intrepid-dejected intrepid-flying-high intrepid-leans-in intrepid-main intrepid-progress intrepid-reborn intrepid-think-creatively intrepid-treading-water Farm Icon

Meet our Hero

Intrepid

the Aspiring Impact Investor

Intrepid wants to use his powers to fight evil(which may have been where he made his money)

  • drawing of a plant growing
    He doesn't know the food industry, but has developed a utopian vision of what could be - delicious food, thriving communities, jobs and prosperity, healthy soils, clean water, fresh air, life and vitality.
  • drawing of a computer
    Given his background, Intrepid generally believes technology can "disrupt" any old world industry and he has a sense that food is the next frontier.
  • drawing of an arrow go up and to the right
    When he looks around, Intrepid sees inexperience all over the food system - among farmers, advocates, entrepreneurs - he wants to apply his deep experience and success in business to create efficiencies, harvest market value, and do good, all at the same time.

Hope, optimism and excitement prevail.

Intrepid begins his journey…

  • drawing of a martini glass
    Buoyed by a fir-tip infused, locally distilled craft cocktail, and fortified by his newfound love of local charcuterie, Intrepid dives into a stream of events filled with eager change-makers bent on “hacking“ the system.
  • drawing of a two cartoon people talking
    His relentless networking connects him to lots of people extolling the virtues of local farmers (the farmers themselves are too busy to go to events) and frothing over the anticipated demand for local food, so his first thought is to create a platform or exchange to connect buyers and sellers.
  • Drawing Two Leaves
    As his immersion continues, Intrepid is reading Civil Eats, Grist, Mark Bittman and Michael Pollan. His eyes are opening to climate change, population growth, water scarcity, soil health, ocean acidification, antibiotic resistance, food waste, farmworkers, soda, diet-related disease, the loss of family farms and community-scale infrastructure, rural urban migration, poverty and food sovereignty, China.

The challenges feel big, important and urgent.

Intrepid hits a wall.

The more he learns, the more Intrepid begins to realize how incredibly complicated the food system is, and becomes confounded by competing objectives:
Should his target be the farmer, the buyer or the eater? What does local mean? How can he communicate that the good he’s going to do in the world will come from economic development and jobs, public health and nutrition, equitable access, and labor, living wages and values-based supply chains, not to mention deliciousness?

His straw man budgets for his platform concept are getting crushed on the rocks of low margins, high capital costs, perishability, complexity, and the fact that a monumental system has been created to allow Americans to pay little of the true cost of their food, and we’ve gotten used to it. Food safety regulations are as complicated as tax code. “The food system” is actually dozens of discrete and well-developed industries, the operators of which own their infrastructure and are doing just fine, thank you very much.

Frustrated, overwhelmed and forlorn, Intrepid treads water in the primordial soup of all that he cannot now un-know.

Let's leave Intrepid swimming for a moment, and turn to Ecotrust’s study of gaps in regional food infrastructure…

Cover of Oregon Food Infrastructure Gap Analysis Report. Content included previously

Oregon Food Infrastructure Gap AnalysisWhere Could Investment Catalyze Regional Food System Growth and Development?

This project was initiated to meet three objectives on behalf of impact investors, practitioners, advocates and policymakers:

Ecotrust Ag Viewer Screenshot

In other words…

If you wanted to build a resilient regional food system, what would you need to know to get started?

We gathered data and made maps.

  • Ecotrust Ag Viewer Screenshot
    How do the locations of Oregon's chicken farms relate to the locations of chicken slaughter facilites?
  • Ecotrust Ag Viewer Screenshot
    Need a caption?
  • Ecotrust Ag Viewer Screenshot
    Need a caption?

Data Sources: FoodHub, ODA, USDA ERS, AMS, NASS and FNS, OSU, OFB, NWFBA, NWFPA, OF2SSGN, HCWH, and Oregon Tilth.

The results felt wrong. So we hit the road.

  • We visited farms and ranches, leaned against trucks, walked warehouses, donned “freezer suits”, awed at banana ripening rooms with space age doors, and toured commercial chicken coops in greenhouses, horse stables, hoop houses and mobile trailers.

  • We asked nosy questions about sales and costs, looked at ingredient lists on bags of feed, drew boxes and arrows on white boards, and referenced this mythical report that would tell us where to point the hose of “catalytic capital”.

  • Then we bounced data and ideas off industry experts who asked smart, pointed questions.

First thing we learned was that size matters.

Ag of the Middle* Framework (AOTM)
SmallAOTMCommodity

PLEASE NOTE: “Ag of the Middle” is a conceptual framework, not a set of hard and fast rules. See www.agofthemiddle.org for more.

How big are they?$$$$$$$$
Who are their customers?Eaters
  • Restaurants
  • Retailers
  • Institutions
  • Distributors
  • Processors
  • Brokers
  • Distributors
What's their region?LocalRegionalGlobal
How diversified are they?VerySomewhatMinimally
Where's the boss?In the fieldOn-siteAt HQ
Who owns the business?Family
  • Family
  • Co-op
  • Partnership
Corporation
Who sets the price?ProducerNegotiation (farmer/buyer together)Market
Does the producer have an off-farm job?YesNoNo

The second is that values are important, especially transparency and connection.

At the smaller scale, that means farmers’ markets and community supported agriculture (CSA). In wholesale, it means “Values Based Supply Chains.”

Regional food sweet spot:

Ag of the Middle: Local values, wholesale volume

And our maps got better.

  • Ecotrust Ag Map Viewer Screenshot
  • Ecotrust Ag Map Viewer Screenshot
  • Ecotrust Ag Map Viewer Screenshot
  • Ecotrust Ag Map Viewer Screenshot
  • Ecotrust Ag Map Viewer Screenshot
  • Ecotrust Ag Map Viewer Screenshot

DIFFERENTIATE OR DIE.

Ag of the Middle players do not have the economies of scale to compete with commodity producers on price, and therefore must differentiate. If differentiation doesn’t seem possible, it’s unlikely to be a fruitful investment.

Word cloud of various differentiation attributes such as organic, family owned, local...

Who’s buying differentiated food?

  • drawing of a shopping cart

    Retailers

    Not just Whole Foods Market and New Seasons Market, but also Costco, Walmart and Kroger
  • drawing of a knife and fork

    Restaurants

    Yes, Laughing Planet, Grand Central Baking, Dick’s Kitchen and Burgerville, but also Chipotle, Chick-Fil-A and even Carl’s Jr. and MCDONALDS!
  • drawing of a warehouse

    Manufacturers

    Not just Truitt Family Foods, Nature’s Path, and Amy’s Kitchen, but also Unilever, Kellogg, and Coca-Cola

And… The World.

$2.6 billionin agricultural products were exported internationally from Oregon in 2014
Source: US Department of Commerce International Trade Administration

“Historically, when people in emerging countries start making more money, they spend it on more food, better food, high protein food—things the US excels in producing.”

USDA Deputy Under Secretary Alexis Taylor on a visit to Oregon, March 2015

With his newfound understanding of local supply and global demand, Intrepid realizes that he…

  • Wants to solve problems for aspiring Ag of the Middle producers

  • Sees market opportunity in differentiated food, both at home and abroad

  • Worries that vulnerable people in his community will be left behind

Research Findings

Ecotrust’s research shows that food aggregation, processing and distribution infrastructure is not readily accessible by Oregon’s Ag of the Middle farmers, ranchers and artisans, and the lack of access is inhibiting growth and development of a robust regional food economy.

In other words

Caitlin Welby, newly minted 32 year-old CEO of a family-owned, $100M refrigerated trucking business describes the situation much more colorfully:

“I’m committed to farm-to-table, but the ‘to’ is the gray area, for everybody,” she says. “We’re getting really good at what the farm is, know thy farmer and all that. And we’re really clear about the ethics of the retailer. But the ‘to’ is widely ignored, and for good reason: it’s a fucking mess.”

Source: http://fastcompany.com/3042033/caitlin-welby-is-a-32-year-old-yoga-loving-punk-rock-tree-hugger-oh-and-now-shes-the-ceo-of-

Key Infrastructure Gaps

  • Lack of last-mile warehousing and logistics for both rural and urban producers.
  • Lack of access to dedicated, scale-appropriate processing facilities and co-packers.
  • Lack of experience with market development.

For example, Bowery Bagels self-distributes to 114 locations between 2am-7am every weekday

Ecotrust Ag Viewer Screenshot

Most infrastructure is unique to its product category, so we looked more deeply at six categories:

  1. Sales & ConsumptionRetail / Restaurant / Foodservice
  2. InfrastructureAggregation / Processing / Distribution
  3. Production

They might be connected.

Our beef research showed that the conversion from cow/calf operator to cut beef producer requires more slaughter and processing facilities.

Like all infrastructure, beef slaughter and processing require steady throughput of animals in order to be financially viable. Differentiated beef is a seasonal product – the fall processing crunch leaves facilities and equipment largely idle for much of the year.

Pork can be run in the same facilities and on the same equipment, and can be raised year-round. Our pork research indicates significant demand for local, and an assumption that we can’t develop a hog industry because we don’t grow corn and soy.

Fun fact — pigs are omnivores. They’ll eat almost anything!

They love spent grains from breweries, fruit and vegetable silage, whey from dairies, and table scraps from foodservice and retail (provided there are no pork bits).

Wheat farmers need to rotate crops in their fields to build fertility, disrupt disease cycles, manage pests and weeds, and increase yields. What do they grow in rotation?

Stuff pigs might eat.

Who will create a Northwest blend of pig feed that helps wheat farmers monetize their rotational grains? Who will organize logistics to gather food byproducts from processing and get them to a network of regional pig farmers?

While we’re creating Salmon Nation Feed let’s also change the chicken game.

Our chicken findings suggest up to 60% of the cost of pastured, antibiotic-free, non-GMO chicken is feed (even higher if it’s certified organic).

What if our investments were coordinated to connect the dots between categories?

We’ve left Intrepid treading water for a very long time, let’s see how he’s doing.

In his “stuckness,” Intrepid starts walking.

The beach, the forest, the ranch where the cows from his 100% grassfed charcuterie platter were raised. Intrepid walks, and finds he feels better every time he gets outside and away from the churn.

Furthermore, he discovers that the calmness is the perfect counterpoint to the adrenaline rush he feels at the hackathons; he needs them both.

His business and technology roots re-emerge as Intrepid realizesNature is the original agile developer.
She starts with a minimally viable product and then iterates like crazy.

Intrepid Leans In

With his revelation ringing in his ears and rocking his worldview, Intrepid resurfaces.

Over time, he finds he’s comfortable embracing complexity and leaning into the not-knowing.

He stops thinking in linear chains and starts drawing circles and thinking in ecosystems

Visualization of complexity between farm and table

Intrepid is Reborn

  1. He divests his corpus from holdings creating the harm he wants to fix.
  2. He focuses on niche categories where differentiation is clear.
  3. He co-invests in scale-appropriate, shared infrastructure.
  4. He hooks his producers and processors up with marketing and sales support from his prior life.
  5. He takes a hard look at feed and forage, knowing most humans like meat when they can afford it, and eyes all those acres planted in grass seed…

He breaks the mold

He works on co-creating a food system that allows big wholesale buyers to source from hundreds of smaller regional producers, instead of just big, consolidated players.

  • What will people want to eat when they can’t afford meat, or worry that its production is killing the planet?
  • What sort of incentives would help make local markets attractive alongside export ones?
  • How can technology help restore soil and water?

Join Ecotrust and the Intrepids of the world to figure it out

Cover of Oregon Food Infrastructure Gap Analysis Report. Content included previously

Oregon Food Infrastructure Gap AnalysisWhere Could Investment Catalyze Regional Food System Growth and Development?

Download the full report (PDF, 212 pages) or the executive summary (PDF, 9 pages)

For more information, contact Ecotrust at connect@food-hub.org.

Ecotrust logo: mandala illustrationecotrust.org