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National Convening of the Good Food Network

National Convening of the Good Food Network. Case Research of Food Value Chains Chicago IL November 20, 2008 (gwsteven@wisc.edu). Percentage Change in US Farms by Sales Class, . 1997 - 2002. 10%. 5%. 0%. < $5,000. $5,000-. $25,000-. $50,000-. $1000,000-. $500,000-. <$1,000,000.

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National Convening of the Good Food Network

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  1. National Convening of the Good Food Network Case Research of Food Value Chains Chicago IL November 20, 2008 (gwsteven@wisc.edu)

  2. Percentage Change in US Farms by Sales Class, 1997 - 2002 10% 5% 0% < $5,000 $5,000- $25,000- $50,000- $1000,000- $500,000- <$1,000,000 $25,000 $50,000 $100,000 $500,000 $1,000,000 -5% -10% -15%

  3. AOTM Working Group Structure

  4. Business & Marketing Options Value- Added 1. Direct Sellers • Cooperative • Sellers Strategic Alliances & Food Value Chains Farmers’ Markets CSA’s Internet Sales Very Small Very Large 3.Low Margin/ High Volume 4. Troubled Zone Mid-scale Commodity Producers Large-scale commodity Producers Commodity

  5. Tier 4 Tier 3 Tier 2 Tier 1 Tier 0 Tiers of the Food System

  6. Definition of Mid-tier Food Value Chains: • Values-based strategic business partnerships • Featuring mid-scale agri-food enterprises that • Create and distribute responsibilities and rewards equitably across the supply chain, and • Operate effectively at regional levels with • Significant volumes of high-quality, differentiated food products.

  7. Case Studies • Country Natural Beef [www.oregoncountrybeef.com] • Shepherd’s Grain [www.shepherdsgrain.com] • Organic Valley Family of Farms [www.organicvalley.coop] • Red Tomato [www.redtomato.org]

  8. Key Characteristics of Mid-tier Food Value Chains: • Engage value/values in products and business relationships • Emphasize organizational interdependence. trust and transparency: shared support & shared reward • Achieve scale & volume through cooperation and aggregation of mid-scale producers • Enable mid-scale enterprises to be competitive

  9. Farmers, Ranchers, and Fishermen: • Are treated as strategic partners, not as interchangeable input suppliers • Negotiate prices based on production and transaction costs, plus a reasonable margin • Experience agreements/contracts as fair and for appropriate time frames • Control brand identity up the supply chain …co-branding with strategic partners • Participate fully in value chain decisions

  10. Challenges and Opportunities: • Creating & Marketing Significant Volumes of Differentiated Food Products • Creating Effective Internal Organizational Forms • Selecting Value Chain Partners [Shared values, different competencies, and complementary business models]

  11. Challenges and Opportunities Cont. • Developing Effective Supply Chain Logistics • Achieving Economic Sustainability [commitment to the economic welfare of all strategic partners; supply management, stable pricing, and cost-of-production-based pricing] • Future Dynamics [engaging consumers as strategic partners and deeper differentiations]

  12. Big Themes: • Building Out a Middle Tier in the U.S. Food System 1) Develop, test, communicate, and proliferate a “new business logic” 2) Address key systemic issues [The “Good Food” bundle & Michael Pollan’s list]

  13. Big Themes Cont. • Value Chains Can Be Both “Smart” and “Right” 1) Smart Business: strategic partnerships (social capital) replace economic capital and expertise; nimbleness in the market; quality control efficiencies; food miles and food safety efficiencies; geographical identities 2) Ethical Business: equitable distributions; participatory organizations and alliances; ethical differentiations

  14. Other References • www.agofthemiddle.org • Thomas Lyson, G.W. Stevenson, and Rick Welsh, eds. 2008. Food and the Mid-Level Farm: Renewing an Agriculture of the Middle. The MIT Press, Cambridge MA.

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