VALUE-ADDED CORNER
Appalachian Spring Cooperative
Treadway, Tennessee
Type of Business:
Appalachian Spring Cooperative is a
100 percent, producer-owned cooperative
that markets value-added fruit and
vegetable products. It offers more than
48 different jellies, sauces, relishes,
herbal salves and other farm
and food products.
Business objective:
To help members
start and strengthen value-added
farm and food product businesses by
providing an array of collaborative
marketing and other services.
Annual revenue:
Appalachian Spring Cooperative is
a very young cooperative, and the
process of developing and finding markets
for a value-added farm or food
product is lengthy. So far, 24 members
have developed a product for commercial
sale, most quite recently.
Other members are still in
the farm/food-product
development process.
Annual revenue to
the cooperative
in 2004 —
derived
from a
percentage of member sales and grants
— was $148,485.
Number of members & employees:
Appalachian Spring Cooperative has
80 members currently residing in 14
counties of east Tennessee. Of these,
34 produce honey through a project
that is re-introducing honeybees into
the region; another 24 members produce
a value-added product for commercial
sale while others are still in the
product-development stage. The cooperative
has two full-time employees
and one part-time worker.
Description of business activity:
Locally grown fruits and vegetables
are processed in a nonprofit, shared-use
commercial kitchen into a variety
of value-added products. These
include: tomato sauce, pasta sauce,
salsa (5 brands), barbecue sauce (3
brands), hot sauce (2 brands), habanero
pepper extract, strawberry jelly, raspberry
jelly (2 brands), blackberry
jelly, grape jelly, pumpkin butter,
sweet potato butter,
honey, creamed honey,
habanero-flavored
honey and flavored
marinades. Also:
flavored mustards,
cucumber relish,
corn relish, zucchini
relish, pepper
relish, chow-chow,
bread-and-butter
pickles, vegetable
soup starter, beer cheese, herbal skin
salves, herbal lip balms, and more.
Members’ products are marketed
through a variety of channels, including
wholesale to area food stores, retail
from the cooperative website
(www.apspringcoop.com), retail gift
baskets promoted to corporations,
churches and civic groups, and retail
from the cooperative store.
How co-op was developed/financed:
Realizing that new producers of
value-added farm and food products
needed help in marketing, Jubilee
Project — a nonprofit community
development organization — helped
local farmers organize the Appalachian
Spring Cooperative, which held its
founding annual meeting in 2002 as a
marketing cooperative for value-added
food products. It quickly added the
Honeybee Project, using a grant from
Heifer Project International to introduce
honeybees on 34 farms in the east
Tennessee area. In addition to the
Heifer Project grant, the cooperative
has received federal, foundation and
church grants directly and through
Jubilee Project, which operates the
shared-use kitchen used by cooperative
members (Clinch Powell Community
Kitchens, www.clinchkitchens.org).
The Honeybee Project was set up so as
to pass 10 percent of the honey produced
back to the cooperative; members
selling value-added products
through the cooperative also pay 10-20
percent to the cooperative.
How USDA helped:
Appalachian Spring Cooperative has
benefited from several USDA funding
programs, including: an initial USDA
Community Food Project Grant of
$182,000 over three years, a Value-Added Producer Grant of $39,800 for
one year and a SARE Sustainable
Community Initiative Grant of $6,436.
In addition, the cooperative received a
SARE Producer grant of $10,000 in its
second year. Jubilee Project has helped
the cooperative find matching funds
for all these grants.
Leader’s comment:
“At a time when farmers in the east
Tennessee area are looking for new
sources of income, the combination of
Jubilee’s processing kitchen
and our marketing cooperative
offer an alternative
enabling local farmers, and
local entrepreneurs buying
from them, to increase farm
income by producing high-quality
value-added food
and body-care products.”
— Dianne Levy, general
manager, Appalachian
Spring Cooperative.
The results:
Today, 24 cooperative
members are producing
more than 48 products for
commercial sale, with
growing sales through the
Internet and plans for
increased gift basket sales
and establishment of a local
retail store.
Market outlook:
The demand for specialty
foods, including gourmet,
natural and organic food products, has
continued to grow at a faster pace than
overall food sales. At the same time,
more than 70 percent of the public
express a preference for buying local
food. Appalachian Spring Cooperative
expects to grow member sales by capitalizing
on both of these promising
trends.
Major challenge/opportunity facing co-op:
A major challenge for the cooperative
is that members starting food
product businesses are producing at a
small enough scale that they cannot
keep their per unit costs low enough to
afford producing for many wholesale
markets in the area. A major opportunity
is that local and state officials are
willing to help open retail outlets for
locally produced food.
Contacts:
Phone: (423) 733-2095; e-mail:
manager@apspringcoop.com;
website: www.apspringcoop.com.
