Key Challenges & Strategies →
Challenges to Establishing Successful Food Hubs
While food hubs can have a wide range of positive and equitable impacts, starting and operating a food hub comes with obstacles, even if you are reconfiguring a current farmers’ market or wholesale distribution center into a food hub:
- Start-up, administrative, and operational costs. Finding the capital to start and maintain a food hub can be challenging. Given the complex nature of food hubs, overhead costs can arise at all points on the operational chain, from the in-take of local produce to the sale of goods to distributors and/or consumers.
- Site development. Similar to supermarkets, food hubs require strategic site development to ensure that they efficiently and equitably connect producers to distributors and/or consumers in a specified geographic area. Food hubs often necessitate cold storage and space for processing, distribution, and marketing, so choosing a site suitable for a food hub requires knowledge of the local food system.
- Economic sustainability. Depending on the model, food hubs have to attract food producers, distributors, and/or consumers to be sustainable over time. Food hubs can take several years to achieve financial profitability.
Key Strategies for Successful Food Hubs
- Rely on proven and documented business strategies. Similar to other forms of healthy food retail, food hubs can benefit from comprehensive business plans. These enterprises can tap into targeted technical assistance programs that advise participants about how to increase their earning potential. Existing small business development training programs can also help food hubs improve their marketing strategies to increase their profitability.
- Develop unique financing/funding packages for each specific food hub project, with long-term stability in mind. Although support from any available funding source is critical at the early stages of development, food hub operators should also develop a plan for long term sustainability. Nonprofit food hubs, in particular, often rely on multiple sources of funding in addition to revenue, including grants and contributions, and must anticipate potential changes in these funding sources. However, given that food hub financing tends to reflect long-term, slow, management growth, this structure sets up the stage for long-term sustainability of the sector as a whole. For more information on finding funding for your food hub project, see Funding.
- Collect high quality operational and financial data. Investing in data systems and processes is important to track progress, evaluate performance, and make improvements each year. As food hubs grow in time and experience, data can help to strengthen operations and inform decisions around pricing and staffing.
- Develop policies to support food hubs. In addition to city and statewide financing initiatives that support fresh food projects across the country, there are also non-funding policies supporting food hubs in underserved communities, see Policy Efforts.
- Build support among local partners. Food hubs can work with various partners, including local farmers’ associations, schools districts, and established food distribution centers, to establish distribution agreements to increase their market footprint. These partners can also help with advertising and marketing efforts.
- Choose a space strategically. The location of a food hub matters for growers, buyers, and the communities it serves. Selecting a site for growing, processing, or distributing in a low-income neighborhood, or a community of color, will maximize the benefit for these residents. In addition to improved food access, locating your hub in a low-income community will facilitate local hiring, workforce development, and, if done well, a commitment from the community to support the hub.
- Find your spot in the market. Engage and remain engaged with residents of local communities, restaurants, and institutional buyers to find out which products are most desirable. Engaging the community will help you create a culturally relevant product line that attracts local customers, and creates a base of buyers who view themselves as partners in the food hub. The most profitable food hubs often reach a diverse customer base through a broad range of buyers, including small grocery stores, restaurants, and K-12 food services.