Startup Profile: A Food Hub to Help Sustainable Urban Farmers Achieve Economic Viability
August 31, 2011 | Kelly Hatton
Urban farms and community gardens located within an hour’s drive of Nashville, TN will soon have a new outlet to garner revenue from their produce in the guise of a nonprofit food hub called Nashville Grown. The hub, which is set to launch in Spring 2012, will collect produce from these small and often underfunded urban farmers and help them achieve economically viability by marketing and distributing their products as part of a larger aggregated offering, rather than individually, to a consortium of wholesale buyers including restaurants, universities and various retail outlets throughout the city.
“For urban agriculture to be more than a novelty, or an educational tool, there has to be an effective, profitable way to collect and sell food from a large number of tiny farms across a city,” said Sarah Johnson, Co-Founder of Nashville Grown.
Johnson connected with her fellow Co-Founder, Will Greene, while both were undergraduates at Stanford. Together they possess a wealth of experience in agriculture, urban development and social entrepreneurship.
The idea for Nashville Grown grew out of a brainstorming session between the two founders that focused on coming up with ideas for urban agriculture startups.
“We had a list of dozens of ideas,” Johnson said, “but we narrowed it down to produce aggregation and distribution for urban farmers because it helped meet what we saw as one of the biggest needs in urban agriculture–the need for it to be efficient and economically viable to grow food in small spaces.”
Providing an economic opportunity
Markets and retail outlets often require quantity and variety that small urban producers can’t provide.
“It’s hard to grow only tomatoes when farmers markets or CSAs are your only option,” said Johnson. “Being able to sell through us, without having to worry about quantity or week-to-week consistency like they might with a direct restaurant relationship, means a lot.”
Johnson pointed out that many urban agriculture initiatives focus on education, social justice and nutrition. Growing food can restore a lost connection to food production for urban participants, and provide access to fresh, healthy vegetables that would otherwise be hard to come by.
Johnson and Greene believe that in addition to being a source of empowerment and nutritious food, urban farming can potentially help feed cities and offer economic opportunity for growers.
The pair was recruited by Green Loop, a social enterprise that is attempting to transform a 12,000 square foot warehouse into a hub for green businesses and sustainability initiatives in Northern Nashville. This past May, Johnson and Greene travelled to Nashville to explore the opportunity, and the sustainable agriculture community they discovered during their visit convinced them that Nashville was the right place for their project.
“There’s so much going on, from edible landscaping to local dye making, and it feels like there’s a new farmers market every week,” said Johnson. “It’s really the perfect time and place for this.”
A nonprofit model
Johnson and Green are currently in the process of filing for 501c(3) status. Nashville Grown plans to use a nonprofit business model to keep distribution fees below 15% for its farmer partners.
“For-profit food hubs we talked to charged more like 35% per transaction in fees, and that just didn’t seem feasible for us and the small, new, primarily urban farmers we’re working with,” Johnson explained.
After funding, the largest challenge for the startup is working out the logistics of distribution.
“Coordinating across dozens of restaurants and farms to ensure that demand is roughly equal to supply is tricky enough with established farms, but it’s even more complicated when many of the farms are new to this and are very uncertain about expected yields and harvest dates,” said Johnson.
There are roughly ten farms and ten retail outlets signed on for Nashville Grown’s first season, and the founding team has been working to coordinate the needs of the two groups.
“We found that farmers are flexible in what they can grow,” said Johnson. “We’ve started working backwards and making lists of what retailers are interested in, and then going back to farmers with those lists.”
Developing a successful collection and distribution model will be the priority for Nashville Grown’s first year in operation. Once established, Johnson and Greene hope to reinvest the revenue from the distribution fees that they collect to further build out the project. Plans include coordinating with the city to make more land available for farms and gardens, developing training programs for new farmers, and collecting and consolidating resources for other startup food hubs around the country.