Two years ago, Kunia Country Farms in Central Oahu started working with the Zippy’s restaurant chain to supply lettuce and other salad greens to the company. As the farm’s founder Jason Brand tells it, the deal was a game changer for Kunia Country Farms.
When Zippy’s started ordering large quantities of its salad mixes from the farm, it wasn’t just the revenue that made the difference, Brand says. It was also the security that went with having a steady, consistent buyer.
Kunia Country Farms increased its size by 45%, Brand says, investing in fields, equipment and food safety capabilities.
“By knowing that we have reoccurring orders in hand, it’s easier as a business to invest or to approach a bank about financing against known revenue,” Brand said. “That’s the difference between growing by grants and growing by orders.”
Now, advocates of Hawaii agriculture say the state of Hawaii can do the same sort of thing Zippy’s did for Kunia Country Farms for farmers across the state.
And, they say, it won’t cost taxpayers a dime because there already are big institutions buying lots of food: the state’s schools, prisons and hospitals.
“This is all doable,” says Greg Christian, of Beyond Green Partners, a food service consultancy that helped create models for seven Hawaii institutions, including Kohala High School on the Big Island and Mililani High School on Oahu. “It’s really going to come down to — are the people going to demand it?”
The COVID-19 crisis has severely hurt demand for Hawaii produce.
Hawaii still produces crops for export — mainly seed corn, coffee and macadamia nuts. But locally, the big buyers of other products are hotels and restaurants, and the government has put a lid on those businesses to contain the spread of the virus.
About 46% percent of Hawaii restaurants have virtually shut down, their revenue reduced to near zero during government-imposed closures, a study conducted by statewide business groups and the University of Hawaii Economic Research Organization found.
That’s been a huge blow to Hawaii’s 7,300 farms, some two-thirds of which are small operations growing produce to sell locally. Overall, revenue has dropped 16.7% for Hawaii’s agriculture industry, the UHERO study found.
That probably would have been worse if growers hadn’t quickly pivoted to selling to food banks and directly to customers through newly expanded community-supported agriculture programs and online farmers’ markets.
Such programs provide short-term relief and may lead to more retail customers turning to CSAs, which let people buy regularly delivered boxes of local produce.
But such programs are no match for a statewide school system with 170,000 students, says Jesse Cooke, vice president of investment and analytics at Ulupono Initiative, which invests in projects related to food and energy sustainability.
And schools aren’t the only potential buyers: Add state prisons and state-owned hospitals, and that means more potential for local farms.
Brian Miyamoto, director of the farm bureau, recently gave a presentation before the House Select Committee on COVID-19 Economic and Financial Preparedness in which he called for more agriculture contracts with state institutions so “farmers can plan to meet institutional demand.”
He echoed Ulupono’s Cooke in calling for Department of Education meals to have at least 25% of the content be locally grown food within five years.
Even with an abbreviated school year, the DOE spent about $30 million on food this year, said Lindsay Chambers, the department’s communications director.
A quarter of that would mean nearly $8 million in the pockets of local farmers.
It’s not just the schools in Kohala and Mililani heading in that direction. The DOE is now focusing on Kauai to set up the supply chain and train staff, Chambers said.
And, she said, the department is systematically working on purchasing more local products statewide.
For instance, the department procures local ground and stew beef for all islands, Chambers said in an email. It’s looking at pork and fish as the next locally sourced proteins, she said.
Meanwhile, she said, the statewide school system also “continues work with our current distributors to seek partnerships with farmers that provide fresh, locally grown vegetable produce.”
It’s hard to overstate the importance of the big state purchases for small farmers. The Hawaii Ulu Producers Cooperative is a case in point. As a farmer-owned collective, the organization includes more than 70 member farms which grow Hawaiian breadfruit, as well as squash, sweet potatoes, papaya and bananas.
It sells to the DOE through a distributor, Y. Hata, said Dana Shapiro, the cooperative’s manager.
Having that base of support has allowed producers to scale up quickly, knowing that there’s a consistent market. For example, she said, between 2017 and 2018, the cooperative went from producing 39,000 pounds to 80,000 pounds of ulu.
“I don’t think we would have been able to do it without a large anchor customer,” she said.
Like other producers, the cooperative had to pivot quickly when it became clear the schools wouldn’t reopen after spring break, Shapiro says.
The cooperative has kept it together by selling to food banks and online. Whether the schools come back buying in a big way next year isn’t clear, she said.
“Everything is a little up in the air,” she said.
It’s not only food contracts that can help farmers. For example, in addition to growing salad greens, Brand also grows sugar cane as a raw ingredient for another business, Manulele Distillers, which makes KoHana brand rum.
As the COVID-19 crisis unfolded, the company switched from booze to hand sanitizer, producing 300 gallons in its first week and now making 3,000 gallons weekly.
Recurring, consistent orders from private and public customers have kept the company’s farm and distillery employees working at a time when many others are shutting down. Now, the distillery is bringing back part of its sales team.
“It’s the same principle” as the salad greens contracts, Brand says. And the hand sanitizer business is only going to grow as reopening businesses adopt protocols to keep people safe.
Ultimately it will mean a local product will replace thousands of gallons of sanitizer that otherwise would have to be shipped in, he said.
“We’re able to supply that same product locally, and at the same price — actually a little cheaper,” Brand says.
Whether the Hawaii Department of Education can scale up statewide remains to be seen.
Already on most islands, the amount of local produce the department buys regularly exceeds 25%, Chambers said.
While she called increasing local purchasing by 5% over the next five years “a great goal,” Chambers said funding will have to be available.
Another issue, she said, is finding local products that are readily available, within the department’s price range and that students like. It can also be hard training staff to prepare meals using local fresh food, especially food that the staff may be unfamiliar with like ulu.
Christian, the food consultant, said there are work-around solutions to those challenges.
One challenge, he said, is one the department creates for itself by requiring menus be the same at most schools. Giving different areas more flexibility when it comes to menus can eliminate the challenge of finding massive quantities of the same food to serve to everyone.
“It’s easy if you don’t have to serve bananas to 100,000 kids next Tuesday,” he said.
He agreed it can be a challenge to get staff, in Hawaii or anywhere, to go from reheating processed food to making meals from scratch using fresh food. But, he said, one solution is to reduce menu selections to, say, two entrees per day instead of four, which reduces work for staff.
As for cost and availability, he said if the department starts putting out orders for large quantities of fresh produce, growers will step up to provide it at a good price.
“If you make the menu more seasonal, the food will show up,” he said. “If you build it, the food will show up.”
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