POLICY BRIEF Regional Food Distribution Centers: Linking Communities to Healthy Foods and Economic Development

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1 POLICY BRIEF Regional Food Distribution Centers: Linking Communities to Healthy Foods and Economic Development May 2012 It is well known that increasing fruit and vegetable consumption is critical to improving health and reducing chronic disease, and that the availability of these foods is a key factor in their consumption. i,ii,iii DASH NY seeks to promote health and prevent disease by increasing access to fresh fruits and vegetables in all New York communities, especially those that currently experience the least access. An inadequate fresh food distribution infrastructure is one barrier many communities face in obtaining the fresh foods needed to support a healthy population. iv,v Regional distribution centers can therefore play an important role in improving health. By also creating jobs and expanding consumer markets, the centers can also add to New York s regional economies, which also contributes to health improvement. What are Regional Food Distribution Centers? Distribution centers are physical facilities with a management structure that purchases goods from farmers in a region, aggregates the products, stores them, and then transports them to either individual or wholesale buyers. Centers may also provide light processing and other services that add value to fresh foods. These services may involve equipment that is too costly for many farmers. Furthermore, distribution centers can help ensure that services performed are compliant with food safety regulations. These facilities serve a critical function in the supply chain for fresh, local 1 food by linking local farmers to area retailers, wholesalers, institutions, and consumers. Without them, many farmers do not have appropriate outlets for sale of their goods. Small and medium sized farms are either left to rely on direct to consumer marketing, which can be insufficient to support medium sized farms, or attempt to access mainstream supply chains, where these farms often lack adequate volume or cannot be competitive with large farms. vi,vii,viii, As a result, they and the regional economy lose money. Are Distribution Centers the Same as Food Hubs? Regional distribution centers that include a staffing infrastructure that works to improve the connections between producers and buyers could be considered food hubs. There is growing interest in 1 There is no standard definition of what it means to be a local or regional food. Current usage emphasizes limiting the number of miles, the amount of time, and the length of the supply chain from farm to consumer.

2 2 food hubs and the USDA has recently issued a new Regional Food Hub Resource Guide that defines them as a business or organization that actively manages the aggregation, distribution, and marketing of source identified food products primarily from local and regional producers to strengthen their ability to satisfy wholesale, retail and institutional demand. The USDA also notes that food hubs typically aim to serve economic, social, and environmental goals (i.e. achieve a triple bottom line ). ix Thus, while distribution centers can be food hubs, they are not food hubs necessarily. According to the USDA, as of April 16, 2012, there exist just over 100 food hubs nationwide, twelve of which are located in New York State. 2 These include multi farm CSAs, a mobile market, as well as wholesale markets and distributors. What is the Connection Between Food Distribution and Health? Good distribution improves access to fresh fruits and vegetables. The Centers for Disease Control and Prevention have targeted obesity, nutrition, and physical activity as a winnable battle, and specified that increasing consumption of fruits and vegetables is a focal strategy in this battle plan. x,xi Currently nearly 75% of New York adults do not get the daily recommended servings of fruits and vegetables. xii Availability is strongly tied to consumption: adults who do not live within a mile of a supermarket are 25 46% less likely to eat a healthy diet. xiii Conversely for each additional supermarket in a census tract, produce consumption rises 32% for black adults in that area, and all inhabitants are more likely to eat the minimum 5 servings of fruits and vegetables. xiv Reviews have also noted that availability is one of the most consistent factors associated with fruit and vegetable consumption in schools. xv Further research is needed on how each piece of the food supply chain independently affects consumption. However, studies of local food supply chains have repeatedly cited a lack of distribution facilities as a major barrier to the supply chain. xvi Regional distribution centers present an opportunity to improve health by mitigating these barriers and making local healthy foods more available. Regional distribution centers could have the greatest potential to impact diets and health in low income communities and communities of color. xvii These communities have the highest rates of disease 3 and they have the least access to healthy foods: there are fewer large and medium sized food stores in both low income neighborhoods and communities that are predominately Black or Hispanic. xviii Furthermore, the small stores (like bodegas and convenience stores) available in many urban and rural areas are less likely to carry healthy foods or carry them at unaffordable prices. Making appropriately scaled 2 The food hubs located in New York State identified by the USDA as of April 16, 2012 are: Basis Good Food to You, Central New York Bounty, Central New York Regional Market Authority, Corbin Hill Road Farm, Farm to Chef, Field Goods, Good Food Collective Head Water Foods, Inc, Growing Green Mobile Market, Hudson Valley Fresh, Regional Access Inc, Hunts Point Wholesale Greenmarket, and Winter Sun Farms. Available at % of Black non Hispanic and 70% of Hispanic adults are overweight or obese, compared to 60% White non Hispanic adults. See Centers for Disease Control and Prevention. (2009). [Prevalence of Overweight and Obesity BMI>24.9. New York State]. Behavioral Risk Factor Surveillance System. Atlanta, GA: U.S. Department of Health and Human Services.

3 3 distribution more accessible would mediate one of the barriers to these small businesses carrying more fruits and vegetables. xix What is the Current Regional Food Distribution Capacity in New York State? There is little comprehensive research on New York s regional food distribution capacity. Further research on regional food distribution in New York State could give a better understanding of current capacity, but it seems clear that the existing infrastructure is limited. New York s largest food distributor is the Hunts Point Cooperative Market. It serves the New York City metropolitan region and is also the largest food distribution center in the country. The portion of the market dedicated to distributing regionally produced foods, the Hunts Point Wholesale Farmers Market, is small and cannot not meet the demand for regional food that exists outside of New York City. The other organizations known to currently distribute regional foods include Regional Access, based in Ithaca, NY, which operates statewide; and the Central New York Regional Market Association, which houses a wholesale farmers market in Syracuse, NY, and well as Central New York Bounty, a wholesale delivery service also based in Syracuse, NY. How Would Distribution Centers Help New York Provide More Healthy Foods? Corner stores cite lack of access to wholesale distributors as one of their major impediments to carrying fresh fruits and vegetables. xx These small independent businesses, which are often the main sources of food for low income communities in rural and urban areas, have difficulty accessing current distribution networks. The networks are scaled for higher volumes of purchasing than smaller retailers can sustain. Regional distribution centers could provide food distribution and transportation services that is of the appropriate scale for these retailers purchasing. Strategic sizing and locations could also generate opportunities for cooperative purchasing, which could further enable smaller retailers to carry produce. xxi How Are Local Foods Sold? Local foods can be sold using direct to consumer or intermediated channels. Direct to consumer means that the farmer is selling directly to the person consuming the foods. Examples include farmers markets and community supported agriculture (CSAs). Intermediated marketing means that the food passes through an intermediate step. This includes sales from farmers to providers and retailers, like restaurants, schools and grocery stores, as well as sales to distribution centers. Wholesale purchasing simply means buying in bulk. This can be done using direct toconsumer methods, such as when a school buys apples in bulk directly from a farmer, or through intermediated methods. Institutional buyers (e.g., health and senior facilities, food pantries, hospitals, schools, and large employers) could also increase their purchases of local, healthy foods through regional distribution centers. Many institutions have shown interest in purchasing more healthy foods, and doing so locally,

4 4 but the quality, quantity, and delivery assurances they require frequently are not feasibly addressed by a single mid sized farm and these institutions do not have mechanisms for otherwise buying locally. xxii A statewide survey of school food purchasers identified lack of distribution as a top barrier for schools to purchase New York State products. xxiii Distribution centers can also be equipped for the light processing of fruits and vegetables, such as dicing and peeling, which can help make healthier choices more convenient for institutions and other wholesale buyers. Lightly processing fruits and vegetables has also been argued to increase consumption among low income populations. xxiv Light processing makes cooking more convenient, which studies suggest is a determining factor in the decision to purchase and consume fresh fruits and vegetables. xxv How Can Distribution Centers Connect Farmers to New Markets? By making local produce more convenient, available, and cost effective for small and mid sized purchasers and underserved communities, regional distribution centers give producers new access to these markets. As of 2011, only 5% of farms in the US sold foods locally, including small and medium sized farms. xxvi Yet, there is a strong push for institutions to start sourcing more local food, and the existing consumer demand for locally sourced food has carried over to the restaurant industry. xxvii This is a growth opportunity for farmers, and in particular the small and medium sized growers that represent a majority of New York State farmers. Regional distribution centers would provide infrastructure to further develop this market. In addition to meeting the known current unmet demand, there are New York State and USDA programs that could help the centers develop strategies to better engage the potential markets in low income and ethnically diverse communities. Growers and distributors could become better informed about demands for culturally relevant produce for certain local populations. And distribution centers could develop strategies to help stimulate new demand for local and healthy foods. For example, close to 90 percent of all food stamp benefits are redeemed at supermarkets or large grocery stores. xxviii Increasing local foods in these retail settings could potentially increase awareness of and demand for local foods among lower income populations. How Does Distribution Positively Impact the Economy? The local food economy has significant potential to generate regional wealth, particularly when local dollars are spent on local food products. xxix When imported products are substituted for local items, there is a missed opportunity to retain wealth in the region. For example, although New York State produces more apples than are consumed locally, we still import apples from other states and abroad. xxx It has been calculated that if all New York State residents bought 10% more of their food from New York farmers, and 10% more of their food from New York food manufacturers, this change would generate $16.5 billion in revenue and create 17,000 new jobs. xxxi Creating regional distribution centers that are in

5 5 adequate proximity to farms and connected to a regional population center would help bring more New York State agricultural products to local communities. Multiple studies have shown that further expansion of regional food systems has the potential to create tens of thousands of new jobs, particularly in rural areas that can be economically depressed. xxxii Creating regional distribution centers can provide farmers with the stable market they need to sell their goods and the revenue to expand and invest in their operations, creating local investment and new jobs. This, in turn, supports the health of New Yorkers because economically thriving communities that have the resources to invest in education, community resources, social networks, and quality health care generate better health outcomes. Recommendations As New York considers investment in regional distribution centers, it is recommended that: 1. Distribution centers are strategically located with the intention of both being accessible to farmers, and reaching populations that are currently underserved. 2. Distribution centers include capacities like adequate space for trucks, cold storage, and light processing facilities to increase distribution and consumption of healthy foods and to maximize benefits to farmers. 3. Distribution centers are connected to resources that foster and enable marketing and cooperative purchasing agreements for a diversity of buyers. With strategic attention to connecting New York s farmers with the local markets, institutions, retailers, and communities that currently lack sufficient access to fresh fruits and vegetables, New York s investment in regional distribution centers could generate a double win for New York: it could contribute toward reducing diet related health disparities, and strengthen regional economies. Acknowledgments Written by Elyse Powell and Radhika Patel. Designing a Strong and Healthy New York (DASH NY) is New York State s Obesity Prevention and Policy Center. Established in 2010, with support from the New York State Department of Health, DASH NY was created to address the epidemic of obesity and related chronic diseases in New York State through statewide change. DASH NY is housed at the New York Academy of Medicine (NYAM) in New York City and serves all of New York State. NYAM is an independent, public health, non profit, established in NYAM focuses on research, policy analysis, and programming to address aging, disease prevention, and disparities. We would like to thank the following individuals for their input in the development of this paper: Todd Erling, Hudson Valley Agribusiness Peter Fleischer, Empire State Future

6 6 David Haight, American Farmland Trust Rebecca Jablonski, Cornell University Ph.D. program in Department of City and Regional Planning Myeta Moon, United Way New York City Julie Suarez, New York State Farm Bureau Kelly Verel, Project for Public Spaces Abby Youngblood, Just Food, Inc. References i Moore, L. V., Diez Roux, A. V., Nettleton, J. A, & Jacobs, D. R. (2008). Associations of the local food environment with diet quality a comparison of assessments based on surveys and geographic information systems: the multi ethnic study of atherosclerosis. American Journal of Epidemiology, 167(8), ii Rose, D., & Richards, R. (2004). Food store access and household fruit and vegetable use among participants in the US Food Stamp Program. Public Health Nutrition, 7(8), iii Morland, K., Wing, S., & Diez Roux, A. (2002). The contextual effect of the local food environment on residents diets: the atherosclerosis risk in communities study. American Journal of Public Health, 92(11), iv Day Farnsworth, L., Busse, H., & Hahn, E. (2009). Scaling up: Meeting the demand for local food. Madison, WI: University of Wisconsin Extension Agricultural Innovation Center, University of Wisconsin Center for Integrated Agricultural Systems. v Martinez, S., Hand, M., Pra, M. D., Pollack, S., Ralston, K., Smith, T., Vogel, S., et al. (2010). Local Food Systems: Concepts, Impacts, and Issues (Economic Research Report 97). Washington DC: U.S Department of Agriculture. Economic Research Service. Retrieved May 2012 from vi Kirschenmann, F., Stevenson, S., Buttel, F., Lyson, T., and Duffy, M. (2005). Why Worry About the Agriculture of the Middle? (White Paper). Retrieved May 2012 from vii Tropp, D. (2011). Regional Food Hubs: Linking Producers to new markets. Presented at The Role of Institutions on Local Food, Warrenton, VA. viii Martinez, S., Hand, M., Pra, M. D., Pollack, S., Ralston, K., Smith, T., Vogel, S., et al. (2010). Local Food Systems: Concepts, Impacts, and Issues (Economic Research Report 97). Washington DC: U.S Department of Agriculture. Economic Research Service. Retrieved May 2012 from ix Baram, J., Tropp, D., Enterline, K., Farbman, J., Fisk, J., and Kiraly, S. (2012). Regional Food Hub Resource Guide. Washington DC: U.S Department of Agriculture. Retrieved May 2012 from x Centers for Disease Control and Prevention. (2011). Winnable Battles: Nutrition, Physical Activity and Obesity. Retrieved May 2012 from xi U.S Department of Health and Human Services. (2010). The CDC guide to Fruit and Vegetable: Strategies to increase access, availability and consumption. Washington DC: Centers for Disease Control and Prevention. Retrieved from xii Centers for Disease Control and Prevention. (2009)). [Consumption of Five of More Servings of Fruits and Vegetables. New York State]. Behavioral Risk Factor Surveillance System. Atlanta, GA: U.S. Department of Health and Human Services. xiii Treuhaft, S., & Karpy, A. (2010). The Grocery Gap: Who has Access to Health Foods and Why it Matters. Oakland, CA: PolicyLink. xiv Treuhaft, S., & Karpy, A. (2010). The Grocery Gap: Who has Access to Health Foods and Why it Matters. Oakland, CA: PolicyLink. xv Blanchette, L., and Brug, J. (2005). Determinants of fruit and vegetable consumption among 6 12 year old children and effective interventions to increase consumption. Journal of Human Nutrition and Dietetics 18(6), xvi Day Farnsworth, L., Busse, H., & Hahn, E. (2009). Scaling up: Meeting the demand for local food. Madison, WI: University of Wisconsin Extension Agricultural Innovation Center, University of Wisconsin Center for Integrated Agricultural Systems. xvii Bolen, E., & Hecht, K. (2003). Neighborhood Groceries: New Access to Healthy Food in Low Income Communities Neighborhood Groceries. Oakland, CA: California Food Policy Advocates. xviii Treuhaft, S., & Karpy, A. (2010). The Grocery Gap: Who has Access to Health Foods and Why it Matters. Oakland, CA: PolicyLink.

7 7 xix Bolen, E., & Hecht, K. (2003). Neighborhood Groceries: New Access to Healthy Food in Low Income Communities Neighborhood Groceries. Oakland, CA: California Food Policy Advocates. xx Bolen, E., & Hecht, K. (2003). Neighborhood Groceries: New Access to Healthy Food in Low Income Communities Neighborhood Groceries. Oakland, CA: California Food Policy Advocates. xxi GrowNYC. (2011). Fresh Bodegas. Retrieved May 2012 from xxii Day Farnsworth, L., Busse, H., & Hahn, E. (2009). Scaling up: Meeting the demand for local food. Madison, WI: University of Wisconsin Extension Agricultural Innovation Center, University of Wisconsin Center for Integrated Agricultural Systems. xxiii Grace, C. (2008). New York Farm to School: 2008 Food Service Director s Survey Highlights. Presented at June 2008 Farm to School Coordinating Committee Meeting. xxiv Glanz, K., & Yaroch, A. L. (2004). Strategies for increasing fruit and vegetable intake in grocery stores and communities: policy, pricing, and environmental change. Preventive medicine, 39 Suppl 2, S xxv Glanz, K., & Yaroch, A. L. (2004). Strategies for increasing fruit and vegetable intake in grocery stores and communities: policy, pricing, and environmental change. Preventive medicine, 39 Suppl 2, S xxvi National Agricultural Statistics Services. (2009). Direct Marketing Survey Albany, NY: New York Department of Agriculture and Markets. xxvii Union of Concerned Scientists. (2011). Market Forces: Creating Jobs through Public Investment in Local and Regional Food Systems. Cambridge, MA: Author. xxix Kroeger,R., and Zeltsin, Y. (2009). Developing a Vibrant Local Food Community in New York Communities. Available at xxx Kroeger,R., and Zeltsin, Y. (2009). Developing a Vibrant Local Food Community in New York Communities. Available at xxxi Why Hunger. (2010). Introduction: Local and Regional Food Systems. Retrieved May 2012 from via, The Center for Popular Research, Education and Policy xxxii Union of Concerned Scientists. (2011). Market Forces: Creating Jobs through Public Investment in Local and Regional Food Systems. Cambridge, MA: Author.