Philly Nonprofit Food Distributor Marks Five Years

9/7/2013 7:00 AM
By Philip Gruber Staff Writer

Farmers can easily sell their products to many large institutions: grocery stores, milk bottlers, slaughterhouses, grain elevators.

Other institutions, such as schools and hospitals, need a lot of food, too, but it is difficult for farmers to work directly with those organizations.

In 2008, Haile Johnston and Tatiana Garcia-Granados, two graduates of the University of Pennsylvania’s Wharton School of Business, saw an opportunity to connect local farmers with grade schools, colleges and medical centers in the Philadelphia region.

On Sept. 12, they will mark the fifth anniversary of Common Market, the nonprofit distributor they founded, with a warehouse warming party at their new 73,000-square-foot building in North Philadelphia.

The expanding operation expects almost $2 million in sales this year, said Johnston, who is a co-director of Common Market. Garcia-Granados, his wife, is the executive director.

Common Market works with nearly 80 producers and serves about 170 institutions. Most of the farmers live within 70 or 80 miles of Philadelphia. Common Market tries not to use growers more than 150 miles away, although it does draw from as far as the Eastern Shore of Maryland and the Finger Lakes in New York.

Common Market selects growers who consistently produce high-quality food in wholesale quantities. In addition, the farmers must also minimize chemical usage, emphasize environmental protection and take care of their workers.

“We’re looking for a broad diversity of products,” including produce, milk and meat,” Johnston said.

Now that Common Market has an established group of growers, it is looking to grow by adding farmers who can provide unique or creative products.

“Farms are more viable when they’re able to segment their market.” Johnston said.

Curt Fifer of Fifer Orchards in Camden-Wyoming, Del., is one farmer who has benefited from being able to diversify with Common Market. His family also operates two farm markets, sells at farmers markets and runs a wholesale operation.

Common Market is not a huge customer compared with grocery stores, but the nonprofit has been buying more each year since it started buying from Fifer in 2011.

“It’s definitely a different avenue, and they buy pretty much everything we grow,” Fifer said.

He also noted that Common Market helps provide fresh food to people in needy parts of Philadelphia, a goal that Johnston also said is integral to Common Market’s mission.

Common Market aims “to make food accessible and affordable for all people in Philadelphia while returning as much of the food dollar to farmers,” he said. It supplies food to a dozen grocery stores and co-ops in lower-income neighborhoods.

Maximizing farmers’ profitability while minimizing consumer prices is tricky, but Common Market has strategies to make it work. It is the only entity that handles the food between the producer and consumer, reducing the number of people taking a share of the price.

There are “far fewer middle people than the typical wholesale relationship,” Johnston said.

“Their prices are very competitive,” said Lou Anne Bachert of Valley Road Farm in Tamaqua, Pa. “Everybody’s getting a good, fair price for their products.”

Bachert, who is in her third year of working with Common Market, grows mostly raspberries and cherry tomatoes, and she sells 20 to 30 percent of her produce to Common Market.

She said she appreciates that Common Market shares her dedication to making farms eco-friendly and giving customers quality produce.

“I really enjoy our relationship,” she said.

Having a large-scale operation built over five years is another major part of Common Market’s cost-containment plan.

The nonprofit’s goal from the start was to grow quickly to take advantage of economies of scale, and with the new warehouse the group is finally getting to that stage, Johnston said.

In their initial research, Common Market leaders talked to numerous institutional foodservice directors who wanted to serve locally grown food in their cafeterias. The people who ate there were asking for it, but it was hard to find the producers to make it work.

“(The foodservice staffers) were all expressing a similar frustration,” Johnston said.

Common Market also values identifying the people who grew its produce and promotes the names of those farmers.

Another part of the vision for helping farmers succeed is that “we try to pay our farmers very quickly,” Johnston said. Creating value for suppliers means improving the suppliers’ liquidity.

Jonas King of Pequea Valley Yogurt in Ronks, Pa., said Common Market has been good about paying within 30 days, something not every distributor does.

King said Common Market helped Pequea Valley Yogurt by taking over its Philadelphia-area delivery route. The institutional market has increased sales of the company’s 5-pound bulk containers.

“Our volume increased a lot” after Common Market recruited the company, King said.

Because Common Market interacts with consumers, it is well-positioned to give farmers feedback about where the market is headed.

Some farmers were simply growing crops that commanded good prices at auction the previous year, but Common Market’s data help farmers anticipate future demand and prices.

Eric Buzby of A.T. Buzby Farm in Woodstown, N.J., said his family selected colorful new varieties thanks to Common Market’s advice. The addition of rainbow carrots and Easter egg radishes “keeps it interesting,” he said.

The Buzbys, who make most of their sales at their farm, have been with Common Market since it started and appreciate its support for a local food system.

Common Market is different from most other produce brokers, Buzby said, because it does not guarantee volume. It finds out what a grower has available and offers that to its customers. It does not simply cart away 500 boxes of tomatoes because that is what the farmer has to move, he said.

Despite the greater uncertainty, “they basically sell whatever we have,” Buzby said.

As Common Market celebrates its fifth anniversary, the still-young nonprofit is looking to the future. It has recently started selling in Baltimore and New York City.

Those cities are within 100 miles of Philadelphia, so Common Market’s existing producer partners are still local to those metro areas.

“From a population standpoint, it’s a tremendous market with a whole lot of underserved communities,” Johnston, the co-director, said.

The dual goals of making healthy food accessible and helping farms be sustainable continue to animate Johnston and Garcia-Granados.

“We bring to this work a degree of compassion and empathy and desire,” Johnston said. “We do it in complete service to these communities.”

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