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Change on the Horizon:
A Scan of the American Food System
February 2005
Brian Halweil
bhalweil@worldwatch.org
Change on the Horizon: A Scan of the American Food System
Table of Contents
Executive Summary: Drivers and Recommendations p. 5
The Slow American Eater p. 9

Our Bellies Aren’t Going Away. . .
. . . Even as Food and Health Become Synonymous
Baby Boomers Dominate Food Shopping
Cities Are the Next Agricultural Frontier
Both City and Country More Ethnically Diverse. . .
. . . And So Are Farmers
Americans Want it Prepared. . .
. . . But Still Want it Fresh
Food Scares and Energy Spikes On The Horizon p. 16

New Food Safety Risks Emerging
Climate Crisis Will Hit Farmers Hardest
Energy Crops Will Make Money for Farmers
Food Won’t Be Able To Hide p. 20

Organic Foods Soar. . .
Even As Americans Go Beyond Organic. . .
. . . To Place-based Foods
Agribusiness Gets Interested in the Details
Internet Technology Allows The Customer To Be A Partner
Eating Local Will Be More Convenient p. 25

Local Food Market Remains Small
Farmers Markets and CSA’s Continue to Grow, But Could Be So Much More
Full-service Farmstands Emerge
Local Food Distributors Fill A Food Chain Gap
2
Farm-to-Senior Programs Get Food to Underserved
The Big Guys Could Be Allies, As Nonprofits Define the Brands p. 29

Even Large Companies Need to Distinguish Themselves
Agribusiness Has Absorbed Organic, But The Rest is Harder
Third-Party Verification Can Help
Changes Can Ripple Through the Food Chain
Farmers Will Own Food Businesses p. 33

Where Are the Other Organic Valleys?
Value Chains Can Help Scale Up
Business Training and Financing are Lacking
Tapping into Charity to Jump-start Food Businesses
Kitchen Incubators Important, But Could Be More Effective
Foodservice Will Be King p. 38

An Untapped Market Where Americans Eat More and More
Farm-to-School Attracts Interest from Big Buyers
Colleges and Universities Offer Another Lucrative Market
Youth Voice Still Not Organized
The Largest Hospitals Are Experimenting With Buying Local
Chef Interest in Sustainability Growing, But Still Fringe
Supermarkets Will Change or Die p. 46

Supermarkets In Deep Trouble. . .
Though They Are Still the Place to Shop
Some Supermarkets Respond by Declaring Local Allegiance
The Really Local Supermarket
The Future of Supermarkets
Forget the Farm Bill, and Look To Local Food Clusters p. 50
3
Rising Concerns About Food Security and Food Imports

The End of Commodity Payments
Healthy Farms and Healthy Communities
Local Food Policy Councils Could Be More Organized. . .
. . . So Could Local Food Clusters
Appendix 1: Key contacts associated with ideas, organizations, businesses or projects

mentioned in this scan p. 55
4
Executive Summary: Drivers and Recommendations
Echoing broader political and economic trends, America’s eating habits are becoming more and
more divided. On the one hand, Americans are cooking less, eating faster, and buying more of
their food at convenience stores and Wal-Mart. On the other hand, a minority of better-off,
better-educated Americans is propelling the explosion of farmers markets, farmstands,
community supported agriculture (CSAs), grassfed meats, farmer-owned brands and slow food.
This dichotomy requires that farmers, food activists, environmentalists, community developers,
and foundations interested in changing the food system take a bifurcated strategy that includes
pressuring the Sysco’s, Kaiser Permanente’s, and Wal-Mart’s that provide much of America’s
food to help build a food system that depends on sustainably grown foods from regional farmers
and food makers, while at the same time encouraging grassroots enterprises—full-service
farmstands, farm-to-senior programs, local food policy councils—that make it easier and more
convenient for people to eat local and support small-scale food businesses.
In coming years, the following issue clusters will drive the trajectory of the American food
system, and provide strategic points of entry for people interested in changing that trajectory.
Scale remains a potent barrier in many of these areas—farmers and small food businesses are
often not equipped to supply those restaurants, cafeterias, or supermarkets where Americans buy
most of their food. Scale also remains a barrier at the policy level where innovative community,
county or state policies exist in isolation and in opposition to federal policy and the interests of
powerful lobbies.
The National Health Crisis Will Shape Food Policy
Rising healthcare costs and a spreading obesity epidemic, particularly in children, will continue
to preoccupy health officials in coming decades. Already, health concerns are playing into more
food decisions—individual shoppers are changing buying habits to favor more whole grains,
fruits and vegetables; institutions are changing policy to eliminate unhealthy foods from
cafeterias. Increasingly, governments and the healthcare industry will look for holistic responses
that engage schools, supermarkets, farmers markets, and entire communities in healthy eating,
while saving money.
Against this backdrop, healthcare organizations, from hospital buying groups to children’s health
advocates, can be allies in helping to harness farm-to-school projects, healthcare food
procurement, and nutrition and healthcare policy to support healthy communities and healthy
food systems.
Recommendations
Build alliances between the health community and sustainable agriculture community to
launch farm-to-hospital, farm-to-school and farm-to-senior projects; to alter hospital
procurement; and to lobby on the Farm Bill.
5
Use health concerns to jumpstart a youth movement around sustainable agriculture analogous
to the key role youth play in the environmental movement.
Foodservice Will Be King
In a few years, foodservice will consume the majority of the consumer dollar, as aging and
hurried Americans eat more meals away from home, and many more of the “home-cooked”
meals are largely prepared away from home. But competition and customer demand is forcing
both large and small restaurants, cafeterias, and other foodservice settings to distinguish
themselves by offering fresher, higher-quality products with a story about how and where the
food was produced. Local, organic, and sustainable are all labels that allow mom-and-pop
restaurants, regional hospitals, and other independent food businesses to get an edge over the
competition.
Currently, farm-to-institution projects remain small, and a large gap exists between what nearby
farmers and food makers can supply and the current (and future) demand from foodservice
companies. Apart from a few large success stories, these programs are not making a noticeable
dent in farm income; price remains a barrier for budget-conscious cafeteria directors, as does the
logistical hassle of dealing with smaller growers. As larger foodservice buyers—from the
Department of Defense to Kaiser Permanente to Sysco—enter the fray, they could help eliminate
price and distribution barriers, and increase returns to rural communities.
Recommendations
Engage a large food distributor to create a model for supplying a large school district or chain
of cafeterias with food from a particular region.
Examine the potential for farmer-owned cooperatives or value chain arrangements for
supplying foodservice.
Encourage business and entrepreneurship programs for rural areas through land-grant
colleges, farmer associations, or community groups.
Encourage kitchen incubators, food processing ventures and marketing cooperatives that can
feed full-service farmstands, cafeterias, and foodservice providers.
The Big Guys Could Be Allies, As Nonprofits Define the Brands
Whether they are grazing at a farmers market, picking over a restaurant or cafeteria menu, or
rolling down a supermarket aisle, Americans are demanding to know more about the origins of
their food. They are moving beyond organic towards such distinctions as local, humane, place-
based, and fair. This curiosity is forcing food makers and distributors—big and small—in the
same direction, as they try to distinguish themselves from the competition.
At the same time, food companies are seeing increasing pressure from environmental, health,
animal rights, and community groups to be more socially and ecologically responsible. As a
result, environmental groups, family farmer organizations, and other third parties are certifying
more and more food products: supermarkets and food distributors are building allegiances with
6
nearby farmers; the top coffee companies are certifying their crop with rainforest
conservationists; fast food companies are asking animal rights groups for advice.
These larger players in the food chain will help overcome the logistical, management, and
economies of scale dilemmas that now plague so many community-based or sustainable food
enterprises. But such allegiances also threaten to undermine the economic benefits for rural
communities, particularly if food producers are pigeonholed as suppliers of raw commodities and
if smaller firms are shut out in the process.
Recommendations
Encourage business and entrepreneurship programs for rural areas through land-grant
colleges, farmer associations, or community groups.
Support value chain projects that provide models for major farm sectors, such as grains,
meats, and dairy, and engage mainstream farm groups to attract new growers for these value
chains.
Identify particularly “dirty” sectors of the conventional food chain, like chicken production,
to be targeted with certification.
Encourage supermarket “buy local” and sustainable product campaigns that can ripple
through the food chain.
Forget the Farm Bill, and Look To Local Food Clusters
Despite a growing budget crisis and international pressure to eliminate commodity payments,
major farm lobbies remain powerful. Coalitions of environmentalists, sustainable agriculture
community, hunger groups, and public health lobbies have achieved small victories in the name
of healthy food systems, but have not been able to reorient farm policy or guarantee funding for
sustainable food projects.
At the same time, local food policy councils are proliferating around the country, and have
grown from an estimated 15 to over 40 in the last five years. Changes in food and agricultural
policy may be most likely at the local level, where politicians can be more responsive to the
needs of their citizens. These local food policy councils can pave the way for local buying
campaigns, farm-to-institution projects, and changes in hunger policy. Still, these councils would
benefit from greater national coordination to amplify their influence and learn from similar
experiences.
Recommendations
Encourage greater collaboration between local food policy councils around the nation,
including the possibility of a nationwide campaign around the Farm Bill, farm-to-school
programs, or anti-hunger programs.
Use local food policy councils to replicate pilot programs that make it easier and more
affordable for consumers to eat local, including farm-to-senior programs.
7
Look for allies beyond the current fold who might have a stake in healthy food systems,
including senior organizations, parent-teacher groups, youth organizations, and community
development corporations.
Food Scare and Energy Spike Wild Cards
Among those specters on the horizon that could radically restructure the American food system
are a large-scale food scare or energy crisis. Already Americans have witnessed massive meat
recalls, genetically modified contamination, and the lone mad cow. American consumers have
demonstrated incredible resilience and made few changes in their buying habits. (In Europe,
changes to food production and policy also came slowly after well-publicized food scares.) Still,
the imminent introduction of biopharming, emerging zoonotic illnesses like avian flu, and the
prospect of a deliberate attack on America’s food supply, all threaten the nation’s food safety.
Concern about agroterror is rising among agricultural, health, and defense officials, in particular,
and could prompt major changes in the nation’s agricultural and food policy.
For a food and farming system that depends heavily on petroleum, continued increases in oil
prices as supplies tighten around the world could raise the price of farm inputs, alter the logic of
long-distance food shipping, and invigorate markets for energy crops (such as wind or biodiesel).
The pending climate crisis will reinforce this shift away from fossil fuels, even as it challenges
farmers with more erratic growing conditions.
Recommendations
Consider the policies and training that would encourage biofuels production and markets.
Examine opportunities for funding and institutional support for sustainable agriculture
projects through the federal government’s homeland security programs.
8
The Slow American Eater

Key drivers
Americans are getting older, more obese, and more urban.
American consumers and farmers are more ethnically diverse.
Key implications
Health concerns are playing into more food decisions, both by individuals (buying habits)
and by institutions (policy decisions).
Americans are eating more prepared foods, even as they want it “fresh.”
Americans are eating more ethnic foods.
Urban growth puts pressure on nearby farmland while it creates opportunities for urban-
focused food businesses.
Our Bellies Aren’t Going Away. . .
Americans are heavier than ever before. With 65 percent of American adults overweight, some
analysts feel the obesity epidemic is peaking and shifting to younger Americans, where there is
still room for growth.1 Roughly 16 percent of American children (aged 6-19) are overweight.2
Among both adults and children, Hispanic and African-Americans are more likely to be
overweight.3 A recent survey of 1,100 organizations targeting childhood obesity found that they
are largely ineffective: they target children too late in live, do not engage family members, and
do not teach practical eating habits.4
. . . Even as Food and Health Become Synonymous
Despite some fluctuations in concern with nutrition and health, Americans are accepting the
close connection between food and health, according to Joe Marra, executive director of the
Natural Marketing Institute, which has been tracking health and wellness trends since 1999.5
Marra sees great potential for growth in functional and fortified foods (a booming European
market for these foods foreshadows a related boom in America), and hormone and antibiotic free
meats (58 percent and 57 percent of Americans said these were important to them in 2004 and
2003, compared with 50 percent in previous years).6 It remains to be seen whether Americans are
1
Gina Kolata, “Exchanging Cigarettes for Bagels,” New York Times, 19 December 2004; Health, United States,
2004 (Hyattsville, Maryland: National Center for Health Statistics, 2004), available at www.cdc.gov/nchs/hus.htm.
2
Health, United States, 2004 (Hyattsville, Maryland: National Center for Health Statistics, 2004), available at
www.cdc.gov/nchs/hus.htm.
3
Health, United States, 2004 (Hyattsville, Maryland: National Center for Health Statistics, 2004), available at
www.cdc.gov/nchs/hus.htm.
4
Shaping America’s Youth: National Survey and Registry of Programs Addressing
Childhood Physical Inactivity and Excess Weight (Portland, Oregon: Academic Network, 2004), available at
www.shapingamericasyouth.com/Default.aspx.
5
Joe Marra, Natural Marketing Institute, discussion with author, 8 December 2004; and Natural Marketing Institute,
The Health and Wellness Trends Report (Harleysville, Pennsylvania: 2004).
6
Natural Marketing Institute, The Health and Wellness Trends Report (Harleysville, Pennsylvania: 2004).
9
more interested in getting their vitamins and minerals from pills or by eating more fruits,
vegetables, and whole foods. “Whole grains” made it onto the 2005 trends list of the NPD group,
a top consumer research firm, just as General Mills, the nation’s number two cereal maker,
announced that it would convert all of its cereals into whole grain products.7
Baby Boomers Dominate Food Shopping
Americans are getting older. The “baby boom” generation, born between 1946 and 1964,
comprises nearly 30 percent of the national population, and is fueling an explosion in the
nation’s elderly population, projected to grow by 79 percent between 2000 and 2025.8 (For
context, traditional families, defined as a married couple with children, accounted for 30 percent
of all households in 1980, 24 percent in 2000, and are projected to account for about 17 percent
by 2020. At the same time, single-person households increased from 23 percent in 1980 to 26
percent in 2000, and will rise to 29 percent in 2020.9)
Baby boomers, who buy half the food in the United States, constitute the largest segment of food
shoppers for the foreseeable future.10 Many boomers still have first-hand memories of a time
when more Americans cooked meals at home, from scratch, and had closer ties to farming—in
1950, farmers still made up 12 percent of the labor force, compared with less than 2 percent
today.11 But older, budget conscious Americans in smaller households will accelerate the trend
towards convenience foods.12 Boomers also tend to be health-conscious and price-conscious
eaters.13
Cities Are the Next Agricultural Frontier
Most farmers are still in the middle of the country, but more and more Americans live in cities,
and those cities are pushing further into farm country. The share of the nation’s population living
in cities increased to 79 percent in 2000, up from 75 percent in 1990.14 Even when Americans
move beyond the sphere of large cities towards rural hinterlands, they are increasingly clustering
7
“USA: Top 2005 trends expected to include whole grains, probiotics,” just-food.com, 24 November 2004; Bruce
Horovitz, “General Mills cereals go totally whole grain,” USA Today, 30 September 2004.
8
Julie Meyer, “Age 2000: Census 2000 Brief,” U.S. Census Bureau, October 2001, available at
www.census.gov/prod/2001pubs/c2kbr01-12.pdf; U.S. Census Bureau, “Projections of the Population, By Age and
Sex, of States: 1995 to 2025,” available at www.census.gov/population/www/projections/stproj.html.
9
J. Cromartie, “Population Growth and Demographic Change, 1980-2020,” FoodReview, Vol. 25, No. 1, 2002, pp.
10-12.
10
The Generations in the Marketplace: A Closer Look at the Baby Boomer Market Basket (Washington, DC: Food
Marketing Institute, 2002).
11
U.S. Department of Agriculture, Agriculture in the Classroom, “A History of American Agriculture,” available at
www.agclassroom.org/teacher/history/farmers_land.htm.
12
The Generations in the Marketplace: A Closer Look at the Baby Boomer Market Basket (Washington, DC: Food
Marketing Institute, 2002).
13
Nicole Ballenger and James Blaylock, “Consumer-Driven Agriculture: Changing U.S. Demographics
Influence Eating Habits,” Amber Waves, April 2003.
14
U.S. Census Bureau, “Census of Population and Housing,” available at
www2.census.gov/prod2/decennial/index.htm.
10
in “micropoles,” a new Census designation for a core city with fewer than 50,000 people, but
that is too far away from a major city to be considered a suburb. One in ten Americans, about 28
million of us, now lives in a mircopolis.15
This demographic shift puts tremendous pressure on farmland around cities.16 But it may also
create two big opportunities. First, sprawling urban and suburban areas provide a strong
argument for preserving space for farmers markets, CSAs, community gardens, food processing
plants, kitchen incubators, and full-service farmstands. Second, urbanites will be the investors,
entrepreneurs, and partners in new rural ventures tied closely to city markets. In Boston,
companies like City Fresh Foods and The Food Project, have found success at this rural/urban
margin.17 Heritage Foods USA buys heritage meats from farmers concentrated in rural areas, and
sells them to customers concentrated in cities.18 From Havana, Cuba, to Washington, DC,
relatively small city gardens have produced a large amount of food and jobs.19 Somerton Tanks
Farms, a one-fifth-acre plot under a defunct water storage tank in inner-city Philadelphia,
provides jobs for a few city-slickers-turned-farm-managers, has built a 40-member CSA, and
supplies some of Philadelphia’s best-known eateries. The Institute for Innovations in Local
Farming hopes to spread these sorts of sub-acre farms around the country.20
Both City and Country More Ethnically Diverse. . .
Minorities now constitute nearly one third of the American population.21 And not just in urban
areas. From Somalis in Minnesota to Hmongs in Arkansas, racial and ethnic minorities now
comprise 17 percent of nonmetro residents.22 Almost one out of five Americans speaks a
language other than English at home, a 50 percent increase since 1990.23
Hispanic and Asian populations are growing at much faster rates than the population as a whole.
The Hispanic population reached 39.9 million on July 1, 2003, accounting for about one-half of
the 9.4 million residents added to the nation’s population since Census 2000. This 13.0 percent
15
Michael J. McCarthy, “Main Street America Gets a New Moniker,” The Wall Street Journal, 23 August 2004.
16
American Farmland Trust, Farming on the Edge: Sprawling Development Threatens America’s Best Farmland
(Washington, DC: 2002).
17
Glynn Lloyd, City Fresh Foods, discussion with author, 13 December 2005; Pat Gray, executive director, The
Food Project, discussion with author, 15 December 2004. Also see www.cityfreshfoods.com and
www.thefoodproject.org.
18
For more information see www.heritagefoodsusa.com.
19
For a summary, see Brian Halweil, Eat Here: Reclaiming Homegrown Pleasures in a Global Supermarket (W.W.
Norton: 2004), pp. 89-102.
20
Roxanne Christensen, Somerton Tanks Farms, Philadelphia, Pennsylvania, email to author, 3 January 2005, and
Somerton Tanks Newsletter, The Institute for Innovations in Local Farming, Philadelphia, Pennsylvania, Winter
2005.
21
U.S. Census Bureau, “Annual Estimates of the Population by Sex, Race and Hispanic or Latino Origin for the
United States: April 1, 2000 to July 1, 2003,” available at www.census.gov/popest/race.html.
22
USDA, Economic Research Service, “Race and ethnicity in rural America,” Briefing Room,
www.ers.usda.gov/Briefing/RaceAndEthnic.
23
U.S. Census Bureau, “2003 American Community Survey,” available at factfinder.census.gov.
11
growth was nearly four times that of the total population (3.3 percent).24 (During the same
period, the Asian population grew 12.5 percent to 13.5 million.25) Hispanics will comprise nearly
20 percent of the American population by 2020, and 25 percent by 2050.26 Surveys have found
that although these ethnic populations favor ethnic flavors, they adapt typical American eating
habits the longer they are in the country.27
Still, ethnic Americans constitute a growing market for goat meat, cilantro, ethnic cheeses, gai
lan and similar ingredients for their ethnic Asian, Hispanic and African cuisines. For instance,
goats are among the fastest growing sectors of the livestock industry: the number of goats raised
annually for meat increased from 1.2 million to 1.9 million—a jump of 58 percent—from 1997
to 2002, largely sold to Middle Eastern, South Asian, and African populations in America.28
Hispanic consumers spend about 25 percent more on fresh food consumed at home than other
consumers, partly a result of having larger families and partly due to the cultural emphasis on
meals shared at home.29
But the larger market for these unique ingredients—an estimated 75 percent—are those non-
minority Americans who are assimilating water spinach, bok choy, kielbasa and couscous into
their everyday diets.30 Depending on how it is defined, the ethnic foods market in the United
States is between $10 and $50 billion, and most segments are growing faster than the general
food market.31 A 1998 report projected that ethnic foods would capture one out of every seven
new food dollars in the next decade; a 2003 report projected that sales of Hispanic foods would
triple from $1 billion to $3 billion by 2008.32 It wasn’t too long ago that salsa surpassed ketchup
as the most common condiment on the American table. Supermarkets and cafeterias often offer
Indian or Asian bars to compliment their standard salad bars.33 In the last 15 years, Southern
24
U.S. Census Bureau, “Hispanic and Asian Americans Increasing Faster Than Overall Population,” press release,
www.census.gov/Press-Release/www/releases/archives/race/001839.html.
25
U.S. Census Bureau, “Hispanic and Asian Americans Increasing Faster Than Overall Population,” press release,
www.census.gov/Press-Release/www/releases/archives/race/001839.html.
26
U.S. Census Bureau, 2004, "U.S. Interim Projections by Age, Sex, Race, and Hispanic Origin," available at
www.census.gov/ipc/www/usinterimproj.
27
Nicole Ballenger and James Blaylock, “Consumer-Driven Agriculture: Changing U.S. Demographics
Influence Eating Habits,” Amber Waves, April 2003.
28
“Meat goats a growing business for farmers,” Chicago Tribune, 12 December 2004; Ag Census.
29
The U.S. Market for Hispanic Foods Volume 1, in the series The U.S. Market for Ethnic Foods
(MarketResearch.com: March 2003).
30
Judith Weinraub, “New American Farmers: Each Succeeding Wave of Immigrants Brings Its Own Crops to Our
Country's Table,” Washington Post, 15 October 2003; Gus Schumacher, W.K. Kellogg Foundation, Consultant,
discussion with author, 26 January 2005; 75 percent from Promar International, Riding the US Ethnic Food Tide:
Strategies for food manufacturers into the new millennium (Alexandria, VA: November 1998).
31
Matthew E. Seward, MarketResearch.com, discussion with author, 31 January 2005; The U.S. Market for
Emerging Ethnic Foods Volume 3 in the series The U.S. Market for Ethnic Foods (MarketResearch.com: June
2003); The U.S. Market for Hispanic Foods Volume 1, in the series The U.S. Market for Ethnic Foods
(MarketResearch.com: March 2003); The U.S. Market for Asian Foods Volume 2, in the series The U.S. Market for
Ethnic Foods (MarketResearch.com: May 2003).
32
Promar International, Riding the US Ethnic Food Tide: Strategies for food manufacturers into the new millennium
(Alexandria, VA: November 1998); The U.S. Market for Hispanic Foods Volume 1, in the series The U.S. Market
for Ethnic Foods (MarketResearch.com: March 2003).
33
Matthew E. Seward, MarketResearch.com, discussion with author, 31 January 2005; The U.S. Market for
Emerging Ethnic Foods Volume 3 in the series The U.S. Market for Ethnic Foods (MarketResearch.com: June
2003).
12
Tsunami, the largest provider of fresh sushi to supermarkets in America, has opened 1900 sushi
bars in 48 states.34
. . . And So Are Farmers
Even as the number of farmers continues to decline, women farmers are increasing (210,000 in
1997 to 238,000 in 2002), and they tend to be younger than male farmers (52 years old compared
with 54).35 The number of minority farmers is considerably smaller, but has grown rapidly over
the same period.36 For instance, the number of Hispanic-run farms has nearly doubled from
33,450 to 50,592. The Department of Agriculture did not keep data on other minority farmers in
1997. In addition to Hispanic farm operators in 2002, there were 8,375 Asian, 29,090 African
American and some 15,494 Native American farmers.37
Women farmers run about 11 percent of American farms, and minority farmers run nearly five
percent. These women- and minority-run farms explain much of the growth of America’s
smallest farms (10 to 50 acres), which increased from 530,902 in 1997 to 563,772 in 2002.38
“About one thousand Hmong farmers are moving from little two-acre plots in Minnesota to 50
acre poultry operations in the Ozarks,” said Gus Schumacher, who has studied this data on
minority growers. “They are becoming the new American poultry farmers,” he added, using cash
from these poultry operations to diversify into cattle and vegetables.39 There will be no shortage
of applicants for programs that assist immigrants break into farming, like the New Entry
Sustainable Farming Project in Massachusetts, the New Immigrant Farmer Initiative of Heifer
International, and the New Farmer Development Project in New York. And the farmers in these
programs will have no shortage of markets. Still, in addition to the language and legal barriers
that new immigrants often face, they face the same challenges to success of most other farm
enterprises, including lack of marketing expertise and start-up capital.40
Americans Want it Prepared. . .
As a microcosm of America’s growing dependence on imported foods, Americans themselves

are eating more meals away from home. Three decades ago, foodservice (spending in restaurants
and cafeterias) accounted for just over one-third (37 percent) of American food spending, while
grocery sales were nearly two-thirds (63 percent). Today, the share is split almost fifty-fifty and
tipping towards foodservice.41 This split will become less meaningful as farmstands, farmers
34
For more information, see www.afcsushi.com/pages/history.html.
35
USDA, 2002 Census of Agriculture (Washington, DC: 2004); Haya El Nasser, “Women, Hispanics put new face
on U.S. farming,” USA Today, 19 July 2004.
36
USDA, 2002 Census of Agriculture (Washington, DC: 2004). See also Jennifer Medina, “American Dirt, Mexican
Grit: New York’s Newest Farmers,” New York Times, 31 October 2004.
37
USDA, 2002 Census of Agriculture (Washington, DC: 2004).
38
USDA, 2002 Census of Agriculture (Washington, DC: 2004).
39
Gus Schumacher, W.K. Kellogg Foundation, Consultant, discussion with author, 23 December 2004.
40
41
“An Ag of the Middle Overview in PowerPoint Format,” a project of Iowa State University and the University of
Wisconsin-Madison, November 2004, available at www.agofthemiddle.org/archives/nov_04.ppt; Sysco vice
13
markets, convenience stores, and grocery stores begin to offer more chopped stir-fry greens,
roasted chickens, soups, and other products that customers can take home for immediate
consumption.42 Statistics on farmers markets and farmstands selling prepared foods are not
readily available, although anecdotal evidence from around the country points to more and more
turning to this sort of value-added product for additional income.
. . . But Still Want it Fresh
“I think the next battleground is fresh,” said Harry Balzer of the NPD group. “The paradigm in
the food business is moving from ‘who can provide food for the family?’ to ‘who can provide
fresh food for the family?’”43
Pre-cut, pre-washed packaged fruits and veggies are the fastest growing segment of produce
sales, reaching $12 billion last year.44 Fast-casual dining, the industry designation for restaurants
that are a little fresher and a little healthier than fast food chains, is growing twice as fast as the
restaurant industry as a whole.45 The local Subway sandwich shop, which has more units than
McDonald’s in the United States, is defining fresh right now with bread “baked fresh” and
sandwiches “made fresh” on site.46 “Mark my words,” Balzer added, “five years from now,
someone is going to come up with a new way of eating, preparing, buying, or selling fresh,
because the country’s waiting for it.”47 Theoretically, farmers markets and farmer owned
businesses have the advantage in delivering fresh foods, although most do not currently have the
infrastructure to make these products or the distribution to get these items into the places where
most Americans shop.
The Slow Life
“As people cook less, they consume more cook books, cook magazines, and food TV shows,”
said Jack Bishop, editor of Cooks Illustrated. “Most of this didn’t exist 20 or 40 years ago, when
people really cooked.”48 Cooks Illustrated subscriptions have doubled to 700,000 in recent years,
as have subscriptions to Cooking Light, Taste of Home, Martha Stewart Living, and Organic
president, who spoke on behalf of his company, but preferred not to be mentioned, discussion with author, 15 and 17
December 2004. Americans still eat most meals at home, but the average meal out of the home is more expensive,
which pushes up the share of foodservice sales.
42
James Pond, Foodservice Director, discussion with author, 17 December 2004; Sysco vice president, who spoke
on behalf of his company, but preferred not to be mentioned, discussion with author, 15 and 17 December 2004.
43
Harry Balzer, NPD Group, discussion with author 2 December 2004.
44
International Fresh-cut Produce Association, “The Sky’s The Limit: New IFPA Report Shows Fresh-Cut Produce
Remains Fastest Growing Segment In Produce,” press release, 7 October 2004.
45
J. Michael Harris et al., The U.S. Food Marketing System, 2002, Agricultural Economic Report No. 811
(Washington, DC: USDA, June 2002); Naomi Snyder, “Food Away From Home Report,” The Tennessean, 21 July
2004.
46
Harry Balzer, NPD Group, discussion with author 2 December 2004; “About Subway, History,”
www.subway.com.
47
Harry Balzer, NPD Group, discussion with author 2 December 2004.
48
Jack Bishop, Cooks Illustrated, discussion with author, 21 December 2004.
14
Style.49 The Food Network’s audience has jumped 33 percent since 2002, expanding its reach
from 54 million to 84 million households.50 In the last year, Slow Food USA added 3,000 new
members, an increase of one-third, bringing the total to 12,000—the largest national chapter
outside of Italy. There are 125 local chapters scattered around the nation.51
Despite the contradiction between Americans eating out more and showing more interest in
cooking, this interest provides an opportunity for infusing cooking magazines and food programs
with a message about changing the American food system. The publishers of Organic Style
consider their 3.6 million readers “savvy thought-leaders,” who are younger, better educated,
wealthier and more urban than the general public.52 These readers are embracing cooking and
food shopping as a creative pursuit, as a way to spend more time with family, and not simply as a
chore. For the first time in a half century, the share of women entering the workforce has leveled
off and is starting to slowly decline.53 And more parents, both male and female, are working
from home, which provides an opportunity for a resurgence in home-cooked meals made with
fresh ingredients.54
49
Jack Bishop, Cooks Illustrated, discussion with author, 21 December 2004; Organic Style, media pack, “A Letter
from the Publisher,” November 2004; 2003 Annual Report, Martha Stewart Living Omnimedia,
www.marthastewart.com; Cooking Light, media kit, www.cookinglight.com/cooking/magazine/advertising.html;
Taste of Home, www.tasteofhome.com.
50
Corie Brown, “Food Shows Are Making Chefs Into Stars,” Los Angeles Times, 28 July 2004.
51
Ragan Rhyne, Slow Food USA, email to author, 28 December 2004.
52
Organic Style, media pack, “A Letter from the Publisher,” November 2004.
53
U.S. Bureau of Labor Statistics, www.bls.gov, "Percent of Females (over 16 years) Participating in the Labor
Force.” The peak level was reported in 1999.
54
Bureau of Labor Stats, “Employment Characteristics of Families in 2003,” press release, 20 April 2004.
15
Food Scares and Energy Spikes On The Horizon

Key drivers
Biopharming, new animal diseases, and emerging foodborne illnesses threaten food safety.
Concern about agricultural terror is increasing.
Energy prices are rising.
Climate change is altering historic rainfall and temperature patterns.
Key implications
Food safety and agroterror will feature in food and agriculture policy.
Biofuels and energy crop markets will continue to grow.
New Food Safety Risks Emerging
While nitrates, phosphates, pesticides and other forms of chemical pollution continue to plague
the air and waterways around farm communities, biological pollution is a growing concern.1 The
area planted in genetically modified crops continues to increase, even though biotech companies
have resisted introducing new varieties beyond the now common modified corn, soybeans, and
cotton.2 Proponents argue that such crops will help reduce pesticide use and erosion, increase
farm profits, and usher in an era of sustainable agriculture. Recent studies indicate that such
claims, particularly of reduced pesticide use, have not been realized.3 Moreover, concerns about
cross pollination between modified and nonmodified crops have not been resolved. A recent
report from the Union of Concerned Scientists indicated that there were few safeguards against
crops engineered to produce pharmaceuticals and industrial chemicals contaminating the general
food supply.4 The potential for such a public relations fiasco prompted the Grocery
Manufacturers Association to break from unconditional support for the biotech industry, and call
for use of non-food crops in raising pharmaceuticals, even though public concern about biotech
crops seems to be softening.5
The international spread of factory farming and the global integration of the food processing
business has also created a breeding ground for a new generation of livestock diseases that can
1
The H. John Heinz III Center for Science, Economics and the Environment, The State of The Nation's Ecosystems:
Measuring the Lands, Waters, and Living Resources of the United States (Washington, DC: 2002); UCS Pharma
study.
2
Clive James, Global Status of Commercialized Biotech/GM Crops: 2004 (Ithaca, New York: International Service
for the Acquisition of Agri-Biotech Applications, 2004); Elizabeth Weise, “ Biotechnology appears to be withering
as a food source,” USA Today, 2 February 2005.
3
Charles M. Benbrook, “Genetically Engineered Crops and Pesticide Use in the United States: The First Nine
Years,” BioTech InfoNet, Technical Paper Number 7, October 2004.
4
Union of Concerned Scientists, A Growing Concern: Protecting the Food Supply in an Era
of Pharmaceutical and Industrial Crops (Washington, DC: December 2004).
5
Grocery Manufacturers of America, “GMA says stringent FDA and USDA bio-pharma regs needed to maintain
food supply purity,” press release, 6 February 2003; “Americans' Acceptance of Food Biotechnology Matches
Growers' Increased Adoption of Biotech Crops, Food Insight (magazine of the International Food Information
Council), May/June 2003.
16
jump from animals to humans.6 Avian flu, mad cow disease, and antibiotic resistant forms of
foodborne illnesses have been making headlines and worrying public health officials in recent
years. Recent studies have indicated that breathing the air from concentrated swine operations
could expose people to antibiotic-resistant bacteria.7 Such health risks have already attracted the
attention of officials at the Centers for Disease Control and Prevention and the World Health
Organization concerned about unhygienic farm practices and the policies that support them.8
Most recently, the specter of a deliberate attack on the nation’s food supply, what some terror
experts call America’s “soft underbelly,” and a large scale food scare in coming years could
prompt major changes in the nation’s agricultural and food policy.9
Nonetheless, Americans have demonstrated a stubborn resistance to changing their eating habits,
even in the face of well-publicized meat recalls, genetically modified crop contaminations and a
lone made cow. For instance, surveys showed a spike in concern about food safety and
agricultural terrorism following September 11, 2001, which gradually returned to pre-attack
levels.10 Ron Wimberley, a sociologist at North Carolina State University, said that “as
customary, such fears subside as time goes on without further evidence of a threat.”11 In Europe,
following a series of food scares, change also came slowly, but it did come.
Climate Crisis Will Hit Farmers Hardest
Farming may be the human endeavor most dependent on a stable climate—and the industry that
will struggle most to cope with the more erratic weather, severe storms, and shifts in growing
season lengths predicted for coming decades.12 Climate modelers are still refining their craft and
do not agree on the exact impact climate change will have on American agriculture. One analysis
by Cynthia Rosenzweig and colleagues at the Goddard Institute for Space Studies at Columbia
University found that the expected temperature increases in the major U.S. growing areas will
result in: higher incidence of most major pests (by speeding development and reproduction and
by reducing winter dieoff), which will in turn increase pesticide use; higher likelihood of both
6
World Society for the Protection of Animals (WSPA), Industrial Animal Agriculture: The Next Global Health
Crisis? (London: 2004); “High Geographic Concentration May Have Favored the Spread of Avian Flu,”
FAONewsroom, 28 January 2004.
7
Amy Chapin et al., “Airborne Multi-drug Resistant Bacteria Isolated from a Concentrated Swine Feeding
Operation,” Environmental Health Perspectives [Online], 22 November 2004.
8
Margaret Mellon et al., Hogging It Estimates of Antimicrobial Abuse in Livestock (Washington, DC: Union of
Concerned Scientists, January 2001).
9
Peter Chalk, Hitting America's Soft Underbelly: The Potential Threat of Deliberate Biological Attacks Against the
U.S. Agricultural and Food Industry (Santa Monica, California: RAND Corporation: 2004).
10
Ronald C. Wimberley, North Carolina State University, discussion with author, 26 January 2005; Ronald C.
Wimberley et al., “Food from Our Changing World: The Globalization of Food and How Americans Feel About It,”
available at sasw.chass.ncsu.edu/global-food/foodglobal.html.
11
Ronald C. Wimberley, North Carolina State University, discussion with author, 26 January 2005.
12
For recent reports see International Climate Change Taskforce, Meeting the Climate Challenge
(Washington, DC: January 2005), and Peter Schwartz and Doug Randall, An Abrupt Climate Change
Scenario and Its Implications for United States National Security (San Francisco, California: Global
Business Network, October 2003).
17
floods and droughts; more crop loss due to temperature extremes; and a shift north of the
optimum growing areas for wheat, corn, and soybeans.13
These changes may increase farm expenses (for pesticides, irrigation, and replanting failed
crops), while simultaneously reducing the stability of the harvest. The changes might also
encourage farms to raise a more diverse set of crops, as a way to become less dependent on
outside inputs, and to better cope with drought, increased pests, and a range of other climate-
related jolts.14 As the costs of fossil fuels rise, it will be more expensive to depend on oil for
farming and food shipping. (Today, food shipping accounts for just five percent of total food
costs.15)
Energy Crops Will Make Money for Farmers
Since 2004 the price of oil has fluctuated at nearly double the level of the 1990s.16 Even if the
world’s governments do little to accelerate the shift away from fossil fuels to energy sources that
do not disrupt the planet’s climate, a shortage of oil may force this shift. At the pessimistic end
of the spectrum is the Association for the Study of Peak Oil and Gas, which thinks global
production will peak in 2006 or 2007. At the other end of the spectrum is the Energy Information
Administration of the U.S. Department of Energy, which thinks it won’t happen until 2035. PFC
Energy, a widely respected “mainstream” analyst believes the peak will be in "roughly 2015."17
Rising fossil fuels costs, and more government incentives for renewable energy, will make it
more lucrative for farmers to supplement their income by raising energy crops. (However,
American farmers or food businesses are not allowed to participate in greenhouse gas emissions
trading schemes in the Kyoto Treaty or the European Union, as long as the United States has not
signed the treaty.18) Even at current crop and energy prices, the Agricultural Policy Analysis
Center has shown that American farmers could plant switchgrass, willow and poplar on 19.4 to
41.9 million acres of cropland at a profit greater than existing uses of the land. Such plantings
would boost traditional crop prices from 3 to 14 percent and net farm income by $2.8 to $6
billion annually.19
13
Cynthia Rosenzweig et al., “Climate Change and U.S. Agriculture: The Impacts of Warming and Extreme
Weather Events on Productivity, Plant Diseases, and Pests,” Center for Health and the Global Environment, Boston,
May 2000.
14
Peter B. Reich et al., “Plant Diversity Enhances Ecosystem Responses to Elevated CO2 and Nitrogen Deposition,”
Nature, 12 April 2001; and L.E. Drinkwater et al., “Legume-Based Cropping Systems Have Reduced Carbon and
Nitrogen Losses,” Nature, 26 November 1998.
15
Brian Halweil, Eat Here: Reclaiming Homegrown Pleasures in a Global Supermarket (W.W. Norton: 2004).
16
Thomas Prugh, Christopher Flavin, and Janet L. Sawin, “Changing the Oil Economy,” State of the World 2005
(New York: W.W. Norton, 2005).
17
Thomas Prugh, Christopher Flavin, and Janet L. Sawin, “Changing the Oil Economy,” State of the World 2005
(New York: W.W. Norton, 2005). Energy analysts point out, for instance, that oil production generally peaks a few
decades after the peak in oil discoveries. U.S. oil discoveries peaked in the 1930s, four decades ahead of the
downturn in production. The world is now passing the fortieth anniversary of the global peak in oil discoveries.
Production has plateaued or declined in 33 of the 48 largest producers, including 6 of OPEC’s 11 members.
18
Lee Hayes Byron, US Climate Action Network, discussion with author, 26 January 2005.
19
Daniel G. De La Torre Ugarte et al., The Economic Impacts of Bioenergy Crop Production on U.S. Agriculture,
18
In the United States, wind energy has been growing at 28 percent over the last five years, now
generating 6,374 megawatts or less than one percent of total electricity.20 The top ten states with
the most wind energy potential are all heavily agricultural in the Midwest and Great Plains,
although California, which ranks 17th in potential, has the most installed capacity.21 Farmers
continue to grow crops or graze livestock up to the base of the turbines, allowing a form of
"double cropping" that can provide an additional $14,000 per year or more in income to a
landowner leasing his wind rights.22
Production of ethanol has increased by 25 percent each of the last four years, and now consumes
12 percent of American corn acreage.23 It represents 2.6 percent of gasoline consumed in the
United States, and less than 1 percent of total energy use.24 (In contrast, the European Union
plans to make biofuels 20 percent of road transport fuels by 2020.25) Production of biodiesel,
primarily from soy, has also increased dramatically, and will benefit from a recently passed
federal tax incentive for biodiesel users.26 Large new facilities were recently announced in North
Carolina, Colorado, and California.27 While the scale of ethanol production has grown beyond
reach of many medium-sized farmers and farm cooperatives—100 million gallon per year
operations have replaced most 15 million gallon operations in the last four years—the other
biofuels still offer opportunities for cooperatives of smaller farmers, according to Jeff Kapel,
who focuses on renewable energy at the Boston-based agribusiness consulting firm SJH & Co.
Groups of farmers can own the crop and energy-producing facilities and sell the fuel to nearby
university or municipal fleets.28
Agricultural Economic Report No. 816 (Washington, DC: USDA, February 2003); see other documents at
www.agpolicy.org/biopubs.html.
20
American Wind Energy Association, “Wind Power Outlook 2004,” available at
www.awea.org/pubs/documents/Outlook2004.pdf.
21
American Wind Energy Association, “Wind Power Outlook 2004,” available at
www.awea.org/pubs/documents/Outlook2004.pdf.
22
American Wind Energy Association, “Wind Energy and the Economy,” available at
www.awea.org/faq/tutorial/wwt_economy.html.
23
Based on analysis of National Renewable Energy Laboratory data by Jeff Kapell, SJH & Co.,
discussion with author, 4 January 2005.
24
Based on analysis of National Renewable Energy Laboratory data by Jeff Kapell, SJH & Co.,
discussion with author, 4 January 2005.
25
Ralph E.H. Sims, “Biomass, Bioenergy and Biomaterials: Future Prospects,” in Biomass and Agriculture:
Sustainability, Markets and Policies (Paris: OECD, 2004)
26
Jim Kleinschmit and Mark Muller, Cultivating A New Rural Economy Assessing the Potential
of Minnesota’s Bioindustrial Sector [DRAFT VERSION] (Minneapolis, Minnesota: Institute for
Agriculture and Trade Policy, June 2004); American Soybean Association, “Senate Passes Jobs Bill
Including Biodiesel Tax Provisions,” press release, 13 May 2004.
27
Jeff Kapell, SJH & Co., discussion with author, 4 January 2005.
28
Jeff Kapell, SJH & Co., discussion with author, 4 January 2005; Jim Kleinschmit and Mark Muller, Cultivating A
New Rural Economy Assessing the Potential of Minnesota’s Bioindustrial Sector [DRAFT VERSION]
(Minneapolis, Minnesota: Institute for Agriculture and Trade Policy, June 2004).
19
Food Won’t Be Able To Hide

Key drivers
American shoppers are moving beyond organic towards local, humane, and fair.
Shoppers are demanding more information about how and where food is raised.
Key implications
Farmers and food makers need to include more information about the food they sell.
Place-based foods are becoming more important.
Internet and related technologies is helping make this information available.
Organic Foods Soar. . .
Within the food landscape, the fastest growing category remains organic food, sales of which
have been increasing at nearly 20 percent each year for the last decade.1 Organic food sales
topped $10 billion in 2003.2 They now account for about 2 percent of total grocery sales, but are
growing 8 times faster than the relatively stagnant grocery sector as a whole, and are expected to
hit $32.3 billion by 2009.3 Farmers markets, CSAs, and other direct marketing schemes account
for a disproportionate share of organic food sales. Farmers markets alone account for 4 percent
of organic sales, although farmers markets account for only 1 percent of total food sales.4
Organic food sales will likely accelerate beyond the 20 percent growth rate in coming years.
More supermarkets are adding private label organic lines.5 Large food manufacturers that have
purchased smaller organic companies will likely incorporate organic ingredients into their
dominant lines, which will dramatically increase demand for organic crops and sales of organic
foods.6 There is no guarantee that small farmers or small food companies will benefit from this
growth, and members of the organic community are realizing that the absence of any social
justice or economic criteria is a shortcoming of the current federal standards.
Even As Americans Go Beyond Organic. . .
Organic foods were the first items in the marketplace to capitalize on consumer interest in how
their food was raised. But more and more consumers, still a minority, are looking beyond organic
1
Elaine Lipson, The U.S. Market for Organic Foods and Beverages: Executive Summary (MarketResearch Inc.:
November 2004).
2
November 2004).
3
November 2004).
4
November 2004).
5
November 2004).
6
November 2004).
20
to foods connected to some place (varied, seasonal, tasting of a region) and foods with more
nuanced distinctions of social responsibility (fair trade, free range, family-farmed) that go
beyond the scope of the organic standards.7 For instance, TransFair certified 18.7 million pounds
of coffee sold in the United States as fair traded in 2003, almost twice the poundage certified in
2002 in this country.8 The Hartman Group, a health and wellness market research firm, which
divides the American population into core, mid-level, and periphery shoppers (representing 13,
62, and 24 percent of the population, respectively), has found that while preferences for organic
food was only found among the core segment ten years ago, it is now being used by the mid-
level segment. The core is seeking out biodynamic, local, and fair foods. And, over the same
period, the periphery has moved into healthier foods such as natural and low-calorie items, as
well as more fresh fruits and vegetables.9 (The size of Hartman’s segments stay the same, while
the attitudes and behaviors of those within the segment have changed.)
“Local absolutely is becoming more important to consumers,” said Laurie Demeritt, president of
the Hartman Group.10 Demeritt said "mainstream” consumers are going to farmers markets and
starting to talk about CSAs and home milk delivery, behaviors previously observed only for its
highly committed “core” consumers. In some cases, “core” consumers are beginning to say that
local is more important to them than organic in some cases. Fifty percent of consumers said that
“locally grown” affected their purchases, compared 38 percent said the same for “organically
grown.”11 Other surveys indicate that consumers get more excited about terms that imply a food
has been raised nearby, than the fact that it’s organic, and will often pay more for local foods.12
(Surveys also indicate that consumer interest in such details tend to be motivated more by selfish
concerns—health and exposure to toxins—than altruism.13
“Local” made the short list in the Hartman group’s latest “Coming Trends” report, and the group
believes “it will become part of our culture.”14 Which is prompting more and more food
manufacturers—from Cascadian Farm to Organic Valley or Whole Foods—to include a sense of
place (the name of a farm, picture of a valley) on their label, to put photos of farmers in their
produce aisles, or invite farmers to give out samples in stores. (Consider MaryJaneFarms, a line
7
Elaine Lipson, Food Writer and Editor, discussion with author, 23 and 29 December 2004; Laurie Demeritt, The
Hartman Group, discussion with author, 12 and 24 January 2005.
8
Steve Sellers, Transfair, discussion with author, 11 January 2005.
9
Laurie Demeritt, The Hartman Group, discussion with author, 12 and 24 January 2005.
10
Laurie Demeritt, The Hartman Group, discussion with author, 21 December 2004, and 12 and 24 January 2005.
11
Hartman Group, Organic Trends Study (Bellevue, Washington: December 2003). The Hartman group is currently
conducting a survey that will be completed in spring of 2005 that will give a sense of how these numbers have
changed in the last few years.
12
University of California at Santa Cruz, “Consumers eager to know more about the environmental and social
impact of the food they buy, survey finds,” press release, 24 January 2005; “Attracting Consumers with Locally
Grown Products,” prepared for the North Central Initiative for Small Farm Profitability, Food Processing Center,
Institute of Agriculture and Natural Resources, University of Nebraska-Lincoln, October 2001; “Ecolabel Value
Assessment: Consumer and Food Business Perceptions of Local Foods,” report of market research conducted and
prepared by the Leopold Center for Sustainable Agriculture and the ISU Business Analysis Laboratory, (Ames,
Iowa: Leopold Center, November 2003), available at
www.leopold.iastate.edu/pubinfo/papersspeeches/ecolabels/ecolabels.html; “Roper Poll Shows Consumers Trust
Family Farms,” Organic Valley, press release, 3 May 2004, www.organicvalley.coop.
13
Gene Kahn, General Mills, discussion with author, 22 December 2004.
14
The Hartman Group, Inc., Coming Trends: A Grounded Perspective on Evolving Trends (Bellevue, Washington,
Winter 2004).
21
of packaged foods and rural-made goods, that revolves entirely around the back-to-the-land
mystique of one savvy organic farmer in Idaho, MaryJane Butters. The top sells are easy-to-
prepare, one-dish meals. MaryJaneFarms doesn’t share its sales figures, but it recently began
selling at Wal-Mart and has increased its shareholders dramatically.15)
. . . To Place-based Foods
From state labels (Colorado Proud and Pride of New York) to regional labels (Berkshire Grown
and Be a Local Hero) to county and city labels (San Diego Grown 365 and Familyfarmed.org),
it’s become more common for food packaging to declare something about where the food was
raised or made.16 The familyfarmed.org label will designate growers in Illinois, Wisconsin,
Michigan, Iowa, and Indiana, and include the name of the grower and the place of production.
The most interested consumers can visit the group’s website to find out exactly where the food is
grown “to have a personal experience with their farmer.” Whole Foods has been interested in
using this label for all its regional producers in its 22 regional stores.17 (One exciting benefit of
such a label is that it allows supermarkets to easily track the volume and value of local/regional
sales, which could make it easier to understand how these local purchases have created jobs or
saved farmland.)
Edible Communities, a for-profit, membership corporation, has already helped eight

communities set up quarterly food guides, including Edible Ojai and Edible Chesapeake, and is
beginning production on guides for 16 more states or communities, and has 40 more on the
waiting list.18 Available on-line and given away in-print at restaurants, food shops, and farmers
markets, these ad-supported seasonal magazines direct people to food producers in their area,
and make money for the people who publish them. The first Edible food guides were recently
launched in major metropolitan areas, like Sacramento, Phoenix, and the Twin Cities.19
As consumers become acquainted with the seasonal nature of cuisine, they will look for items
with a distinct regional flavor. Fleisher’s Grass-fed & Organic Meats, a new butcher in Kingston,
New York, which sells only meat that is organic, pasture-raised from within a two-and-a-half
hour radius, has attracted so much business in its first six months, that the couple who run it are
already looking for a larger space.20 Slow Food USA has compiled a list of dozens of distinctive
and endangered crops and foods from the United States. From the Olympia Oyster to the Green
Mountain Potato to the Pixie Tangerine, these foods are generally produced in small quantities in
a limited geographic area, and local Slow Food chapters work with nearby farmers and food
businesses to promote production and sales of these foods. For instance, the mayor of New York
recently designated the Newtown Pippin the official apple of the city and designated a week for
15
See www.maryjanefarms.org, and Dana Goodyear, “The Simple Life, Inc.,” The New Yorker, 11 October 2004.
16
“San Diego Grown 365” was created by the Ag Society of San Diego, an association of local growers and
producers, to promote foods from San Diego County, www.sandiegogrown365.com.
17
Jim Slama, Sustain, discussion with author, 26 January 2005.
18
For more information, see www.ediblecommunities.com.
19
For more information, see www.ediblecommunities.com.
20
Jessica Applestone, Fleisher’s Grass-fed & Organic Meats, Kingston, New York, discussion with author, 20
October 2004.
22
the apple when it was promoted in shops and at farmers markets.21 The United States now boasts
170 American Viticultural Areas in the United States.22
A coalition of native communities, sustainable agriculture experts, and food aficionados recently
formed the group Renewing America’s Food Traditions to highlight more than 700 uniquely
North American plant and animal foods that are at risk of extinction, and assists with marketing
and distribution strategies for those ethnic communities that wish to sell their surplus to the
wider American public.23 Another emerging subset is rare livestock breeds, which inspired
Heritage Foods USA, a mail-order company set up to sell heritage breeds of turkeys, chicken,
lamb, and pigs.24
Agribusiness Gets Interested in the Details
Public curiosity in the details behind our foods is among those drivers pushing food makers and
distributors in the same direction. Large grain buyers like General Mills are favoring identity
preserved grains.25 John Deere has launched “Food Origins,” a consulting arm to help food
companies trace foods, because “Now more than ever, consumers, ingredient suppliers and
governments want to know ‘what is in our food.’”26 Sodexho and Aramark started offering
regional menus to many of its corporate and university clients for the same reason.27 Wal-Mart is
working with its top 100 suppliers to deploy new radio frequency identification (RFID) tags for
tracking crates and pallets in its supply chain beginning in 2005.28 This system is intended to
reduce costs, and track food safety and liability problems, but these tags contain a lot more
information than a standard barcode, and, in the future, may become important for answering
customer questions about how and where food was produced.29 Marks and Spencer, one of the
largest British retailers, has just completed a rollout of the same technology in its food supply
chain.30 Kraft Foods is also considering the technology.31
21
Slow Food USA, “Mayor Declares October 11-17 2004 ‘Slow Food NYC Apple Week’,” press release, 5
October, www.slowfoodusa.org.
22
Estimate as of July 2004 from Rich Pirog, Geography of Taste A Geography of Taste: Iowa's Potential for
Developing Place-based and Traditional Foods, A project of the Leopold Center's Marketing and Food Systems
Initiative (Ames, Iowa: October 2004).
23
For more information, see www.environment.nau.edu/raft.
24
For more information, see www.heritagefoodsusa.com.
25
Thomas Johnson, General Mills, discussion with author, 5 January 2005, and Larry Mitchell, American Corn
Growers Association, discussion with author, 6 January 2005.
26
For more information, see www.deere.com/en_US/foodorigins/index.htm.
27
For more information, see www.foodalliance.org/products/where.html.
28
Wal-Mart, “Wal-Mart Begins Roll-Out Of Electronic Product Codes in Dallas/Fort Worth Area,” press release,
April 30, 2004.
29
Wal-Mart, “Wal-Mart Begins Roll-Out Of Electronic Product Codes in Dallas/Fort Worth Area,” press release,
April 30, 2004.
30
Jaikumar Vijayan and Bob Brewin, “Wal-Mart to deploy radio ID tags for supply tracking,” Computerworld, 12
June 2003.
31
Jaikumar Vijayan and Bob Brewin, “Wal-Mart to deploy radio ID tags for supply tracking,” Computerworld, 12
June 2003.
23
At the same time, it’s not clear that smaller farms and food businesses will be equipped to meet
these traceability standards. Farmer Direct Co-operative Ltd., an organic farmers’ co-operative
based out of Regina, Saskatchewan, has become the first company in North America to launch a
web-based tracking system for meat products.32 At the Chef’s Garden, a 100-acre farm in Huron,
Ohio, that supplies restaurants around the country with over 600 gourmet vegetables,
microgreens, herbs, and edible flowers, farmer Lee Jones passes every clamshell of microgreens
through a metal detector to assure they contain no unwanted materials.33
Internet Technology Allows The Customer To Be A Partner
Internet transactions are giving consumers a more intimate window onto their food. Today, 69
percent of American food shoppers have access to the internet, up from 62 percent in 2000, and
analysts argue that the adoption of high-speed internet and higher internet use by women will
spur tremendous growth in the online grocery market.34 Heritage Foods USA, a company set up
to market rarebreed livestock, includes a traceability tag with every piece of meat it sells, which
allows the buyer to find the animal’s medical, feed, and other history at the Heritage Foods
website.35 (They have also included a turkey cam so that customers can watch the birds grazing
or mating.) By answering some simple survey questions when ordering on-line, the consumer
can serve as a sort of marketing consultant who helps steer inventory, plantings, and ordering for
farmers and food companies. Rentmothernature.com allows customers to “lease” a milking cow,
sheep, beehive or lobster trap, investing upfront in the animal and then receiving the cheese,
wool, honey, or lobster at the end of the season.36
These sorts of websites are still relatively small although traffic is growing fast. Daily visitors to
localharvest.org, one of a few national, on-line clearinghouses for information on eating local,
have jumped more than 20-fold in the last two years, from 300 to 7,000. The site now includes
7,000 members (farmers, food makers, like-minded restaurants), and sells about $10,000 worth
of produce each week.37 As part of an effort to refocus its work away from research and farmers
and towards everyone else in the food system, the Rodale Institute is planning to create an
internet based food community that will attract “mainstream” consumers, distributors, and
producers. Rather than supplant existing efforts—like localharvest.org or eatwell.org—Rodale
wants to help make them easier to use, to increase their reach, and to use this internet community
as a launching pad for farm-to-school projects or start-up food businesses. “We’re interested in
that part of the business that puts the farmer and the consumer back in touch with the whole
distribution network,” said David Ward, VP of Marketing, Business, and Program Development
at Rodale.38
32
“Canada: Co-operative Launches Organic Meat Tracking System,” Organic Monitor, 20 October 2004.
33
For more information, see www.chefs-garden.com.
34
Food Marketing Institute, Trends in the United States: Consumer Attitudes and the Supermarket 2004
(Washington, DC, 2004).
35
For more information, see www.heritagefoodsusa.com.
36
For more information, see www.rentmothernature.com.
37
For more information, see www.localharvest.org/admin/usage.
38
David Ward, Rodale Institute, discussion with author, 23 December 2004.
24
Eating Local Will Be More Convenient

Key drivers
Demand for local food is growing, despite little official support.
Local food is showing up beyond farmers markets and CSAs.
Key implications
Farmers markets and CSAs are still sprouting around the nation.
Full-service farmstands are emerging where shoppers can buy most groceries.
Local food distributors and marketing cooperatives are emerging to fill a gap in the food
chain.
Local Food Market Remains Small
There is no good estimate for the total market for local and community-based food, although it is
safe to say it is growing. (For this report, community-based food systems “are locally owned and
controlled, environmentally sound and health promoting,” according to the Kellogg Foundation’s
description.) The USDA’s 2002 Census of Agriculture estimates that, in 2002, farmers sold $812
million worth of “agricultural products directly to individuals for human consumption.”1 This
compares with $592 in 1997, a 37 percent increase. Despite this growth, the 2002 total was just
0.4 percent of gross farm sales, although 5.5 percent of farms sold something directly to
consumers.2
Still, just as consumers interested in buying organic can now choose from a parallel product
universe that includes everything from a full-line of organic groceries to organic junk food, the
same parallel universe is beginning to emerge for locally raised foods. Businesses like the
Farmers Diner in Barre, Vermont, Fleisher’s Grass-fed & Organic Meats in Kingston, New
York, and Burgerville and New Seasons Market in the Pacific Northwest, have shown that
successful restaurants, butchers, fast food joints, and supermarkets can revolve almost entirely
around locally raised ingredients. It remains to be seen if such examples can be replicated or
franchised. Not to mention barriers like continued consumer affinities for eating out of season,
the higher price of some locally raised goods, and lack of a diversity of offerings. And there are a
range of gaps in this new food chain. As local and community-based food products shift beyond
farmers markets, CSAs and other forms of direct marketing, and show up on more restaurant
menus, in more school cafeterias, and on more supermarket shelves, here are some sectors that
are worth watching.
1
USDA, 2002 Census of Agriculture (Washington, DC: 2004), available at available at
www.nass.usda.gov/census/census02.
2
USDA, 2002 Census of Agriculture (Washington, DC: 2004), available at www.nass.usda.gov/census/census02.
25
Farmers Markets and CSA’s Continue to Grow, But Could Be So Much More
The latest USDA survey estimates that there are now over 3600 farmers markets around the
country, up from 3100 just a couple of years ago, and more than twice as many as in 1994.3 And
the nation now counts an estimated 1000 to 1200 CSAs, up from just one in 1985.4
This growth has taken place with little official government support, and there is clearly room for
greater growth and more organized markets. Some of the nation’s largest CSA’s now have over
2000 members, including the 2,500 member Watershed Organic CSA in N.J.5 (And Denmark
boasts a 40,000-member “box scheme” organization.6) Although many farmers market shoppers
use email, surveys have shown that just one-third of farmers markets send out an email alerting
customers to what is available at the upcoming market.7 The Alabama Farmers Market Authority
is a good model for how farmers markets can grow with some official assistance. In 1995, there
were only 17 markets overseen by the state Farmers Market Authority. There are 72 today.8 No
other state has a similar agency that helps set up farmers markets, helps farmers sell direct, and
promotes the idea of buying local to consumers. Still, farmers markets, which are most
appropriate for smaller scale, diversified farmers, still do not create much room for the majority
of farmers in the United States.
Full-service Farmstands Emerge
Full-service farmstands, like Wilson’s Farm in Lexington, Massachusetts or Underwood Family

Farms in Oxnard, California, do millions of dollars worth of business each year, keeping enough
profit to employ large extended families in addition to hired staff.9 From Vermont to Kansas,
many dairy farmers who shift from selling milk wholesale from a confinement dairy to selling
milk from a farmstand from rotationally grazed animals find that they are able to reduce their
herd, reduce their expenses, and bring in enough money to employ four or five family
members.10 By working with other growers, these stands can offer something closer to one-stop
shopping and they are selling more and more prechopped greens, soups and sauces, and other
home meal replacement items.
Statistics are not available to describe the growth of such full-service farmstands, but it is clear
that many farmers around the country are using such businesses to increase their income and stay
3
For more information, see www.ams.usda.gov/farmersmarkets/FarmersMarketGrowth.htm, and Velma Lakins,
USDA, Farmers Market Manager, email to author, 25 January 2005.
4
Henry A. Wallace Center for Agricultural & Environmental Policy at Winrock International, Making Changes:
Turning Local Vision Into National Solutions (Winrock International: Arlington, Virginia, May 2001), and data from
www.csacenter.org.
5
Jim Kinsel, Watershed Organic CSA, email to author, 3 February 2005. For more information, see
www.csacenter.org and www.watershedfarm.com/about.
6
Steve Gilman, “Advanced Training for Advanced Farmers: Serious about CSA,” 30 January 2004, available at
www.newfarm.org/depts/talking_shop/0404/nofa-ny2.shtml.
7
8
David Rountree, “State promotes farmers markets,” Montgomery Advisor, 24 June 2004. For more information, see
Alabama Farmers Market Authority, www.fma.state.al.us/about.htm.
9
For more information, see www.wilsonfarm.com/about.html and www.tierrarejadafamilyfarms.com.
10
Larry Swain, University of Wisconsin–River Falls, discussion with author, 29 April 2004.
26
on the land. Fred Lee, a second-generation Chinese American farmer in Peconic, New York, has
revitalized his farm by tapping into the changing demographic of the American eater—a hurried
suburban shopper interested in convenient, healthy, ethnic cuisine. Mr. Lee shifted from growing
just a few Asian vegetables on 550 acres for the wholesale market to raising over 250 different
varieties of vegetables on 23 acres for sale at the family’s farmstand. Extensive greenhouses
allow the farm to produce almost year-round, and a commercial kitchen where the family turns
surplus produce into highly popular dressings (ginger scallion, Asian vinaigrette, toasted sesame,
and citrus), pestos (cilantro, basil, arugula, and spinach), and dips (herb garlic and ginger
scallion). For Lee, turning a $2 bunch of basil into a $6 jar of pesto is how he’s going to entice
his kids to take over the family farm.11
Local Food Distributors Fill A Food Chain Gap
Groups in both New York City and Chicago are also hoping to re-establish wholesale markets
for locally raised produce to help fill a distributor gap for restaurants, caterers, grocers and other
businesses interested in buying local; the New York group estimated the unmet demand for
locally grown and processed products at $866 million per year.12 The Whole Farm Coop in
Central Minnesota and HomeGrown Wisconsin Cooperative are good examples of farmers
joining together to collectively market and distribute to restaurants and food stores.13 In 2004, the
University of Northern Iowa’s Local Food Project, which acts like a local food distributor,
arranged $226,954 in local food sales for 14 buyers, including supermarkets, restaurants, and
institutional cafeterias, up from $110,773 for three institutions in 1998.14 These distributors,
which may not be able to compete with larger national distributors on price, are capitalizing on
client interest in community ties.
Several small marketing coops have chosen to “deepen” their marketing by integrating wholesale
and retail arms. Grown Locally, a 14 grower cooperative in Iowa, started to market to
institutions, but recently starting a weekly CSA and a made-to-order local food basket. “Because
many of the same growers are part of each business,” the coop’s website notes. “It just makes
good sense for us to coordinate our resources in this way.”15 The Western Montana Growers
Cooperative is moving in a similar direction. It started two years ago with 5 farmers who wanted
to market to the nearby university and other institutional clients, and now 12 growers also
delivering to food buying clubs. “We are looking at one geographic area and trying to identify as
many markets as possible within that geographic area,” said Jane Kile, who helps run the
Western Montana Growers Coop. The coop remains dependent on outside funding and has
11
Fred Lee, Sang Lee Farms, discussion with author, 23 September 2004.
12
New York from Karen Karp, Karp Resources, discussion with author, 23 December 2004 (For more information,
see www.wholesalefarmersmarketnyc.com.); Chicago from Jim Slama, Sustain, discussion with author, 26 January
2005; New York State Department of Agriculture, “Survey Says Wholesale Market Good for Farmers, Consumers,”
press release, 9 February 2005.
13
Kristin Wilson, Whole Farm Coop, www.wholefarmcoop.com, email to author, 28 December 2004; Suzanne
Rubenstein, HomeGrown Wisconsin Cooperative, www.homegrownwisconsin.com, email to author, 3 January
2005.
14
Kamyar Enshayan, University of Northern Iowa, discussion with author, 4 January 2005.
15
For more information, see www.grownlocally.com.
27
struggled to meet demand: it sold $30,000 worth of produce in 2004 compared with an estimated
local demand of half a million dollars.16
Dedicated wholesalers are also showing interest. On Long Island, New York, Harbor View
Foods, a small distributor, was able to double its business in five years by offering to seek out
and coordinate Long Island-grown food shipments for the 60 King Kullen supermarkets on the
Island.17
And Sysco has developed an online clearinghouse for ordering locally raised food in Minnesota
called “SYSCO Minnesota Farmers Market.”18 It lists 11 growers, including stories and photos
of these farms, in addition to groups involved in promoting regional agriculture. A Sysco official
preferred not to discuss the sales impact, but noted that “we have learned a great deal from this
dedicated effort. It could serve as a template for other distribution locations. Stakeholders
[growers and NGO partners] are pleased with the progress. Our operating company hopes to
expand the number of suppliers in the upcoming growing season.” Sysco has also been looking
into lending options to help farmers convert from raising a generic commodity to crafting a niche
product, such as hormone-free pork or beef.19 (Imagine the results if Sysco offered such “farmers
markets” in all major metropolitan areas?)
Farm-to-Senior Programs Get Food to Underserved
In Maine, in 2004, about 180 farmers provided a weekly delivery of fruits and vegetables to over
7,500 seniors, with thousands more receiving produce through meal sites, food pantries and
nursing homes. This Maine Senior FarmShare program, funded primarily through the USDA
Food and Nutrition Service, pays farmers upfront to supply low-income elders with a $100
seasonal produce box. A novel variation on farmers market coupons, this program avoids
banking fees, and taps into farmers who aren’t selling at farmers markets, and seniors who didn’t
have access to a farmers market. It has attracted the interest of local rotary groups who are
helping to raise money for more shares.20 Many of the farmers have planted more acreage, and
over 50 percent of participating seniors are canning or freezing the food throughout the year.21
“If you could replicate this nationally,” said Gus Schumacher, who has tracked the program,
“you’d change the face of rural America.” Already similar programs are run by Community
Involved in Sustaining Agriculture (CISA) in western Massachusetts, Pike Place Market in
Seattle, and the Oregon Department of Agriculture.22
16
Jane Kile, Western Montana Growers Cooperative, discussion with author, 10 January 2005. For more
information, see www.mt-missionmtnmrkt.com/OtherPages/GrowersCooperative.html.
17
Joe Casa, Harbor View Foods, discussion with author, 2 October 2004.
18
For more information, see www.syscomn.com/fmarket.htm.
19
Sysco vice president, who spoke on behalf of his company, but preferred not to be mentioned, discussion with
author, 15 and 17 December 2004.
20
Deanne Herman, Marketing Manager, Maine Department of Agriculture, discussion with author 27 December
2004. For more information, see www.mainefoodandfarms.com/connect/farmshare.html.
21
Deanne Herman, Marketing Manager, Maine Department of Agriculture, discussion with author 27 December
2004.
22
Gus Schumacher, W.K. Kellogg Foundation, Consultant, discussion with author, 26 January 2005.
28
The Big Guys Could Be Allies, As Nonprofits Define the Brands

Key drivers
Mergers and competition are consolidating every link in the food chain.
Companies are seeing increasing pressure from environmental, health, animal rights, and
community groups to be more socially and ecologically responsible.
Key implications
All food companies are looking for ways to distinguish themselves.
Environmental groups, farmer organizations, and other third parties are certifying more and
more food products.
Mainstream farm groups could help attract new growers for certified value chains.
Sustainable product campaigns by supermarkets or food manufacturers can ripple through the
food chain.
Even Large Companies Need to Distinguish Themselves
There is an “agribusiness of the middle” that parallels the “agriculture of the middle.”
Companies like Sysco, Safeway, and General Mills are big. But, amidst rampant consolidation,
Wal-Mart or some overseas conglomerate is bound to be bigger. In every segment of the food
chain, independent companies looking to distinguish themselves from the competition and attract
more customers may do so by offering more information about the food they sell, including how
it was grown, where it was grown, and who grew it. In some cases, companies might be
responding to persistent questions from customers or lobbying from citizen groups: McDonald’s
made changes to their meat buying practices largely in response to lobbying from animal
welfare, public health, and environmental groups.1 In other cases, companies might be
responding to what they see as changing market conditions: Nike helped launch the Organic
Exchange, a business consortium to help source organic cotton, because it felt that a combination
of bad press and growing environmental concerns would make organic cotton the only choice for
the future.2
There are trade offs to working with these large players. On the one hand, smaller companies
might be neglected in the process. On the other hand, these larger players will help overcome the
economies of scale dilemma that now plagues so many community-based food enterprises,
working out the logistical, management and business solutions that will allow farmers to supply
nearby food processors and food business. The Department of Defense’s Fresh program that
moves millions of dollars of produce into schools in half the country’s school districts or Sysco’s
new Farmers Market website offer a glimpse of this potential. (Of course, many of the same
people trying to work with the agribusiness giants actually envision a future where there are
thousands of smaller firms taking back some of the agribusiness marketshare. In the meantime,
the sheer buying power and customer base of the agribusiness giants can help jump start the
revolution.)
1
Marian Burros, “McDonald's Takes Steps on Its Antibiotics Promise,” New York Times, 12 January 2005.
2
Lisa Mastny, Purchasing Power: Harnessing Institutional Procurement for People and the Planet (Washington,
DC: Worldwatch Institute, July 2003).
29
Some observers suggest that American food executives are taking note of policy and consumer
changes in the European food system—where recent food safety scares have encouraged an
integration of health and agricultural policy, a shift away from industrial livestock operations,
and local food procurement policies by public institutions. Of course, there is no guarantee the
Americans will follow the lead. But Mark Ritchie of the Institute for Agriculture and Trade
Policy noted that heads of many American food companies, including McDonald’s, have rotated
through Europe and brought back innovations and new ideas. Other American food companies
are being bought by European food companies who are bringing their homegrown ideas on
board. And American food company initiatives, like new animal welfare rules adopted by fast
food restaurants, borrow language and tone from European standards.3
Agribusiness Has Absorbed Organic, But The Rest is Harder
Dunkin Donuts is the first national brand to sell espresso beverages that are made exclusively
with Fair Trade coffee.4 Chipotle, the burrito chain that is the fastest growing arm of
McDonald’s, is the first fast food company to buy pastured pork.5 Until recently, it was buying
all its pork from Niman Ranch, but demand, which increased significantly after the promotion of
this pork, outstripped what Niman could supply. (The company’s website exclaims that Chipotle
knows exactly where it’s pork comes from: “We’ve visited their farms, walked their fields, even
met their families.”) In October 2003, conventional foodservice leader Sodexho announced a
partnership with United Natural Foods to distribute natural and organic foods to Sodexho’s 6,000
institutional customers.6 In an article about several restaurant chains beginning to offer grassfed
and natural meats, the senior vice president of marketing for Arby’s Franchise Association noted
that “If consumers want it, we certainly want to be there to give it to them. In a world of
sameness, you look for these opportunities.”7
Supermarkets have surpassed natural food stores as the largest sellers of organic foods. And, as
Eileen Lipson points out in “Organic Foods and Beverages,” these markets are not just selling
branded organic foods. Many chains, including Safeway, Kroger, and Giant Eagle, are also
offering private-label organic foods.8
Such investments in the sustainable foods market by mainstream agribusiness corporations are
perhaps the strongest evidence that organic, humanely-raised, and other eco-labels have carved
out more than a niche in the food landscape. However, it’s easier to acquire an organic subsidiary
than to make wholesale changes to operations. Tyson Foods Inc. recently rolled out its Nature’s
Farm line of organic chicken products, but hasn’t adopted the same principles for most of its
3
Mark Ritchie, Institute for Agriculture and Trade Policy, discussion with author, 7 and 14 January 2005.
4
Dunkin’ Donuts, “Dunkin' Donuts to Sell New Espresso Beverages Using Fair Trade Certified Coffee,” press
release, 25 April 2003.
5
See the “Porkutopia” section of the Chipotle website, www.chipotle.com.
6
November 2004).
7
Elizabeth Lee, “A natural alternative for carnivores,” Cox News Service, 25 January 2005.
8
November 2004).
30
farms.9 Unilever, one of the world’s largest food companies, with sales in 150 nations, recently
declared its own interest in sustainability. It developed guidelines for “sustainable management”
of its five top crops and promoted them to growers; it buys half of its fish from certified fisheries
and wants to increase that share to 100 percent; it has modified its food buying to protect water
sources around the world; and it has restructured its advertising to promote healthier foods.10
For firms wedded to national or international sourcing, and dealing in mass volume, it might be
most difficult to embrace an allegiance to place. “A lot of our companies, given the volume in
which they work, cannot depend on local,” said a spokesperson for the Grocery Manufacturers
Association, which represents America’s largest food brands. This spokesperson added that
GMA believes that geographic labeling “adds a lot of extra cost to food making, without adding
much benefit to the consumer,” part of the reason that GMA opposes mandatory country-of-
origin labeling. (Nonetheless, this same spokesperson noted that many of its members support
“strong organic standards,” and have begun to embrace the campaigns for American shrimp or
American salmon, based partly on food safety, terrorism, and food quality concerns.11)
Third-Party Verification Can Help
As shoppers look for more information about their food and more credible sources of this
information, farmers and nonprofits are playing an increasing role in defining the food brands of
tomorrow. Whether it's Rainforest Alliance certified bananas or Wild Farm Alliance certified
salmon. companies are scrutinizing their supply chains and sourcing more certified ingredients,
not just to get an edge over their competitors, but because they have to in order to maintain their
positions and their customers. The implication for nonprofits working in this arena is that instead
of focusing on educating consumers, it might be more effective to interact with businesses—
from the family farmer to the multinational food corporation. The challenge is determining
which organizations either have the skills and experience to do this effectively, and how those
that don’t can acquire that capacity or partner effectively with those who have it already.
The Rainforest Alliance worked with Chiquita, which supplies one third of the bananas sold in
America, to reduce pesticide use, improve worker conditions, and conserve rainforest around its
plantations. More recently, Chiquita finished certifying 100 percent of it’s banana farms in Latin
America to the SA8000 international labor and human right standard.12 Chiquita saw these
moves as central to holding onto marketshare in a rapidly changing market—organic and fair-
trade bananas are increasingly popular.13 (In a related program, Rainforest Alliance Certified
coffee volumes grew from 10,000 metric tons—22 million pounds—in 2002 to 27,000 metric
tons in 2004, a 174 percent increase, as Kraft, Proctor & Gamble, and other major coffee sellers
signed on.14) A similar effort is the Sustainability Institute’s Food Lab project to bring together
9
For more information, see www.naturesfarm-organic.com/contact.asp.
10
For more information, see www.unilever.com/environmentsociety/
11
Press officer, Grocery Manufacturers of America, discussion with author, 17 December 2004.
12
Chiquita International, “100 Percent of Chiquita-Owned Farms in Latin America Now Certified to International
Labor Standard,” press release, 17 January 2005.
13
J. Gary Taylor and Patricia J. Scharlin, Smart Alliance: How a Global Corporation and Environmental Activists
Transformed a Tarnished Brand (Yale University Press, 2004).
14
Chris Wille, Rainforest Alliance, email to author, 7 February 2005.
31
industry and NGOs to define improved standards for producing major global commodities, like
palm oil.15
In the United States, the more nuanced discussion about how to raise meat has enticed
mainstream environmental and animal welfare groups: the Sierra Club launched an anti-factory
farming campaign, and the Humane Society has begun to define a new set of animal welfare
standards. Beginning in 2005, Whole Foods Market will allocate five percent of total company
sales to create the Animal Compassion Foundation, in conjunction with the Humane Society and
People for the Ethical Treatment of Animals, among other groups, to help ranchers and meat
producers achieve a higher standard of animal welfare.16
Changes Can Ripple Through the Food Chain
The desires of one big buyer can ripple through the food chain, according to Scott Exo of the
Food Alliance, which has marketed food from its certified producers to supermarkets,
foodservice companies, and restaurants. Exo noted that the recent interest of restaurant chains
and foodservice companies in “sustainable cuisine” has meant that the distributors who serve
them—like Sysco at the national scale, as well as regional distributors—are increasingly signing
on as Food Alliance partners. Sysco’s participation, in turn, is starting to drive interest among the
food processors and manufacturers further up the chain.17 Many of these foodservice companies
are scrutinizing their supply chains in response to questions from their customers, interest
groups, or investors. It’s no longer enough, Exo said, “to green up your own operations, but you
need to extend that scrutiny down to your supply chain.” For instance, with input from various
farmer and citizen groups, Sysco has created a set of supplier guidelines for processors of frozen
and canned fruits and vegetables. These guidelines include questions about pesticide use,
genetically modified ingredients, workplace conditions, and other sustainability issues.
“Frankly, the challenge for the Food Alliance is scaling up quickly enough,” Exo said. “We will
not have the attention of these companies and their suppliers forever.” Food Alliance certified
operations grew 34 percent in 2003 and 39 percent in 2004. Yet, certified growers still couldn’t
supply the volumes and seasonal consistency required by large foodservice buyers. In response,
Food Alliance is considering expanding into California and other year-round growing areas, as
well as working with farm organizations, nonprofits, and agribusiness to recruit more farmers.
The markets for regional or sustainable products clearly exist, but so much of American
agriculture is ill-equipped to respond.
15
Hal Hamilton, Sustainability Institute, discussion with author, 10 January 2005.
16
Whole Foods Market, “Whole Foods Market Establishes Foundation to Help Achieve More Compassionate
Treatment of Farm Animals,” press release,14 December 2004.
17
Scott Exo, Food Alliance, discussion with author, 30 December 2004 and 7 January 2005.
32
Farmers Will Own Food Businesses

Key drivers
Demand for local food is growing in restaurants, supermarkets, and cafeterias.
Farmers lack business training and financing opportunities.
Key implications
Cooperatives and value chain partnerships will help farmers hold onto more of the food
dollar.
Business schools and agricultural schools can better integrate their programs.
Land-grant colleges, farmer associations, and community groups could all help bring
business and entrepreneurship programs to rural areas.
Where Are the Other Organic Valleys?
As public interest in supporting community-based food ventures grows, some of these businesses
are likely to enjoy substantial economic success. These ventures will need to scale up to supply
supermarkets and foodservice firms. At first blush, this seems like a non-problem. But the
question remains how a food company can grow while still retaining a large share of the profits
for growers and the community. “We may wind up just recreating a new treadmill for farmers to
be able to get big in order to supply them,” said Rich Pirog, project director for the Value Chain
Partnerships for Sustainable Agriculture at the Leopold Center.1
On the short list of companies that have shown that growth need not jeopardize an interest in
being a continual source of jobs, income, and food for the local community, Organic Valley is
near the top. The nearly 800 farmer-members of Organic Valley, the largest organic dairy
cooperative in the United States, now report yearly sales of $208 for 2004, a 33 percent increase
over the previous year. (Keep in mind that the coop struggled financially and shifted emphasis
several times in its first five to seven years.) The company consistently pays its members a 30-60
percent premium for their milk—and its members are smaller than the average American dairy—
even as it maintains a commitment to “regional flavor” by selling milk primarily in the region it
was raised.2 “Organic Valley’s mission is not to grow big and become a giant company,” said
Theresa Marquez, Organic Valley’s marketing director. “Our mission is to keep family farmers
farming and keep rural communities healthy.” As Dean Foods (Horizon) and HP Hood
(Stonyfield) emerge as Organic Valley’s top competitors, Organic Valley has lost some farmers
to even higher prices offered by the competition in the short term, and has lost some retail
accounts because it refuses to engage in price wars.3
1
Rich Pirog, Leopold Center for Sustainable Agriculture, discussion with author, 19 November 2004.
2
Prices from Maria Powell and Greg Lawless, “CROPP Cooperative/Organic Valley,” a case study prepared for the
North Central Initiative for Small Farm Profitability by the University of Wisconsin Center for Cooperatives,
January 2003; members and sales from “Organic Valley Cooperative Overview,” www.organicvalley.com, viewed
18 May 2004; Organic Valley, “Organic Valley Celebrates Nation’s First Ever National Program of Regional
Organic Milks,” press release, La Farge, Wisconsin, www.organicvalley.com, 7 March 2002.
3
Theresa Marquez, Organic Valley, discussion with author, 24 November 2004.
33
Thousands of Organic Valley-like companies selling a variety of foods in the American

marketplace would be a good start at changing the economics of the food system. But the
Organic Valley model hasn’t been easy to replicate. Similar, but smaller, companies that have
also been successful include Oregon Country Beef (a cooperative with 29 members), Cedar
Grove (an organic cheese producer in Wisconsin that supports several dozen family farms), and
Sustainable Organic Family Farms (a cooperative of 38 Washington organic fruit producers).4 In
Colo, Iowa, Wholesome Harvest, Wholesome Harvest, a coalition of 41 farmers in four states
that raises, slaughters, and markets certified organic animals. Founded in 2001, the coalition
included six farmers the fist year, twenty the next. The coalition now includes over 40 farmers.
At a time when American hog and cattle farmers are going belly-up by the thousands,
Wholesome Harvest has a waiting list of 70 farmers. Sales jumped 156 percent in 2004.5
Value Chains Can Help Scale Up
One alternative to a farmer-owned cooperative is making farmers partners in a value chain. In

contrast to the more typical “value chain” role of farmers as providers of a low-cost commodity,
this reconfiguration gives farmers more power, including a greater share of profits, more control
over business decisions, and more predictable income. The idea has attracted attention from
several universities and research centers. The Agriculture and Food Council of Alberta, Canada
has also launched a Value Chain Initiative “to create awareness of value chain strategies and help
progressive food producers, processors and marketers develop successful value chains and other
collaborative business relationships.”6 So far, it has spawned the Little Potato Company (which
markets small, fast-cooking potatoes the company calls “the new, natural convenience food of
the 21st century”), Minnesota Certified Pork (an alliance of natural pork producers, processors
and a dedicated retailer), and Dow AgroSciences Nexera Canola (a network of producers and
marketers of a non-hydrogenated canola oil called Natreon oil).
Proponents argue that the value chain approach offers some advantages over farmer-owned
enterprises, which have proven difficult to launch due to lack of start-up capital, sufficient
business planning, and many of the same problems that inevitably emerge with any small
business.7 In contrast, value chain arrangements allow farmers to be partners in the food chain
without having to provide all of the managing, processing, or manufacturing expertise and
without being vulnerable to high risks as in a farmer owned business. Moreover, the farmer’s
role is indispensable since they are part of the story that adds value to the product.8 (Imagine
what consumers of fair trade coffee would do if they found out the coffee grower did not receive
a fair price.)
4
Oregon Country Beef, www.oregoncountrybeef.com; Cedar Grove Cheese, cedargrovecheese.com; Judith Blake,
“Organic apple growers bid for shoppers' attention,” The Seattle Times, 17 November 2004.
5
Wende Elliot, Wholesome Harvest, email to author, 22 December 2004.
6
For more information, see www.agfoodcouncil.com/serve/chainindex.html.
7
Fred Krschenmann, Leopold Center for Sustainable Agriculture, discussion with author, 26 January 2005.
8
Fred Krschenmann, Leopold Center for Sustainable Agriculture, discussion with author, 26 January 2005.
34
Perhaps the most ambitious effort to organize the emerging value chains around the country
under one roof is the American Family Farmers venture.9 The AFF label would be like a
secondary label that could offer “a more compelling story” to everything from Washington
apples to Mississippi shrimp to Vermont cheese. Farmers will be selling a brand (American
Family Farms of Washington apples, for example) rather than generic apples, and the farmers
will own this brand and have more control over the supply chain. AFF hopes to tackle a daunting
paradox in the present food system. Consumers seem interested in buying local, but do most of
their shopping at large food stores that operate on a national scale. AFF hopes to offer food
industry executives a consistent clearinghouse for regional products: the ability to create “a store
within a store.” Already, representatives of both Sysco and Winn-Dixie have shown interest in
the label. The organizers already have groups of farmers and retailers around the nation ready to
sign up, although they will need significant start-up capital to launch the venture.10
Business Training and Financing are Lacking
Taking advantage of value chains and coops will require innovative business and legal structures,
market research, and logistical arrangements. The Center for Rural Entrepreneurship found that,
among all economic sectors, people in agriculture spawned a disproportionately small share of
new businesses in the last few decades.11 Getting college and university business schools to work
more closely with agriculture schools could help iron out the logistical and management
dilemmas that stifle most farmer-owned businesses. Among those programs that are being used
around the country to build business skills in rural areas is the Tilling the Soil of Opportunity
curriculum developed by the University of Nebraska’s Edge Program and NxLeveL.12 Between
2000 and 2002, nearly 500 individuals in more than a dozen states went through the class and
over 400 instructors were trained.13
Kevin Hodne, who directs the Center for Agriculture Development and Entrepreneurship in
central New York, has helped jumpstart many small food businesses, and he admits these
ventures are often not based on solid business plans and are not self-sustaining.14 CADE’s
Agriventure program helps farmers and food entrepreneurs write grants, access capital, and
develop business plans, which Hodne thinks is essential to a successful start-up food business.
“We’re talking about a whole different type of farmer,” Hodne said.15 For instance, farmers need
on-going access to capital and information to transition from being commodity producers to
producers of differentiated products. (For comparison, Community Food Security grants are for 2
9
Larry Yee, American Family Farmers, email to author, 20 December 2004.
10
Larry Yee, American Family Farmers, email to author, 20 December 2004.
11
Don Macke, Center for Rural Entrepreneurship, discussion with author, 7 February 2005.
12
Marilyn Schlake, NebraskaEDGE, Center for Applied Rural Innovation, University of Nebraska-Lincoln, email to
author, 8 February 2005.
13
Marilyn Schlake, NebraskaEDGE, Center for Applied Rural Innovation, University of Nebraska-Lincoln, email to
author, 8 February 2005.
14
Kevin Hodne, Center for Agriculture Development and Entrepreneurship, discussion with author, 19 January
2005.
15
2005.
35
to 3 years, although many business say they need 5 to 6 years to be self-sufficient.16) They also
need to band together into marketing networks so that their production can be brought into the
market place in a manner that allows farmers to retain a fair share of the value without driving
the price up so far that consumers are unwilling to buy the product. Hodne added that growth in
the number of such small, locally-rooted businesses will be small without greater policy support,
including loans and financing from a wider range of government agencies, like the U.S.
Department of Housing and Urban Development’s Small Cities program.17
Tapping into Charity to Jump-start Food Businesses
“There is a significant opportunity for food businesses that reach out to consumers with an
explicitly philanthropic mission,” said Woody Tasch, chair of the Investors Circle, which
invested in the Farmer’s Diner, Niman Ranch, and Stonyfield Yogurt, among other sustainable
food ventures.18 One retail consulting group estimated that retail-hosted charitable events and
promotions in the United States have at least tripled since 2000.19 Charity-related missions can
help keep companies connected to a given community and truly independent, since their
charitable giving will make them less likely takeover candidates.20
Several food companies have prospered with this model, including Newman’s Own (which
donates all profits to charity) and Ben & Jerry’s (which donates some). The Greystone Bakery in
Yonkers, New York, is a for-profit subsidiary of the Greystone Foundation, dedicated to
improving the inner city of southwest Yonkers. The bakery, a $3.5 million per year food
production business, providing permanent employment for 55 people (most of whom were
formerly considered unskilled or unemployable), markets all-natural gourmet tarts and cakes to
top Manhattan restaurants and stores, and is the sole supplier of the chocolate fudge brownies
used in Ben & Jerry's frozen yogurt and ice cream.21
Gene Kahn of General Mills has suggested a related strategy, which he loosely calls Robinhood
ventures, to help nonprofit organizations start community-owned food enterprises.22 Think of it
as a nation-wide incubator approach. For instance, a women’s shelter in the Southwest might
market tortilla chips made from native corns grown by women farmers, and the profits would
support the shelter’s work. The community group would own the brand and the equity in the
brand. Kahn thinks that moving food enterprises closer to a hunger, food security, or even faith-
based agenda can help broaden interest in recreating the food system. In Southeast Minnesota,
the University of Minnesota’s Experiment in Rural Cooperation is helping to set up the Hiawatha
16
Jane Kile, Western Montana Growers Cooperative, discussion with author, 10 January 2005.
17
2005.
18
Woody Tasch, Investors Circle, discussion with author, 21 December 2004.
19
Tracie Rozhon, “Stores Are Hoping to Do Well By Urging to Do Good,” New York Times, 16 December 2004.
20
Woody Tasch, “Slow Money,” More Than Money Journal, Summer 2004; Woody Tasch, Investors Circle,
discussion with author, 21 December 2004.
21
For more information, see www.greystonbakery.com.
22
Gene Kahn, General Mills, discussion with author, 22 December 2004.
36
Fund to solicit funds from area residents that can be invested in retaining local ownership of
local firms, including sustainable food and energy startups.23
Kitchen Incubators Important, But Could Be More Effective
Around the country, incubator kitchens have helped spawn many new community-owned food
businesses, particularly where farmers and aspiring food entrepreneurs cannot afford their own
equipment or need some marketing and production assistance. In the last two years, the Food
Innovation Center at Rutgers University helped 225 clients, 94 percent of them farmers or small
businesses, develop or market food products.24 Lou Cooperhouse, who directs the Food
Innovation Center, suggests that a given center can reach a critical mass of successful clients
which will allow it to offer even more services, spawn more clients, and potentially justify
additional incubators.25
Industry observers estimate that there are roughly 50 full-service agricultural, food processing, or
kitchen incubators around the country, although government cutbacks and the sluggish economy
have slowed what had been steady growth of two to three new incubators in recent years.26 In
other words, food incubators face the same sorts of financial hurdles as small food start-ups.
Most people who track the industry agree that greater collaboration and communication between
existing and start-up incubators could save time and resources, and prevent failures. The newly
formed National Food Business Incubator Network (Food BIN) hopes to facilitate this
collaboration.27
23
Ken Meter, Crossroads Resource Center, discussion with author, 18 January 2005.
24
Lou Cooperhouse, Food Innovation Center, Rutgers University, email to author, 9 December 2004.
25
Lou Cooperhouse, Food Innovation Center, Rutgers University, email to author, 9 December 2004.
26
Estimates based on Cameron Wold, Boise State University, email to author, 27 December 2004, Brian Norder,
Vermont Food Venture Center, discussion with author, 8 December 2004, and Lou Cooperhouse, Food Innovation
Center, Rutgers University, discussion with author, 14 December 2004.
27
For more information, contact Carol Coren, Food Innovation Center, Oregon State University.
37
Foodservice Will Be King

Key drivers
Americans are eating more and more meals away from home, and foodservice will consume
the majority of the food dollar within a few years.
Farm-to-institution projects remain small but are proliferating.
Key implications
Competition and customer demand is forcing restaurants, cafeterias, and other foodservice
settings to offer fresher, higher-quality, differentiated products with a story.
Big foodservice players—including hospitals, school districts, universities, and top
distributors—could point the way for others by helping to overcome logistical and price
barriers.
A youth movement around sustainable agriculture analogous to the key role youth play in the
environmental movement could help jumpstart sustainable foodservice projects at schools
and universities.
An Untapped Market Where Americans Eat More and More
Americans will continue to eat more meals away from home, and many more of the “home-
cooked” meals will be prepared largely away from home.1 But Americans will demand knowing
more about where foodservice items come from, whether in restaurants, school and hospital
cafeterias, or supermarkets.2
Michel Nischan, who has developed menus for Song Airlines, Ruby Tuesday’s and the Be Our
Guest Restaurant group, said that “more and more restaurant chains are moving towards well-
being as a marketing opportunity to differentiate themselves from each other.”3 Ruby Tuesday’s,
for instance, now includes nutritional information on its menus. Song’s market research shows
that its customers want organic, natural, and healthful meals.4 A vice president at Sysco agreed:
“It’s more than an itch out there by restaurateurs to be able to offer products that do have a flavor
of being locally procured and hand selected. These people want to be able to tell a story.” This
story offers one way for mom-and-pop restaurants to separate themselves from the intense
marketing campaigns of chain restaurants. “We do have concern about the survival of the family
farm and being able to obtain value added differentiated products,” the Sysco vice president
added.5
1
Harry Balzer, NPD Group, discussion with author 2 December 2004; “An Ag of the Middle Overview in
PowerPoint Format,” a project of Iowa State University and the University of Wisconsin-Madison, November 2004,
available at www.agofthemiddle.org/archives/nov_04.ppt; Sysco vice president, who spoke on behalf of his
company, but preferred not to be mentioned, discussion with author, 15 and 17 December 2004.
2
Laurie Demeritt, The Hartman Group, discussion with author, 12 and 24 January 2005.
3
Michel Nischan, Chef and Food Consultant, www.michelnischan.com, discussion with author, 27 December 2004.
4
Michel Nischan, Chef and Food Consultant, www.michelnischan.com, discussion with author, 27 December 2004.
5
Sysco vice president, who spoke on behalf of his company, but preferred not to be mentioned, discussion with
author, 15 and 17 December 2004.
38
This vast market for local and regional food businesses comes with formidable barriers,
including federal legislation that requires least cost bids for school and municipal cafeterias, a
lack of dependable supply, and opposition from foodservice workers unions to dealing with raw
ingredients.6 Within the $430 billion foodservice industry, schools, hospitals, the military, and
other institutional segments represent about one-quarter of all sales and about $50 billion in food
purchases. Restaurants comprise the remaining three-quarters of this business. The three largest
institutional food buyers, in order of declining food purchases, are K-12 schools ($6.9 billion in
purchases), colleges and universities ($4.3), and hospitals ($3.3).7
There will be opportunities for local food tie-ins in most cafeteria settings. In military mess halls,
American-grown could be pitched as the most patriotic option. Mayors and governors might
favor local farmers and food makers in municipal cafeterias as an obvious way to boost the local
economy and support their constituents. In New York and Oregon, correctional facilities are
beginning to buy more and more items from nearby farmers.8 Or, further afield, Norway’s only
celebrity chef is working with the Norwegian Touring Association (which represents hiking,
camping, and other recreation in the Norwegian mountains, among the nation’s most popular
pastimes) to develop a line of foods made exclusively from local ingredients and that will be
available in the nation’s extensive network of camping huts. For instance, instead of the standard
precooked meals that most hikers use, sojourners at Gjendesheim mountain cottage in
Jotunheimen National Park sit down to a meal of cured reindeer heart, sour cream porridge,
cakes made from locally produced grains, and a type of small potato grown only in those
mountain valleys.9
Farm-to-School Attracts Interest from Big Buyers
In the seven years since a few innovative farmers, school administrators, cooks, and parents took
the first steps to get locally raised foods into school cafeterias, the farm-to-school movement has
grown from scattered experiments to a nationwide effort supported by federal legislation.10
Propelled by worry over the obesity crisis, the corporatization of education, and the decline of
nutritional literacy, schools in more than 700 school districts now have farm to cafeteria projects
in place, serving more than half a million students.11
6
Gail Feenstra and Marion Kalb, “Farm to School: Institutional Marketing,” Ag of the Middle case study, available
at www.agofthemiddle.org/pubs/farmschool.pdf.
7
James Pond, Foodservice Director, email to author, 3 January 2005.
8
New York State Department of Agriculture, “Commissioner Applauds Decision to Buy NYS Farm Products: Dept.
of Correctional Services To Procure NYS Apple Juice Concentrate,” press release, 22 July 2004; Portland -
Multnomah County Food Policy Council, “Food Policy: At the Core of a Healthy Community,” 2004 Report,
available at www.sustainableportland.org.
9
Øystein Dahle, Worldwatch Norden and Norwegian Mountain Touring Association, Oslo, Norway, discussion with
author, 27 October 2003.
10
See various articles in Community Food Security News, a Community Food Security Coalition Publication, Spring
2003.
11
“Farm to Cafeteria,” Community Food Security News, a Community Food Security Coalition Publication, Spring
2003.
39
Nonetheless, these half a million meals represent just four percent of all the lunches served
through the national school lunch program.12 For comparison, New York City schools alone
serve 750,000 meals a day, Sodexho feeds about 2 million kids, and Aramark feeds about 5
million.13 In contrast to the billions of dollars spent on standard school lunches and breakfasts,
the largest programs to buy food for these meals direct from nearby farmers spend $1-2 million
each year.14 Apart from a few cases—the Ross School in East Hampton, New York or the New
North Florida Coop—where schools are buying large quantities of produce from nearby farmers,
most current farm-to-school programs are too small to have a significant impact on farm income.
(Advocates suggest that even small programs can help encourage better eating habits and
cooking skills, and expose students to food production.) Barry Sackin, Vice President for Policy
at the School Nutrition Association (formerly the American School Foodservice Association),
the largest representative of school foodservice professionals in the country, said that farm-to-
school programs are “unrealistic on a large scale, not that it’s not a worthy goal.”15
Keep in mind that an estimated seventy-five percent of farm-to-school programs are functioning
without any formal support, started by someone outside of the school system, according to
Marion Kalb, director of the National Farm-to-School Program of the Community Food Security
Coalition.16 With even a small amount of financial and institutional support, the efforts of these
individuals could blossom—$10 million could seed 100 school districts with $100,000 for new
staff, facilities, and other transition costs.17 One survey of nearly 400 K-12 school foodservice
directors in Michigan found that 73 percent were interested in sourcing from a local producer, a
share that increased to 85 percent if local foods were available from the directors’ existing
vendors.18 The School Nutrition Association’s latest School Fruit and Vegetable Procurement
Study found that school districts obtain far more fruits and vegetables from the local level than
the federal commodity program, and more than half of districts offer salad bars in at least one
school in their district.19 The study also found that student preferences, the amount of
reimbursable funding, and cost are the main factors influencing the amount of produce buying by
district directors.
As larger buyers (including the New York City school district, for instance) enter the fray, the
returns to rural communities will become noticeable. In many cases, demand is greater than
supply, as farmers are not yet equipped to meet foodservice requirements or are not convinced of
12
See www.fns.usda.gov/pd/slmonthly.htm and www.fns.usda.gov/pd/sbmonthly.htm.
13
New York from Ann Cooper, Chez Panisse Foundation, discussion with author, 10 December 2005; Sodexho and
Aramark from Gail Feenstra and Marion Kalb, “Farm to School: Institutional Marketing,” Ag of the Middle case
study, available at www.agofthemiddle.org/pubs/farmschool.pdf.
14
15
Barry Sackin, School Nutrition Association, discussion with author, 17 December 2004.
16
Marion Kalb, Community Food Security Coalition, discussion with author, 1 December 2004.
17
For more information, see www.farmtoschool.org.
18
Ola Rostant et al., “Farm-to-School Opportunities in Michigan: What do Food Service Directors Say?,” survey
conducted by the Michigan Department of Education and the C.S. Mott Group for Sustainable Food Systems at
Michigan State University, available at www.carrs.msu.edu/Main.
19
School Nutrition Association, 2004 School Fruit and Vegetable Procurement Study (Washington, DC: November
2004).
40
the value of participating in this market.20 One bright spot that shows the potential for
overcoming these barriers and operating on a larger scale is the DoD Fresh program, started
about ten years ago to take advantage of the Department of Defense’s excess food delivery
capacity following base closings in the United States. Operating in 42 states, and nearly half of
the nation’s school districts, DoD Fresh bought $72 million worth of food last year, and only
from small, family farmers within the state.21 (That’s up from just $4 million in 1994.22) In North
Carolina, where DoD Fresh purchased over half a million dollars of produce from North
Carolina growers for North Carolina schools, the program included nearly 60 growers and adds 5
to 7 each year.23 “This is a market that they didn’t have before,” said Gary Gay, who directs DoD
Fresh. “They are definitely excited about it.”24 Participating schools draw on $50 million of
federal commodity money earmarked by USDA for DoD Fresh program, as well as an additional
$20 million of USDA reimbursable money.25 And although its extensive food distribution
infrastructure has allowed DoD Fresh to get locally grown produce to market at an affordable
price, reimbursable funding is the main limitation to additional growth.
Colleges and Universities Offer Another Lucrative Market
Faculty, staff, and students at colleges and universities are asking more questions about the food
in their cafeterias and seeking out fresher, more nutritious, and better tasting food.26 A recent
survey of 400 students at the Pennsylvania College of Technology found that 70 percent of
respondents said they care about the source of their food and wish to support their local farming
community. In contrast, less than 30 percent said they were counting their carbs. When the
college started buying its beef from the nearby Northern Tier Sustainable Meats Co-op, sales of
hamburgers jumped 30 percent.27
Since Yale’s Berkeley Dining Hall started offering an array of local and organic items in fall of
2003, students have stood on line and counterfeited i.d.'s to gain access to the meals. Student
demand encouraged the university to expand the project to each of its dining halls, and this year,
a selection of sustainable items (fair trade bananas, organic milk, organic tea, local honey) and
seasonal entrees are being served in each of the dining halls. The program is still relatively small,
and spent less than $100,000 on food from nearby farmers, although at least one tomato grower
20
21
Patricia Scott, Defense Supply Center, School Lunch Program Manager, Philadelphia, Pennsylvania, email to
author 1 February 2005.
22
23
Gary Gay, North Carolina Department of Agriculture, Food Distribution Division, discussion with author 17
January 2005.
24
Gary Gay, North Carolina Department of Agriculture, Food Distribution Division, discussion with author 17
January 2005.
25
26
James Pond, Foodservice Director, discussion with author, 17 December 2004.
27
Pennsylvania Association for Sustainable Agriculture, “Farmers Beat Atkins in Popularity Contest,” press release,
11 November 2004.
41
and apple grower “can really make a go at it this year” because of the Yale contract, and in 2005
a half a dozen local growers will plant their fields with Yale’s needs in mind.28
The Food Alliance has had some success convincing Aramark, Bon Appetit, and Sodexho to
stock the cafeterias at 13 colleges and universities in the Pacific Northwest with some foods
raised in that region, and convinced Sodexho to serve regional foods at 11 Midwestern
campuses.29 Large purchases from a university might also help jumpstart other markets. Ohio
University, recently launched a farm-to-college program in conjunction with the Appalachian
Center for Economic Development (ACENET) that includes not only buying over $300,000
worth of farm products each year, but also helping to find additional markets for these
products.30
Youth Voice Still Not Organized
“Sustainable agriculture needs to become legitimized as a field, so youth will stick with it,” said
Pat Gray, executive director of the Food Project, among the oldest efforts in the nation to use
farming, food, and cooking to build a new generation of leaders.31 Gray notes that there is no
youth movement in the realm of sustainable food comparable to youth concern with
environmental issues, which has spawned local chapters of mainstream environment groups
(Sierra Club and Earth Day) in all the nation’s K-12 schools, colleges, and universities. The Food
Project involves hundreds of teens to grow nearly a quarter-million pounds of food in and around
Boston, donating half to local shelters and selling the remainder through a year-round CSA,
farmers markets, and harvest bags. The group recently introduced a line of farm-fresh salsa sold
at six area grocery stores. It also offers bag lunches and holiday pies, and catered 95 events in
2004.32 The group has sold 1500 copies of a manual on replicating the project, and Gray
estimates that 30 or 40 groups around the nation are closely following the model. A similar
program has emerged on the north shore of Massachusetts.
The Project has also created a national network of over 600 groups interested in similar sort of
work.33 This email network and the national youth conference organized annually by Rooted in
Community represent the only integration of the movement.34 The hundreds of farm-to-school
efforts around the nation seem like another logical and fruitful place to begin. The Global
Resource Action Center for the Environment (GRACE), originally set up to eliminate factory
farms, but now engaged in a wide range of social and environmental issues, has set up
“Sustainable Food in Schools”, a web resource that offers kids, parents, teachers, cafeteria and
dining hall managers information on setting up school garden projects.35 Slow Food USA is also
28
Melina Shannon-DiPietro, Yale Sustainable Food Project, discussion with author, 4 and 6 January 2005.
29
For more information, see www.foodalliance.org/products/where.html.
30
“Ohio University Farm-to-College Program,” Community Food Security News, a Community Food Security
Coalition Publication, Spring 2003.
31
Pat Gray, The Food Project, discussion with author, 15 December 2004.
32
Pat Gray, The Food Project, discussion with author, 15 December 2004. Also see www.thefoodproject.org.
33
Pat Gray, The Food Project, discussion with author, 15 December 2004. Also see www.thefoodproject.org.
34
For more information, see www.lejyouth.org.
35
For more information, see www.sustainabletable.org/schools.
42
encouraging its 125 chapters around the country to sponsor educational programs at nearby
schools, and many already have.36
Of course, young Americans represent the farmers, food buyers and taxpayers of tomorrow, and
among those youth organizations that could ostensibly be allies in building a community-based
food system are 4-H, Future Farmers of America, Boys and Girls Clubs of America, Boy and
Girl Scouts, and the YMCA and YWCA. In New York City, on Saturdays, the members of one
girls club have worked with some short-staffed New York farmer to start the Lower East Side
Girls Club Farmers Market. “It’s a great program for the girls who sit around eating healthy food
all day, get paid to work there, and farmer still thinks it’s worth his while,” said Anna Lappé of
the Small Planet Foundation, who has produced a film on the market.37 The YWCA in New York
City, with assistance from New York Women’s Culinary Alliance, recently planted a community
garden to complement a new culinary and nutrition program as part of its Girls Give Back
program.38 The United Way of Massachusetts Bay recently launched a campaign to counter the
rise in childhood obesity and unhealthy eating habits.39 The campaign includes airing public
service announcements in and around Boston, working with several academic institutions to
develop a healthy eating curriculum for after-school programs, where kids spend more and more
time, and developing a rewards program that gives teens points for going to the YMCA or
buying healthy foods.
Future Farmers of America requires every member to have a “supervised agricultural

experience” that includes writing a business plan and often starting a business.40 “A lot of these
projects are focused on taking advantage of local production,” said Rosalie Hunsinger, who
coordinates the Agri-Entrepreneurship Awards for FFA. Recent national finalists for the award
included a young woman who opened a fruitstand on her family’s farm, a young man who
started a fish farm for stocking ponds, and a young man who started a manure pumping and
application business.41
The Largest Hospitals Are Experimenting With Buying Local
“Like schools, hospitals play a role in modeling good health and eating habits, and they have an
ostensible mission that ought to correlate directly with making available fresh and healthy food,”
said Robert Gottlieb, director of the Urban Environmental Policy Institute at Occidental College.
“It just makes so much sense.” A recent report from the Prevention Institute, Cultivating
Common Ground: Linking Health and Sustainable Agriculture, argues that the obesity crisis,
rising healthcare costs, and the unhealthy aspects of the current food system offer an opportunity
for the public health and agriculture communities to work together to get healthy foods to poor
36
For more information, see www.slowfoodusa.org/education/index.html.
37
Anna Lappé, Small Planet Foundation, discussion with author, 18 December 2005.
38
Elisabeth Fassberg, Eat Food, www.eatfood.biz, discussion with author, 18 January 2005.
39
Peg Sprague, United Way of Massachusetts Bay, discussion with author. 14 December 2004.
40
Rosalie Hunsinger, Future Farmers of America, Agri-Entrepreneurship Awards, discussion with author, 26
January 2005.
41
Rosalie Hunsinger, Agri-Entrepreneurship Awards coordinator, Future Farmers of America, discussion with
author, 24 January 2005; “2004 Excellence in Entrepreneurship,” press pamphlet, National Future Farmers of
America, 2004.
43
communities, to shift agricultural subsidies to support production of healthy foods, and to get
healthy foods into hospitals and clinics.42 Several of the participants in FoodRoute’s Buy Local
Initiative, including the Land Stewardship Project, Appalachian Sustainable Agriculture Project,
and Community Alliance with Family Farmers identified the health community as an important
new partner to engage in their buy local campaigns. CAFF’s Jered Lawson noted that, “One of
our partners, Health Services Agency of Santa Cruz County, is helping to expand our campaign’s
outreach to medical schools, health practitioners and hospitals.”43
A recent report from the Urban Environmental Policy Institute found a handful of farm-to-
cafeteria programs operating around the nation.44 The 30-bed Sutter Maternity and Surgery
Center in Santa Cruz is already buying nearly 20 percent of its fruits and vegetables from a 110-
acre community farm about 15 miles from the clinic. Patients, doctors, staff, and the surrounding
community now enjoy regular farmers markets at Allen Memorial Hospital in Waterloo, Iowa,
Duke University in Durham, North Carolina, and Kaiser-Permanente hospitals, clinics, and other
facilities locations throughout California. Industry analysts estimate that 70 to 80 percent of
American hospitals still operate their own, independent, non-contract foodservice operations—a
market of more than $12 billion (in sales) each year.45 Ostensibly, this independence affords
hospitals more freedom to buy from local farmers and food makers—and argues for building
stronger community ties—than if they were outsourcing their food service.
As the largest healthcare provider in the United States, Kaiser-Permanente could help lead the
way for other hospitals, schools, and institutions interested in local food buying. Working with
Healthcare Without Harm, Kaiser recently drafted an overarching nutrition policy that not only
includes increasing the number of farmers markets it hosts from 10 to 20 by the end of 2005, but
also local purchasing for salad bars, favoring food raised without pesticides and meat raised
without antibiotics and hormones, and attention to the conditions of farm workers and other
social justice issues in the food supply chain.46 In the Midwest, building on its successful
campaign to eliminate mercury, PVC plastics, and other toxics from the purchases of the top five
group purchasing organizations for America’s hospitals, Healthcare Without Harm has also been
working with Sysco and the Food Alliance to launch a similar campaign around food.47 “Once
Kaiser and Consorta (a top group purchasing organization) make this public, it will send market
signals around,” said Jamie Harvie, food coordinator at Healthcare Without Harm, who helped
these two companies develop food protocols with a heavy emphasis on buying local. “There’s no
doubt that within a year we’re going to have some big successes.”48
42
Prevention Institute, Cultivating Common Ground: Linking Health and Sustainable Agriculture, (Oakland,
California: September 2004).
43
Pam Mavrolas, “FoodRoutes Network Buy Local Initiative Evaluation Report, 2004 [Draft],” sent by Joani
Walsh, FoodRoutes, 11 January 2005.
44
Moira Beery and Mark Vallianatos, “Farm to Hospital: Promoting Health and Supporting Local Agriculture,”
UEPI Papers, Urban and Environmental Policy Institute, Occidental College, Los Angeles, California, November
2004.
45
Michael Romano, “Food Fight,” Modern Healthcare, 13 September 2004, available www.hfm.org/news/pdf/09-
30-2004_4.pdf.
46
Ted Schettler, Science and Environmental Health Network, Boston, Massachusetts, discussion with author, 4
August 2004.
47
Jamie Harvie, Healthcare Without Harm, discussion with author, 5 January 2005.
48
Jamie Harvie, Healthcare Without Harm, discussion with author, 5 January 2005.
44
Chef Interest in Sustainability Growing, But Still Fringe
By turning their menus into manifestos, proclaiming the organic nature of their meats or
brightening up a deep-winter dinner with kale and turnip greens, chefs have helped introduce
American eaters to the possibilities of sustainable cuisine. At the 2004 Women Chefs &
Restaurateurs national conference, the keynote address focused on sustainability, and was
followed by a panel on restaurant sustainability. The membership is so interested in the topic that
it also consumed two hours of the general session on organizational matters, according to
member Ann Cooper. In addition one-third of the 47 scholarships the group awarded in 2004
were to “sustainability–minded” restaurants or farms.49
The 100,000 culinary students training in the United States offer a legion of potential
sustainability promoters as they enter the trade. Three years ago, the Portland chapter of Chefs
Collaborative, an organization of about 1000 members “who promote sustainable cuisine by
celebrating the joys of local, seasonal, and artisinal cooking,” worked with Ecotrust to launch the
“Farmer-Chef Connection,” an on-line product directory for farmers, fishermen, ranchers,
retailers and chefs in and around Portland.50 In conjunction with a Buy Local Campaign, the
Farmer-Chef Connection nearly quadrupled local food sales to restaurants between 2002 and
2003.51 With a membership of 135 restaurants and 90 farmers and food producers, the Vermont
Fresh Network arranges “handshake agreements” between Vermont farms and restaurants.52 In
2004, handshake agreements between farmers and chefs more than doubled from 72 to 185. For
participating restaurants, the share of their food purchases that came from Vermont increased
from 21 percent to 29 percent.
49
Ann Cooper, Chez Panisse Foundation, discussion with author, 10 December 2005.
50
For more information, see www.farmerchefconnection.org.
51
Pam Mavrolas, “FoodRoutes Network Buy Local Initiative Evaluation Report, 2004 [Draft],” sent by Joani
Walsh, FoodRoutes, 11 January 2005.
52
Amy Trubek, Vermont Fresh Network, discussion with author, 29 December 2004.
45
Supermarkets Will Change or Die

Key drivers
Mergers have consolidated the supermarket industry.
Big box (Wal-Mart) and fresh box (Whole Foods) are the only growth areas in food retailing.
The market for conventional supermarkets is shrinking.
Key implications
Supermarkets looking for ways to differentiate themselves are building local allegiance and
offering local flavor.
A handful of region-focused grocers and assorted supermarket “buy local” campaigns are
thriving.
Farmer-owned grocers have precedents, but have also struggled.
Supermarkets In Deep Trouble. . .
“The conventional American supermarket industry is in deep trouble,” said a November 2004
report from CIBC World Markets.1 This trouble comes from two directions: supercenters or big
box stores (such as Wal-Mart) and fresh box grocers (such as Whole Foods), and their respective
customers in search of value and a healthier lifestyle.2
Discount-oriented food retailers now absorb 35 percent of U.S. retail food sales, up from 24
percent just five years ago, and projected to account for 45 percent of the U.S. food retailing
business by 2010.3 By some estimates, discounters are growing at three times the rate of the
whole grocery business.4 A Wal-Mart store is three times larger than the conventional U.S.
supermarket, does four times the weekly sales, and has lower labor costs (which help keep down
food prices, which help to sell more food).5 At the same time, sales at large natural foods
retailers like Whole Foods and Wild Oats jumped by nearly 30 percent in 2004, a year that was
difficult for most food retailers.6
1
Perry Caicco et al., “Executive Summary: U.S. Supermarket Industry,” CIBC World Markets, Toronto, 1
November 2004.
2
Perry Caicco et al., “Safeway Inc., Initiating Coverage: Battling for the Middle,” CIBC World Markets, Toronto, 1
November 2004.
3
November 2004.
4
November 2004.
5
November 2004; “Wal-Mart: How Big Can It Grow?,” The Economist, 15 April 2004.
6
“Whole Foods Market Reports Fourth Quarter Results,” press release, www.wholefoods.com, 10 November 2004.
46
Though They Are Still the Place to Shop
Although discount superstores are gaining fast, supermarkets are still where Americans do most
of their food shopping.7 And even when Americans show that they are interested in buying food
made or raised locally, they prefer to purchase it at the supermarket. For instance, a 2001 survey
of 500 heads of households found that 80 percent of respondents wanted to purchase “locally
grown/produced products” from a grocery store, compared with 76 percent who wanted to buy
them from a farmers market, 72 percent who wanted to buy it direct from the farmer, and just 56
percent who wanted to buy it in a restaurant or cafeteria.8
Consumers still get most of their take-out meals from fast-food restaurants, although
supermarkets are gaining rapidly: 35 percent from fast-food places compared with 27 percent
from supermarkets.9 In 2004, supermarkets first surpassed full-service restaurants as a source of
take-out meals, and supermarkets are likely to look more like cafeterias in the future.10
Some Supermarkets Respond by Declaring Local Allegiance
Industry analysts are proposing that, to survive, supermarkets must either adopt the high-volume,
low-price model of Wal-Mart or morph into “lifestyle” stores that offer more organic and natural
food items, fresher producers, and a more enticing shopping experience.11 Many grocers are
responding by reinvigorating their own community ties. A recent survey of major American
grocers found that many have some local produce buying campaign in place.
At Ukrop’s, a 28-store chain in Virginia, shoppers can find organic Prudens Purple tomatoes,
Yukon Gold potatoes and Sweet Dumpling squash from Appalachian farmers.12 At Genuardi’s, a
Safeway affiliate, executives recently allowed the regional management to add back over 4,000
local products that had been removed after it realized their absence was hurting sales.13
Supervalue (which owns Cub) is the first mainstream supermarket chain that has put country of
origin labels on its produce.14
7
8
Michael W. Hamm, “Attracting Consumers with Locally Grown Products,” prepared for the North Central
Initiative for Small Farm Profitability, Food Processing Center, Institute of Agriculture and Natural Resources,
University of Nebraska-Lincoln, October 2001.
9
10
11
November 2004.; Perry Caicco et al., “Safeway Inc., Initiating Coverage: Battling for the Middle,” CIBC World
Markets, Toronto, 1 November 2004.
12
13
Perry Caicco et al., “Safeway Inc., Initiating Coverage: Battling for the Middle,” CIBC World Markets, Toronto,
1 November 2004.
14
Perry Caicco et al., “Safeway Inc., Initiating Coverage: Battling for the Middle,” CIBC World Markets, Toronto,
1 November 2004.
47
This year, King Kullen, which committed to buying exclusively Long Island fruits and
vegetables during the local growing season, purchased nearly $4 million worth of Long Island
produce for its 50 stores, compared with just $100,000 five years ago.15 Next year, Whole Foods
Markets, the largest natural and organic retailer in the world, plans to require its stores to find at
least 40 percent of their produce from nearby. Even Wal-Mart can tell which way the wind is
blowing. It recently became the latest partner in the Pride of New York campaign, as its 30 New
York superstores displayed New York produce, including the largest New York apple display in
the state.16
Over 200 stores, including Kroger, Farmer Jack, and Kmart now carry Michigan-raised produce,
according to Melissa Curtis, who coordinates the Michigan Department of Agriculture’s new
“Select Michigan” campaign. “It’s a response to the increased globalization of the food market,”
Curtis said. It’s also profitable. One store saw blueberries sales jump 26 percent, and asparagus
sales jump 67 percent, after the label was introduced.17
The Really Local Supermarket
But there is a big difference between the token apple display and a measurable commitment to
buying local. On a smaller scale, two single-location grocers have emerged that revolve entirely
around local products. These hybrids offer the one-stop shopping convenience of a supermarket
along with the intimate community connections of a farmers market. In downtown Lincoln,
Nebraska, the farmer-owned and farmer-managed Centerville Market sells most standard grocery
items—from bacon to cottage cheese to organic flax flakes—all raised in that state. Entering its
second season, the Centerville Market is still struggling.18 In Columbia, Missouri, the Root
Cellar has been open three years, and is thriving with a similar model to offer only foods that are
locally grown and processed. The store recently added a full-service deli, featuring free-range
meats and hormone-free cheeses, as well as salads and soups.19
These two grocers are similar to farm shops that have sprung up around Europe that are owned
and managed by a group of farmers diverse enough to stock the stores with the full range of
items people want. Among the largest is AVEC (Agriculteurs en Vente Collective Direct), a
farmers cooperative in the Rhone-Alpes region of southwest France that runs 19 farm stores
offering a wide range of foods produced and processed on members’ farms, including cheeses,
wines, jams, sausages, fruits, and vegetables. One AVEC store reports roughly 2,000 customers
each week and revenues of about $2 million each year, which are shared by 25 families on 10
farms.20
15
16
New York State Department of Agriculture, “Commissioner Kicks Off Pride of NY Promotion with Wal-Mart,”
press release, 28 October 2004.
17
Melissa Curtis, Michigan Department of Agriculture, discussion with author, 23 September 2004.
18
John Ellis, Centerville Farmers Market, Lincoln, Nebraska, discussion with author, 29 April 2004. For more
information, see Brian Halweil, Eat Here: Reclaiming Homegrown Pleasures in a Global Supermarket (W.W.
Norton: 2004).
19
Lisa Frick, “Organic market rooted in local foods: The Root Cellar thrives as produce outlet specializing in
products made the simple way,” Columbia Tribune, 7 February 2004.
20
See Brian Halweil, Eat Here: Reclaiming Homegrown Pleasures in a Global Supermarket (W.W. Norton: 2004).
48
The Future of Supermarkets
Or, consider New Seasons Market, a Portland-based chain with six stores in Oregon, whose
mission includes the goal of “building a regional food economy.”21
“If you were standing at our meat cases right now [in November of 2004] you'd see that 99
percent of the products have the logo,” said Brian Rohter, president of New Seasons Market, a
Portland-based chain with six stores in Oregon, which has just rolled out a “Pacific Village” logo
to help shoppers find wild salmon, Marion berries, Chanterelles, microbrews and other items
from Washington, Oregon or Northern California.22 (More and more grocery stores are
developing their own labels to denote foods or products from their region.)
New Seasons is a neighborhood grocery store with a price structure similar to Safeway or
Albertson’s. And, yet, instead of a handful of vendors that supply the business, New Seasons
buys from hundreds of small and mid-sized farming, fishing, ranching and manufacturing
operations that have individual relationships with the purchasing managers.23
New Seasons devotes significantly more resources than the typical grocer to manage local and
sustainable products orders. New Seasons cuts deals on price without a middleman and not based
on the Commodity Price Index, but instead based on what the producer needs and what New
Seasons Market thinks it can afford. In other words, as Eileen Brady explained, New Seasons
works out a price that allows both parties to participate over the long-term, since New Seasons
feels its growers “make the shopping experience more interesting and exciting for the
customers.”24 A recent New Seasons ad campaign asked “Where is your lamb grown? You
choose!,” and contrasted a map of New Zealand with one of Oregon. New Seasons Market,
which is not interested in expanding beyond the Pacific Northwest, is helping the Community
Food Security Coalition put together a handbook for opening quality foods markets in low
income neighborhoods across the country.25
21
Eileen Brady, Ecotrust, discussion with author, 10 December 2004; Eileen Brady, “New Seasons Market – Case
Study Portland, Oregon, July 2004,” Ag of the Middle case study, available at
www.agofthemiddle.org/pubs/newseasons.pdf.
22
Brian Rohter, New Seasons Market, discussion with author, 3 December 2004.
23
24
25
49
Forget the Farm Bill, and Look To Local Food Clusters

Key drivers
A growing national deficit, budget cuts, and international trade laws threaten farm payments.
Major farm lobbies remain powerful, and federal funding for sustainable food projects is
uncertain.
Local food policy councils and local food strongholds are proliferating.
Agroterror concerns are growing within the government.
Key implications
Changes in food and agricultural policy may be most likely at the local level.
Unusual bedfellows—small farmer, environment, anti-hunger groups—will need to form
coalitions to transform farm policy at all levels.
Homeland security programs could provide funding and institutional support for sustainable
agriculture projects.
Rising Concerns About Food Security and Food Imports
Despite concerns about American vulnerability to agricultural terrorism raised by outgoing

Health and Human Services Secretary Tommy Thompson, which were promptly disavowed by
the administration, America is becoming less self-reliant on its own food production. In June and
August of 2004, the nation had the first monthly trade deficit in food since the farm crisis of the
mid-1980s. And if the estimates of agricultural officials are correct, 2005 could be the first year
since 1959 that the nation might import more food than it exports.1 (For perspective, in 1990, the
value of food exports was nearly double that of imports.2) This increased reliance on foreign
foods could provide a rallying point for a variety of interest groups to lobby for greater food self-
sufficiency.
The spike in concern about agricultural terrorism and the safety of imported foods following
September 11, 2001 has gradually returned to pre-attack levels.3 Nonetheless, more and more
agricultural policy decisions are couched in homeland security terms: in 2002, the Department of
Agriculture made “Agricultural & Food Biosecurity” one of 11 national emphasis areas, and the
Department of Agriculture has worked with the Departments of Defense and Homeland Security
to run wargames of possible agricultural terror attacks.4
This interest might provide an opportunity to inform the public and government officials that
huge farms raising just one crop or livestock variety are particularly vulnerable to attack.
1
Scott Kilman, “Increasing Imports of Food Creating Trade Problems for U.S. Economy,” Wall Street Journal, 11
August 2004.
2
“Indicators,” Amber Waves (publication of USDA, ERS), November 2004, available at
www.ers.usda.gov/Amberwaves/November04/Indicators.
3
Ronald C. Wimberley, North Carolina State University, discussion with author, 26 January 2005; Ronald C.
Wimberley,et al., “Food from Our Changing World: The Globalization of Food and How Americans Feel About It,”
available at sasw.chass.ncsu.edu/global-food/foodglobal.html.
4
For more information, see csrees.usda.gov/nea/ag_biosecurity/ag_biosecurity.html; Charles Piller, “Farmlands
Seen as Fertile for Terrorism,” Los Angeles Times, 22 August 2004.
50
However, most military and agricultural officials are calling for logistical and technical remedies
to this threat—better interstate communication between veterinarians, biosurveillance equipment
at farms, quarantine procedures.5 This mindset could actually reinforce the move towards factory
farms that can handle the costs of such surveillance, rather than a shift to smaller, more diverse,
and more decentralized food systems as a our best defense.
The End of Commodity Payments
Regardless of such security concerns, many agricultural economists, farm lobbyists, and others
who track food policy argue that radical change in American farm policy is almost certain in
coming years. Most recently, President Bush called for significant caps on payments.6 The
growing budget deficit makes commodity subsidies harder to justify. So do world trade laws that
forbid them—consider the World Trade Organization’s recent ruling in favor of Brazil and
against American cotton subsidies, and in favor of Europeans and against American crop export
subsidies. The recent General Accounting Office and Environmental Working Group reports on
the distribution of subsidies have also made them less politically palatable.7 The changing
demographics of America’s farmers—smaller, more urban, more ethnic—means that farm
politics could attract more and more attention from the majority of urban, suburban, and rural
politicians outside of the Midwestern and Great Plains districts that benefit most from farm
policy. Other observers note that the commodity lobbies and agribusiness interests that benefit
most from existing farm policy are as powerful as ever, and that no effective coalition has
emerged to counter this power.
In the European Union, similar concerns have prompted several member states to redirect
production payments to “green” or “stewardship” payments, which would support farmers who
meet certain ecological goals, along the lines of the Conservation Security Program in the United
States. France is considering shifting 20 percent—up from just a few percent today—of all direct
payments to farmers toward rural development and ecological farming programs in coming
years. This would support France’s Contrats Territoriales d’Exploitation (land management
agreements), a new grassroots program that involves rural communities in deciding what
changes to farming practices will most benefit local environmental needs but also farm
profitability.8
Both in the United States and around the world, some analysts have suggested that simply
shifting from commodity payments to “green” payments will not address the perennial concern
of low commodity prices. In a report that was widely acknowledged to point a way out of the
costly subsidy quagmire, Darryl Ray and colleagues suggested a combination of acreage
diversions, a farmer-owned food security reserve, and price supports. The authors’ models
5
Peter Chalk, Hitting America's Soft Underbelly: The Potential Threat of Deliberate Biological Attacks Against the
U.S. Agricultural and Food Industry (Santa Monica, California: RAND Corporation: 2004).
6
Robert Pear, “Bush Is Said to Seek Sharp Cuts in Subsidy Payments to Farmers,” New York Times, 6 February
2005.
7
For more information, see www.gao.gov/highlights/d04861thigh.pdf and www.ewg.org/farm.
8
Thomas L. Dobbs and Jules N. Pretty, “The United Kingdom's Experience with Agri-Environmental Stewardship
Schemes: Lessons and Issues for the United States and Europe,” South Dakota State University Economics Staff
Paper 2001-1 and University of Essex Centre for Environment and Society Occasional Paper 2001-1, March 2001.
51
showed that such a combination would encourage farmers to plant less acreage, would increase
major commodity prices by 20 to 30 percent, would increase farm income, and would save
taxpayers $10 to $12 billion per year in commodity payments.9
Healthy Farms and Healthy Communities
In the last decade, coalitions of anti-hunger, environmental, and sustainable agriculture groups
have partnered to push through small, but important pieces of legislation as part of the Farm Bill.
These programs, including the Community Food Projects Competitive Grants Program, the
Value Added Producer Grants Program, and local food provisions in the Child Nutrition Act,
have helped to seed and nurture small local food projects, but they are still funded at relatively
low levels and funding for some is far from certain. For instance, the 2002 Farm Bill authorized
$40 million each year for Value Added Producer Grants to invest in enterprises started by
farmers and ranchers, but funding has steadily declined from $37 million in 2002 to $28.7 in
2003 to $13.1 in 2004.10 Over the same period, the number of projects has declined from 231 to
172 to 97.11
Politically, such programs could gain some lobbying allies from a range of potential
beneficiaries. Beyond small farmers and food businesses who would benefit most directly,
foodservice companies like Sysco interested in finding more small food suppliers should be
interested in supporting value added producer grants; AARP should be interested in supporting
more community food security grants to help replicate programs like Maine FarmShare which
get fresh produce to elderly Americans; and soccer moms and dads, YMCA, and Boys and Girls
Clubs of America should be lobbying for greater funding for farm-to-cafeteria pilots.
In anticipation of the 2007 Farm Bill, a coalition of the American Farmland Trust,
Environmental Defense, the Sustainable Agriculture Coalition, and the Community Food
Security Council, among others, hopes to build partnerships with nutrition and public health
groups to continue to reform the Bill.12 Public health organizations have shown growing interest
in changing a farm policy that they say encourages the production and eating of unhealthy
foods—fatty livestock products, soy oil, high fructose corn syrup.13 Several aid organizations,
including Oxfam American, were exploring the possibility of launching a campaign against the
current agricultural subsidy structure that would be aimed at suburban moms and dads, among
9
Daryll Ray et al., “Executive Summary, Rethinking U.S. Agricultural Policy: Changing Course to Secure Farmer
Livelihoods Worldwide” (Agricultural Policy Analysis Center (APAC), University of Tennessee: September 2003).
10
“Value-Added Producer Grant Awards: 2004,” prepared by the Sustainable Agriculture Coalition, sent to author
by Ann Wright, Sustainable Agriculture Coalition, 17 December 2004.sent to author by Ann Wright, Sustainable
Agriculture Coalition, 17 December 2004.
11
“Value-Added Producer Grant Awards: 2004,” prepared by the Sustainable Agriculture Coalition, sent to author
by Ann Wright, Sustainable Agriculture Coalition, 17 December 2004.sent to author by Ann Wright, Sustainable
Agriculture Coalition, 17 December 2004.
12
Andy Fischer, Community Food Security Coalition, discussion with author, 26 January 2005.
13
Scott Fields, “Fat of the Land,” Environmental Health Perspectives, October 2004.
52
others, who are concerned about childhood obesity, but may not otherwise have interest in farm
policy.14
Local Food Policy Councils Could Be More Organized. . .
Some of the most interesting political activity in agriculture is happening at the state, county, and
local levels, where politicians may have more latitude to respond to local needs. For instance,
dozens of communities around the country have passed local laws restricting the activities of
industrial livestock farms, including at least eight counties in Iowa and 14 counties in North
Carolina, the two top hog producing states.15
When they were first founded in the early 1990s, local food policy councils seemed to offer a
model for holistic and inclusive decision-making that was in touch with local needs on issues
ranging from hunger to land preservation to food procurement. About 40 cities, states, and
counties around the country have formed such councils, up from 12 to 15 about five years ago.16
In California, where the Nutrition Network under the Department of Health Services has
provided some money to develop local food policy councils, there may be as many as 15
councils, and the Community Food Security Coalition is also trying to develop a state food
policy council.17 One innovative model from Oregon is the Portland/Multnomah County Food
Policy Council which seems to have found some additional efficiency and effectiveness from a
sort of “bilateral” arrangement between city and the surrounding country.18 Founded in 2003, the
council has already encouraged the local correctional facility to procure more local food.
“I like what local food policy councils can do,” said Mark Winne, who used to direct the
Hartford Food Project and helped found the Connecticut Food Policy Council. “But in order for
them to fulfill their potential, they need a lot more support than they are getting.”19 Christine
Pardee, co-director of State and Local Food Policy project at Drake, and coordinator of the Iowa
Food Policy Council, recently surveyed over 40 food policy council coordinators in the United
States and Canada.20 The survey indicated that many councils lack the funding to employ full-
time staff or support any programs. (Councils without a paid coordinator have the highest rate of
failure.) Councils are also struggling with the trade-offs of being housed in government agencies
(which affords greater political legitimacy, but also susceptibility to changes of administration)
or being independent nonprofits (which affords greater autonomy, but could make government
buy-in harder to obtain). The survey also found that nearly 80 percent of the councils are actively
14
Molly Anderson, Oxfam America, discussion with author, 17 August 2004.
15
Wally Taylor and Barclay Rogers, “Worth County Friends of Agriculture v. Worth County, Iowa.,” Amicus
Curiae Brief filed by Sierra Club, Iowa Farmers Union, and Worth County Concerned Citizens, Iowa Supreme Court
No. 03-552, Des Moines, Iowa, 11 July 2003; Wally Taylor, Iowa Chapter of the Sierra Club, email to author, 6
February 2005.
16
Christine Pardee, Drake University, discussion with author, 6 January 2005.
17
Heather Fenney, Community Food Security Coalition, discussion with author, 26 January 2005.
18
Brian Rohter, New Seasons Market and Portland/Multnomah County Food Policy Council, discussion with
author, 3 December 2004; Portland - Multnomah County Food Policy Council, “Food Policy: At the Core of a
Healthy Community,” 2004 Report, available at www.sustainableportland.org.
19
Mark Winne, Mark Winne Associates, discussion with author, 1 December 2004.
20
53
engaged in promoting locally grown foods and an equal share are focused on hunger and food
insecurity.
Winnie suggested that existing and future councils could benefit from more standardization
(some consideration about what they can and cannot do), communication between councils
(many waste time and resources reinventing the wheel), and evaluation of what has and has not
been successful (building local buying standards into state policy can help more farmers than
starting dozens of farmers markets around the state). A local food policy council remains an
important place to start, since it can seed many projects once up and running. (The Drake survey
also found that there is significant interest among policy councils to work together as a network
to influence portions of the next farm bill.21)
. . . So Could Local Food Clusters
A related sort of project worth watching is the local food cluster or local food system council:
farmers, food businesses, politicians, and citizen groups who organize reinforcing campaigns for
local food in a given area. Examples would include the Leopold Center’s value chains project or
CISA’s Be a Local Hero Campaign. These groups can also help to jumpstart political change on
a regional level, not through a formal political process or by simply building greater public
awareness, as local food policy councils do, but by trying to form business relationships.
Such clusters are emerging in various parts of the country: the Pacific Northwest centered around
work in Portland; western Massachusetts centered around the work of CISA; Iowa focused on
Iowa State University; Minnesota focused on the Minneapolis coop network; Philadelphia
centered around the work of the White Dog Café. (A noteworthy international example would be
in British Columbia centered on Farm Folk/City Folk.) These clusters serve as the central
clearinghouse for efforts ranging from new farmers markets to restaurant buying pools to ad
campaigns. Their power lies in the fact that once public awareness has been raised sufficiently, it
paves the way for wide support of farm-to-school, farm-to-hospital, and farm-to-supermarket
projects, and spawn related efforts. For instance, CISA’s Be a Local Hero campaign, recognized
by 70 percent of people in western Massachusetts, is paving the way for a farm-to-school project
and farm-to-senior project.22
21
22
Mark Lattanzi, Community Involved in Sustaining Agriculture (CISA), discussion with author, 3 January 2005.
54
Appendix 1: Key contacts associated with ideas, organizations, businesses or projects

mentioned in this scan
Molly Anderson John Ellis

Oxfam America Centerville Farmers Market
MAnderson@OxfamAmerica.org centervillemarket@alltel.net
Jessica Applestone Kamyar Enshayan

Fleisher’s Grass-fed & Organic Meats University of Northern Iowa
schmutzyapple@yahoo.com Kamyar.Enshayan@uni.edu
Harry Balzer Scott Exo

NPD Group Food Alliance
harry_balzer@npd.com Scott@FoodAlliance.org
Jack Bishop Elisabeth Fassberg

Cooks Illustrated Eat Food
jack_bishop@bcpress.com www.eatfood.biz
Eileen Brady Heather Fenney

Ecotrust Community Food Security Coalition
ebrady@ecotrust.org heather@foodsecurity.org
Lee Hayes Byron Andy Fischer

US Climate Action Network Community Food Security Coalition
lhbyron@climatenetwork.org andy@foodsecurity.org
Joe Casa Pat Gray

Harbor View Foods The Food Project
joecasa@optonline.net pgray@thefoodproject.org
Roxanne Christensen Hal Hamilton

Somerton Tanks Farms Sustainability Institute
www.somertontanksfarm.org hhamilton@sustainer.org
Ann Cooper Jamie Harvie

Chez Panisse Foundation Healthcare Without Harm
chefannc@aol.com harvie@isfusa.org
Lou Cooperhouse Deanne Herman

Food Innovation Center, Rutgers University Maine Department of Agriculture
Lcooperhouse@aol.com Deanne.Herman@maine.gov
Melinda Curtis Kevin Hodne

Michigan Department of Agriculture Center for Agriculture Development and
melmca@aol.com Entrepreneurship
khodne@cadefarms.org
Laurie Demeritt
The Hartman Group Rosalie Hunsinger
laurie@hartman-group.com Future Farmers of America
RHunsinger@ffa.org
Wende Elliot
Wholesome Harvest
welliott@wholesomeharvest.com
55
Gene Kahn
General Mills Theresa Marquez
gene.kahn@genmills.com Organic Valley
theresa.marquez@organicvalley.com
Marion Kalb
Community Food Security Coalition Joe Marra
marion@foodsecurity.org Natural Marketing Institute
www.nmisolutions.com
Jeff Kapell
SJH & Co. Ken Meter
jkapell@sjhandco.com Crossroads Resource Center
kmeter@crcworks.org
Karen Karp
Karp Resources Michel Nischan
www.karpresources.com Chef and Food Consultant
www.michelnischan.com
Jane Kile
Western Montana Growers Cooperative Christine Pardee
dxn3606@blackfoot.net Drake University
christine.pardee@drake.edu
Jim Kinsel
Watershed Organic CSA Rich Pirog
jameskinsel@earthlink.net Leopold Center for Sustainable Agriculture
rspirog@iastate.edu
Fred Kirschenmann
Leopold Center for Sustainable Agriculture James Pond
leopold1@iastate.edu Foodservice Director
jpond@fsdmag.com
Fred Lee
Sang Lee Farms Barry Sackin
www.sangleefarms.com School Nutrition Association
www.schoolnutrition.org
Velma Lakins
USDA, Farmers Market Manager Patricia Scott
Velma.Lakins@usda.gov Defense Supply Center, School Lunch Program
Patricia.Scott@dla.mil
Anna Lappé
Small Planet Foundation Melina Shannon-DiPietro
anna@smallplanetfund.org Yale Sustainable Food Project
melina.shannon-dipietro@yale.edu
Mark Lattanzi
Community Involved in Sustaining Agriculture Ragan Rhyne
(CISA) Slow Food USA
www.buylocalfood.com ragan@slowfoodusa.org
Elaine Lipson Mark Ritchie

Food Writer and Editor Institute for Agriculture and Trade Policy
EMLIPSON@aol.com mritchie@iatp.org
Glynn Lloyd Brian Rohter

City Fresh Foods New Seasons Market
www.cityfreshfoods.com brianr@newseasonsmarket.com
Don Macke Suzanne Rubenstein

Center for Rural Entrepreneurship HomeGrown Wisconsin Cooperative
don@ruraleship.org www.homegrownwisconsin.com
56
Tracey Ryder Ronald C. Wimberley

Edible Communities North Carolina State University
www.ediblecommunities.com wimberley@ncsu.edu
Ted Schettler Mark Winne

Science and Environmental Health Network Mark Winne Associates
tschettler@igc.org Win5M@aol.com
Marilyn Schlake Larry Yee

NebraskaEDGE, Center for Applied Rural Innovation American Family Farmers
University of Nebraska-Lincoln lkyee@ucdavis.edu
www.nebraskaedge.unl.edu
Gus Schumacher
W.K. Kellogg Foundation
Gussch@aol.com
Steve Sellers
Transfair
steve@transfairusa.org
Matthew E. Seward
MarketResearch.com
Jim Slama
Sustain
jim@sustainusa.org
Woody Tasch
Investors Circle
woodytasch@verizon.net
Wally Taylor
Iowa Chapter of the Sierra Club
Wtaylorlaw@aol.com
Amy Trubek
Vermont Fresh Network
amy@vermontfresh.net
Joani Walsh
FoodRoutes
joaniwalsh@verizon.net
David Ward
Rodale Institute
david.ward@rodaleinst.org
Chris Wille
Rainforest Alliance
cwille@racsa.co.cr
Kristin Wilson
Whole Farm Coop
www.wholefarmcoop.com
57

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Change on the Horizon:

A Scan of the American Food System

Executive Summary: Drivers and Recommendations p. 5

The Slow American Eater p. 9

Food Scares and Energy Spikes On The Horizon p. 16

Food Won’t Be Able To Hide p. 20

Eating Local Will Be More Convenient p. 25

Farm-to-Senior Programs Get Food to Underserved

The Big Guys Could Be Allies, As Nonprofits Define the Brands p. 29

Farmers Will Own Food Businesses p. 33

Foodservice Will Be King p. 38

Supermarkets Will Change or Die p. 46

Forget the Farm Bill, and Look To Local Food Clusters p. 50

Rising Concerns About Food Security and Food Imports

Appendix 1: Key contacts associated with ideas, organizations, businesses or projects

Executive Summary: Drivers and Recommendations

The National Health Crisis Will Shape Food Policy

Foodservice Will Be King

The Big Guys Could Be Allies, As Nonprofits Define the Brands

Forget the Farm Bill, and Look To Local Food Clusters

Food Scare and Energy Spike Wild Cards

The Slow American Eater

Our Bellies Aren’t Going Away. . .

. . . Even as Food and Health Become Synonymous

Baby Boomers Dominate Food Shopping

Cities Are the Next Agricultural Frontier

Both City and Country More Ethnically Diverse. . .

. . . And So Are Farmers

Americans Want it Prepared. . .

As a microcosm of America’s growing dependence on imported foods, Americans themselves

. . . But Still Want it Fresh

The Slow Life

Food Scares and Energy Spikes On The Horizon

New Food Safety Risks Emerging

Climate Crisis Will Hit Farmers Hardest

Energy Crops Will Make Money for Farmers

Food Won’t Be Able To Hide

Organic Foods Soar. . .

Even As Americans Go Beyond Organic. . .

Edible Communities, a for-profit, membership corporation, has already helped eight

Agribusiness Gets Interested in the Details

Internet Technology Allows The Customer To Be A Partner

Eating Local Will Be More Convenient

Local Food Market Remains Small

Full-service Farmstands Emerge

Full-service farmstands, like Wilson’s Farm in Lexington, Massachusetts or Underwood Family

Local Food Distributors Fill A Food Chain Gap

Farm-to-Senior Programs Get Food to Underserved

The Big Guys Could Be Allies, As Nonprofits Define the Brands

Even Large Companies Need to Distinguish Themselves

Agribusiness Has Absorbed Organic, But The Rest is Harder

Third-Party Verification Can Help

Changes Can Ripple Through the Food Chain

Farmers Will Own Food Businesses

Where Are the Other Organic Valleys?

Thousands of Organic Valley-like companies selling a variety of foods in the American

Value Chains Can Help Scale Up

One alternative to a farmer-owned cooperative is making farmers partners in a value chain. In

Business Training and Financing are Lacking

Tapping into Charity to Jump-start Food Businesses

Kitchen Incubators Important, But Could Be More Effective

Foodservice Will Be King

An Untapped Market Where Americans Eat More and More