FINE Webinar January 7 th | 2 pm CONTRACTED FOOD SERVICE ACTION PROJECT
PART I INTRODUCTION Photo Credit: Franklin Pierce University www.farmtoinstitution.org
SPEAKERS STACIA CLINTON Health Care Without Harm: New England Regional Director National Leadership Team Farm to Institution New England: Leadership Team, CFSAP Advisory Board sclinton@hcwh.org PETER ALLISON Farm to Institution New England: Network Director peter@farmtoinstitution.org www.farmtoinstitution.org
SPEAKERS (continued) JOHN TURENNE, FCSI Sustainable Food Systems, LLC. President & Founder Farm to Institution New England: CFSAP Advisory Board jturenne@sustainablefoodsystems.com JEN OBADIA, PhD. Health Care Without Harm: New England Regional Coordinator Farm to Institution New England: CFSAP Researcher jobadia@hcwh.org www.farmtoinstitution.org
WHO WE ARE FINE is a six-state network working to strengthen our food system by increasing the amount of New England grown and processed food served in our region’s schools, hospitals, colleges and other institutions. www.farmtoinstitution.org
OUR VISION ALL NEW ENGLAND INSTITUTIONS PREFERENTIALLY PURCHASE REGIONALLY-PRODUCED FOOD Photo Credit: Chris Manzella OUR GOALS MORE VIABLE FARM & FOOD ENTERPRISES Photo Credit: Umass Amherst GOOD JOBS & A STRONG AGRICULTURAL ECONOMY A ROBUST REGIONAL SUPPLY CHAIN INFRASTRUCTURE CONSISTENT ACCESS TO AFFORDABLE, HEALTHY FOOD FOR ALL INSTITUTIONAL CONSUMERS www.farmtoinstitution.org
WHY A REGIONAL APPROACH? 1. Imbalance in the New England food shed 2. Distributors and FSMCs work across state borders 3. New England is a small region geographically www.farmtoinstitution.org
WHY FOCUS ON INSTITUTIONS? ~$1 BILLION per year in New England (Institutions purchase a lot of food!) A diversified market for producers www.farmtoinstitution.org
INSTITUTIONAL CUSTOMERS MATTER! HEALTH CARE K-12 SCHOOLS COLLEGES & UNIVERSITIES www.farmtoinstitution.org
NETWORK AT THE CORE Meet a few of FINE’s network partners! JANE’S TRUST www.farmtoinstitution.org
OUR STRATEGIES RESEARCH NETWORKING CONVENINGS TECHNICAL EDUCATION COMMUNICATIONS ASSISTANCE www.farmtoinstitution.org
PROGRAM HIGHLIGHTS Here are a few of our recent projects areas: FARM TO COLLEGE BEEF TO INSTITUTION FARM TO SCHOOL FOOD DISTRIBUTION RESEARCH FOOD PROCESSING FOOD POLICY & PLANNING FARM TO HEALTHCARE CONTRACTED FOOD SERVICE www.farmtoinstitution.org
PART II CONTRACTED FOOD SERVICE ACTION PROJECT Photo Credit: Jessica Boynton www.farmtoinstitution.org
COMMON BARRIERS Barriers to local food procurement by institutions: NATIONAL CONTRACTS FOOD PRICE AVAILABILITY OF LOCAL & SUSTAINABLE PRODUCTS TRACKING & TRACEABILITY ABSENCE OF TRANSPARENCY www.farmtoinstitution.org
PROJECT GOALS PHASE 1 GOALS ACCOMPLISHMENTS Create project advisory team Hired 6 advisory board members and one project assistant Catalogue relationships and Held bi-weekly conference calls best practices Research the structure, Hired two researchers and challenges and opportunities for interviewed stakeholders FSMC to increase local Review findings and identify Got together to review results areas for collaboration and and plan phase 2 future work Produce and share public Share findings via webinar, FTI education materials Summit April 7-9 and outreach www.farmtoinstitution.org
PROJECT STRUCTURE ( Phase 1) FINE Leadership Team Project Liaison Kelly Irwin – Massachusetts Farm to School Project Associate Heather Vitella – food systems consultant Project Advisory Board Kimberly Clark – Farm Fresh RI Stacia Clinton – Health Care Without Harm John Turenne – Sustainable Food Systems David Schwartz – Real Food Challenge Lisa Damon – Massachusetts Farm to School Jen White – Colby Sawyer College Photo Credit: Bowdoin College Researchers John Stoddard – Health Care Without Harm Jennifer Obadia – food systems consultant www.farmtoinstitution.org
ADVISORY BOARD BACKGROUND Our advisory board members are: INVOLVED IN RELATED PROGRAMS WORKING ACROSS LINES OF BUSINESS EXCITED ABOUT THE FARM TO INSTITUTION MOVEMENT COMMITTED TO PROFESSIONAL STANDARDS LOYAL TO COLLABORATIVE PRIORITIES WELL CONNECTED www.farmtoinstitution.org
ADVISORY BOARD ROLES PROCESS 1. Provided input and data based on experience 2. Provided connections to FSMCs 3. Interviewed and collected data from FSMC connections 4. Editorial review of researcher data OUTCOME Comprehensive report Recommendations for next steps www.farmtoinstitution.org
PUBLICATIONS www.farmtoinstitution.org
PART III FSMCs IN NEW ENGLAND: BARRIERS & OPPORTUNITIES FOR LOCAL FOOD PROCUREMENT Photo Credit: Vermont Tech www.farmtoinstitution.org
SPHERE OF INFLUENCE THE BIG THREE MANAGEMENT COMPANIES • Collectively generated $31 billion in sales in North America in 2013 • Managed 47% of hospitals, 21% of colleges and 11% of public schools www.farmtoinstitution.org
FSMC MARKET SHARE TOP THREE FOOD SERVICE MANAGEMENT COMPANIES MARKET SHARE IN THE HEALTHCARE & EDUCATION SECTORS ¡ ¡ Health ¡Care ¡ Colleges ¡& ¡ K-‑12 ¡ ¡ ¡ Universi2es ¡ ¡ ¡ Districts ¡ ¡ ¡ Collec2ve ¡# ¡of ¡Clients ¡ 2,683 ¡ 1,500 ¡ 1,451 ¡ for ¡Top ¡Three ¡FSMC ¡ ¡ # ¡of ¡Facili2es ¡ 5,724 ¡ 7,021 ¡ 13,588 ¡ Na2onwide ¡ % ¡of ¡Facili2es ¡Managed ¡ 47% ¡ 21% ¡ 11% ¡ by ¡the ¡Big ¡Three ¡ www.farmtoinstitution.org
BENEFITS OF FSMCs WHY DO INSTITUTIONS USE FOOD SERVICE MANAGEMENT COMPANIES? 1. Provide expertise that may not be readily available within the host institution 2. Offer low prices on products based on collective volume of all institutional clients 3. May offer cash infusion/ investment for major repairs www.farmtoinstitution.org
MAINTAINING LOW PRICES HOW DO FSMCs KEEP PRICES LOW? 1. FSMCs negotiate prices based on the volume of all clients 2. Develop an approved list of products for which prices have been negotiated 3. FSMCs typically require clients to purchase 80% or more of “on-contract” products www.farmtoinstitution.org
THE REBATE SYSTEM HOW DO REBATES WORK? 1. An agreement with a distributor for a % discount if minimum purchase level is met 2. An agreement with a manufacturer or supplier for a % discount if minimum purchase level is met 3. Discount on high margin products for quick sales www.farmtoinstitution.org
REBATES & SCALE WHY ARE REBATES A BARRIER FOR SMALL PRODUCERS? 1. Require producers and suppliers to provide large volumes, which is difficult for many small-scale operations 2. Typically result in lower prices for producers and suppliers, which is often not possible for small-scale operations www.farmtoinstitution.org
BARRIERS TO WORKING WITH FSMCs ON LOCAL FOOD PROCUREMENT 1. Price 2. Seasonality and product availability 3. Limited regional infrastructure 4. Food safety and product insurance 5. Rebate system www.farmtoinstitution.org
OPPORTUNITIES FOR WORKING WITH FSMCs ON LOCAL FOOD PROCUREMENT 1. Aggregation of smaller producers to increase volume capacity 2. Local and sustainable requirements written into contracts 3. FSMC investment in infrastructure and regional projects www.farmtoinstitution.org
FSMC STRATEGIES TO INCREASE LOCAL PROCUREMENT 1. Provide technical assistance to farmers on how to negotiate contracts and work with FSMCs 2. Provide technical assistance to institutions on contract development 3. Improve regional infrastructure www.farmtoinstitution.org
ADOPT-A-FARM CASE STUDY Agreement to purchase all • product grown on 20 acres at individual farms Insurance and distribution • handled by Roch’s Sold to schools and hospitals • Expanded to additional farms • and institutions in 2013 & 2014 www.farmtoinstitution.org
PART IV LEVERAGING CONTRACTS FOR LOCAL FOOD PROCUREMENT Photo Credit: Katy Hiza www.farmtoinstitution.org
CONTRACT TYPES COMPARISON OF P&L VS. MANAGEMENT CONTRACTS ¡ Profit ¡and ¡Loss ¡ Management ¡ Contract Contract Financial ¡Risk/Opportunity FSMC ¡faces ¡primary ¡ InsDtuDon ¡faces ¡ risk ¡of ¡loss ¡and ¡ primary ¡risk ¡of ¡loss ¡ opportunity ¡for ¡gain and ¡opportunity ¡for ¡ gain Typically ¡a ¡flat ¡rate ¡ Typically ¡a ¡ Management ¡Fee that ¡covers ¡basic ¡ percentage ¡of ¡ overhead revenue Ability ¡to ¡Alter ¡Contract Limited ¡flexibility Enhanced ¡flexibility www.farmtoinstitution.org
IMPORTANCE OF CONTRACTS They are the legally • binding relationship between FSMCs and institutions Any requirements for • local products included in a contract must be met Photo Credit: UMass Amherst www.farmtoinstitution.org
REQUEST FOR PROPOSAL The RFP can be used to vet FSMCs to ensure that companies are able to meet institutional demand for local products. Remember to: Photo Credit: Wake Robin Define local • Ask about local products • currently offered Ask about process for • approving new local vendors www.farmtoinstitution.org
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