MONTEREY, Calif. — Within the locally grown movement, there’s a new way of doing business, and it may become the newest industry acronym — VBSC.
The values-based supply chain model is designed to overcome barriers buyers face when they want to purchase locally grown produce.
Barriers include a price premium (up to 10%) buyers incur, delivery logistics, timeliness and consistency of deliveries, limited product selection/volume and seasonality, said Shermain Hardesty, extension economist agricultural and resource economist for the University of California-Davis.
She was one of six panelists at the “Locally Grown: Supply Chain Success Stories” workshop at the Produce Marketing Association Foodservice Conference & Exposition on July 31.
The tenets of VBSC call for treatment of growers as strategic partners (not input suppliers), increased volumes through product aggregation, differentiated products/local branding, and rewards and responsibilities distributed equitably across the supply chain. It also includes a story of the people and business practices behind the products, Hardesty said.
UC-Davis researchers recently studied supply chain solutions to problems associated with supplying locally grown product to foodservice operators.
The research showed that for distributors to be successful, they need to find the right balance of small, midscale and large producers in their networks, said Gail Feenstra, a food systems analyst at UC-Davis.
Food safety is another challenge.
“Unless smaller growers are exempt, they will need to prepare for the (good agricultural practice) standards coming down from the federal government,” she said.
To better handle the distribution and marketing challenges small growers face, aggregation hubs or regional food hubs in various forms are emerging to consolidate product.
“These may involve existing distribution warehouses, or they may involve farmers markets as the distribution or food hub,” Feenstra said.
Communicating stories about the grower may soon trump “local” in the consumer’s mind, she said.
“People want to know how their food is produced, who is producing it and what their story is,” Feenstra said. “If there’s a good communication stream, that may be the most critical element in what defines value for these value-based supply chains.”
The other four session panelists were part of one of the successful supply chain collaborations UC-Davis studied and held up as an industry example.