Food hubs are businesses or organizations that actively manage the aggregation, distribution and marketing of local food products.

A dozen years ago, they were virtually unknown. As demand for local food has surged, however, food hubs are emerging rapidly as a solution for farmers who need to get their products to market and for consumers and institutions who want to buy.

Matthew Tremblay, general manager of the new Unity Food Hub LLC, estimates that there are, “by the broadest definition, about 40 food hubs operating in Maine currently.”

A number of these existing and prospective businesses have sought assistance from Maine Farmland Trust, a factor in MFT’s decision to create the model Unity Food Hub. An even more critical factor, Tremblay said, was that distribution is one of the greatest challenges to farm growth and success. As a result, farmers are looking at diversification, including aggregation and wholesaling.

“There is increased interest in Maine and in the whole country in aggregation,” Tremblay said.

Maine Farmland Trust, a Belfast-based nonprofit, will use what it learns from this “living laboratory” to help farmers, distributors and, ultimately, customers.

Market opportunities

MFT began studying the food hub concept about four years ago. In that time, survey data suggests that the Trust is on the right track in establishing the model food hub.

A National Food Hub Survey in March 2013 found that almost a third of food hubs operating to date had started up within the prior two years, and most — 62 percent — had been operating for five years or less.

Food hubs are financially viable businesses, the survey found; average sales in 2012 exceeded $3.7 million. They are set up primarily as for-profit businesses (47 percent), nonprofits (34 percent) and cooperatives (13 percent). They’re creating jobs — the average food hub employs 19 people.

Although their principal customers are restaurants, small grocery stores and K-12 schools, food hubs are supplying local food to all communities — about half of food hubs are equipped to accept SNAP federal food assistance benefits, and nearly half are committed to equity, increasing food access, and/or community development.

Conducted by Michigan State University in association with the Wallace Center at Winrock International, the survey also found that food hubs are creating market opportunities and providing crucial services for small and midsized farms, with the majority of food hub customers located within 100 miles.

Growth constraint

In Maine, the locavore movement is growing and spurring changes in consumption of local foods. Strolling of the Heifers, a Vermont-based local food advocacy group, ranks Maine second nationally in its 2014 Locavore Index that measures each state’s commitment to local foods and community-based agriculture. Ranking is based on the number of farmers markets, Community Supported Agriculture (CSA) shares and food hubs per capita, plus the percentage of each state’s school districts with active Farm-to-School programs.

Farming, too, is growing in Maine, as is the market value of Maine farm products.

Thirty-seven new farms began operating between 2007 and 2012, according to the 2012 Agricultural Census conducted by the U.S. Department of Agriculture, and the number of acres being farmed grew from 1.35 million to 1.45 million over the same period.

The market value of Maine’s agricultural products soared 24 percent over the previous five years: Maine’s 8,173 farms sold $763,062 in agricultural products in 2012, compared to the $617,190 market value of Maine farm products sold in 2007.

Yet inadequate distribution channels remain a major constraint to further growth. The problem is not peculiar to Maine; a USDA research study in 2010 found that lack of food distribution systems for small and mid-sized farms was a major constraint to the local food movement nationally.

Direct sales

In Maine, a rapidly growing number of farmers’ markets and CSA shares offered by numerous small farms have helped move more local food from farm to table. While direct sales of this kind didn’t even show up in the USDA’s 2007 Census of Agriculture, in 2012 almost 1,100 Maine farms reported selling direct to consumers.

In Waldo County, burgeoning demand has fostered rapid growth of farmers’ markets in many towns, which give consumers the opportunity to meet and chat with farmers, and with each other. Some consumers enjoy meeting their farmers, and some farmers enjoy socializing with their customers — though others do not.

Selling direct to consumers through farmers markets makes substantial time demands on farmers who must cover several half-day markets every week, traveling to sites and setting up, selling, breaking down their booths and then traveling home.

“If you’re doing five or six farmers’ markets per week, it takes a lot of time away from the farm,” Tremblay said.

“And when you look at the percentage of people who buy from farmers markets or subscribe to CSA shares, it’s still very small,” he added. “Only a limited number of people are willing to take the time to do that.

“Farmers’ markets can also be a double edged sword,” he said. “With more farmers’ markets in the area, more farms are competing for that same dollar, which is why farms are looking for more market diversification.”

Diversification key

Other distribution channels exist for Waldo County farms. The Belfast Co-op, established in 1976, is probably best-known. In the last year, the cooperative has sold more than $1.9 million in Maine agricultural products.

How do local products get to the Co-op? Farmers must deliver them.

Food banks buy local products, as do restaurants, schools, colleges, small grocers and, lately, even supermarkets — but these channels also require farms to deliver.

“All of these factors point to a role for food hubs,” Tremblay said. “That doesn’t mean 100 percent of farm product marketing should be done through a food hub — farms should use some wholesale, some direct, some retail — diversification is key.”