Enabling Regional Food Systems with Value Chain Coordination

Penn State Extension, and indeed the entire Extension system, is known for its farmer-focused education and technical support, dating back to the early 1900s. After all, farmers are the heartbeat of our food system and essential to our local and national economies. But there is much more to a food system than food production—distribution, storage, marketing, sales, planning, and relationships to manage, just for starters. Actors within each of these components, particularly within the context of local and regional food systems, exhibit their own specific needs. Supporting and connecting these actors along the supply chain in order to bolster a resilient regional food system calls for nuanced and tailored solutions, through a practice known as value chain coordination. The following outlines the various facets or roles of value chain coordination, using the work of Penn State Extension’s Food Systems & Local Foods (FSLF) team for illustration.

Introduction to Value Chain Coordination (VCC)

"Value Chain Coordination" – or "VCC" for short – originated as a business philosophy that value can be added to raw materials with each subsequent round of processing – for example, from wheat to flour to bread to a packaged loaf (Porter, 1985). The concept has been adopted by the local food movement and its defining characteristics have evolved over time. Extension’s FSLF team uses VCC as an umbrella term for the many important "soft infrastructure" roles (those centering relationships and resources) necessary to move local and regional foods from the farm to the fork. (Each role is explained below, with examples from the FSLF team’s work.) One might think of it as a supply chain that’s rooted in values. Those values might include local, regional, community-based, regenerative, cooperatively owned, fair trade, equity-driven, or others. Through these intentional partnerships, the actors can work together to build wealth for the local or regional community. Food system VCC work manifests in a variety of ways.

Market Matchmaking

One way is through market matchmaking – in other words, facilitating business exchanges between value chain stakeholders. This might mean making connections between growers and market outlets. In one such instance, Extension educators met with a group of growers that was seeing declines in sales in the grocery sector and looking to identify new market opportunities. The growers operated at a scale large enough to consistently fill high volume orders, could manage transportation logistics, and did not want to manage online ordering systems. Meanwhile, the team knew about a regional produce distributor who had room to take on more local, high-volume growers and was comfortable doing business by phone. The Extension team made the "market match," and after several weeks of successful transactions, they began planning together for next season. This success, according to the wholesale buyer, rested on high-quality product combined with reliable volume and straight-forward communication. The businesses were a natural fit for each other; they simply needed someone to listen to their needs and make the connection.

Convening Stakeholders

Similar to market matchmaking, VCC work sometimes means convening stakeholders to provide an environment for learning and sharing. For instance, Extension’s FSLF team led a group of market managers on tours of several Lancaster produce farms, to talk with growers and learn about the challenges farmers face when considering running a market stand. (Public markets and farmers markets in many parts of the country, including Pennsylvania, struggle to attract enough fruit and vegetable farmers as vendors.) These tours provided market staff with valuable on-the-ground insights and perspectives that are difficult to glean from within the walls of a busy marketplace. For instance, most farmers agreed that they would be thrilled to see their produce sold in the markets while admitting that they didn’t have the time or staff to run the booth themselves.

Innovating New Ideas

This feedback allowed the Extension team and managers to serve another VCC function—innovating new ideas—by imagining creative food system solutions that are informed by farmer input and experiences. In this case, the group explored the potential of multi-vendor "flex space" booths (to reduce the time investment from each farm), seasonal market-run events featuring limited seasonal items (like strawberries), or hiring market-employed procurement manager and booth staff to purchase and sell products from regional farms, on behalf of the market. Convening the stakeholders affected by a shared challenge allows both groups to think outside the box and imagine solutions that neither might imagine on their own.

Technical Assistance

VCC is often delivered by providing technical assistance to businesses or other stakeholders, to enable the value chain transaction. This role can be seen in the FSLF team’s work training wholesale buyers like chefs, market managers, and food service directors on incorporating produce auctions into their procurement strategy. Technical assistance starts by identifying the need. In this case, produce auction growers noticed a lot of farm market buyers at the auctions but not many foodservice buyers. Further investigation revealed that many of these buyers didn’t know about the auctions, held misconceptions about them, or found lack of understanding on how to participate to be a barrier to entry. The team launched a series of on-site and virtual info sessions to break down the auction bidding process and give participants an up-close look at auctions while providing a space to ask questions. Technical assistance is making sure that value chain stakeholders have the tools to participate and succeed.

Resource Prospecting

Resource prospecting is a facet of VCC work that involves securing funding, property, or other resources necessary to grow a project. Because value chain coordinators are often positioned central to a network, they can serve as a hub and direct resources, relationships, and opportunities toward the stakeholders that offer the best fit. For example, the FSLF team learned about the Fresh Food Financing Initiative grant program, which serves to increase community access to regionally grown foods. They shared the opportunity (and provided additional support and technical assistance) with 10 food businesses and a farmers market, resulting in $640,000 of combined awards.

Research & Assessment

Research and assessment enables coordinators to make informed decisions about needs and the best ways to address them. In addition to performing VCC work directly in communities across the Commonwealth, Penn State Extension provides tools to empower others to perform this research, which presents opportunities to perform additional VCC roles in their local or regional food system. The team developed a Farm Market Finder app, an interactive map that allows users to search for farmers markets, on-farm retail markets, agritourism businesses, and public markets throughout the Commonwealth. (Funding from the Northeast Regional Center for Rural Development provided support for data collection of agritourism operations.) The app can be used by local municipalities to identify direct-to-consumer farm businesses in their communities for a variety of purposes. It could help planners and policymakers prospect resources to support these businesses; understand the demand for technical assistance in their area; identify market matchmaking opportunities with other local processors or businesses; or discover market gaps and innovate new ideas for the local economy. (Note: markets can add or update their market information here.)

Conclusion

Each regional food system is a unique reflection of its stakeholders, resources, challenges, relationships, and innovations. Value chain coordination provides Penn State Extension and community development professionals with a flexible approach to supporting businesses, communities, and food systems. Through a tailored mix of the transactional and enabling roles outlined above, Extension’s Food Systems & Local Foods team and other value chain coordinators can facilitate connections and opportunities that meet the needs of each stakeholder and situation.

Resources

Diamond, A., Tropp, D., Barham, J., Muldoon, M. F., Kiraly, S., and Cantrell, P. (2014). Food Value Chains: Creating Shared Value to Enhance Marketing Success. U.S. Dept. of Agriculture, Agricultural Marketing Service. 

Rocker, S. J. (2020). Value chain coordination for Extension professionals: Opportunities for supporting and developing regional food systems. Northeast Regional Center for Rural Development. Webinar.

Rocker, S. J., & Hinrichs, C. C. (2019). Value chain coordination: A new strategy for developing soft infrastructure in regional agri-food systems in the United States.