Middlemen on a Mission

By Samuel Fromartz    
Photography by N. Scott Trimble

It might be hard to believe that this cold, dank, 27,000-square-foot warehouse in Eugene, Oregon, across the road from several natural gas storage tanks and a giant commercial composting operation, represents a distant ideal of food distribution. But it just might. The cement loading docks of Organically Grown Company are quiet at 8 a.m., but earlier in the morning, well before dawn, workers here and at another facility twice as big in Portland were pushing pallets of organic produce into waiting trucks.

Some are stamped with the LADYBUG label, indicating produce grown on farms in the Pacific Northwest.

I had arrived at this quiet outpost of the wholesale produce business to meet with David Lively, a one-time farmer who has passionately promoted local, organic and sustainable food for three decades. In a tight office upstairs, Lively is wearing a T-shirt and shorts and looks a bit fatigued this morning. He apologizes. “We pulled some late nights,” he says. The company had just concluded a three-day conference in Portland that brought more than 200 farmers and suppliers together with 400-odd customers. The meetings began early in the morning and ended at the hotel bar late at night. Although Lively and his team were feeling the aftereffects, the meeting was crucial for people who knew each other only through invoice slips and phone calls. Organically Grown Company, or OGC, is at the center of this network, chipping away at a mission to deliver fresh, organic and local food to places where most consumers shop—supermarkets and co-ops.

The trucking fleets and chilled warehouses in this endeavor often stand at odds with the typical images of “local” and “sustainable” foods, such as bustling farmers markets, community-supported agriculture programs that deliver a box of vegetables to your door, or farmers hauling freshly butchered lamb into restaurants. No doubt, those alternative, direct sales channels have been vitally important for farmers, especially smaller ones that can’t produce enough to break into mainstream food channels or who don’t want to, because of the compromises that might entail. Plus, direct sales channels give the farmer the full dollar in a sale, cutting out the middleman often caricatured as the scourge of agriculture.

But then here is Lively, a different sort of middleman, surrounded by a dozen young workers wearing T-shirts, tattoos and telephone headsets, chattering away making sales or arranging pickups from farms. Rather than taking a slice of the profit and leaving the farmer hungry, OGC is actually doing something that’s not recognized enough: providing a vital service that connects grower and retailer in long-term partnerships. One of several such operations around the country, OGC joins the ranks of Veritable Vegetable in the Bay Area, Tuscarora Organic Growers in the mid-Atlantic and Co-op Partners Warehouse in the Twin Cities, to name a few—a new wave of distributors channeling local food into stores and offering a solution to farmers who want to diversify beyond small, direct sales.

This work will need to be replicated many times over if fresh, local foods are going to reach customers beyond high-end restaurants and farmers markets (representing two to three percent of food sales) and begin to show up on many more plates.

OGC is now owned by its workers and a number of its farmer suppliers. Lively—the longest-running employee and guiding spirit of the company—joined in 1980. At the time, OGC was a fledgling nonprofit enterprise aimed at helping farmers like himself. As we talk about these roots, he reaches under his desk and pulls out a metal toolbox filled with yellowing sales books from his days at Thistle Organics farm. “The reason we formed the group was we couldn’t make enough money,” he says, showing me sales slips that total a few dollars here and there. Even in Eugene—ground zero back then for the organic movement—there weren’t enough natural food stores, and farmers markets were barely existent. So growers did what all businesses do—they competed against each other. “Everything I sold was another friend’s loss,” he says.

To resolve this no-win game, the farmers came together to coordinate planting schedules, so that everyone’s broccoli wouldn’t be harvested the same week. They also divvied up markets, so they could be assured of sales. Natural food stores could then have a dependable source of produce rather than relying on a farmer here, a farmer there. Within a few years, the nonprofit morphed into a farmer-owned co-op and finally into a company owned by farmers and employees.

These small farmers were also pragmatic. They knew that certain regions excelled in particular crops, whether onions in Eastern Oregon, tomatoes and peppers in the warm southern part of the state, or peaches and apples in Washington. Yet if every market only drew from its own backyard, the benefits of these bioregions would be denied. The supply chain, therefore, quickly grew regionally. No rigid 100-mile diet limitations here.

Then, the steady demand for fresh produce in the winter created another supply crunch. “We realized pretty early on that we’d have to provide year-round produce if we were going to keep our customers,” Lively says. So the company arranged for California farmers to supply produce from October to May, when the Pacific Northwest grows little more than parsnips, beets, turnips, leeks and kale. To fill out the line, OGC began importing organic bananas from Mexico, but did so with principles: contributing 60 cents a box to fund schools and health programs for farmers in Colima, Mexico. The program, created by its supplier, Organics Unlimited, has raised tens of thousands of dollars for these social programs.

OGC also analyzed the guts of food distribution to save energy wherever possible—converting trucks to biodiesel, swapping out waxed boxes for reusable plastic produce bins, aiming for zero waste, and retrofitting the doors on coolers and lighting fixtures. “They’re really a bunch of social activists who are running a business,” says Natalie Reitman-White, a University of Oregon faculty member who also runs the company’s sustainability initiative.

Still, OGC has kept its regional identity with the LADYBUG label; a third of the produce sold comes from three dozen farms in the Pacific Northwest—an amount that rises in the peak of the growing season and naturally tapers off during the winter.

At Spring Hill Farm, in Albany, Oregon, farmer Jamie Kitzrow is eager to tell me why this wholesale operation works. As we walk around his muddy fields and lush greenhouses, Kitzrow says he sold only at farmers markets for several years after he started farming in 1990. “Those were our poverty years,” Kitzrow says. He found it hard to pay a full-time staff only needed during market days, so he expanded by building a wholesale channel. The wholesale business has grown 50 percent annually, largely because of New Seasons Market, the Oregon grocery chain with nine stores. With Lively as the broker, Kitzrow sealed a deal to supply the chain with fresh greens for the entire season at a set price. “We were all willing to compromise to make it work,” Kitzrow says.

Twenty-seven hundred miles away in South Central Pennsylvania, the farmer-owned Tuscarora Organic Growers (TOG) co-op underscores the strength of this system. Formed in 1988 and named after a nearby mountain range, TOG now runs produce deliveries from 30 organic farms to stores and restaurants in Washington, Baltimore and Philadelphia.

The impetus for the co-op came from Jim Crawford, a Vietnam veteran who went back to the land in the 1970s and began New Morning Farm with his wife, Moie. The Crawfords are well known in Washington, D.C., where they sell at two farmers market stands, as well as through TOG. Crawford began by selling vegetables out of the back of his pickup truck in Georgetown 35 years ago, when the phrase “local foods” hadn’t yet been invented.

Sitting at a desk piled high with seed catalogs, invoices and farm magazines, Crawford emphasizes that the food always sold itself. “People always wanted fresh, homegrown and organic, and we never produced enough—we still don’t,” he says. “But TOG allowed us to do far more than we could ever do on our own.” The co-op pulled in growers who didn’t want to market directly in the city and gave them an outlet.

Unlike Organically Grown Company, TOG’s farmers felt it was vitally important to their identity to remain local, even if it meant shutting down in the winter. In fact, TOG has only begun to sell during the off-season in the past few years. Its farmers put up greenhouses and, as OGC did in Oregon, pulled in crops from other organic co-ops from Maine to South Carolina.

Mark Stanley, with 10 greenhouses at Help From Above Farm, near Crawford’s, has a similar story. The greenhouses were all built by Stanley, his eight children, and a few laborers at a cost that grew into the six figures. Chard, basil, arugula, lettuce, tomato seedlings and puntarella (an Italian chicory) were all going strong in the half-acre of enclosed space in the early spring. Another 20 acres outside were soon to be sown. The output will be split between TOG and Whole Foods Market, which has also pushed into local produce in a big way.

When I asked Stanley, a biodynamic-trained farmer turned born-again Christian, why he only sells wholesale, he says he found farmers markets too time-consuming. “We were up at 2 a.m. and returned home at 6 p.m. and my wife had two babies on her lap at the market,” he says. “Plus, I would take five cases of lettuce to the market and come back with two. And what would you do with those?” Now he can sell 100 cases in one shot and earn enough to support his family.

Many farmers who don’t want to market their own food, or live too far from markets, or who don’t drive (such as the Amish) need vibrant wholesale channels to survive. Now the biggest issue confronting them—and perhaps the entire local foods movement—is the lack of farms. “The big bottleneck is not being able to meet demand,” Crawford says. “We’ve gotten growers to ramp up, to do more, but we’re not keeping up. There’s never enough.”

But without distributors like Tuscarora Organic Growers and Organically Grown Company, there’d be fewer still.