Economic Development, Food Service & Agriculture, and Lakeshore

Regional food hub advances

Muskegon will be site of distribution center serving lakeshore, GR, Detroit and Chicago.

July 10, 2015
| By Pat Evans |
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Muskegon soon could be a regional hub of food activity.

An $85,000 study of how to grow the West Michigan food system recommended a food hub be created in Muskegon.

Food hubs support local food systems by acting as aggregates for small to mid-size local growers, processing, packaging and distributing the food.

The study was conducted by Marty Gerencer of Morse Marketing Connections, and Evan Smith of Cherry Capital Foods, who were advised by several community, state and national organizations.

The Community Foundation for Muskegon County backed the study, with funding from Consumers Energy and the U.S. Department of Agriculture.

CFMC requested the study to determine how to increase the city’s supply of regional food and the access low-income communities have to the food.

“We are very involved and interested in helping food access in the Muskegon community,” said Chris McGuigan, CFMC president.

The community has set a collective goal of making Muskegon the healthiest county in Michigan by 2021. Since the Healthy Muskegon initiative began in 2011, the community foundation has re-granted $676,000 from the W.K. Kellogg Foundation to various Muskegon community endeavors focused on promoting healthy living.

Despite forward strides, McGuigan said there is another level to be reached in connecting local food with the urban core. Much of the foundation’s recent effort has worked toward that goal.

The county as a whole has a household median income that is 17 percent lower than the state average, and an 18.5 percent poverty rate from 2007 to 2011.

With that in mind, Gerencer was called in for the study. In addition to Smith, she also received assistance from Renae Hesselink, vice president of sustainability at Nichols Inc., Dennis Marvin, Consumers Energy’s community engagement manager, and CFMC’s Janelle Mair.

The study found a huge network of farmers in the region that includes Muskegon, Newaygo, Oceana and Ottawa counties who could use support to move their products, as well as a large array of organizations and retailers that could use the food.

With eight food hubs currently in Michigan but a relative dearth in West Michigan, Gerencer said the area was prime for the study. There are approximately 3,600 small producers in the four-county area, she said, and the study found 60 percent of them were ready to commit product to a food hub.

Gerencer said many of the producers are in the middle ground — too large for direct selling through food stands or farmers markets, but too small to supply large retailers and other larger organizations.

“Small growers have difficulty getting into retail stores such as Meijer,” Gerencer said. “So a food hub would take 20, 50 — even the 3,600 growers in the region and work together to clean it, package it and distribute the food.”

In addition to serving the four-county region, the infrastructure is in place to send food to major metropolitan areas such as Grand Rapids, Detroit and Chicago.

The food hub may not be the final solution for all of the region’s food problems, but it can help address some of the issues, Gerencer said. She said the study found 59 percent of the area’s potential buyers are ready to purchase now.

She hopes by the time the hub is operational — within the next year — even more would be ready to commit.

“The study indicated Muskegon is an excellent place for this,” Mair said. “Now a group will look to establish a small hub to take the next step.”

Locations being scouted, and the organization is looking for a general manager for the business.

The economic potential of the hub — which will be a for-profit business — is the reason Consumers Energy became involved. Consumers contributed approximately $50,000 to the study, with USDA Rural Development kicking in $30,375.

Consumers is seeking ways to stay connected in the community as it gears up to retire the B.C. Cobb power plant, Marvin said.

He said the company had two objectives when it committed to the study. One was recognizing the decrease in taxes the company would pay with the plant’s retirement, therefore putting a financial hardship on the community. Second was to attempt to replace some of the jobs that would be lost through the plant’s closure. Marvin said Consumers would still be the No. 1 property taxpayer in the city based on its distribution facilities.

“We’re not going away,” he said. “But we want to replace the tax dollars and jobs that will be lost.”

There was a third point Marvin made, which he said was the most important. The Cobb facility is one of very few 100 percent water-borne coal plants, and provides the Muskegon port with approximately two-thirds of its activity.

“That’s a big priority for us. How can we keep that port viable?” Marvin said, adding the U.S. Army Corps of Engineers requires 100 million tons of annual commercial activity before agreeing to dredge a waterway.

Initially, the food hub would not be a large participant in the waterway, but Marvin said he hopes the early talks with potential customers in Chicago could help put agricultural products on vessels to ship across Lake Michigan.

Gerencer believes the food hub facility could offer approximately 20 jobs and create many more through the farms and distribution networks. She pointed to the Cherry Capital food hub in Traverse City, which opened in 2009 and now has 50 employees.

While the for-profit portion of the food hub is attractive to several people involved, the community foundation is driven by the social mission of the organization. Its potential to connect Muskegon area schools, hospitals and food pantries with local food is great, Mair said.

With the need and feasibility acknowledged, the effort to make the food hub a reality is underway.

“We’re going to start small and build. If we do well for the community, then we can be a regional opportunity,” Gerencer said. “The grower gets a new market, and the community gets better food.”

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