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<p>Farmhand Foods seeks to develop a reliable, local supply chain for pasture-based meat production, processing and consumption that minimizes food safety risks across the supply chain and enhances global food security. Farmhand Foods proposes to conduct research that will facilitate the scale-up of an innovative business model that connects small-to-medium scale, pasture-based livestock producers with local wholesale markets. Farmhand Foods' unique business approach is expected to result in building a sustainable, small-scale meat supply chain that supports the viability of community-based farms and businesses. Support from SBIR will allow Farmhand Foods to prove the feasibility of its business model by supporting research and development of marketing and business strategies and supply side partnerships that are scalable and ready for further expansion during Phase II research. Specifically, Farmhand Foods seeks to: </p>
<p>1. Design and test marketing and accounting strategies that allow the Company to profitably sell all parts of each animal it purchases, or to achieve "whole animal utilization," and </p>
<p>2. Design and test supply-side business practices and protocols that attract farmers to Farmhand Foods' network. </p>
<p>Specific questions answered during Phase I research include: What innovations can be made in marketing and sales to help Farmhand Foods' build greater brand awareness and enable its customers to better utilize whole animals Which managerial accounting changes can be made to help Farmhand Foods more precisely measure and monitor revenues and associated costs on a per product basis, and to thereby stabilize gross margins Which multi-store retail grocery customer(s) will best help Farmhand Foods scale its business to new target market areas How can meat quality information best be tracked and used to improve producer awareness and production practices What are best business practices for attracting appropriate producers to participate and rewarding long-term participation Support from SBIR will enable Farmhand Foods to leverage several benefits to society, including maintenance of jobs in the farming and small-scale meat processing sectors. Over the next 3 years, Farmhand Foods anticipates tripling both the number of farmers participating in its network (from 16 to 50) and the revenues it generates for small-scale processors.</p>
<p>NON-TECHNICAL SUMMARY:<br/> The US is rapidly losing small-to-medium scale farmers. In the 10 years between 2007 and 1997, the U.S. lost over 11,000 farms and over 32 million acres of farmland. To save and attract new farmers to agriculture requires that farming be a profitable enterprise and that farmers have access to wholesale markets. Industry trends in consolidation and vertical integration, particularly in the meat industry, have made it extremely challenging for independent livestock producers to penetrate these markets. At the same time, consumer interest in local, pasture-raised and other niche meat products is on the rise. A recent review of meat sales through natural retail grocery stores shows the natural and organic meat sector growing at a much stronger rate than conventional meat sales. Pasture-based meat production is an important and viable enterprise
for many farmers however those producers interested in marketing their own meat find themselves ill-equipped, on their own, to provide what wholesale markets demand. Farmhand Foods is a new, innovative North Carolina business designed to provide small-to-medium scale pasture-based livestock producers with access to wholesale market opportunities, and to create jobs in allied businesses, including meat processing. As a branded meat company, Farmhand Foods sources from a network of local producers who raise their animals humanely, on pasture, without feeding antibiotics or animal by-products or using added hormones. Farmhand Foods? co-owners believe in doing business with transparency and therefore trace the company's meat products back to the farm of origin so that their customers know exactly where their meat comes from and how it was raised. Farmhand Foods works with small-scale, USDA
inspected slaughter and processing facilities to harvest and fabricate their meats. Farmhand Foods focuses on doing the legwork necessary to market and distribute its products to restaurant and retail customers. Farmhand Foods was started, at least in part, as a counterpoint to the intensive trends in consolidation and concentration seen throughout the meat sector. It is an innovative test case for the nation, and the south in particular, of the viability of a mission-driven business model in the meat sector that can provide social, environmental and economic benefits along the local meat supply chain. Farmhand Foods has developed an award-winning brand and local supply chain that includes 16 livestock producers, 2 small-scale meat processors, and 25 restaurant and retail customers. It is well on its way to achieving significant societal benefits but specific research is needed to assist
with scaling the business beyond its current size and scope.
<p>APPROACH:<br/> 1. Farmhand Foods will field test a "standing orders" approach with all future sales calls, identifying the pros and cons of this approach for scaling. Prior to implementing this approach to sales, a baseline will be established to quantify Farmhand Foods' capacity to utilize whole animals without significant standing orders. This will be followed up six months later with an quantitative and qualitative evaluation of how well the "standing orders" approach worked to address the whole animal utilization challenge. 2. Farmhand Foods will design and field test several promotional events and materials and evaluate their success and importance for scaling the business. This will involve an initial survey and/or in-person interview of its customers to identify their needs and interests and will be followed up with a survey and/or in-person interviews to
ascertain customer satisfaction and feasibility. 3. Farmhand Foods will research and refine the managerial accounting approach to itemize per product costs and revenues. This will add greater depth to the Company's understanding of profit margins and inform its approach to pricing, sales and marketing. Farmhand Foods proposes to interview local experts in the food sector to refine its model and vet it with selected business development mentors. 4. Farmhand Foods will conduct detailed background research on two prospective retail partners and use the following criteria to evaluate and determine the best "fit" for scaling: 1) company culture, core values, and merchandising strategies, 2) competitive in-store product offerings and pricing, 3) packaging requirements and costs, 4) logistics and costs for supplying and distributing product to new regions, and 5) company decision-makers and
appropriate venues for "pitching" Farmhand Foods products. 5. Farmhand Foods will develop a comprehensive approach to evaluating meat quality. Based on these analyses and discussions, producer guidelines will be developed that focus on ensuring meat quality. 6. Farmhand Foods will research best business practices to strengthen producer relationships. Key issues for investigation include a company approach to setting and adjusting pricing, managing scheduling conflicts, and incorporating incentives such as profit-sharing. 7. Farmhand Foods will design and field-test new beef producer evaluation check-list. This check list will clarify requirements for participation in Farmhand Foods' producer network and will cover: 1) beef cattle health, 2) farm and animal production practices, and 3) record-keeping practices.
<p>PROGRESS: 2012/06 TO 2014/01<br/>Target Audience: Target Audience -- Our target audience for this project is pasture-based livestock producers, specifically pork and beef producers. The project focuses on developing wholesale market opportunities for these producers. Efforts -- Our efforts focused on two fundamental activities: 1) design and field-test marketing and accounting strategies that allow for whole animal utilization and 2) design and field-test supply-side business practices and protocols that attract farmers to the Company's producer network. Changes/Problems: During the project period, Farmhand Foods encountered a trademark dispute with Smithfield Foods, owner of a line of pork products called Farmland Foods. This delayed our creation of promotional materials since for a period of time, we were not sure if we could continue using our name. We
requested and received a no-cost extension to execute some of our marketing activities. Despite ultimately getting the approval of the U.S. Patent & Trademark Office to go ahead with the use of our logo, Smithfield Foods threatened to sue us regardless. This prompted us to change our name in May 2013 to Firsthand Foods. While not a challenge per se, it is worth noting that we had originally planned to begin working with a major grocery store customer during the project period as a means of scaling and expanding sales. We found, instead, plenty of demand from University food service accounts and thus chose to focus on this market channel during Phase I. Our intent is to tackle the grocery channel in Phase II. What opportunities for training and professional development has the project provided? Nothing Reported How have the results been disseminated to communities of interest?
Firsthand Foods is sharing the results of its research with the sustainable agriculture community in North Carolina through NC Choices (www.ncchoices.com) and its parent-organization Center for Environmental Farming Systems (www.cefs.ncsu.edu) as well as the non-profit Carolina Farm Stewardship Assocation. In addition Firsthand Foods is participating in the Wallace Center's National Food Hub Collaboration, which is designed to provide technical assistance and peer-to-peer learning opportunities for mission-driven food hubs around the country. What do you plan to do during the next reporting period to accomplish the goals? Nothing Reported