Transcript Strategy & Strategy Development

Economics & a
Sustainable Regional
Food System
Jim Bower
Blue Planet Partners
Planting Seeds for our Future Conference
March 26, 2007
Scoping Partners for Regional
Food Strategy Project
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Blue Planet Partners
Michael Fields Agricultural Institute
Center for Integrated Agricultural Systems
DATCP
REAP
UW – Center for Cooperatives
Common Wealth Development, Inc.
UW College of Agriculture
Other key food systems leaders
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Goal of Regional Food Strategy
Project
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Develop cohesive strategic framework for
scaling up this region’s sustainable food system
(Madison – Milwaukee – Chicago)
Strategies nesting both locally and regionally.
Goal: “Increase consumption of sustainable,
regionally produced and processed food from
2% to 10% in 7 to 10 years.”
Blue Planet Partner
Anatomy of a Scaling Up a
Sustainable Food System
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Values (Heart)
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Local, organic, sustainable, environmentally sound,
life giving for communities, healthfulness,
freshness, taste, etc.
Economics (Blood in the bloodstream)
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Financial viability
Which is more important?
Which is more capable of flexibility?
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Regional Food Economies
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Not working
Outflow is greater than inflow
Northwest MN study (Ken Meter)
$851m revenue
 $1092m cost
 Losing $200m per year in production costs
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Supply Chain Economics
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Production
Processing
Distribution
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Economics of Distribution
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Tier 1 – direct from farm to consumer
Tier 2 – local / regional distribution – small
scale
Tier 3 – regional distribution
Forklifts
 Semi-trailer scale minimums
 Regional warehouses
 Just in time delivery
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Punch line
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We as a society/region have not figured it out
yet
If the economics worked then supply would
increase in a proportion to demand at price
points that worked
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Changing Economic Ground
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Fuel prices
Changing consumer demand
Major market makers redefining landscape (Wal-Mart)
Current market makers rapidly adjusting (Whole Foods)
New institutional buyers beginning to enter the market
Public policy – national, state & local
Environmental costs internalized
Food security
TIPPING POINTS???
Blue Planet Partner
What’s Next
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Building 100s of viable businesses at all levels of the region’s
food system
Driving innovation – new products, new/improved processes
Increasing consumers ready and able to consume a value-laden
product at higher price points
Getting more efficient/effective at all levels of the supply chain
Encouraging the development of market makers
Building partnerships that can create new market opportunities
TIPPING POINTS???
Blue Planet Partner