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Good Food Economy Digest

Juicing up economy with food makers and movers

People building strong places with local and regional food


Good Food: Healthy, green, fair, and affordable


By Patty Cantrell, Regional Food Solutions

Earl Herrick has been in the wholesale produce business for nearly 30 years. But 2015 was perhaps the busiest and most exciting yet for San Francisco-based Earl’s Organic Produce.

In This Edition

We explore San Francisco’s new strategy for building employment and economic diversity with support for food and beverage producers and distributors.

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Check out the Roadmap for City Food Sector Innovation and Investment for information and tools you can use.

“In the last six months we’ve had more new customers than we’ve ever had,” Herrick said. “It’s an incredible time of innovation and incubation. We’re seeing an interesting marriage of technology and produce, with our new customers doing everything from home deliveries to juice programs.”

The growing customer list at Earl’s and at other farm-direct organic wholesalers like San Francisco’s Veritable Vegetable — at 41, the longest-running organic distributor in the country — is yet another indicator that independent food and beverage is on the rise. These distributors’ customers represent an economic base layer of food and beverage manufacturers and wholesalers that is re-emerging as markets demand greater variety and veracity in food and drink.

In San Francisco the danger of losing out on this growth, due to factors like intense real estate competition, has public and private leaders lining up to make sure food and beverage entrepreneurs can start, stay, and grow in the city. Its new Makers and Movers Economic Cluster Strategy may prove a model for other places that also see opportunity in this growing sector for building employment diversity and economic diversity.

Targeted Assistance

“A big driving force behind this study was the understanding that if San Francisco wants this cluster, it needs to hold on to this cluster,” said Eli Zigas, food and agriculture policy director at the San Francisco-based community development organization SPUR. Zigas was part of a 2014 task force that worked with the city’s planning, economic, and workforce departments to craft the Makers and Movers strategy.

Securing specialized space for food and beverage businesses is a Makers and Movers priority. “Once you take out sinks and floor drains, for example, the chances someone will put those back in are slim,” Zigas said.

Stephanie Rosenbaum Klassen, Bay Area Bites  

Stephanie Rosenbaum Klassen, Bay Area Bites

 

The strategy also calls for technical and business support, workforce development and retention, and transportation solutions.

San Francisco is moving these recommendations forward in part with a new dedicated point person for food and beverage at the city’s Office of Economic and Workforce Development: Susan Ma.

Ma lists other progress to date. One big win is the major renovation and expansion of the 138-year-old San Francisco Wholesale Produce Market with a new 60-year lease of municipal land. Another is a private developer’s work with SFMade, a nonprofit supporter of smaller manufacturers, to include food and beverage needs in 140,000 square feet of new industrial space they are bringing online.

“We are also in the midst of a late-night transit pilot for people and businesses that work the other 9-to-5,” Ma said.

Transit is huge for companies that operate 24 hours a day 7 days a week.

“Some of our staff come to work between 2:00 a.m. and 6:00 a.m.,” said Veritable Vegetable staffer and Makers and Movers task force member Nicole Mason. “Improving transit during these hours would increase access to jobs at our company and others.”

Flyover states, too

San Francisco’s Makers and Movers strategy is specific to that city but also relevant across the nation. Clusters of food and beverage producers and distributors are growing nationwide as more and more people come to expect a quality of food and life that is no longer unique to cosmopolitan destinations.

Farmers’ market flavors and artisan food innovations have opened a Pandora’s Box of consumer and community demand all the way from rural and urban food deserts to corporate cafeterias. Now even the most middle of American towns can boast, or hopes to soon have, their own chocolatiers, craft breweries, neighborhood grocers, and regional wholesalers delivering fresh, local and ethnic foods to them.

Real estate developers are among those trying to understand and satisfy this demand, said Sarene Marshall, executive director of the Center for Sustainability at the Urban Land Institute, an association of 36,000 real estate and land use professionals.

Stephanie Rosenbaum Klassen, Bay Area Bites

Stephanie Rosenbaum Klassen, Bay Area Bites

“The conventional wisdom has always been that the best first-floor retail food tenant for your office or apartment building is a national chain,” she said. “But there is so much interest now in alternatives that developers are branching out.”

They are looking for new food retailers to differentiate storefronts or lift up underserved neighborhoods. They are also looking for the next generation of food processors and distributors that can help them repurpose and rejuvenate industrial space.

New supply chains

An example from the world of innovative food retail is the organic delivery firm Full Circle. Full Circle sources and packs weekly boxes of local and regional foods for subscribers in San Francisco as well as some 200 other cities across five states: Alaska, California, Idaho, Oregon, and Washington.

Full Circle buyer Katie von der Lieth said the company works directly with farmers but also appreciates organic wholesalers that source locally and regionally.

“We want to have good variety for our customers and still provide that connection with farmers,” she said.

Maintaining and building the supply chain of businesses that companies like Full Circle need is key to the employment and economic diversity that San Francisco wants from its Makers and Movers strategy.

“Our research showed that the sector provides relatively well-paid jobs and career advancement opportunities for San Franciscans at all education levels,” said Diana Sokolove, a senior planner at the City of San Francisco. Entry-level stock handlers and clerks, for example, can move up to well-paying distribution and purchasing manager positions.

These are important and steady jobs, said Michael Janis, general manager of the San Francisco Wholesale Produce Market. “We didn’t lose any jobs during the 2008 economic crisis. People can raise families with these jobs, put their kids through college.”

Competition. Collaboration.

These jobs are also growing after years of decline. In 2012 employment at food and beverage makers and movers increased by 13 percent in San Francisco (to more than 5,000) after dropping by half between 1990 and 2005. Businesses in the sector are also multiplying. In 2013, one third of San Francisco’s 370 food and beverage firms were in their first five years of operation.

Turning these startups into mainstays, or even icons one day, is a big reason San Francisco is doubling down on assistance to them. Growth and innovation in food and beverage builds diversity into San Francisco’s economy and adds value to its brand, benefitting tourism, entertainment, and more.

Fundamental to that growth and innovation is the creativity and synergy that happens in a business cluster, even among competitors. It happens in places like southeast San Francisco where fruit and vegetable producers and distributers are concentrated. Earl’s Organic Produce and 30 other wholesalers are located there as merchant tenants of the San Francisco Wholesale Produce Market. Veritable Vegetable is among dozens of other collaborators and competitors also nearby.

Together they build a fertile, even familial business environment. “The collective impact of many businesses working together is what really moves the dial,” said Veritable Vegetable’s Nichole Mason.

Earl Herrick’s experience demonstrates. The very first Earl’s Organic Produce location was an extra desk in some extra space that an existing San Francisco Wholesale Produce Market tenant made available.

Herrick recalls: “I asked the gentleman what he wanted for rent, and he said, ‘We’ll see if you’re here at the end of the month.’ ... I was, and he charged me about $200.

Fresh produce in San Francisco’s Mission District   Credit: Flickr photostream user torbakhoppe

Fresh produce in San Francisco’s Mission District   Credit: Flickr photostream user torbakhoppe