This weekend is New York City’s fifth annual Wine and Food Festival. To mark the event, The Financialist looks at the challenges faced by farm-to-table restaurants to ensure their fruits, vegetables, and meats are indeed sourced directly from the farm.
Ten years ago, a salad was simply a salad. Today, mixed greens on menus are a far more involved affair: a bowl might contain mesclun “fresh from Satur Farms,” spinach “gathered at Paffenroth Gardens,” and tomatoes “handpicked at Eckerton Hill Farm.” The implication is clear: ingredients sourced from local farms are higher quality, fresher and tastier, and will likely be priced accordingly.
“Farm-to-table” restaurants—those sourcing most or all of their ingredients from small, local producers—have skyrocketed in popularity. There’s no exact data tracking how many restaurants in the US are sourcing their ingredients this way. However, a recent Entrepreneur article called the trend “big business almost everywhere.” Over half of the respondents polled by global market research company Mintel in a recent foodservice sustainability report said they were willing to pay more for local and sustainable food.
Straight From the Farm
Unlike traditional restaurants that typically source ingredients year-round from one or two commercial distributors, farm-to-table restaurants often source seasonally from multiple small distributors that work directly with local farms. “We see over 1000 people a day, making us one of the largest farm-to-table restaurants in America,” says Ryan Armstrong, general manager of ABC Kitchen, one of Jean-Georges Vongerichten’s restaurants in New York. “We spent over $1.2 million at local farms last year. This year, we project we’ll spend close to $1.5 or $1.7 million on local ingredients, because our volume has consistently increased as well.”
Although the market is growing, the method does present challenges: small farm-to-chef suppliers are often more expensive and less efficient than traditional distributors. Given this reality, how does the farm find its way to the table and still turn a profit?
“It’s definitely difficult to source locally, consistently and in volume,” explains Mike Kokas, founder of Upstate Farms, in Tivoli, NY. Upstate, founded in 1989, was one of the first farm-centric distributors in the region. Today, Kokas and his partner Jan Greer oversee a fleet of three refrigerated trucks, delivering specialty produce three times a week from a network of 25 farms to 40 high-end restaurants in and around New York City.
“Our clients probably pay about 30% more to order from us than a SYSCO-style wholesale distributor,” says Greer, who adds that Upstate has lost a handful of clients “specifically because of our prices.” Sticker-shock aside, reliability is a persistent challenge for Upstate: small farms are threatened by everything from inclement weather to mechanical breakdown to pest infestation. Despite these challenges, Upstate’s business has increased by about 25% over the past four years, says Greer, with first-time orders coming in weekly. “It’s a quality issue. The way our products are grown, handled, and delivered—and the way they ultimately taste—is simply better,” she says. “Our customers make a conscious decision to support small farms, and they are willing to pay the price.”
ABC Kitchen’s Armstrong buys from Upstate as well as from small farms directly, and he agrees: “On the surface, local foods can be more expensive, but when you buy a product from a commercial distributor that’s been compacted, preserved, and packaged to travel, the actual yield and freshness of that product is compromised.”
Other chefs agree that the quality of local ingredients outweighs the added cost. Daniel Humm, executive chef of four-star New York restaurant Eleven Madison Park, explains that “in sourcing ingredients, our goal has always been to find the best possible products. Period. And for a long time, it didn’t matter to us where they came from. But as we developed a sense of self as a restaurant, we realized that our roots are here in New York, and those roots run deep. As we explored our own backyard, we found lush farmland and dedicated farmers that could provide us not only with the vast majority of our ingredients, but also with some of the best possible renditions of those ingredients that we had ever seen. And although they are at times more expensive than those that we had previously sourced from farther away, there was a connection to the land that we had never before felt.”
It’s Not Just About Profits
The business models for many regional distributors are rooted in philosophy more than profit. “We’re committed to sustainable and organic farms. We’re not focused on growth or consolidation—our idea is to become more complex, to remain regional, and service independent and mid-sized, smaller venues,” says Bu Nygrens, co-owner of San Francisco’s Veritable Vegetable, which has distributed organic produce throughout California and the Southwest since 1974. Like Upstate, Veritable’s produce is 20-30% more expensive than a traditional wholesale. Unlike Upstate, the operation sources globally, culling ingredients from hundreds of small and medium-sized farms. Veritable’s food service business has quintupled in the past five years, with overall sales last year totaling $43,500,000.
The success of established suppliers like Upstate Farms and Veritable Vegetables has inspired a new generation of distribution entrepreneurs; for example, Mike Azzara founded Zone 7 in Hightstown, New Jersey (the name is taken from the region’s agricultural growing code). Since its launch in 2008, Zone 7 has convinced more than 100 restaurants in New York’s tri-state area to buy its products, sourced from over 60 area farms. Azzara can rattle off a slew of typical small-business challenges, but marketing is one area in which Zone 7 is not having difficulties. “We haven’t made a single cold call,” notes Azzara with a touch of pride, before excusing himself to check this week’s spinach supply.
Jamie Feldmar has written for Saveur Magazine, Bon Appetit and New York Magazine.
Photo: Christopher Harrison — Flickr