Competitiveness of Small Farms and Innovative Food Supply Chains: The Role of Food Hubs in Creating Sustainable Regional and Local Food Systems
- “Redefining products and markets,
- Redefining supply chains, and
- Building supportive industry clusters at the company’s locations”  (p. 65).
1.1. Redefining Products and Markets
- Quality, safety and healthiness: freshness, nutritional values, flavour, consistency, composition and texture, modes of production (inputs and farming practices), authenticity means, tenderness, colour, preparation, tradition, handcrafting, etc.;
- Sustainability and healthiness: organic, biodynamic, waste management practices, water management practices, biodiversity/local species, antibiotic and/or hormone free meat; ecosystem services provided with the agricultural production, animal welfare, etc.;
- Locality: distance between place of production and selling point, administrative boundaries, identity, tradition, biodiversity/local species.
- The demonopolization of existing markets,
- The construction of new connections between existing markets,
- The creation of new markets,
- The development of new governance structures for both existing and new markets.
- They are associated with “distinctive” products or services in contrast with standard, undifferentiated and placeless products available in the conventional agri-food markets, whose “value” drives to a premium price for producers;
- They presents different market governance mechanisms which are at the base of a more distributed power and equal distribution value added along the supply network;
- They are organised around different organisational platform and physical infrastructures and logistics that are constituted by short circuits;
1.2. The Challenge of Scale and the Redefinition of Food Supply Chains
- Transparency: provenance, traceability, composition of products, modes of production;
- Democracy: producers reconfigure power relations along the supply chain or network with reaffirmed control;
- Equity: fair income for the small scale producers, equitable distribution of added value along the food network, reasonable price for consumer, accessibility also for lower income groups;
- Access: organisational and physical structures of the appropriate scale for moving locally grown food to consumers.
- Providing the right quantity and consistency of products and at the same time maintaining the quality for individuals, family and big buyers (restaurants, pubs, schools, hospitals, hotels, etc.) needs; i.e., matching supply with large-scale demand,
- Providing a more varied range of products and therefore overcoming the existing tension between variety and locality,
- Improving accessibility and convenience for meeting consumers’ needs for healthy and fresh food, especially for low-income communities.
- Rather than homogenization of products and economies of scales typical of the conventional food chains, products in a VBFSC possess unique stories that identify where the food comes from, how it is produced, and how it reached the market-place via transparent supply chains;
- The capacity to combine cooperation with competition to achieve collaborative advantages and to adapt relatively quickly to changes in the market;
- Emphasis on high levels of performance and high levels of trust throughout the network;
- Emphasis on shared vision, shared information (transparency), and shared decision-making among the strategic partners;
- Within the alliances, the farmers function as strategic partners, rather than as interchangeable input suppliers;
- Commitment to the welfare of all participants in the value chain, including fair profit margins: they receive prices based on reasonable calculations of their production and transaction costs and fair wages and business agreements of appropriate extended duration.
2. Approaches and Definitions of Food Hubs
- Those that narrowly define FHs in terms of market efficiency functions, and
- More expansive definitions that incorporate FHs into wider visions of building a more sustainable food system.
3. Sustainable Food Community Development Approaches to Food Hubs
- Long-term financial viability
- Dependence on volunteers
- Trade-off between environmental goals and economic equity
4. The Values-Based Food Supply Chain Approach to Food Hubs
4.1. From Economic Value to Shared Value
4.2. Aggregative Scaling and Strategic Coordination
4.3. Economic Democracy: From Centralization to Distributed Power
- costs and remunerations. According to Barham et al.  (p. 12), FHs “play an essential role in building effective information flows and transparency among the value chain partners, enabling every partner in the supply network to fully understand the operating costs of production, processing, transportation, and marketing, all of which helps to ensure that value chain partners can negotiate acceptable returns”.
- products quality (organoleptic properties, freshness, etc.) and products sustainability (organic, seasonality, agroecology, biodynamic agriculture, biodiversity) and products provenience;
- waste management reduction.
4.4. Supermarket in VBSC and Food Hubs
- Supermarket chains tend to compete on volume and price associated with food products manufactured from a very few ingredients uniformly produced;
- These supermarkets often have centralised purchasing systems that do not interface well with more regional supply chains;
- These supermarket companies are noted for maintaining adversarial relationships with their suppliers, a very different business paradigm than the collaborative approach taken by value chains  (pp. 121–122).
4.5. Product Differentiation and Food Justice
5. Food Hubs Models, Functions and Operations
- Logistics. According to Van der Vorst et al.  (p. 236), “logistics is that part of the supply chain process that plans, implements and controls the efficient, effective flow and storage of goods, services and related information from the point-of-origin to the point-of-consumption in order to meet customer requirements and satisfies the requirements imposed by other stakeholders such as the government and the retail community”. In the case of FHs the logistics function concerns the active coordination of the actors and the aggregation and distribution of food.
- Marketing, which is defined by American Marketing Association as “the activity, conducted by organizations and individuals, that operates through a set of institutions and processes for creating, communicating, delivering, and exchanging market offerings that have value for customers, clients, marketers, and society at large”  (p. 275). In the case of FH intermediary organizations, marketing comprises seeking markets for producers and processors and others actors and all the activities necessary for the product differentiation to be understood as the co-creation of “shared value” within the FH strategic network, which involves all actors: producers, processors, retailers and consumers . Indeed, the FH intermediary organisation is a network facilitator and broker involved in building long term relationships among food value chain actors by helping to establish effective communication channels for transparency, ensuring values are articulated and shared and fostering a trusting environment.
- Product services, which refer to other activities aiming at adding value to the agricultural products and also providing facilities to farmers as storage.
- Producers’ consultancy services. The FH intermediary organisation can provide to the producers, especially the farmers, many other services that can reinforce the capacities of the single individual producers, supporting the transition to sustainable agro-ecological or organic practices, and also services aiming at strengthening the connections and integration of different actors of the network and help the development of a “web of practices”.
- Web of practices. Acting as knowledge brokers and knowledge developers, the FH intermediary organization can provide learning and innovation services to all the actors involved in the networks, to support the development of the single actors but also development of the FH strategic network as a “web of agri-food practices”.
6. Food Hubs in the Digital Era
- The first type are virtual meeting places where buyers and producers or processors connect and interact and this interaction may lead to business transactions. The actual transactions themselves and delivery logistics do not take place on the electronic platform; instead they are carried out and managed by the buyer and seller directly  (p. 14).
- The second type are more complex tools which allow establishing information connections between buyers and sellers in real time and they also offer the capability to place online orders, to carry out payment processing and to coordinate delivery logistics including routing optimisation.
7. Food Hub: A New Definition
- “value creation strategy” oriented to product differentiation along the dimensions of quality, locality and sustainability;
- “supply chain (or supply network) organizational strategy” that shifts from individual competition to active clustering through the development of strategic alliances and relies on the creation of local clusters.
- providing the right quantity and consistency of products;
- providing a more varied range of products;
- improving accessibility and convenience;
- assuring food security and safety.
- FHs are finacially viable businesses generating a positive cash flow and 60% of FHs operate without grant fundings .
- Food hub suppliers and customers are almost entirely regional.
- FHs are supplyng local food to all communities increasing community food access and they strive to improve health outcomes.
- FHs are creating jobs.
- FHs are creating market opportunities and providing crucial services for small and midsized producers.
- FHS are growing to meet market demand.
Conflicts of Interest
References and Notes
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|FHs are understood in terms of market efficiency functions.||FHs are conceptualised FHs into wider visions of building a more sustainable food system.||Barham et al. (2012)  and Morely et al. (2008) |
|FHs aim at responding to ‘consumer demand for local’ adjusting the mainstream food system by reducing what have become ‘unacceptable externalities’.||FHs aim at challenging the basic assumptions of the mainstream by prioritising environmental and social goals.||Cleveland et al. (2014) |
|FHs are designed primarily for the economic advantage of the commodity producers and the entities that provide middleman services.||FHs have social motivations relating to community cohesion, social gain, increasing healthy eating options, and improving local food access options. At the same time, they seek to enhance the economic viability of local farmers to promote environmental protection and wellbeing.||Franklin et al. (2011) |
|Instrumental Producer-Oriented||Humanist People-Oriented||Authors|
|FHs aim at aggregating products from local small and midsized producers and providing source-identified locally grown products to wholesale buyers.||FHs aim at providing easy access, opportunity, and viability for small producers and low-income consumers with the main purpose of contributing to a healthier, more vibrant, and equitable system.||Horst et al. (2011) |
|Values-based agri-food supply chain||FH is a mechanism by which small producers can collectively access a middleman facility that enables them to trade with large customers—be they supermarkets, food service vendors or public procurement consortia—that none of them would be able to trade with by acting alone.||Morley et al. (2008) |
|FH is 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.||Barham et al. (2012) , also referred in Bloom and Hinrichs (2011) , Woods et al (2013) , Clark and Inwood (2015) ; Klein (2015) |
|FH is a way to connect multiple producers to mid- and large-scale wholesale purchasers as well as individual customers more efficiently. The food hub concept has blossomed and has emerged as a logistical vehicle that facilitates a local food supply chain.||Matson and Thayer (2013) |
|FHs are, or intend to be, financially viable businesses that demonstrate a significant commitment to place through aggregation and marketing of regional food.||Fischer et al. (2015) |
|Local FHs are a means of aggregating and distributing food by pooling food products from a number of smaller farms and delivering them to grocery stores, schools, hospitals and restaurants.||Cleveland et al. (2014) |
|A food hub is a business or organization that actively coordinates aggregation, storage, distribution, and marketing of locally or regionally produced food to strengthen small producers’ abilities to satisfy wholesale, retail, and institutional demands. By aggregating the products of many individual farmers and providing economies of scale, food hubs help small producers reach a wider range of markets, including large regional buyers.||Reynolds-Allie et al. (2013) |
|Sustainable food community development||FH is an intermediary led by the vision of one or a small number of individuals which by pooling together producers or consumers adds value to the exchange of goods and promotes the development of a local supply chain. This added value may be gained through economies of scale, social value, educational work or services. In other words, the pure function of distribution is only one element of the hub and the distribution function may be contracted out to a third party. The hub may also provide a means for public sector services to reach disadvantaged communities, provide a space for innovation and act as a focal point for developing a political agenda around an alternative food system.||Sustain (2009) |
|FH is an intermediary between many market actors in the aggregation and distribution of local or regionally produced food, with a civic agriculture mission. Within this general definition it is possible to identify varying typologies of FHs.||Le Blanc et al. (2014) |
|A FH serves as a coordinating intermediary between regional producers and suppliers and customers, including institutions, food service firms, retail outlets, and end consumers. Food hubs embrace a spectrum of functions, purposes, organizational structures, and types, each of which can be tailored to achieve specific community-established objectives. Services provided by a food hub may include and are not limited to aggregation, warehousing, shared processing, coordinated distribution, wholesale and retail sales, and food waste management. Food hubs contribute to strengthening local and regional food systems as well as to broader community goals of sustainability and health.||Horst et al. (2011) |
|A FH is a as networks and intersections of grassroots, community-based organisations and individuals that work together to build increasingly socially just, economically robust and ecologically sound food systems that connect farmers with consumers as directly as possible.||Blay-Palmer et al. (2013) |
|FHs are defined as community-based initiatives that link producers and consumers as directly as possible.||Stroink and Nelson (2013) |
|Community food hubs can be broadly defined as coordinating alternative sourcing, supply, and/or marketing on behalf of producers and consumers, and providing technical as well as infrastructure support for product distribution. In addition to having clear environmental goals, they are also often founded on social motivations relating to community cohesion, social gain, increasing healthy eating options, and improving local food access options. At the same time, they seek to provide an alternative source of economic income for local farmers.||Franklin and Morgan (2014) |
|Producers Consultancy Services|
|Web of Practices|
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Berti, G.; Mulligan, C. Competitiveness of Small Farms and Innovative Food Supply Chains: The Role of Food Hubs in Creating Sustainable Regional and Local Food Systems. Sustainability 2016, 8, 616. https://doi.org/10.3390/su8070616
Berti G, Mulligan C. Competitiveness of Small Farms and Innovative Food Supply Chains: The Role of Food Hubs in Creating Sustainable Regional and Local Food Systems. Sustainability. 2016; 8(7):616. https://doi.org/10.3390/su8070616Chicago/Turabian Style
Berti, Giaime, and Catherine Mulligan. 2016. "Competitiveness of Small Farms and Innovative Food Supply Chains: The Role of Food Hubs in Creating Sustainable Regional and Local Food Systems" Sustainability 8, no. 7: 616. https://doi.org/10.3390/su8070616