Laura Flagg’s 2018 UEP Thesis (“Small-Scale Food Processing’s Role in Farm to Institution: Filling Market Gaps and Moving Toward a Regional Supply Chain”) explores small-scale food processing with a case study of Commonwealth Kitchen and three other processors. Read Laura’s full thesis here.
By Laura Flagg
Farm-to-institution initiatives are trying to grow the local economy by having local farms supply produce to the food systems of local schools and hospitals. But one of the challenges to developing this supply chain is a lack of infrastructure to process the season’s bounties into products (like sauces) that can be used throughout the year. Laura Flagg’s May 2018 master’s thesis explores how CommonWealth Kitchen in Boston and three other small scale food processors in the Northeast are attempting to close this gap.
Flagg finds that food processing for farm to institution faces similar challenges as supplying local produce, such as distribution, cost, and supply of production. But there are also unique challenges such as funding, scaling up production, and buyer habits. Small-scale processors of local food struggle to access consistent and sufficient funding. Even more challenging is that available funding usually focuses on developing new food processing centers rather than expanding existing infrastructure. This lack of consistent funding feeds into the challenge of scaling up and expanding processing operations. Eventually, small-scale processors need to scale up to take full advantage of their opportunities, which includes purchasing more equipment, expanding their physical space, and finding a steady stream to customers to regulate their operating costs. However, for many this process is a “chicken or the egg” situation. In many cases, the processor needs a steady stream of income to scale up and bring the product costs down to appeal to institutional buyers, but this cannot happen until the processor has a steady stream of committed institutional buyers. However, many institutions will not commit to large purchases of locally processed food due to buyer habits of expecting low-cost, high volume food, short turn around times for orders placed, and working with vendors within their food service management companies.
Flagg also finds that local procurement laws and mandates have good intent, but they are not strong enough to create major change within the farm to institution movement. There are two types of local procurement laws, the first being a preference for local food purchasing as long as it does not cost a certain percentage more than conventionally purchased food and the second being a targeted mandate of purchasing a certain percentage of local food by a certain date. The issue with preference vs. target laws is that preference laws are not binding. They imply a desire to purchase locally grown and processed goods, but impose no requirement.
Regional Economic Impact of Small-Scale Food Processing
One of her most significant findings is the need to reframe the conversation around farm to institution to emphasize the positive regional economic impacts of small-scale food processing. The conversation around farm to institution has typically been framed around increasing knowledge of and access to local fresh foods and healthy eating and creating close relationships between farmers and consumers. However, the economic benefits of farm to institution are not often discussed, even though the potential is high.
Product and Capital Flow in Farm to Institution
As can be seen in the above figure, farm to institution has impacts on the regional economy through import substitution and the multiplier effect (orange arrows=product flow, green arrows=capital flow). Goods that are produced locally or regionally can replace goods that are typically imported. The purchase of these local products begins the circulation of money within a region, as opposed to money flowing out of a region. This can be seen in the way that dollars from institutional purchases flow to local aggregators and small-scale processors, to local farms, and then are circulated back into the local economy through job creation and local spending. It is estimated that for every $1 spent locally, another 40 cents to $1.60 of local economic activity is generated.[1] Additionally, the purchase of local food leads to job creation, with studies indicating that nearly 32 jobs are created for every $1 million in revenue generated by local farms, compared to only 10.5 jobs for wholesale farms.[2]
CommonWealth Kitchen Small-Scale Processing
CommonWealth Kitchen (CWK) is best known for their work as a food business incubator and shared kitchen facility in Dorchester, MA. Their work focuses on creating an equitable and resilient local food economy, by supporting women, immigrant, and people of color owned businesses. They also focus on providing sustainable employment, especially for those impacted by racial, social, and economic inequality. Recently, CWK has expanded their operations to include small-scale food processing. They see this venture as a way to further support small food business, create more jobs within the food system, and play a role in regional food systems change.
With grant funding from the US Department of Agriculture and the Massachusetts Dept. of Agriculture Resources, CWK first began their foray into small-scale food processing in 2016. At the start, their work focused on co-packing for member businesses, farmer value added products, and farm-to-institution. The first tangible work that CWK did with farm-to-institution was the 2016 Tomato Project that CWK completed for Northeastern University Dining Services. Conceptualized in the spring and executed in the summer of 2016, CWK developed a recipe and then produced sauce from diced tomatoes gleaned from Davidian’s Farm (sourced by Red Tomato), which was then sold to Northeastern. This local marinara sauce was then showcased on Northeastern’s fall menu in their residential dining halls.
Throughout the process of working with local institutions, CWK has found buyer habits and their capacity to develop new products as challenges. However, they have found working with existing buyer habits, specifically the typical institutional purchasing and procurement timeline and price sensitivity, to be the largest hurdle. Institutional buyers are used to purchasing products that are readily available and in stock, as well as products that are low-cost for a higher volume. As small-scale processing of local food is fairly new, CWK’s timeline for developing, processing, and finalizing a product is approximately 1 – 2 months. The length of the process depends on when an order is placed, how larger the order is, CWK’s production schedule, and the type of product that is being made (it takes longer if the product is new to CWK and requires recipe scaling and other adjustments).
Pathway of Institutional Contract Manufacturing with CWK
The pathway of institutional food processing at CWK starts with partnership formation with local institutions. Once a partnership is formed, CWK and the institution discuss the specific needs of that institution, what products would do well on their menu, what volume of product they need, and when they need it by. Following this conversation, the institution places an order with their estimated volumes. This process of meeting, discussion, and order placement takes around 1 – 4 weeks. Next, the institution confirms the final volume of product needed, CWK schedules production and orders ingredients, and the product is manufactured, packed, and labeled at CWK’s facility. This process takes another 1 – 4 weeks. Once the product is finalized, it is picked up and distributed throughout the institution’s kitchens and food service locations to be used in institutional meals. This last part of the pathway takes about 1 – 2 weeks.
Thesis Recommendations
Based on her thesis learnings, Flagg recommends further exploration and expansion of existing cross-sector partnerships. She urges the development of a cross-sector pilot program focused on institutional buyer commitments. Ideally, this cross-sector pilot program would bring together various partners along the supply chain, including farmers, food processors, and distributors, food management companies, food procurement directors at institutions, and funders. The shared goal of those in the pilot program would be to acknowledge and commit to strengthening and obtaining institutional commitments to buy. Finally, she encourages the reframing of the farm to institution conversation to focus on the local and regional economic impacts of small-scale food processing.
Since Flagg’s thesis was published, the City of Boston has passed the Good Food Purchasing Program (GFPP), which will transform the way public institutions purchase food. Boston is the first East Coast city to follow in the footsteps of cities such as Los Angeles and Chicago. The GFPP directs public institutions in Boston to purchase food that is nutritious, local, sustainable and ethically sourced, as well as food that meets robust labor, health, animal welfare, and environmental standards. Boston’s GFPP specifically centers around racial equity, and includes stakeholder participation in the implementation process. The coalition advocating for this program included local and national organizations, including CWK.
[1] “Farm to School Rocks,” Farm Aid, Accessed April 5, 2018.
[2] “The Economic Impact of Locally Produced Food,” Federal Reserve Bank of St. Louis, Accessed December 5, 22017.
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