and some consumers equate healthier foods as not being as tasty. The majority of consumers expect to pay the same for healthier foods as those considered less healthy.”

National Restaurant Association What’s Hot Survey, 2010. Accessed at http://www.restaurant.org/pdfs/research/whats_hot_2011.pdfConsumers Define Healthy Eating When They Go Out to Eat,

Culinary Tourism TrendsCulinary destinations may be businesses, business districts,

communities, or geographic regions that attract people interested in unique and memorable food and eating

experiences. • Dining out • Retail establishments (e.g. wine, spice, or candy shops)• Food tours, wine trails, tastings, cooking classes,• Food related events, farmers markets, community meals).

2007 Travel Industry Association Study:

• 27 million travelers, or 17% of American leisure travelers, engaged in culinary or wine-related activities between 2004 and 2007.

• Culinary travelers are younger, more affluent and better educated • Motivated by a desire for unique experiences. • The study found that 90 % of culinary travelers 83% of non culinary travelers were

under the age of 65.

Travel Industry Association (TIA), in partnership with Gourmet and the International Culinary Tourism Association conducted a study of 2,364 leisure travelers in the United States.

Photo credits:“"Wine Tasting" by Yaniv Ben-Arie

• Does shifting consumer spending from imported to local foods and shifting to local processing allow producers to retain more of the food dollar?

• Farmers markets – generally found to have positive impacts on the local economy• Iowa study- each $1.00 spent generates .58 cents in additional

indirect and induced sales.• Labor and sales benefits but may be offset by losses to

mainstream retail sales• Help larger businesses expand• Act as an incubator for smaller businesses• Spillover effects- spending at other downtown businesses

Impact on Local Economies

Martinez, Steve. et al. Local Food Systems Concepts, Impacts, and Issues. ERR, 97, USDA. Economic Research Service, May 2010Otto, D. and T Varner. 2005 Consumers Vendors and the Economic Importance of Iowa's Farmers Markets . Leopold Center for Sustainable Agriculture. Accessed October, 2011 at http://www.leopold.iastate.edu/pubs-and-papers/2005-05-farmers-marketsFeenstra, G.W. 2003. “Entrepreneurial Outcomes and Enterprise Size in US Retail Farmers Markets,” American Journal of Alternative Agriculture, Vol 18, pp46-55. Lev, L.l. Brewer and G Stephenson. 2003. How do Farmers Markets Affect Neighboring Businesses? Oregon Small Farms Technical Report No 16, Small Farms Extension Program, Oregon State University, Corvallis, OR.

Local Food Entrepreneurship Resources

Downtown Business Market Analysis- Restaurant and Culinary Opportunities http://fyi.uwex.edu/downtown-market-analysis/analysis-of-opportunities-by-sector/restaurants/

Food & Value Added Ag Resources http://fyi.uwex.edu/aic/

Business Incubation Network http://fyi.uwex.edu/foodbin/the-food-bin-network/

Wisconsin Local Food Marketing Guidehttp://datcp.wi.gov/Business/Buy_Local_Buy_Wisconsin/BLBW_Food_Marketing_Guide/index.aspx

Laura BrownUniversity of Wisconsin-ExtensionCenter for Community & Economic DevelopmentLaura.brown@ces.uwex.edu