Buy Fresh, Buy Local News

your source for locally grown happenings

New Distribution Company Seeking Local Product

Posted: January 26, 2010

Phil Danowsky from Local Harvest Supply was the guest speaker at the December meeting of the Northeast Iowa Food & Farm Coalition.  Danowsky shared information about this new distribution service which specializes in local food.  Below are excerpts from his presentation.

Who is Local Harvest Supply?
Our parent company is Hawkeye Foodservice Distribution, Inc. We are a 3rd generation business that has been family owned and operated for over 50 years with annualized sales of about 200 million this year. We operate out of 4 warehouses - Coralville, IA, which is the original center of operation and is also our corporate headquarters housing our purchasing, accounting and administration departments, along with our locations in Danville, IL, Fairmont, MN, and our newest location of only 1 1/2 years, Wright City, MO.

What has motivated you to start this endeavor?
We feel the timing is right.  There is a definite need and desire for locally grown products that are being requested by our Hawkeye Foodservice customer base.  

A recent study from “The National Restaurant Association Research”, stated that Local Sourcing, Sustainability, and Nutrition are the top trends this year, according to the results of surveys from 1800 members of the American Culinary Association.

People are looking to buy local and support the local economy.  All you have to do is read the paper or listen to the news to know that there is a need. The Government is promoting it and our customers are asking for it! The benefits of buying local produce are numerous and the media is helping to educate the public on the values and benefits of buying local. It tastes better, is better for you, burns up fewer resources, and provides a variety of products to our diets that is both healthy and flavorful.

This industry of local food distribution is one that will benefit from a down economy. There is a big market for quality local product and in bad times, people are more willing and encouraged to support their community by buying local produce. Recent studies show that they are willing to pay more - 30 to 50ore! Restaurants want to feature it and are able to charge more, schools and Universities are encouraged to buy it, and casinos want it.

We are uniquely positioned to provide these Marketing and Distribution Services.

Our goal is to research the community of growers, associated government agencies and the cooperative organizations that are assisting the growers of products and become a part of the community.  I have been able to glean a vast amount of information from the Internet and found a number of contacts through the Organic Producers Directories and the Iowa Fruit and Vegetable Growers listings.

What is our plan?
The largest obstacle to buying local is the lack of a consistent reliable supply chain to a significant segment of the market. I believe that we can provide the consistent quality product that the market is waiting for. There are several issues that need to be addressed for this program to be successful, especially that of economic sustainability of the local producer. Important questions arise that need answering - How can the price of the product attract customers and still provide a fair profit margin to the grower? What should be done with excess, undersized and slightly blemished products? How do we deal effectively with safety concerns so that we can assure good agricultural practices?

I understand that for our company to be a successful and profitable one, the supplier also has to be profitable. For this reason, pricing is a key issue. I have looked at the input costs on production sheets from the ISU Extension Services and have studied profit calculators that estimate sell prices in high season and low season. I have familiarized myself with the market volatility of commercial produce and would like to propose a more stable pricing structure where we guarantee a more fair and consistent price to the producer as well as the consumer. Another question arises, how do we allow for some price deviations that may be a necessary as a reaction to extreme market conditions?  Quality standards, good agricultural practices, uniform processing and packaging agreements and storage and transportation criteria need to set and conformed with.

I also propose contracting for weekly supplies of commonly used items from the grower. This will require a commitment from the growers and Local Harvest Supply. I would like to extent the opportunity and market the “seconds” and “less than perfect” items on a consignment basis. We will market those products at a reduced price and share the profits if they are sold. All unusable items will be donated or recycled.

I believe that produce processing will be developed as people see the viability of the market. We are willing to work with processors to provide the distribution serves that are required to get the products necessary for processing. This system of distribution will allow growers to plan production with a greater assurance of selling all that is produced. This also allows for growers to spend a greater percentage of time producing and managing operations, and less time and money in delivery and marketing.

How do you get the product to market?
Deliveries to our facility can be handled two different ways.  I propose that when possible we establish aggregate and cooperative sites for inspection of products, cleaning, sorting, and packaging for weekly or biweekly pick up by Local Harvest Supply or Hawkeye Foodservice. This method will be more relevant to those growers that are located more 30 miles away from Iowa City.

We will work to provide pick up services for supplier groups or the better larger capacity growers, who are already equipped to handle cleaning, sorting, packaging, labeling, and cold storage. For a reasonable fee, we are able and willing to provide bags and boxes for packaging to our remote locations as well as the local growers, who can sort and package products at out location.

We will provide delivery services to customers that are exclusive to Local Harvest Supply as well as pick up products from our aggregated pick-up sites. Local Harvest Supply will maintain delivery hours accepting products from local suppliers who choose to package and deliver their own product. Boxes will need to be labeled with harvest dates and points of origin as well as specific descriptions of product contents; therefore, payment will be contingent on passing satisfactory product quality standards.

We plan to stock higher volume products as stocked items in the Hawkeye Foodservice warehouse that will be available for daily delivery to the Hawkeye’s existing customer base. When space is available, we will use the Local Harvest Supply facility to maintain a stock of products that are for more specialized or unique nature that can be special ordered by Hawkeye customers.

For more information about Local Harvest Supply, contact Phil Danowsky at phild@hawkeyefoodservice.com or (800) 272-6467 ext 3523.