CONTRACTED FOOD SERVICE ACTION PROJECT PART I INTRODUCTION Photo - - PowerPoint PPT Presentation

CONTRACTED FOOD SERVICE ACTION PROJECT

FINE Webinar January 7th | 2 pm

INTRODUCTION

PART I

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Photo Credit: Franklin Pierce University

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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

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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

WHO WE ARE

FINE is a six-state network working to strengthen our food system by increasing the amount

• f New England grown and

processed food served in our region’s schools, hospitals, colleges and other institutions.

www.farmtoinstitution.org

OUR VISION

MORE VIABLE FARM & FOOD ENTERPRISES GOOD JOBS & A STRONG AGRICULTURAL ECONOMY A ROBUST REGIONAL SUPPLY CHAIN INFRASTRUCTURE CONSISTENT ACCESS TO AFFORDABLE, HEALTHY FOOD FOR ALL INSTITUTIONAL CONSUMERS

OUR GOALS

ALL NEW ENGLAND INSTITUTIONS PREFERENTIALLY PURCHASE REGIONALLY-PRODUCED FOOD

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Photo Credit: Chris Manzella Photo Credit: Umass Amherst

WHY A REGIONAL APPROACH?

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• 1. Imbalance in the New England food shed
• 2. Distributors and FSMCs work across state borders
• 3. New England is a small region geographically

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WHY FOCUS ON INSTITUTIONS?

~$1 BILLION per year in New England

(Institutions purchase a lot of food!)

A diversified market for producers

INSTITUTIONAL CUSTOMERS MATTER!

HEALTH CARE COLLEGES & UNIVERSITIES K-12 SCHOOLS

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NETWORK AT THE CORE

Meet a few of FINE’s network partners!

JANE’S TRUST

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OUR STRATEGIES

CONVENINGS NETWORKING TECHNICAL ASSISTANCE RESEARCH EDUCATION

COMMUNICATIONS

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PROGRAM HIGHLIGHTS

Here are a few of our recent projects areas:

FARM TO COLLEGE CONTRACTED FOOD SERVICE FOOD PROCESSING BEEF TO INSTITUTION FARM TO SCHOOL FARM TO HEALTHCARE FOOD POLICY & PLANNING FOOD DISTRIBUTION RESEARCH

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CONTRACTED FOOD SERVICE ACTION PROJECT

PART II

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Photo Credit: Jessica Boynton

COMMON BARRIERS

Barriers to local food procurement by institutions:

NATIONAL CONTRACTS FOOD PRICE AVAILABILITY OF LOCAL & SUSTAINABLE PRODUCTS TRACKING & TRACEABILITY ABSENCE OF TRANSPARENCY

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PROJECT GOALS

PHASE 1 GOALS

Create project advisory team Hired 6 advisory board members and one project assistant Catalogue relationships and best practices Held bi-weekly conference calls Research the structure, challenges and opportunities for FSMC to increase local Hired two researchers and interviewed stakeholders Review findings and identify areas for collaboration and future work Got together to review results and plan phase 2 Produce and share public education materials Share findings via webinar, FTI Summit April 7-9 and outreach

ACCOMPLISHMENTS

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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 Researchers John Stoddard – Health Care Without Harm Jennifer Obadia – food systems consultant

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Photo Credit: Bowdoin College

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

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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

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PUBLICATIONS

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FSMCs IN NEW ENGLAND: BARRIERS & OPPORTUNITIES FOR LOCAL FOOD PROCUREMENT

PART III

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Photo Credit: Vermont Tech

SPHERE OF INFLUENCE

• Collectively generated $31 billion in sales in North

America in 2013

• Managed 47% of hospitals, 21% of colleges and 11%
• f public schools

THE BIG THREE MANAGEMENT COMPANIES

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FSMC MARKET SHARE

TOP THREE FOOD SERVICE MANAGEMENT COMPANIES MARKET SHARE IN THE HEALTHCARE & EDUCATION SECTORS

¡ ¡

Health ¡Care ¡ ¡ ¡ Colleges ¡& ¡ Universi2es ¡ ¡ ¡ K-­‑12 ¡ Districts ¡ ¡ ¡

Collec2ve ¡# ¡of ¡Clients ¡ for ¡Top ¡Three ¡FSMC ¡ ¡

2,683 ¡ 1,500 ¡ 1,451 ¡

# ¡of ¡Facili2es ¡ Na2onwide ¡

5,724 ¡ 7,021 ¡ 13,588 ¡

% ¡of ¡Facili2es ¡Managed ¡ by ¡the ¡Big ¡Three ¡

47% ¡ 21% ¡ 11% ¡

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

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MAINTAINING LOW PRICES

• 1. FSMCs negotiate prices based on the volume
• f 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

HOW DO FSMCs KEEP PRICES LOW?

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THE REBATE SYSTEM

• 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

HOW DO REBATES WORK?

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REBATES & SCALE

• 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

WHY ARE REBATES A BARRIER FOR SMALL PRODUCERS?

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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

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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

• 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

CASE STUDY

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LEVERAGING CONTRACTS FOR LOCAL FOOD PROCUREMENT PART IV

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Photo Credit: Katy Hiza

CONTRACT TYPES

COMPARISON OF P&L VS. MANAGEMENT CONTRACTS

¡

Profit ¡and ¡Loss ¡ Contract Management ¡ Contract Financial ¡Risk/Opportunity FSMC ¡faces ¡primary ¡

risk ¡of ¡loss ¡and ¡

• pportunity ¡for ¡gain

InsDtuDon ¡faces ¡ primary ¡risk ¡of ¡loss ¡ and ¡opportunity ¡for ¡ gain

Management ¡Fee

Typically ¡a ¡flat ¡rate ¡ that ¡covers ¡basic ¡

• verhead

Typically ¡a ¡ percentage ¡of ¡ revenue

Ability ¡to ¡Alter ¡Contract

Limited ¡flexibility Enhanced ¡flexibility

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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

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Photo Credit: UMass Amherst

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:

• Define local
• Ask about local products

currently offered

• Ask about process for

approving new local vendors

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Photo Credit: Wake Robin

INCREASING FSMC TRANSPARENCY

• Are the product’s place of origin and

production characteristics clearly labeled on

• rdering guides?
• Is this information tracked on invoices or in

standing reports?

• Are reports on client purchases available on

request?

A FEW QUESTIONS TO ASK

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CONTRACT COMPONENTS

• Clearly state a preference for local products
• Enable off-contract purchases when desired items

are not otherwise available

• Consider requesting a process for new vendor

approval

• Require transparency of product origin and

characteristics in order guide

• Ensure ability to request reports with product

information

• Address overall budget and price preferences for

local products

DON’T FORGET THESE KEY PIECES

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LOOKING AHEAD TO PHASE 2

PART V

Photo Credit: Health Care Without Harm

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PROJECT STRUCTURE (Phase 2)

FINE Leadership Team Project Liaison Stacia Clinton – Health Care Without Harm Project Associate Kaitlin Haskins FINE Farm to College Project Lead Riley Neugebauer 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 Research & Technical Assistance TBD

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Photo Credit: Northern Girl

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CLOSINGS Q&A

PART VI

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Photo Credit: Farm Fresh RI

STACIA CLINTON

Health Care Without Harm sclinton@hcwh.org

PETER ALLISON

Farm to Institution New England peter@farmtoinstitution.org

JEN OBADIA

Health Care Without Harm jobadia@hcwh.org

JOHN TURENNE

Sustainable Food Systems, LLC. jturenne@sustainablefoodsystems.com

KEEP IN TOUCH!

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Read news on our blog:

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Join us at the Farm to Institution Summit:

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