Recently, Martina and I visited Blue Ridge Produce in Elkwood, Virginia to tour their facility and find out about their business model. Blue Ridge Produce is a local produce wholesale ‘aggregator’, which means they buy from lots of little guys to sell to the big guys.
One of the main issues in increasing the availability of locally grown produce is ‘scaling up’. Small scale sales at farmers markets and CSAs are excellent sources for the farmer to sell directly to the consumer, and the profit margins are good to get a fair price. However, if a small scale producer would like to increase his crop production, have a consistent and reliable sales outlet, have less unsold produce, or would like to not be in the retail business at all, there are few options.
Enter Blue Ridge Produce. They work directly with farmers of all sizes to obtain locally grown produce in order to resell to large outlets. They are a reliable and consistent buyer for the farmers. And they are a reliable and consistent seller to a number of larger wholesalers, such as Coastal Sunbelt Produce and Whole Foods, which are seeking local produce on a large scale. This food hub model provides a way for small farmers to sell small quantities of their produce so they can continue to farm, while assuring a consistent supply for wholesalers. Both nonprofit and for-profit food hubs, such as this one, are beginning to spring up on the local foods landscape to meet the market demand.
There is no limit to the size of the farm they will buy from, however, farmers must provide the types of produce Blue Ridge carries and that it be of first grade quality. In selecting farmers to work with, says Chief Executive Officer Mark Seale, “We do so much more than just buy from them; we provide support, let them know what the market looks like, and we also respect them as businesses. In the long run, we build relationships that last.”
One example of that support is its role in encouraging GAP certification. Good Agricultural Practices Certification, or GAP, is a produce safety certification that sets basic standards for avoiding contamination of produce at the farm or during harvest. Though GAP not required by law, it is growing in popularity with larger buyers as a quality check on the produce they are buying. Blue Ridge Produce will buy from farms that have GAP certification or are in the process of obtaining GAP. It has organized trainings in GAP certification for their farmers, whereby they can attend the training and get inspected right away. “Many farmers see GAP as more regulations and question the need to do the certification. Many farmers would normally not do this, except that they trust us,” says Mark Seale. “When they go through the process, they realize they are doing most or all of the standards as good farming practices anyway, and that becoming certified is no extra burden. It then adds an extra value to their produce. ”
Only in business for a year and a half, they have grown to buying from more than 100 farmers and have a staff of 18 in the peak of the summer season. And business is good: “We have more demand than we can meet says Mark Seale. “Every morning our warehouse is empty by 9am because all our produce has been picked up by clients.”
“We actually get our local produce from the farm to the large scale buyer in about 12 hours, and that’s a market advantage because of the freshness of the produce,” adds Chairman Jim Epstein.
They are also seeing that their farmer partners are looking to expand now that they have a solid source to sell to. “They can still do their farmers markets business, but we convince them that we will buy any unsold produce, and that suddenly changes the game for them and encourages them to expand,” says Seale. “Up until now they couldn’t think bigger because they were working with a smaller customer base. Although the price they sell to us is lower than direct to consumer prices at a farmers market, they can supplement their income with what they sell to us at a fair wholesale purchase price.”
Located in Elkwood, Virginia just off route 29, they are situated in an old floral warehouse complex. Their definition of ‘local’ is anywhere in Virginia. This winter they are expanding their local offerings by identifying Virginia growers with greenhouse production. So far they have contacts with Virginia growers with about 40 acres of greenhouses. Blue Ridge Produce also hopes to add their own 80,000 square feet of greenhouses to that list starting this winter.
“Our main challenge is to stay focused on our core business of aggregation without getting distracted by all the other potential businesses that could be incubated on this property,” says Jim Epstein. “We are being very deliberate in finding the right businesses and the right business partners as we move forward.”
Blue Ridge Produce has the passion for local food movement and continues to participate in the ongoing conversation about local and sustainable foods. They regularly invite school food programs administrators, restaurant owners, health organizations and others to their facility to tour and discuss the movement and how they fit in. They are staying focused on their role as a for-profit business model, with a goal of working with more wholesale buyers to create a larger market to support the local farming community and increase access to local food.