CADC Specialty Crop Food Processing Feasibility Study
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1 CADC Specialty Crop Food Processing Feasibility Study Nils Johnson WSU Stevens Co. Extension Ag Coordinator 9/19/17
2 Outline Project Background Regional Food System Plan CADC Produce Processing Feasibility Study Survey Results Target Products Processing Lines Facility Layout Business Model Contact Information 9/20/2017 2
3 CADC Feasibility Study Project Timeline 2010: WA State Farmers Market Conference in Renton WA Result: Pickle Pilot Project Outcome: Strong need for help 2011: Sweet Meadows Ranch jam production on WSDA license Result: Strawberry-Jalapeno jam (and 2 other products) Outcome: Business models works but we need a better facility 2013: Hatched Feasibility Study plan with Shelly Stevens Result: Wrote grant proposal Outcome: Rejected on a technicality 2014: Re-submitted the grant Outcome: Proposal accepted
4 CADC Feasibility Study Grant Planned Activities 1) Survey and evaluate Specialty Crop demand Individuals, stores, institutions 2) Survey and evaluate Specialty Crop supply Produce Famers & Orchardists 3) Evaluate existing Value Added Processing facilities Include group tours 4) Get Food Safety training for local trainer capacity 5) Design our own project to match Supply with Demand Facility Design Processes and Equipment Food Safety Business Plan
5 Outline Project Background Regional Food System Plan CADC Produce Processing Feasibility Study Survey Results Target Products Processing Lines Facility Layout Business Model Contact Information 9/20/2017 5
6 Regional Food Systems Infrastructure Basic Components of a Complete System Food Systems Director Regional Markets Farm Training & Incubator Regional Growers Food Product Incubator Local Food Markets Shipping & Receiving Food Storage & Aggregation Food Processing Facility
7 Regional Food Systems Infrastructure Farm to Food Pantry (F2FP) & Farm to School Food Systems Director Regional Markets Farm Training & Incubator Local Food Markets Regional Growers Food Product Incubator Food Pantries Farm to Food Pantry & Farm to School Institutions Shipping & Receiving Food Storage & Aggregation Food Processing Facility
8 Regional Food Systems Infrastructure F2FP & 395 Produce Corridor Regional Markets Wholesale Food Systems Director Institutions Farm Training & Incubator Food Pantries Local Food Markets Wholesale Food Pantries Farm to Food Pantry & Farm to School Regional Growers Food Product Incubator Institutions 395 Produce Corridor Shipping & Receiving Food Storage & Aggregation Food Processing Facility
9 Regional Food Systems Infrastructure 395 Produce Corridor & F2FP & Food Processing & Incubator Regional Markets Wholesale Farm Training & Incubator Farm Plots Food Systems Director Retail Stores Institutions Harvesting Facility Classroom Space Food Pantries Food Product Incubator Local Food Markets Retail Stores Wholesale Food Pantries Farm to Food Pantry & Farm to School Regional Growers Food Incubator Program Food Product Assistance Marketing Assistance Facility Management Institutions 395 Produce Corridor Shipping & Receiving Retail Space Office Space Food Storage & Aggregation Dry Warehouse Meeting Space Frozen Storage Chilled Storage Lite Processing Kitchen Demo Kitchen Office Space Intensive Processing Kitchen Food Processing Facility Food Processing Program
10 Outline Project Background Regional Food System Plan CADC Produce Processing Feasibility Study Survey Results Target Products Processing Lines Facility Layout Business Model Contact Information 9/20/
11 Survey: Stevens County Food Pantries 2015 Food Pantry Client Produce Preference Survey
12 Currants Gooseberries Rutabagas Swiss Chard Parsnips Collard Greens Bok Choy Chives Tomatillos Mustard Greens Kohlrabi Rhubarb Turnips Eggplants Kale Basil Plums Pumpkins Peppers (Hot) Baby Nectarines Radishes Apricots Summer Squash Pears Baker type Potatoes Winter Squash Spinach White/Yellow Potatoes Red Potatoes Peppers (Sweet) Peas Brussels Sprouts Beets Cabbage Onions Huckleberries Celery Peaches Melons Apples Blueberries Blackberries Beans (Snap, Green) Cherries Garlic Raspberries Lettuce Cauliflower Grapes Mushrooms Tomatoes Corn Cucumbers Strawberries Asparagus Carrots Broccoli Survey: Stevens County Food Pantries 2015 Client Produce Preference Survey All Results Food Bank Client Produce Preference Survey Results (2015) Food Bank Client Prefences (104 total respondents, 5 Food Pantires)
13 Survey: Stevens County Food Pantries 2015 Client Produce Preference Survey Figure 1 Top 5 produce items requested as "Favorite they d like more of by food bank clients in Stevens County
14 Survey: Stevens County Farmers Markets 2015 Farmers Market Produce Preference Survey
15 Survey: Stevens County Farmers Markets 2015 Client Produce Preference Survey Results Inconclusive Results were all over the place Two typical responses to the question of Fair Price 1. Hmmm. I think I remember Safeway sells those on for $ per Lb 2. I don t look at price since I can buy whatever I want but those Farmers Market prices are too high!
16 Survey: Stevens County Food Loving Public 2016 Public Produce Preference Survey
17 Rosemary Chives Dill Oregano Thyme Mustard Greens Parsley Currants Goji Berries Plums Collard Greens Fennel, Bulb type Potatoes, Yellow Rutabagas Gooseberries Potatoes, Purple Pumpkins Kohlrabi Turnips Rhubarb Bok Choy Swiss Chard Eggplant Parsnips Onions (Bunching/Greens) Summer Squash Potatoes, Baby Radishes Tomatillos Basil Beans (Dry) Potatoes, White Kale Potatoes, Baker type Potatoes, Red Peas (Snow type) Celery Peppers (Sweet) Nectarines Arugula Apricots Melons Peppers (Hot) Mushrooms Pears Cilantro Beets Brussels Sprouts Blackberries Beans (Snap type) Huckleberries Cabbage Cucumbers Cherries Onions (Sweet type) Cauliflower Garlic Winter Squash Spinach Grapes Peas (Sugar Snap) Corn Raspberries Carrots Apples Strawberries Lettuce (all types) Broccoli Peaches Asparagus Tomatoes Blueberries 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% Stevens County CADC Feasibility Study Survey Tri-County General Public Produce Preference Survey All Results General Public Produce Preference Survey Results (2016) 0.0%
18 Stevens County Food Pantry 2015 & 2016 Produce Preference Survey Top 5 produce items requested as "Favorite they d like more of by Food Bank Clients in Stevens County (2015) Overlap Salad Vegetables: - Carrots - Tomatoes Top 5 produce items requested by the General Public Stevens, Ferry, and Pend Oreille Counties (2016) Veggies Eaten Raw Veggies Eaten Cooked Fruit and Berries Cooking Vegetables: - Broccoli - Corn - Garlic - Asparagus Fruit & Berries: - Strawberries - Blueberries - Raspberries
19 Survey: Stevens County Schools 2017 Institutions Produce Preference Survey
20 Survey: Stevens Institutions 2016 School Kitchen Produce Preference Survey Results Frozen produce Broccoli Florets Cauliflower Florets Corn on the Cob Fresh minimally processed produce Carrots Edible Pod Peas Harvest of the Month & Specialty items
21 Survey: Specialty Crop Producers (Farmers & Growers) 2015 & 2016 Interviews Results Farmers want a market for produce they grow Some farmers have seconds that currently aren t even harvested Most farmers don t necessarily want another line of business What does this mean? A processing facility should be designed to accommodate general food systems entrepreneurs who are not necessarily farmers
22 Garlic in Stevens County An excellent Crop for our Area Facts Garlic grows well here (ie: Inchelium Red) Low water usage High labor to farm it High density production Large cloves are high value for seed ($20 per Lb) Small cloves are a byproduct ($3 per Lb) What does this mean? Opportunity: Increase garlic production in Stevens County Opportunity: Develop markets for small cloves
23 Summary of Survey Work Supply and Demand Supply Farmers can grow lots of stuff if there s a market for it Demand: Salad Vegetables: Cooking Vegetables: Fruit & Berries: Carrots, Tomatoes Broccoli, Corn, Garlic, Asparagus Strawberries, Blueberries, Raspberries Processing Format: Canned in Jars Frozen (IQF) High-End Boutique markets (direct sales) Institutional markets (maybe direct sales)
24 Outline Project Background Regional Food System Plan CADC Produce Processing Feasibility Study Survey Results Target Products Processing Lines Facility Layout Business Model Contact Information 9/20/
25 Two Processing Technologies: Canned (in Jars) and Frozen Canned in Jars Boutique items, High-End Prices Purchased as gifts or for special occasions Include Sauces Pickles Jams, Jellies Fruit Butters
26 Fruit Butter Apple, Pear, etc. Details Highest value when No sugar added No pectin added Very long cooking process (up to 72 hours) What does this mean? Need: Low rent processing facility
27 Two Processing Technologies: Canned (in Jars) and Frozen Frozen in Bags Individually Quick Frozen (IQF) For Individuals and institutions Minimally Processed
28 Outline Project Background Regional Food System Plan CADC Produce Processing Feasibility Study Survey Results Target Products Processing Lines Facility Layout Business Model Contact Information 9/20/
29 Products selected through study 1. Jarred Pickled Garlic 2. Jarred Apple Butter 3. Bagged frozen Root Vegetable medley 4. Bagged frozen Corn on the Cob 5. Bagged frozen Broccoli For high-end retail markets For institutional markets
30 Pickled Garlic Apple Butter Frozen Line 3 Processing Lines Wash Soak Sort Cut Blanch Chill Freeze Bag Store (Frozen) Cook (with lid) Fill Invert Heat (jars) Label Sort Cut Peel Store Batches Weigh Pack Store (Dry) Heat (jars) Fill Process (water bath) Inert & Cool Mix Cook
31 Wash Soak Sort Chill Soak Tank and Sorting Tables Chill Tanks
32 Cut Industrial Food Processor Broccoli Floret Machine
33 Cook Blanch Peel 40 Gallon Jacketed Steam Kettle Root Vegetable Peeler Garlic Peeler
34 Heat Jars Fill Proofing Oven Volumetric Filler
35 Bag Vacuum Bagging Machine
36 Freeze Or Blast Chiller Walk-In Freezer
37 Facility Layout Electricity for Portable Equipment
38 Facility Layout In-Floor Drains
39 Products selected through study 1. Jarred Pickled Garlic 2. Jarred Apple Butter 3. Bagged frozen Root Vegetable medley 4. Bagged frozen Corn on the Cob 5. Bagged frozen Broccoli Processing Equipment: $122,000 Processing Equipment: $130,000 Processing Equipment: $210,000 Processing Equipment: $180,000
40 Videos Acres Promo Video 2. MMFEC Overview 3. Mustard Seed Café sauces 4. Livingston Food Resources Center 5. Fosters Pickled Garlic
41 Outline Project Background Regional Food System Plan CADC Produce Processing Feasibility Study Survey Results Target Products Processing Lines Facility Layout Business Model Contact Information 9/20/
42 Facility Layout Large and Small Configurations Large Build Configuration (6500 square feet) Building Cost: $ 975,000 Small Build Configuration (1200 square feet) Building Cost: $ 180,000
43 Facility Layout Large Configuration Building Site (guess): $200,000 Building Cost: $975,000 Processing Equipment: $230,000 Total Cost: $1,405,000
44 Facility Layout Small Configuration Building Site (guess): $75,000 Building Cost: $180,000 Processing Equipment: $80,000 Total cost: $335,000
45 Outline Project Background Regional Food System Plan CADC Produce Processing Feasibility Study Survey Results Target Products Processing Lines Facility Layout Business Model Contact Information 9/20/
46 Business Model Large Configuration Intended Clients: Ramping up from small scale Building inventory for wholesale sales Existing processors outgrowing their kitchens In-Season runs of produce for larger institutions Business Model Assumptions: 3 years of (startup) Business ramps up between 5 and 8 years Full capacity at 8 years
47 Business Model 3 Revenue Streams Year 8 Total Revenue Breakdown $24, Office and Conference Rentals Part of a standard business incubator Might be used by food systems clients or others Processing Facilities & Storage Dry, Chilled, and Frozen storage by the pallet Processing facility rentals, by the hour $54, $49, Office & Conference Room Rentals House-Owned Products Processing Facility & Storage Rentals House-Owned Products Value-Added products manufactured, owned, and sold by facility management Example: Mission Mountain - Beef/Lentil Crumbles
48 Anual Revenue per Stream Survey: Business Model Large Configuration 8 Year Startup Plan Income: 3 Separate Revenue Streams $140, $120, $100, $80, $60, $40, $20, $- Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Office & Conference Room Rentals: House-Owned Products: Processing Facility & Storage Rentals:
49 Survey: Business Model Large Configuration 8 Year Startup Plan Expenses Business Expenses $160, $140, $120, $100, $80, $60, $40, $20, $- Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Non-Production Employee Salaries: Licensing, Insurance, & Services: Building & Utilities: Marketing & Business Development:
50 Survey: Business Model Large Configuration Startup Plan 8-Year Financial Estimate $20, $18, $16, $14, $12, $10, $8, $6, $4, $2, $-
51 Survey: Business Model Large Configuration Startup Plan 8-Year Profit/Loss Estimate $- $(20,000) Annual Profit/Loss (Large Configuration): Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 $(40,000) $(60,000) $(80,000) $(100,000) $(120,000) $(140,000) $(160,000) Annual Profit/Loss (Large Configuration):
52 Survey: Business Model Large Configuration Startup Plan 9 -Year Cumulative Profit/Loss $- Total Cumulative Profit/Loss (Large Configuration): Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 $(500,000) $(1,000,000) $(1,500,000) $(2,000,000) $(2,500,000) Total Cumulative Profit/Loss (Large Configuration):
53 Business Model Job Starts with Large Configuration New Farm Revenue $33,000 Means: 3 new farming enterprises In-House Jobs 2 new salaried jobs 3 new processing jobs $8,429 $5,800 New Farmer (Produce) Revenue in Year 8 $2,646 $6,770 $7,733 $1,737 RootVegMedley FrozenBrocolli FrozenCornOnTheCob PickledGarlic SugarFreeJam FrozenMeals Entrepreneur Jobs 2 new Jobs to cover processing in the model Total: 10 new jobs by year 8
54 Business Model Small Configuration Intended Clients: Production for building and testing markets Startup scale entrepreneurs Farmers with a value-added product to sell at Farmers Markets Cottage industry food processors (candy, baked goods, etc)
55 Small Configuration Facility Layout Kitchen with Dishwasher
56 Small Configuration Facility Layout Kitchen with Commercial Range
57 Anual Revenue per Stream Survey: Business Model Small Configuration 8 Year Startup Plan Income: 3 Separate Revenue Streams $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $- Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Office & Conference Room Rentals: House-Owned Products: Processing Facility & Storage Rentals:
58 Survey: Business Model Small Configuration 8 Year Startup Plan Expenses $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $- Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Non-Production Employee Salaries: Licensing, Insurance, & Services: Building & Utilities: Marketing & Business Development:
59 Survey: Business Model Small Configuration Startup Plan 8-Year Financial Estimate $9, $8, $7, $6, $5, $4, $3, $2, $1, $-
60 Survey: Business Model Small Configuration Startup Plan 8-Year Profit/Loss Estimate $- $(10,000) Annual Profit/Loss (Small Configuration): Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 $(20,000) $(30,000) $(40,000) $(50,000) $(60,000) $(70,000) Annual Profit/Loss (Small Configuration):
61 Survey: Business Model Small Configuration Startup Plan 9 -Year Cumulative Profit/Loss $- $(100,000) Total Cumulative Profit/Loss (Small Configuration): Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 $(200,000) $(300,000) $(400,000) $(500,000) $(600,000) Total Cumulative Profit/Loss (Small Configuration):
62 Business Model Job Starts with Small Configuration New Farm Revenue $??? likely served by existing capacity Means: 0 new farming enterprises In-House Jobs 1 new salaried job 1/2 new processing job Entrepreneur Jobs??? new Jobs difficult to say maybe 1 1/2 Total: 3 new jobs by year 8
63 Next Steps Towards Getting an Actual Processing Center Fine tune the Facility Design Used equipment? Rented space? Fine tune the Business Model Decrease operating costs Find anchor tenants ready to ramp up Recruit key partners Partner organizations (ie, LINC Farmers Coop) Individuals with key skills Search for grant funding Economic development Emergency Food Supply
64 Discussion and Comments 9/20/
65 Contact Information Nils Johnson Stevens County WSU Extension Ag Program Coordinator Phone: (509) Mobile/Text: (509) Stevens Co. Extension Office: 986 S. Main, Suite D, Colville WA
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