Fast growth for slow foods?

Mad @ Mgmt addresses the concerns of middle market companies, including banking, family & succession issues, turnarounds & performance improvement and economic life in general. Walter Simson is founder and Principal of Ventor Consulting a firm dedicated to middle market companies.

Heather Hilleren has become known in ways that belie the size of her company headquarters — which consists of one single room in an attractive startup-incubator building. The founder and president of Local Dirt has been interviewed by national media, such as INC Magazine and National Public Radio, for providing a service to a previously-untapped market in the national organic food chain (pun intended). Not only that, but Local Dirt has also been tapping into the imaginations of the consuming public. Think of her as one of the shock troops envisioned in Michael Pollan’s new-food manifesto, “The Omnivore’s Dilemma.”

So, what exactly does Local Dirt do? Many people think of the Madison-based website as a directory of producers and sellers of small-farm products. But it is more than that. The site provides computing tools for the buying, selling, storage and planning of produce goods. These are same tools that Wal-Mart uses for understanding its buying and selling of televisions. Think of it this way: Local Dirt provides 21st century logistics for 19th century products.

This places Heather Hilleren in the middle of the local food economy in a unique way. She can observe the expansion of buyers, sellers and markets — and their occasional demise — and understand the people and trends that underlie these patterns.

Is the field growing? Absolutely, she says. Is it growing as fast as it might? Absolutely not. “The Department of Agriculture’s long-held policy is that producers should ‘get big or get out.’ And they ensure that through subsidies.” While there are small grants for innovative agriculture production in some states — about six in Wisconsin in the last year, she reckons — the overwhelming government and industry emphasis is on large, commodity and processed foods. “Processed high fructose corn syrup reaches the consumer for less cost than, say, a locally-produced heirloom tomato,” she says.

Despite these odds, her company is swamped with new users ( the exact number withheld) and inquiries for new services. “The needs are overwhelming. My challenge is to focus.”

Heather believes there are places for other business graduates within the organic food industry — not just in farming, but also in other areas like marketing. She explains, “Producers will create a Local Dirt profile that says ‘We produce heirloom potatoes.’ That’s not enough. They need to tell the history of the farm, tell the ‘two kids and a dog’ story of their family. They need to say that a Green Zebra heirloom tomato is great for sauces, maybe give some recipes. But our producers are small — and sometimes they don’t think that way.”

Heather hastens to say that this would be perfect for an entrepreneur, not a person for her to employ. “We get a lot of resumes. We just don’t have the budget to do everything we’d like.”

What about producers — should young graduates enter farming? “Most of our new farmers are people who have succeeded in other walks of life and are now entering the organic products area. Years ago, they would buy a winery. Now it’s an organic farm.” But she sees an influx of young people at the community garden, where a 30 foot by 40 foot plot in full sun produces a bounty of fresh vegetables — too much for many families.

There’s an expectation that more producers, packagers and marketers will enter the organic food arena. Many of these, like Local Dirt, will be start-up companies with an immediate, national scope like marketing organic foods or helping farmers learn from each other through how-to information, policy guides and lobbying efforts, for which the nation is — OK, I’ll do it again — hungry.

I have my own flash of inspiration and ask Heather if people could share their yards with farmers, a kind of crop-sharing. Top-sharing, I called it. The farmer’s capital-intensive land purchase is obviated by the sharing part. She laughs. “Great idea. Do what I did: write a grant and get it going!” In fact, immediately after our talk, she sent me an e-mail complimenting the idea. So maybe, in addition to the marketing and the growing of the products, one could start a new legal and enterprise model to tap the capital in currently-unproductive suburban plots.

Years ago, President H.W. Bush famously asked whether it was better to produce potato chips or silicon chips. For many in finance and government, the answer was silicon. But thanks to Heather and others, a fast-growing, slow-food economy is in the making.

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