Food Enterprise Center Business Plan Executive Summary Freeport, Illinois December, 2014 The Food Enterprise Center supports food entrepreneurs and farmers to sustainably grow the regional economy. The Food Enterprise Center ( the Center ) is a place where farmers and food entrepreneurs will add value to and market food both locally and to the twenty million consumers within a half day s drive. The Center will begin with a food business incubator, offering affordable facilities, business development services, education, networking, and dynamic retail space. The Center will support regional food branding, telling the story of the region s unique geography, agriculture, culture, and culinary traditions. The Center could expand in the future to include aggregation and distribution to help meet the estimated $10 billion annual unmet demand for local foods in Illinois alone. 1 The City of Freeport, University of Illinois-Extension, Blackhawk Hills Regional Council, and many regional stakeholders are advancing this rural economic development demonstration project. The project team is investigating affordable space options in downtown. The project team first came together through a collaboration to investigate uses for vacant space at the Rawleigh Complex and will continue to consider Rawleigh as a potential expansion location in the future. 2 This sustainable economic development initiative leverages the exploding growth in demand for local foods regionally and nationally. A national survey found that 86 percent of consumers are greatly influenced by the availability of local foods in selecting stores to shop in 3 and the National Restaurant Association found local sourcing to be among the hottest trends for restaurant menus in 2012 and 2011. 4 This project will meet this growing consumer interest in supporting a healthy, safe, equitable, and economically sustainable regional food system. FOOD ENTERPRISE CENTER BUSINESS PLAN EXECUTIVE SUMMARY PAGE 1
Leveraging Place-Based Assets for Sustainable Economic Development The Food Enterprise Center will grow the economy based on the region s unique, place-based assets: Fertile Farmland: Northwest Illinois is part of America s fertile breadbasket and is located along the edge of the Driftless Area, well suited to smaller-scale and organic farms. In fact, Wisconsin has the second-greatest number of organic producers in the U.S., and these are concentrated in southwest Wisconsin. There are over 250 local foods producers within a short drive of Freeport. Meat, cheese and dairy are particularly abundant and farmers also produce a wide variety of fruits and vegetables. Access to Markets: Freeport is within a half-day s drive of twenty million consumers, including the Chicago region. This project will contribute to many regional efforts to scale up local foods production and distribution throughout the upper Midwest. Food Processing: The northwest Illinois / southern Wisconsin region has a long history and continued presence of food and ag processors including Furst McNess, Berner Food and Beverage, Snak King, and many cheese processors. The Center will help to grow the existing infrastructure, labor force, and expertise of the regional food cluster. Tourism: The Center will be a trailhead for regional food and agri-tourism. Center visitors will be guided to visit farms and vineyards, connect with the beer and cheese trail in southern Wisconsin, continue their visit to historic downtown Galena (which attracts 1 million visitors annually), or experience the picturesque region by bike via the Grand Illinois Trail which passes alongside the Center. The proposed Amtrak station will create a new front door to Northwest Illinois for travelers who will visit the Food Enterprise Center right as they get off the train. FOOD ENTERPRISE CENTER BUSINESS PLAN EXECUTIVE SUMMARY PAGE 2
Project Goals and Outcomes The Food Enterprise Center will lead to a number of community and economic outcomes, all working together to create healthier and more resilient communities and economies: Regional Food Cluster Development: provide a central place to build momentum to grow the regional food cluster, leading to short- and long-term job creation and helping to meet the $10 billion unmet demand for local foods in Illinois. Entrepreneurship and Job Creation: create at least ten new full-time jobs per year and support the expansion or start-up of at least thirty businesses by year three. Agricultural Economy Development: provide opportunities to add value to and market local foods, supporting local farmers and preserving family farms. Downtown Riverfront and Neighborhood Reinvestment: promote reinvestment in the downtown riverfront and surrounding Third Ward neighborhoods. Talent Retention and Attraction: support employers trying to attract and retain top talent, particularly young employees who highly value quality of life amenities, urban living options, and local foods when deciding on places to work and live. Healthy Communities: increase access to fresh, healthy foods and provide nutrition and food preparation education and outreach in the community. This initiative supports county-wide efforts to reduce preventable chronic diseases including a focus on childhood obesity. Food Security and Access: provide healthy food choices in a food desert including over 5,000 residents, over 30% of which are in poverty, not currently served by a grocery store in walking distance. FOOD ENTERPRISE CENTER BUSINESS PLAN EXECUTIVE SUMMARY PAGE 3
Market Analysis Demonstrated Demand from Producers and Consumers With funding from a USDA Rural Business Opportunity Grant, the City of Freeport retained the University of Illinois Extension to analyze producer and consumer interest in the proposed Center so it could be designed to best meet producer needs and leverage opportunities. The Market Analysis demonstrated significant need for the Center, including the following key findings: Significant Producer Interest in the Proposed Center Services. Sixty percent of producers indicated an interest in participating in a food incubator and 68 percent indicated interest in a year-round market. Demonstrated Existing and Potential Crop and Product Diversity. The Producer survey and focus group highlighted the current and potential growth of a broad diversity of specialty crops and value-added products in the region. Producer Interest in Expanded Marketing Opportunities. The majority of local food products in the region are sold through informal means and there is significant interest and need for more visible and formalized means of sales including farmer s markets, wholesaling, direct to restaurants and institutions, and through Community Supported Agriculture (CSA). Strong Consumer and Community Stakeholders Support. Eighty-eight percent of respondents in a consumer survey indicated locally grown was important to them and 71 percent indicated a potential interest in purchasing products from the Center. A community stakeholder focus group also evidenced strong support for this economic development initiative. A Natural Fit for Downtown. The Center would be a good fit for downtown which currently draws consumers based on its unique mix of stores and special events. A 2008 Freeport Downtown Market Study also demonstrated demand for a local foods/products store. Additionally, 40 percent of respondents to the consumer survey already shop downtown at least monthly, nearly half of those weekly. FOOD ENTERPRISE CENTER BUSINESS PLAN EXECUTIVE SUMMARY PAGE 4
First Phase: Commercial Kitchen Program and Phasing The first phase of this project is a Commercial Kitchen that will support the expanded production of local food crops and valueadded products by: Providing an affordable, certified commercial kitchen with a wide variety of equipment, available for rent on an hourly basis Offering business development resources, education, and networking Affordable dry and refrigerated storage space Potentially offering co-packing services Offering a space to showcase and sell local food products The facility will provide processing space and equipment for those looking to develop new products, expand production from home kitchen processing, or test market products before investing in their own equipment and space. Future Phases The driving goal of this project is to grow the regional food economy as a sustainable economic and community development initiative for the region. The commercial kitchen is the logical first phase. If is successful, this project could expand in future phases to include: A retail outlet to provide fresh, local foods for over 5,000 neighborhood members that currently live in a food desert, having no other grocer in a 1-mile radius. A Northwest Illinois Food Hub that would connect producers with institutional markets, by providing aggregation and distribution services necessary for scalingup local food. A growing partnership with urban agriculture and food security initiatives including Grow Freeport sponsored by the Freeport Area Church Cooperative FOOD ENTERPRISE CENTER BUSINESS PLAN EXECUTIVE SUMMARY PAGE 5
Project Start-up This project has been led by the City of Freeport, University of Illinois Extension, and many regional partner organizations and citizens. Blackhawk Hills Regional Council a member of the Advisory Committee since 2012 has also recently taken on a more leading role as the project s core not-for-profit partner.funding from USDA, USEPA, HUD, and Illinois EPA for this Center and the Rawleigh Complex redevelopment has also been critical for making this opportunity a reality. In 2012, the project team produced a Market Analysis and Business Plan, which is guiding implementation. An Advisory Committee was formed in 2012 which is helping to oversee project planning. Key Next Steps: The following key next steps are the focus of activities in the first two quarters of 2015: Identify potential users through Survey and follow-up calls/meetings Determine start-up location Refine business plan including diverse revenue options Undertake fundraising / grant writing for start-up The Food Enterprise Center Business Plan and Market Analysis were developed for the City of Freeport by the University of Illinois Extension and Vandewalle & Associates with funding from the USDA Rural Business Opportunity Grant program. Get Involved! To participate in this project as it moves forward or for more information, contact: Grant McCarty, County Director University of Illinois-Extension Stephenson, Jo Daviess, and Winnebago Counties 815.235.4125 gmccarty@illinois.edu Jim Brown, Community Development Director City of Freeport 815.235.8202 jbrown@cityoffreeport.org 1 Illinois Department of Agriculture and Department of Commerce and Economic Opportunity. Building Successful Food Hubs: A Business Planning Guide for Aggregating and Processing Local Foods in Illinois, January 2012, p.11. Accessible: http://www.familyfarmed.org/wpcontent/uploads/2012/01/illinoisfoodhubguide-final.pdf. 2 To learn more, visit www.freeportstation.us 3 Baginsky, Carin. 'Local' is biggest food trend in decades, says USDA. Newhope 360. March 21, 2012. 4 National Restaurant Association. Hottest Restaurant Menus Trends in 2012 Include Healthful Kids Meals and Locally Sourced Ingredients, According to National Restaurant Association. December 8, 2011. http://www.restaurant.org/pressroom/social-mediareleases/release/?page=social_media_whats_hot_2012.cfm 5 The Driftless Area is an unglaciated area crossing four states characterized by rolling topography and many small- and medium-sized farms. To learn more about local food initiatives in the Driftless Area, visit: www.driftless.wisc.edu/ and www.driftlessareainitiative.org/. FOOD ENTERPRISE CENTER BUSINESS PLAN EXECUTIVE SUMMARY PAGE 6