Introduction to Pivot Tables

Food hubs provide a wide range of services, requiring different metrics to measure their success. Many food hubs also receive funding from private foundations, the USDA, and investors that demand measurability and accountability on a wide variety of factors. Long ago, we realized that we would never be able to create an out of the box report that provides information required for reporting to funders, summed the way they request. Instead, we provide comprehensive data exports that can be filtered and summarized with spreadsheet tools like Pivot Tables.

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Often times, when we mention Pivot Tables, our customer’s eyes glaze over (at least that’s what we imagine on the other end of the phone!). We’re here to break it down for you and make them a bit less intimidating. While we can’t provide follow-up training and support for Pivot Tables and other spreadsheet functions, we are holding a webinar to introduce you to ways you might use your LFM data and Pivot Tables to gain insight for your food hub.

Join us for a short, customer-only webinar on an introduction on using Pivot Tables with LFM data, on Wednesday, May 27 at 10am PT. Space is limited, so sign up today!

Local Food Marketplace releases QuickBooks Online API Integration Module

 With our most recent release, Version 3.1, we now offer a new module that integrates  your sales in LFM with QuickBooks Online. With just a few simple setup steps, you can eliminate double entry of sales data by exporting batches of sales records.

  •          Map your LFM database with your Quickbooks Online Chart of Accounts so sales get automatically recorded in the appropriate account for accurate financial reporting       

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  •   Easily drill down on each batch of transactions to see the line item detail of each transaction that is included 

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  • Easily see which orders have already been recorded in Quickbooks Online

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Current LFM customers can join us for a short informational webinar on Wednesday, May 6.  If you aren’t an LFM customer and wish to learn more, please contact us.

Meet our Team… Laura Theis

Laura Theis joined the LFM team in the fall of 2013 after working for many years with Idaho’s Bounty in Ketchum, Idaho. Laura works tirelessly with all of our customers, as well as our development and implementation team, to help assure our technology works in a smooth and efficient manner. If you are a customer of ours, you have spent plenty of time with Laura in one way or another. Laura is next in our series of team profiles. We couldn’t do what we do without Laura on board.

 

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I grew up in Hillsboro, WI a small farming community where my parents both worked at nearby schools. I attended the University of Wisconsin at Madison, receiving a Bachelor’s degree in Landscape Architecture. While there, the ethnic restaurant scene, close friends and a college boyfriend, exposed me to how important food, agriculture and proper nutrition are to all of us. Through courses in Landscape Architecture, I became aware of how land, water, community planning, food and health are all so closely intertwined. Botany of Desire by Michael Pollan was a very influential book for me in forming my approach to local food.  Coincidentally, I later got to closely work with the potato farmer Mike Heath in the book.

After leading bike tours in the Mountain West with Trek Travel for several years after college, I started looking for a new opportunity. AmeriCorps seemed like a great opportunity to try out a different locale and learn some new skills.  After being offered a position at the Environmental Resource Center (ERC) in Ketchum, Idaho, I moved cross country to that mountain town, a place I had never heard about or visited. Eek!

One of the requirements for the AmeriCorps program I worked under was called CAP, a Community Action Project. The CAP project allowed AmeriCorps hours for me to work on a project that I was interested in, outside of the ERC. I became involved with the group, now known as Idaho’s Bounty, to help them determine if the community was interested in local food. I worked with a small group of interested locals, who collaborated to meet with producers, consumers, government agencies and other similar formed groups out of state. We eventually applied for and received a FMPP USDA development grant. Idaho’s Bounty Coop was born!

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Over the next 7 years, I helped organize, open and grow Idaho’s Bounty from a once a month retail only distribution, to the multiple weekly wholesale delivery operation across Southern Idaho that it is today (they still reach those retail customers once a week). One of my first roles was implementing an open source technology to meet our needs. We eventually outgrew its capabilities and I worked with an outside firm to facilitate a widespread search for a technology platform that would satisfy current and future needs.  We discovered LFM in the search and determined that their technology and company offered IBC the best long-term solution.     

 I later lead the implementation of LFM at IBC in 2012, including transitioning and training over 70 producers, multiple team members, and customers giving me a comprehensive understanding of the software. In early 2013, I took a step back in my role as Operations Manager at IBC and later in 2013, when Amy reached out about an opening on the LFM support team; I excitedly joined. With my heart and ‘family’ firmly in Southern Idaho, I work remotely, traveling to LFM headquarters in Eugene, Oregon a few times a year to charrette with the rest of the team.

Most of my “downtime” is spent outdoors biking, skiing, or running with my boyfriend, Nick, and other friends.  When we’re not summiting a peak or riding trails on our bikes, we love to garden and spend time with friends and family. I also work part-time with an architectural firm in Ketchum, am a board member of my housing association and volunteer with the local bike group to maintain trails. You might even catch me knitting or reading to wind down at the end of the day.

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Announcing our newest release, Version 3.1

We are excited to announce the release of our newest update, Version 3.1.  This release includes dozens of new features and enhancements to help LFM customers enter their busiest season equipped to maximize their sales!  As we often do in our spring release, we focused our efforts on the “little things” that make a big difference.

We did include a couple of “big” items too.  Version 3.1 features the commercial release of our Quickbooks Online API module that seamlessly exports sales from LFM into Quickbooks Online, broken down by Chart of Accounts.  We also incorporated enhancements to the newly released Production Planning module based on customer feedback – including an improved interface for faster entry of plans and management of pre-orders.

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LFM customers – please contact us to receive a link to our training webinar or to receive a copy of the Release Notes!

What food hubs can learn from farmers markets

If you are a local food geek like me, you probably read the LA Times article,  Has the Farmers Market Movement Peaked?, or the NPR piece, Are Farmers Market Sales Peaking? That Might Be Good For FarmersBoth of these pieces suggest that the rapid expansion of farmers markets has bubbled and sales at farmers markets are declining.

This begs the questions – what does this trend mean for the local food movement as a whole? And, what does this mean for food hubs?

Farmers markets sales trends and the local food movement

Many farmers markets across the country have experienced a noticeable decline in attendance and sales, yet more people than ever want local food .  Is this decline an indication that the local food movement “jumped the shark” or is there something else contributing to the decline? I assert, as have others, that the trend speaks more to the emergence of other models to make local food MORE available, accessible, and convenient to the more people.

Local food is indeed, growing up. Farmers markets will always have a place in the local food community. However, I’ve talked with many farmers, and while they enjoy working a market periodically, the labor and cost of attending them each and every week can be prohibitive.  Farmers markets offer a unique marketing experience that is difficult to duplicate, but they take producers away from what they are good at – farming. Thus, producers are exploring ways to grow and sustain profitable businesses.

While farmers markets have seen a leveling off of sales, intermediaries, such as food hubs and similar collaborative efforts, are growing in leaps and bounds. Local food is going mainstream!  From 2007 until 2012 the number of food hubs in the US has nearly tripled, and continues to grow today.

These trends suggest that food hubs have gained growth by taking sales from farmers markets, which is likely true to some extent, but food hub sales volume is largely being driven by grocers, co-ops, schools, and institutions.  The ability for these businesses to order from multiple producers, get one delivery, and a single invoice is making a difference in the operational effectiveness for producers and buyers alike. Food hubs have the staff, transportation, facilities and overall infrastructure to increase efficiency without increased cost.

 

So, what can food hubs learn from recent farmers market trends?

The growth that farmers markets saw over the last decade shares some characteristics with the tech bubble of the late 1990’s and early 2000’s (minus the billions of venture capital funding, of course!). There was unbridled growth; every city, town, and even some individual neighborhoods started their own market.   Not long ago, the USDA was issuing press releases about the dramatic growth of farmers markets.  So, what happened and how can food hubs avoid the same fate?

  •  Much of the growth was based on a “build it and they will come” strategy, without regard to a financially sustainable business model, or available supply.  Many markets were planned without consulting producers and were used as a way to gain foot traffic to nearby businesses.

Lesson learned:  Ensure that a food hub will fill a critical market demand and that it meets the needs of customers, producers, and other key stakeholders.  Many food hubs create feasibility studies and business plans to better understand and quantify the risks, competition, and required infrastructure to support long term growth.

  • Some markets (new and long standing) struggled to find enough producers to fill their stands.  In many cases, this is directly related to a lack of customers shopping at the market.  But some successful, long standing markets essentially outstripped their supply.

Lesson learned:  The emphasis on planning, particularly production planning, cannot be overstated when starting and operating a hub. Almost all food hubs suffer from a lack of supply and thus, maximizing the use and increasing supply is paramount.  Food hubs should not only be planning for the upcoming year at hand, but for the future. What kind of support or training do your producers require to reach future goals?

  • Farmers markets rely heavily on a fairly homogeneous core group of customers. While that group has diversified slowly over time, the over saturation of markets cannibalized each other without identifying and serving different customer segments.

Lesson learned:  Successful food hubs should look to diversify their sales channels. For example, a hub that relies heavily on restaurants, particularly high-end restaurants, risk their sales with economic downturns.  Similarly, a hub that focuses only on schools and other institutions are exposed to political and regulatory shifts. Diversification of your customer base can keep things steady with the evolving market and regulatory environment.

What this means for the future?

Taking a hard look at long term financial stability and prosperity is especially vital given the influx of funding and resources that have recently become available to food hubs and aggregators through USDA’s Local Food Promotion Program and other sources.   With this funding, food hubs have the opportunity to make tremendous gains for local food – but they can only do so if they are around to reach their mission.

 

 

Meet our Team…Ryan Crum

In December 2014, we welcomed Ryan Crum to our team.  Ryan is our Sales and Marketing Coordinator and primary social media “voice”,  plus he’ll stop by here from time to time to share his ideas on the intersection of local food systems and his experience as a former Executive Chef, Marketing Manager for a grass-fed dairy, and Account Manager for several large food service companies.  We’re glad he’s joined our team of technology and food hub veterans.  Here’s Ryan’s story, in his words.

Growing up in Minnesota, I can’t really remember a time when local food was not important. When you have a short growing season, like much of the upper Midwest, you need to take full advantage of the warm temperatures while they last. As a child, my parents had a large garden that hosted the bounty of what Minnesotans are known to grow; mainly tomatoes, cucumbers, peppers, carrots and rhubarb. The taste of carrots straight out of the garden, have stuck with me all these years.

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After graduating high school in Bloomington, MN, I did what most lost 18 year olds do in suburbia: went to college without much of a plan. Sitting in Philosophy 101, I realized how much I was daydreaming, not about my social life, a football game, or a new car, but about what I was going to cook for my roommates’ dinner that night. It was that moment that I realized I needed to pursue my lifelong love of food, and enroll in Culinary School.

I spent many years cooking from Minneapolis, to the North Shore of Lake Superior, and eventually to NW Montana. Nearly everywhere I landed, I tried to use local products in my kitchens. This was in the early 2000’s so the availability was pretty scarce. The biggest problem was the difficulty in sourcing, purchasing, and transporting the bounty these areas had to offer. If I was lucky, a fisherman would drop off line-caught whitefish or lake trout, or a forager would bring a truckload (yes, I said truckload) of fresh picked morel mushrooms to my back door. These surprise visits were too few and far between, however. When I left the kitchen, I wanted to learn more about how our food moves from the farm to the fork.

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Transitioning out of the kitchen can be difficult for any chef, which is why many take the path I did and move into sales and distribution. I spent a few years with several large broad-line distributors, learning the ins and outs of distribution management. It did, however, take me further away from my end goal of working with local food systems. My ‘aha’ moment came as I was discussing canned tomatoes with a colleague, and the differences between ours and a competitor’s. He turned to walk away, and said: “Let’s be honest here, we are all just peddling a bunch of Monsanto junk from god knows where anyways.” I knew it was time to move on.  I landed as the Sales and Marketing Manager with Cedar Summit Farm, a model of sustainability, locavorism, and top notch agricultural products.

It was at the farm that I met Josh and Natalie Kelly, co-founders of Twin Cities Local Food, and a customer of Local Food Marketplace. I was fascinated by their business and how they were not only able to operate, but able to do it so efficiently with only the two of them as staff (they are now up to three!). I worked closely with the Kelly’s thorough Cedar Summit, farmers markets and with the organization Local Harvest Alliance. Natalie mentioned one day that their software provider was looking for a sales and marketing person, knowing that my position was being phased out with the farm. (Cedar Summit Farm ceased operations in January 2015.) That led me to Local Food Marketplace, and my goal of helping organize and grow our local food system.

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I live in Minneapolis with my beautiful wife Jennifer of 4 months and our wild-eyed two year old labradoodle Nero. I still cook quite a bit in my spare time, and love the wonderful summers in Minnesota where our farmers markets are bustling. We are huge afficanados of Bar-B-Que and all southern foods. We love spending time outdoors: hiking, working in the yard, and enjoying the lakes of MN. We enjoy traveling and, on our adventures, touring, visiting and sampling at local breweries and wineries. In my spare time I do communications work for longtime friend Marshall O’Brien of the Chef Marshall O’Brien Group, with his chef consulting business helping improve nutrition standards in schools, health care, and civic organizations. I also volunteer with the Minnesota Department of Agriculture Organic Advisory Task Force and am currently serving a 3 year term.

I look forward to working with all of you, and helping you with any of your technology needs. I hope to bring a fresh voice to this blog and share stories about local food, success stories, or just something to make you smile. If there is anything I can help you with, please feel free to reach me anytime: ryan@localfoodmarketplace.com.

Production Planning with an Expert: Getting Started with Production Planning

While specifying the requirements of our newly released Production Planning module, we talked to many food hubs that aren’t ready to plan all of their products, but want to implement best practices to position themselves for more rigorous planning in the future.  Our research led us to Mary Oldham, Regional Coordinator for Value Chain Cluster Initiative (VC2), a program of the Natural Capital Investment Fund that provides hands on business support to strengthen local farm and food businesses in West Virginia.

We interviewed Mary about common planning challenges and best practices for newly formed food hubs or those working with small or inexperienced producers.   Below is Part 1 summarizing what should be in place before planning and ways hubs can help less experienced producers transition to planning production.  Part 2 covering common problems and lessons learned will be published in the coming weeks.

Mary will also be joining us for our January 22 webinar, “Getting Started with Production Planning” where she will present on best practices and be available for questions.  Register here, space is limited!  If you are interested in a detailed demonstration of the module, sign up for one of our weekly webinars or contact us to arrange an individual web meeting!

mary production planning lewisburgAbout Mary Oldham

Mary has served as a Regional Coordinator for VC2 since 2013.  Through her role with VC2, Mary co-authored Production Planning for Aggregators with Savanna Lyons, and provides training and support to start-up and emerging food hubs and their producers.

Mary has a Masters Degree in Agricultural and Resource Economics from West Virginia University. She also runs a CSA farm with her husband.  Prior to her role at VC2, Mary worked with small agricultural cooperatives and agricultural development projects in Honduras as a Peace Corps volunteer, through USAID, and various non-profits. 

Getting Ready to Plan

For new and emerging hubs, here’s a quick list of what should be in place before production planning.

Distribution and pricing model

Before formulating a viable plan, a food hub must determine its distribution model and cost structure.  Most food hubs conduct a pilot season to test their assumptions and ensure the model can scale.  Hubs in the pilot season should limit their production planning to a couple key producers and customers that are aware the hub is in pilot stage.  After the pilot season, the hub can make adjustments to the model to achieve greater producer and customer buy-in.  This will also help the hub confidently expand their production planning efforts to a wider group of customers and producers.

Manager/coordinator that has the trust of customers and producers

This role is perhaps the most critical for a hub’s ultimate success, particularly for hubs that are working with larger buyers.  Inevitably, actual sales will not go as planned, but communication and transparency between the hub, producers, and customers will maintain relationships and provide opportunities for future improvement.  To successfully execute a production plan, the coordinator/manager must be in regular contact with customers and producers, updating them on anticipated changes to the plan, and also putting back-up plans in place when necessary.

Detailed buyer demand data

Many hubs are formed based on feasibility studies or analysis that combines macro data and buyer surveys.  This type of demand estimate should not be used to plan production, however.  Hubs should base their plan on the hub’s actual sales to customers or through detailed conversations with the customers about their needs.  A hub must be careful to not take a customer’s anticipated demand at face value particularly if the hub has had limited experience selling to the customer.  Customers often mistakenly overestimate demand because of their enthusiasm or lack of knowledge of their true volume needs.  Overestimating demand, particularly for specialty products that are difficult to find alternative buyers for, can create producer distrust.  Hubs can avoid overestimating demand by asking customers to provide volume and prices for actual purchases of the same product in the previous 12 months and assumptions behind their demand forecast.  The hub can then assess the relative risk in planning production for that customer.

Producer buy-in

Specifically, the hub should have a couple larger, more experienced producers that are bought in and see the big picture.  These producers help bring other producers on board through their example.  They often lend their production experience to the group and shorten the learning curve for other producers.  In addition, they help mitigate risk in working with less experienced producers because the hub can often fill in supply from them when the less experienced producers can’t meet their expected supply.

Good individual farm planning and record keeping practices

The food hub’s production plan is highly dependent on each farm following through on its commitments.  Before working with a producer to plan production, the hub should evaluate the farm’s planning and record keeping practices.  How do they plan and schedule succession plantings?  How much of each product have they grown in each year?  What varieties?  How closely have their plans matched actual production?

Producer Training & Assistance

The mission of some food hubs, such as Alba Organics, is to help farms gain experience and training so that they will be successful when fully operating on their own.  Even if a hub isn’t acting as a farm incubator, the hub can assemble resources that will help producers provide a more predictable supply.

Farm planning and record keeping

Many small farms are transitioning market gardeners or perhaps run small CSAs where their supply is highly variable and unpredictable. Before these producers begin planning, they should assess their needs and time constraints.  If the farmers are also working outside jobs, they may need to plant crops that don’t require succession planting, such as winter squash.  Before creating a plan, producers will need information on yields and days to maturity for the crops they plan to grow. Popular resources include Johnny’s Seed Catalog and Johnny’s website.

When creating a plan for the first time, many producers benefit from working with a worksheet by hand before using technology to automate calculations.  Technologies for automating a producer’s production plan include a spreadsheet based system by Brookfield Farms, developed and supported by the farmers, and AgSquared, a cloud based planning and record keeping technology.

Post harvest handling & grading

Producers accustomed to growing on a small scale for consumers are often unaware of good post harvest handling practices, cleanliness, grading, and standard pack sizes.  Many food hubs offer Wholesale Success Training to their producers so they are better prepared to meet the hubs needs in quality, safety, and consistency.  Depending on the type of customers being served, food hubs may also consider requiring GAP training, which is offered by USDA.  A number of hubs are currently piloting Group GAP certification.

Resources for troubleshooting problems

Producers that begin to grow specific products on a larger scale than they ever have will often experience problems with disease, pests, quality, or growth.  Local extension agents and more experienced producers are a great resource for helping producers overcome challenges.

For more expert planning advice please check out our blog posts (Part 1 and Part 2) featuring expert Johnice Cross, former production coordinator for a producer co-op.  We hosted a webinar featuring Johnice on production planning on November 13.  If you missed it, you can find a link to the recording on our Resources page.  

Best Practices with an Expert: Production Planning for Food Hubs, Part 2

In anticipation of releasing a fully integrated Production Planning module this fall, LFM is featuring expert planning advice from food hub managers and others working in local food systems.

For this installment, we interviewed Johnice Cross about her experience forecasting production and sales for local food.  Below is Part 2 of a summary of our conversation on the mechanics of planning.  Part 1 on why planning is important and what needs to be in place to begin planning is here.

Johnice will also be joining us for our November 13 webinar, “Production Planning for Success” where she will present on best practices and be available for questions.  Register here, space is limited!

johniceAbout Johnice Cross

From 2007 – 2012, she served as the Coordinator of GROWN Locally, a producer cooperative in Northeast Iowa.   As Coordinator, Johnice managed all aspects of running the cooperative, including production planning.  During her tenure, GROWN Locally became the first cooperative to become a qualified vendor for Sodexo.  She is a food safety coach for the USDA GAP certification program.

Johnice has a degree in Finance from the University of Arkansas in Fayetteville.  Prior to her work with GROWN Locally, she owned an IBM Midrange Computer Consulting Company where she specialized in financial analysis and planning for manufacturing and distribution companies.  She is currently consulting in the local food world of NW Arkansas.

Getting Started

Plan everything or just specific products?

This a question most food hubs wonder about, and there isn’t a single right answer.  Certainly, the food hub must take into account the amount of time and capacity available for planning and determine the best approach for their hub for that season.

One advantage of planning all (or most) food hub products, although more time consuming upfront, is that it results in a sales plan and cash flow projection for the food hub and its producers.  Planning all sales also gives the food hub a head start when dealing with new customers.  If the food hub knows what volumes producers are growing and how much is already reserved, the hub knows what products they can sell more of and thus how to more efficiently use their sales and marketing efforts.  This approach will also make the degree of over or under supply of each product more visible, and thus, actionable.

If planning all products a food hub sells is overwhelming or seems unnecessary, planning just those that drive sales or are in short supply still adds significant value to the food hub.  Through planning, the food hub can be more strategic in the sales of products that are in limited supply and recruit producers to fill in gaps.

Putting the plan together

Depending on the type of entity and level of producer engagement, putting the plan together will vary slightly.  Regardless of the entity type, the production coordinator will meet with customers and producers, typically individually, to simultaneously review the previous year and determine volumes for the next year.  Based on these meetings, the production coordinator determines how to best utilize available supply.  In deciding what producers to plan for which products, the production coordinator takes into account many different factors, including:

Producer experience growing the product
-Has the producer grown the product before in similar quantities for similar types of customers?
-Have their results been predictable in volume and quality?

Customer requirements
-How flexible is the customer on product consistency and quality?
-Will the product be used for value added products or sold as harvested?
-How flexible is the customer with pricing?

Food hub requirements
-What are the “costs” of working with each producer and customer? For example, are they easy to work with?  Are they responsive?
-How does each producer and customer fit into the long term strategic goals for the food hub?  Will working with the customer provide experience that can be leveraged to work with other similar customers?

Mainly, the production coordinator is maximizing the available supply while managing risk to ensure the food hub has a reasonable chance of meeting commitments to customers and producers.

In producer co-ops, producers often meet as a group to review results from the previous year, discuss varieties and available acreage for each crop.  The co-op’s bylaws typically dictate how a co-op establishes producer priority and assignment of products.  Based on the producer meetings, the coordinator establishes a primary producer for each product and sets pricing.  Producers then use this plan to purchase seed and finalize their rotational plan.

How long does all of this take? 

Typically, individual buyer or producer meetings take about 1.5 to 2 hours each, plus preparation and follow-up.  For some buyers (small or those not interested in forecasting), the coordinator can assume demand, typically based on sales from the year before.  Often in producer co-ops, individual producer meetings can be eliminated in favor of several producer group meetings.

Between producer and customer meetings, Johnice estimates that she spent about 3-4 person weeks creating and finalizing a production plan.  Obviously, this can vary tremendously by the size of the food hub, number of producers and customers, number of products planned, and the food hub’s experience in planning.

Managing the plan

Producers provide weekly updates on availability throughout the year, relying on their plan to guide volume and pricingProducers should be responsible for notifying the coordinator of crop failures or other circumstances that prevent them from meeting their commitments.  The coordinator should also regularly check on how well producers and customers are meeting their commitments, and keep detailed notes on failures and successes.  These notes are vital in doing a proper review at the end of the year.

In some producer co-ops, primary growers are responsible for mentoring secondary growers to increase their quality and yields.  Secondary growers can call on primary growers to help troubleshoot problems.  This system greatly accelerates the learning process of newer growers and allows the co-op to grow more quickly and serve more customers.

An important aspect of taking on less experienced growers is finding a market for seconds.  Inevitably, the first or second time a producer grows a new crop or grows it at scale, product quality issues crop up.  Food hubs can help producers take risks on growing new products if they can help find customers for “seconds”.

What would make planning easier or more effective?

Besides having more product (almost all products were short on supply), a planning database that is integrated with orders to communicate and track plans greatly enhances a food hub’s ability to learn from and improve future sales plans.  Here are specific areas Johnice cited:

– An easy way to communicate the plan to producers & customers.

– A quick comparison of plan vs actual sales so issues can be spotted earlier.

– A way to easily track missed opportunities to inform production in future years.

How LFM addresses planning

When we began specifying the planning module, we noticed that many food hub production plans were stand alone spreadsheets and went nearly untouched during the sales season.   Of course, the planning process itself provides great value to the food hub, but a food hub can realize much more value by using and updating the plan on a regular basis.

While LFM’s database driven planning module helps production coordinators develop a production plan and spot excess supply and demand in the planning stage, it also helps them manage and execute the plan throughout the season.

The planning module integrates with the producer interface, informing the producer of expected weekly volumes and sales of each product, and customer orders, allowing the food hub to create “reserve” orders based on the plan. LFM also provides reports on plan versus actual for customers and producers.  These reports will not only reduce the prep time for the annual review meetings, but also help the coordinator spot problems earlier.

Want to learn more? 

For more expert planning advice please check out Part 1 of our conversation with Johnice.  We hosted a webinar featuring Johnice on production planning on November 13, 2014.  If you missed it, you can find a link to the recording on our Resources page.    We also interviewed Mary Oldham, Regional Coordinator for Value Chain Cluster Initiative.  Read a summary of our conversation here or register for a webinar on January 22, 2015 where Mary will share her advice on working with new and emerging food hubs.  Also, be sure to check out the publication Production Planning for Aggregators written by Mary Oldham and Savanna Lyons, Leopold Center.

 

Best practices with an expert: Production Planning for Food Hubs, Part 1

In anticipation of releasing a fully integrated Production Planning module this fall, LFM is featuring expert planning advice from food hub managers and others working in local food systems.

For our first installment, we interviewed Johnice Cross about her experience forecasting production and sales for local food.  Below is Part 1 of a summary of our conversation on why planning is important and what needs to be in place to begin planning. Part 2 on getting started and the mechanics of planning is published here.

johniceAbout Johnice Cross

From 2007 – 2012, she served as the Coordinator of GROWN Locally, a producer cooperative in Northeast Iowa.   As Coordinator, Johnice managed all aspects of running the cooperative, including production planning.  During her tenure, GROWN Locally became the first cooperative to become a qualified vendor for Sodexo.  She is a food safety coach for the USDA GAP certification program.

Johnice has a degree in Finance from the University of Arkansas in Fayetteville.  Prior to her work with GROWN Locally, she owned an IBM Midrange Computer Consulting Company where she specialized in financial analysis and planning for manufacturing and distribution companies.  She is currently consulting in the local food world of NW Arkansas.

Why is planning important? 

Planning benefits food hubs, its producers and customers – it increases sales and profits of food hubs and producers while better serving customers.  Here is what planning can do for food hubs:

Consistency

Planning helps create consistent availability for buyers, which allows them to buy more.  Consistency is important in volume as well as variety and quality.  Customers like to buy the same variety of product week to week because their customers demand it.  Having intermittent supply creates challenges in stocking their shelves and building their menus that increases their costs and therefore decreases the amount of product they purchase through the food hub.  Customers also value price consistency; if food hubs can offer a price that doesn’t fluctuate like other vendors, they will purchase more from the food hub.

Pricing

Planning allows hubs to work with customers on a wider range of products over a longer period of time to more easily overcome price sensitivities.  Larger volume buyers are almost always going to be price sensitive.  If hubs work with those buyers to meet their budget for an entire season for a range of products, they won’t be competing on individual product prices week to week.

Producer engagement

In order for a food hub to succeed, it needs producer buy-in.   As with any business, producers assess the importance of the food hub’s business based on a combination of sales volume, profitability, and other benefits they might receive by selling to the food hub.   Producers are more likely to work with a food hub if they know with some certainty the sales they will make to the food hub.   Planning also helps them reduce risk because they are doing less guessing on what to grow.

Increase food hub value

For long term sustainability, food hubs need to provide services beyond sales and distribution.  When food hubs use the planning process to help shape supply to meet demand, they are adding more value to the supply chain and making the food hub more difficult to replace.

Cash flow & infrastructure planning

Forecasting will help food hubs improve cash flow and infrastructure investments.  Planning ahead will cut down on unnecessary last minute line of credit applications and purchases, which are undoubtedly more expensive than if planned and negotiated ahead of time.

What are key components to have in place? 

Production coordinator

Food hubs have different titles for this role, but ultimately this person (or group of people) is the lynchpin to making and executing a good plan.  Coordinators should have strong producer and customer relationships to be effective.

Producer experience

Although it probably goes without saying, producers that you are relying heavily on in the plan should have multiple years of experience growing the products you are planning for them.  They should also have experience growing for similar customers and at similar volumes.  If you are working with many inexperienced producers, consider offering a formal producer training program such as Wholesale Success by Familyfarmed.org.  Food hubs should also consider a peer mentoring program, which are often used by producer cooperatives, where more experienced producers offer support and assistance to less experienced producers.  These producers will expect some preference in return for their services, but in the long run, it will help the food hub continue to grow.

The food hub can minimize its risk by only planning with producers they have experience with and using other producers to fill in gaps.  As the food hub gains experience with other producers, they can add them to the planning process in upcoming years.

Written agreements

While most food hubs and producers aren’t ready to engage in binding agreements, it makes sense to formalize the roles and expectations of the food hub, producers, and customers.  Having these in place will help assess what adjustments need to be made in the future plus will ensure that all parties are committed to the same goals.

Want to learn more?

For more expert planning advice please check out Part 2 of our conversation with Johnice.  We hosted a webinar featuring Johnice on production planning on November 13, 2014.  If you missed it, you can find a link to the recording on our Resources page.    We also interviewed Mary Oldham, Regional Coordinator for Value Chain Cluster Initiative.  Read a summary of our conversation here or register for a webinar on January 22, 2015 where Mary will share her advice on working with new and emerging food hubs.  Also, be sure to check out the publication Production Planning for Aggregators written by Mary Oldham and Savanna Lyons, Leopold Center.