Taking it to
the next level

Success of small Florida vegetable co-op
leads to a network of similar cooperatives

By Glyen Holmes
Liaison with New North Florida Cooperative,
USDA Natural Resources Conservation Service

Vonda Richardson
Marketing Specialist,
Florida A&M University

Dan Schofer
Agricultural Engineer,
USDA Agricultural Marketing Service

Editor’s Note: The early achievements of the New North Florida Cooperative were featured in the July/August 1999 Rural Cooperatives. This article reports on the progress of the past 3 years, and how the cooperative has expanded the business beyond its initial scope

ew North Florida Cooperative (NNFC) is a new-generation cooperative formed by small-scale vegetable and fruit farmers in the Florida Panhandle to create and expand marketing and processing opportunities for its members. NNFC members say that when they farmed individually, they were “price takers.” The cooperative has enabled them to become “price makers” by taking greater control of their products and providing member-growers with bargaining power in the marketplace.

“Having a market, knowing where your products are going and when you need to harvest makes farming a lot easier,” says Spencer Lewis, an NNFC member. “Working with the co-op saves me a lot of time compared to selling along the road, and it eliminates wasted crops in the field.”

From its initial success helping members sell collard greens and other crops to a local school district, this Florida cooperative has now expanded its scope of operations to 15 school districts in three states, added product lines and increased the level of value-added preparation and packaging. It has also created a network of similar cooperatives in its region which are working together to expand valueadded processing and marketing opportunities for small-scale farmers.



The cooperative recently built a structure to house its office and a classroom.A phone, fax, computer and answering machine located in a central office enables NNFC to easily communicate with its members and customers. Eleasa Varner, NNFC’s office manager, notes, “Keeping files and records organized and secure in a central office has really helped with payments, bills and finances.”

Putting customers first
The co-op management team made its first food service industry sale to J’Amy Petersen, food service director of the Gadsden County, Fla., School District. The presentation demonstrated the co-op’s professionalism, courtesy, seri ousness of purpose and accountability. It also stressed that the co-op is as a Department of Defense certified vendor.

After its presentation, the co-op management team carefully listened to Petersen discuss the school district’s needs. The cooperative then arranged to deliver free samples to Gadsden County schools to demonstrate product quality and the co-op’s dependability. At that time, the cooperative did not have any processing equipment, so the participating farmers washed, chopped and bagged the collard greens by hand.

The next day the deliveries were made on time. Petersen and her cafeteria managers were happy with the quality and freshness of the products and the timeliness of the deliveries. NNFC has been providing fresh collard greens to Gadsden County schools consistently ever since.

“The fresh peas and greens have really improved the meals we serve to the children,” says Mitchell Williams, a cafeteria manager in Gadsden County. “The children love the fresh vegetables. I enjoy working with the co-op and look forward to working with them in the years to come.”

Expanding to more schools
NNFC has kept Gadsden County as an important customer and expanded its market to schools in other areas, including Jackson County and Albany County, Ga. Regularly servicing several school districts has helped the cooperative to acquire capital, invest profits in equipment and necessary infrastructure and develop a small amount of working capital. The cooperative applied for, and received, two small loans from the Jackson County Development Council (JCDC) to purchase refrigerated storage and a small processing machine. JCDC is a community-based, nonprofit organization established to increase local economic opportunity in Jackson County (a designated Empowerment Zone).


Ever since the cooperative formed, JCDC has been helping it acquire capital and develop a good credit history. By making its loan payments on a regular basis, the cooperative has established the foundation of a good credit history.

Profits from consistent sales have been invested in processing buildings and gradual improvements in transportation. The improvements from the acquired capital and invested profits greatly increased the amounts of product that couldbe processed, stored and delivered. This experience has created the groundwork for larger scale deliveries in the future.

It was important to develop a working capital fund to cover bills due between harvest and the receipt of payment from customers. Early on, the co-op established a policy of paying the farmer for the harvested produce at the time products were picked up for processing.

Schools as customers
Over the past 2 years, NNFC has delivered produce to 15 school districts in the region (table 1, page 23). Some of the school districts have been steady customers for years, while other sales were “pilot projects” consisting of one- or twotime sales to new school districts to demonstrate the co-op’s quality and delivery standards. Building on these initial deliveries, NNFC plans to develop strong, sustainable business relationships with those “pilot” school districts as well.

Diversifying to military markets
NNFC has experimented with diversifying its initial customer base. The cooperative delivered muscadine grapes to the Defense Subsistence Office (DSO) of the Department of Defense (DoD) in Jacksonville, Fla., in September 2000 for distribution through military base commissaries. This office provides fresh produce to over 30 military bases, from South Carolina to the Caribbean. It also provides fruit and vegetables to over 2,200 schools.

NNFC had previously worked with the DSO to become a certified vendor, so there was already an existing relationship. This breakthrough sale to DoD was a first for the cooperative, and has opened the door to future sales. The sale helped cooperative leaders realize that they needed to investigate other produce varieties in order to supply the DoD and help boost profits.

Pilot retail sales
Retail grocery sales are also another market channel that the cooperative has pursued. Between 1998 and 2001, NNFC sold value-added collard greens to local Winn Dixie and Grocery Outlet stores. Leafy greens were very popular with customers because of their freshness and convenience. Store produce managers were happy with the cooperative because of the freshness and consumer acceptance.

During the summer of 2001, one store sold 200 bags of NNFC greens per week. Nevertheless, logistics and fluctuating demand made this market difficult to sustain.

While NNFC is not supplying any retail grocery stores this year, the sales provided valuable experience and increased cash flow. In 2002, the cooperative is focusing on schools, its primary market.















Product lines
The cooperative’s main product remains collard greens, which are offered through two separate lines: a fine cut and a country cut. The cooperative also recently began selling peas to schools. Pea lines available to schools are: black-eyed, purple hull, butter, cream #4 and cream #8. The cooperative is planning on expanding the amounts and variety of peas sold to schools this fall.

NNFC is looking to sell a french fry cut of sweet potato, supplied by the Sweet Potato Growers Association in Mississippi. It has also grown Habanero peppers, which were sold in bulk to a regional hot-sauce company.

The cooperative has experimented with the strawberry market, selling fruit to schools both for breakfasts and lunch deserts. The perishability and market pressures on prices hurt the profitability of the co-op’s strawberry trade, so it has discontinued strawberry production and sales.

The co-op also supplied blackberries for use in desserts, such as cobblers and pies. But blackberries are harvested mid-summer, creating perishability problems, so the cooperative has discontinued production.

The cooperative has worked closely with Dr. Kathleen Colverson, southeast program manager for Heifer International. Colverson says, “Based on my years of experience in working with limited-resource farmers, I am excited about NNFC’s progress. This type of marketing approach can easily be duplicated by other groups of farmers.”

The cooperative is currently raising goats for meat. There have been some sales of ground chevron (goat meat) to school districts and additional sales are planned for the fall.

Value-added processing
NNFC adds value to its leafy greens by washing, chopping, bagging and weighing them. The country cut is a larger, home-style cut while the fine cut consists of 1/4-inch squares.

Through careful attention in the processing stage, the cooperative assures consistent quality and volumes of its final products. It realized early on that it had to differentiate itself and its products from other suppliers. NNFC chose fresh, leafy greens because there was an undeveloped market niche locally and in schools for them.

Fresh was the only option because the frozen and canned greens markets were already filled by established companies. Washed, cut and “ready-for-the-pot” features not only provided convenience, but also differentiated NNFC’s products from other product lines.

Value-added processing has given NNFC access to markets that would be unavailable with raw products, such as bunches of whole greens. Cafeteria managers and workers do not have the time to wash and chop greens to serve hundreds of children. The convenience of NNFC’s greens save cafeteria managers and workers a great deal of time.

NNFC’s value-added processing, combined with the co-op’s bargaining power, allows the cooperative to set a selling price that is fair to customers and, at the same time, provides a reasonable return to its members. This stands in contrast to individual farmers selling bunched greens straight from the field.

The flip side of value-added processing is that NNFC has had to spend much time and effort acquiring necessary capital, purchasing or leasing equipment, maintaining and repairing the equipment and closely monitoring its quality standards.

Packaging a key factor
The cooperative felt it was important to develop quality packaging to maintain the quality and freshness of its produce. Packaging also provides convenience and improved product appearance for customers.

Plastic bags holding 1, 11/2 , 2 and 3 pounds of leafy greens were selected. The NNFC logo is clearly displayed on the front. Nutritional facts, recipes, contact information and a UPC code are located on the back of the package.

Transportation and logistics
Transportation has improved as the cooperative expanded its sales and marketing area. The cooperative now uses several refrigerated trucks for deliveries. These trucks improve product handling and enable larger orders to be filled more efficiently. They have also helped the cooperative dramatically increase its marketing area to include schools in other states.

The management team and truck drivers are constantly challenged by the logistics of deliveries. Schools in rural areas are distributed over a wide area. Delivering with one eye on the map and the other on a clock is crucial.

Serving larger school districts in metropolitan areas can also require careful logistical planning for deliveries. For example, the cooperative delivered greens to 56 schools in Jefferson County, Ala., in the spring of 2001. In the planning stage, an average delivery and travel time of 30 minutes for each school was assumed. The total delivery time would be 28 hours, which would correspond to 31/2 working days for one driver and truck.

The decision was made to coordinate the deliveries using two vehicles, mobile phones and predetermined meeting locations. Using this method, the deliveries were completed in two days. This situation demonstrates the difficulties that logistics can present.

Educating other farmers
NNFC works to assist other small farmers in the community and region as well as its own members. It teaches new production and farm-business practices in its classroom. NNFC also often hosts groups of farmers or cooperative members from other states.

Members of NNFC candidly discuss their successes and learning experiences with visitors. NNFC also advises individual farmers through informal channels. The cooperative has been very active in agricultural marketing conferences. Members have described their success and learning experiences to audiences in Florida, Georgia, Alabama, Mississippi, Tennessee, Missouri and California. NNFC views this outreach as an important responsibility to the small and limited-resource farmer community.

The Small Farmer
Distribution Network The NNFC is now collaborating with other limited-resource, minority cooperatives in developing the Small Farmer Distribution Network. The network will provide marketing, education, processing and transportation assistance to other cooperatives in the region. This should result in larger amounts and a wider variety of products available to schools. The network should also increase the sales area for each participating cooperative.

The cooperatives participating in the network are: Cooperative (Alabama) Each cooperative will produce and deliver greens, peas and sweet potatoes to schools in its own region. The cooperatives will specialize in their own products and lines, but will also market products from other cooperatives in the network.

The network should greatly increase the sales volume for each cooperative. Waddell Sanders, president of the Sweet Potato Growers Association in Mound Bayou, Miss., says: “The NNFC and the Small Farmer Distribution Network are godsends. We have been having difficulties in marketing for years. NNFC and the network have helped us establish marketing opportunities here in Mississippi. Their realworld experiences have helped us overcome our marketing difficulties.”

The network should also make food service directors’ jobs easier by providing a central contact for several varieties of healthy, fresh produce grown by small farmers. The NNFC will coordinate marketing, production, quality standards, transportation and distribution logistics.

The network met with the Mississippi Department of Agriculture and the Mississippi State Food Service purchasing director in June to discuss sales of fresh produce and value-added prod ucts to 20 Mississippi school districts this fall. The state has been very supportive of supplying fresh, local produce to schools. Mississippi is working with the network to facilitate sales and, hopefully, develop a long-term business partnership.

The Mississippi Department of Agriculture has also been working with the Sweet Potato Growers Association to develop value-added sweet potato products that will fill an important, nutritional niche in local schools. The Rural Business-Cooperative Service of USDA Rural Development has also provided technical assistance to the co-op.

The network met with the Arkansas state food director last spring, and sales are planned for the fall in about 15 counties, including the Dollar Way, Little Rock and Pine Bluff school districts. In Florida this fall, the network plans to expand its market by adding Palm Beach and Santa Rosa County School Districts to its existing customer base. The network will be selling fresh produce to almost 50 school districts on a regular basis in the fall of 2002.




















Postharvest handling
Providing fresh, healthful produce to local schools requires special postharvest handling practices and equipment to ensure the highest possible quality. The produce should look healthy and have a good color. Texture is also important. Produce should be crisp, crunchy and firm. Fresh produce is sweeter and has a better taste.

This is very important to school food service directors, because they provide these products to children, who can be very demanding customers. The cooperative has always focused on postharvest handling equipment as an important step in meeting customer needs and expectations.

Proper postharvest handling starts in the fields. In high field temperatures, refrigeration is crucial to peas and leafy greens. Limited-resource farmers providing fresh produce to the cooperative observe that having the trucks in the field at harvest is crucial to quality and shelf life.

Leafy greens and peas are harvested and immediately placed in trucks to remove field heat. The truck then transports a load of peas for shelling, then delivers them to local schools.

Refrigerated trucks have greatly increased the market potential for the cooperative. By regulating temperatures in trucks, the cooperative has increased its delivery area and still maintains high-quality products. The refrigeration and holding capacity of these trucks have also enabled the cooperative to make larger deliveries to suburban and urban schools.

After buying fresh collard greens from the cooperative, many schools asked about the availability of fresh peas and beans. But the farmers could not economically harvest peas by hand and still meet the school districts’ price limitations. The solution was to lower harvesting costs and increase harvesting capacity with a mechanical, self-propelled pea harvester.

This purchase was made possible with a loan through JCDC. The selfpropelled pea harvester meant peas were arriving much faster and in greater volume, but created a timeconsuming bottleneck in the peashelling area. So the co-op used another loan from JCDC to purchase a pea-shelling line, which cleared the bottleneck. Through increased crop volume and reduced labor costs, the cooperative is meeting price requirements of the schools.

The harvester and pea-shelling line will also provide service to other cooperatives. Sharing these resources should pave the way for more sales and improve profits for member cooperatives, also benefitting the rural communities where they are located.

Much accomplished in a short time period
NNFC has accomplished much in only 5 years. It started with a group of farmers cutting greens by hand on cold nights for next-day delivery. Breakthrough sales led to long-term business relationships and additional sales to other schools.

The co-op’s profits were re-invested into infrastructure to improve processing, refrigeration, storage and transportation. By providing quality products, on-time deliveries with professional courtesy, NNFC developed a reputation as a dependable vendor of fresh fruits and vegetables to schools.

Bringing in other small farmer cooperatives into the Small Farmer Distribution Network will economically benefit the NNFC as well as other small farmers looking for profitable, sustainable marketing opportunities.

The NNFC and other participating cooperatives in the Small Farmer Distribution Network are looking forward to a busy fall. New school districts, expanding markets into new states, additional product lines, expanded processing capabilities and increased production capacity can be expected to provide additional challenges, but with the chance for additional profits.

For more information on NNFC, please see the comprehensive report, “Innovative Marketing Opportunities for Small Farmers: Local Schools as Customers” at www.ams.usda.gov/ directmarketing/publications.htm under the section “Farm to School Publications.” Also, available at the same site is the publication “How Local Farmers and School Food Service Buyers Are Building Alliances.” For a copy of USDA Rural Development’s “How to Start a Cooperative,” a stepby- step guide to launching a cooperative, visit: http://www.rurdev.usda.gov /rbs/pub/cir7/cir7.pdf http://www.rurdev. usda.ogv.andclick.




September/October Table of Contents