65
CADC Specialty Crop Food Processing Feasibility Study Nils Johnson WSU Stevens Co. Extension Ag Coordinator 9/19/17
CADC Specialty CropFood Processing Feasibility
Study
Nils JohnsonWSU Stevens Co. Extension Ag Coordinator
9/19/17
Outline
• Project Background
• Regional Food System Plan
• CADC Produce Processing Feasibility Study
• Survey Results
• Target Products
• Processing Lines
• Facility Layout
• Business Model
• Contact Information
9/20/2017 2
CADC Feasibility StudyProject Timeline
2010: WA State Farmers Market Conference in Renton WA• Result: Pickle Pilot Project
• Outcome: Strong need for help
2011: Sweet Meadows Ranch jam production on WSDA license• Result: Strawberry-Jalapeno jam (and 2 other products)
• Outcome: Business models works… but we need a better facility
2013: Hatched Feasibility Study plan with Shelly Stevens• Result: Wrote grant proposal
• Outcome: Rejected on a technicality
2014: Re-submitted the grant• Outcome: Proposal accepted
CADC Feasibility StudyGrant Planned Activities
1) Survey and evaluate Specialty Crop demand• Individuals, stores, institutions
2) Survey and evaluate Specialty Crop supply• Produce Famers & Orchardists
3) Evaluate existing Value Added Processing facilities• Include group tours
4) Get Food Safety training for local trainer capacity
5) Design our own project to match Supply with Demand• Facility Design
• Processes and Equipment
• Food Safety
• Business Plan
Outline
• Project Background
• Regional Food System Plan
• CADC Produce Processing Feasibility Study
• Survey Results
• Target Products
• Processing Lines
• Facility Layout
• Business Model
• Contact Information
9/20/2017 5
Regional Food Systems InfrastructureBasic Components of a Complete System
Food Product Incubator
Food Processing Facility
Farm Training & Incubator
Food Systems Director
Shipping &
Receiving
Food Storage & Aggregation
Regional
Growers
Local Food Markets
Regional Markets
Regional Food Systems InfrastructureFarm to Food Pantry (F2FP) & Farm to School
Shipping &
Receiving
Food Product Incubator
Food Processing Facility
Food Storage & Aggregation
Regional
Growers
Institutions
Food
Pantries
Local Food Markets
Regional Markets Farm Training & Incubator
Farm to Food Pantry & Farm
to School
Food Systems Director
Regional Food Systems InfrastructureF2FP & 395 Produce Corridor
Shipping &
Receiving
Food Product Incubator
Food Processing Facility
Food Storage & Aggregation
Regional
Growers
Institutions
Food
Pantries
Local Food Markets
Wholesale
Institutions
Food
Pantries
Regional Markets
Wholesale
Farm Training & Incubator
Farm to Food Pantry & Farm
to School
395 Produce Corridor
Food Systems Director
Regional Food Systems Infrastructure395 Produce Corridor & F2FP & Food Processing & Incubator
Retail Space
Shipping &
Receiving
Marketing
Assistance
Facility
Management
Food
Product
Assistance
Food Product Incubator
Lite
Processing
Kitchen
Intensive
Processing
Kitchen
Demo
Kitchen
Food Processing Facility
Frozen
Storage
Chilled
Storage
Dry
Warehouse
Food Storage & Aggregation
Regional
Growers
Meeting
Space
Office
Space
Retail
Stores
Institutions
Food
Pantries
Local Food Markets
Wholesale
Office
Space
Retail
Stores
Institutions
Food
Pantries
Regional Markets
Wholesale
Harvesting
Facility
Classroom
Space
Farm Plots
Farm Training & Incubator
Farm to Food Pantry & Farm
to School
395 Produce Corridor
Food Systems Director
Food Incubator Program
Food Processing Program
Outline
• Project Background
• Regional Food System Plan
• CADC Produce Processing Feasibility Study
• Survey Results
• Target Products
• Processing Lines
• Facility Layout
• Business Model
• Contact Information
9/20/2017 13
Survey: Stevens County Food Pantries 2015 Food Pantry Client Produce Preference Survey
Survey: Stevens County Food Pantries2015 Client Produce Preference Survey – All Results
0
10
20
30
40
50
60
70
80
90
Bro
cco
li
Car
rots
Asp
arag
us
Stra
wb
erri
es
Cu
cum
ber
s
Co
rn
Tom
ato
es
Mu
shro
om
s
Gra
pes
Cau
liflo
wer
Lett
uce
Ras
pb
erri
es
Gar
lic
Ch
erri
es
Bea
ns
(Sn
ap, G
reen
)
Bla
ckb
erri
es
Blu
eber
ries
Ap
ple
s
Mel
on
s
Pe
ach
es
Cel
ery
Hu
ckle
ber
ries
On
ion
s
Cab
bag
e
Bee
ts
Bru
ssel
s Sp
rou
ts
Pe
as
Pe
pp
ers
(Sw
eet)
Red
Po
tato
es
Wh
ite/
Yello
w P
ota
toe
s
Spin
ach
Win
ter
Squ
ash
Bak
er
typ
e P
ota
toes
Pe
ars
Sum
mer
Sq
uas
h
Ap
rico
ts
Rad
ish
es
Nec
tari
nes
Bab
y
Pe
pp
ers
(Ho
t)
Pu
mp
kin
s
Plu
ms
Bas
il
Kal
e
Eggp
lan
ts
Turn
ips
Rh
ub
arb
Ko
hlr
abi
Mu
star
d G
reen
s
Tom
atill
os
Ch
ives
Bo
k C
ho
y
Co
llard
Gre
ens
Par
snip
s
Swis
s C
har
d
Ru
tab
agas
Go
ose
ber
ries
Cu
rran
ts
Food Bank Client Produce Preference Survey Results (2015)
Food Bank Client Prefences (104 total respondents, 5 Food Pantires)
Survey: Stevens County Food Pantries2015 Client Produce Preference Survey
Figure 1 – Top 5 produce items requested as "Favorite they’d like more of” by food bank clients in Stevens County
Survey: Stevens County Farmers Markets2015 Farmers Market Produce Preference Survey
Survey: Stevens County Farmers Markets2015 Client Produce Preference Survey
Results
• Inconclusive
• Results were all over the place
Two typical responses to the question of Fair Price
1. “Hmmm. I think I remember Safeway sells those on for … $ per Lb”
2. “I don’t look at price since I can buy whatever I want… but those Farmers Market prices are too high!”
Survey: Stevens County Food Loving Public2016 Public Produce Preference Survey
Stevens County CADC Feasibility Study SurveyTri-County General Public Produce Preference Survey – All Results
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Ro
sem
ary
Ch
ives Dill
Ore
gan
o
Thym
e
Mu
star
d G
ree
ns
Par
sle
y
Cu
rran
ts
Go
ji B
erri
es
Plu
ms
Co
llard
Gre
en
s
Fen
nel
, Bu
lb t
ype
Po
tato
es, Y
ello
w
Ru
tab
agas
Go
ose
ber
rie
s
Po
tato
es, P
urp
le
Pu
mp
kin
s
Ko
hlr
abi
Turn
ips
Rh
ub
arb
Bo
k C
ho
y
Swis
s C
har
d
Eggp
lan
t
Par
snip
s
On
ion
s (B
un
chin
g/G
reen
s)
Sum
mer
Sq
uas
h
Po
tato
es, B
aby
Rad
ish
es
Tom
atill
os
Bas
il
Bea
ns
(Dry
)
Po
tato
es, W
hit
e
Kal
e
Po
tato
es, B
aker
typ
e
Po
tato
es, R
ed
Pea
s (S
no
w t
ype)
Cel
ery
Pep
per
s (S
wee
t)
Ne
ctar
ine
s
Aru
gula
Ap
rico
ts
Mel
on
s
Pep
per
s (H
ot)
Mu
shro
om
s
Pea
rs
Cila
ntr
o
Bee
ts
Bru
ssel
s Sp
rou
ts
Bla
ckb
erri
es
Bea
ns
(Sn
ap t
ype
)
Hu
ckle
ber
ries
Cab
bag
e
Cu
cum
ber
s
Ch
err
ies
On
ion
s (S
we
et t
ype)
Cau
liflo
wer
Gar
lic
Win
ter
Squ
ash
Spin
ach
Gra
pes
Pea
s (S
uga
r Sn
ap)
Co
rn
Ras
pb
erri
es
Car
rots
Ap
ple
s
Stra
wb
erri
es
Lett
uce
(al
l typ
es)
Bro
cco
li
Pea
ches
Asp
arag
us
Tom
ato
es
Blu
eb
err
ies
General Public Produce Preference Survey Results (2016)
Stevens County Food Pantry 2015 & 2016 Produce Preference Survey
Top 5 produce items requested as "Favorite they’d like more of” by Food Bank Clients in Stevens County (2015)
-10
10
30
50
70
90
Veggies Eaten Cooked
0
10
20
30
40
50
60
70
80
90
Veggies Eaten Raw
0
10
20
30
40
50
60
70
80
90
Fruit and Berries
Top 5 produce items requested by the General Public Stevens, Ferry, and Pend Oreille Counties (2016)
Overlap
Salad Vegetables: - Carrots- Tomatoes
Cooking Vegetables: - Broccoli- Corn- Garlic- Asparagus
Fruit & Berries:- Strawberries- Blueberries- Raspberries
Survey: Stevens County Schools2017 Institutions Produce Preference Survey
Survey: Stevens Institutions2016 School Kitchen Produce Preference Survey
Results
• Frozen produce• Broccoli Florets
• Cauliflower Florets
• Corn on the Cob
• Fresh minimally processed produce• Carrots
• Edible Pod Peas
• Harvest of the Month & Specialty items
Survey: Specialty Crop Producers (Farmers & Growers)2015 & 2016 Interviews
Results
• Farmers want a market for produce they grow
• Some farmers have seconds that currently aren’t even harvested
• Most farmers don’t necessarily want another line of business
What does this mean?
A processing facility should be designed to accommodate general food systems entrepreneurs who are not necessarily farmers
Garlic in Stevens CountyAn excellent Crop for our Area
Facts
• Garlic grows well here (ie: Inchelium Red)
• Low water usage
• High labor to farm it
• High density production
• Large cloves are high value for seed ($20 per Lb)
• Small cloves are a byproduct ($3 per Lb)
What does this mean?
• Opportunity: Increase garlic production in Stevens County
• Opportunity: Develop markets for small cloves
Summary of Survey WorkSupply and Demand
Supply• Farmers can grow lots of stuff… if there’s a market for it
Demand: • Salad Vegetables: Carrots, Tomatoes
• Cooking Vegetables: Broccoli, Corn, Garlic, Asparagus
• Fruit & Berries: Strawberries, Blueberries, Raspberries
Processing Format:• Canned in Jars High-End Boutique markets (direct sales)
• Frozen (IQF) Institutional markets (maybe direct sales)
Outline
• Project Background
• Regional Food System Plan
• CADC Produce Processing Feasibility Study
• Survey Results
• Target Products
• Processing Lines
• Facility Layout
• Business Model
• Contact Information
9/20/2017 28
Two Processing Technologies: Canned (in Jars) and Frozen
Canned in Jars• Boutique items, High-End Prices
• Purchased as gifts or for special occasions
• Include• Sauces
• Pickles
• Jams, Jellies
• Fruit Butters
Fruit ButterApple, Pear, etc.
Details
• Highest value when • No sugar added
• No pectin added
• Very long cooking process (up to 72 hours)
What does this mean?
• Need: Low rent processing facility
Two Processing Technologies: Canned (in Jars) and Frozen
Frozen in Bags• Individually Quick Frozen (IQF)
• For Individuals and institutions
• Minimally Processed
Outline
• Project Background
• Regional Food System Plan
• CADC Produce Processing Feasibility Study
• Survey Results
• Target Products
• Processing Lines
• Facility Layout
• Business Model
• Contact Information
9/20/2017 32
Products selected through study
1. Jarred Pickled Garlic
2. Jarred Apple Butter
3. Bagged frozen Root Vegetable medley
4. Bagged frozen Corn on the Cob
5. Bagged frozen Broccoli
For high-end retail markets
For institutional markets
3 Processing Lines
Wash SortSoak Cut Blanch Chill Freeze Bag
Cook
(with
lid)
Fill
Heat
(jars)
Invert
Label
Sort Cut PeelStore
BatchesPackWeigh
Heat
(jars)
Mix Cook
Fill
Process
(water
bath)
Inert &
Cool
Fro
zen
Li
ne
Ap
ple
B
utt
er
Pic
kled
G
arlic
Store
(Frozen)
Store
(Dry)
Chill Tanks
Wash SortSoak Chill
Soak Tank and Sorting Tables
Industrial Food Processor
Cut
• Broccoli Floret Machine
40 Gallon Jacketed Steam Kettle
Cook Blanch Peel
• Root Vegetable Peeler
• Garlic Peeler
Proofing Oven
Heat
JarsFill
Volumetric Filler
Bag
Vacuum Bagging Machine
Freeze
Blast Chiller
Or…
Walk-In Freezer
Facility LayoutElectricity for Portable Equipment
Facility LayoutIn-Floor Drains
Products selected through study
1. Jarred Pickled Garlic
2. Jarred Apple Butter
3. Bagged frozen Root Vegetable medley
4. Bagged frozen Corn on the Cob
5. Bagged frozen BroccoliProcessing Equipment: $180,000
Processing Equipment: $210,000
Processing Equipment: $130,000
Processing Equipment: $122,000
Videos
1. 21 Acres Promo Video
2. MMFEC Overview
3. Mustard Seed Café sauces
4. Livingston Food Resources Center
5. Fosters Pickled Garlic
Outline
• Project Background
• Regional Food System Plan
• CADC Produce Processing Feasibility Study
• Survey Results
• Target Products
• Processing Lines
• Facility Layout
• Business Model
• Contact Information
9/20/2017 45
Facility Layout“Large” and “Small” Configurations
“Small” Build Configuration(1200 square feet)
Building Cost: $ 180,000
“Large” Build Configuration(6500 square feet)
Building Cost: $ 975,000
Facility LayoutLarge Configuration
Building Site (guess): $200,000Building Cost: $975,000 Processing Equipment: $230,000
Total Cost: $1,405,000
Facility LayoutSmall Configuration
Building Site (guess): $75,000Building Cost: $180,000Processing Equipment: $80,000
Total cost: $335,000
Outline
• Project Background
• Regional Food System Plan
• CADC Produce Processing Feasibility Study
• Survey Results
• Target Products
• Processing Lines
• Facility Layout
• Business Model
• Contact Information
9/20/2017 49
Business ModelLarge Configuration
• Intended Clients: • Ramping up from small scale• Building inventory for wholesale sales• Existing processors outgrowing their
kitchens• In-Season runs of produce for larger
institutions
• Business Model Assumptions:• 3 years of (startup)• Business ramps up between 5 and 8 years• Full capacity at 8 years
Business Model3 Revenue Streams
Office and Conference Rentals
• Part of a standard business incubator
• Might be used by food systems clients or others
Processing Facilities & Storage
• Dry, Chilled, and Frozen storage by the pallet
• Processing facility rentals, by the hour
House-Owned Products
• Value-Added products manufactured, owned, and sold by facility management
• Example: Mission Mountain - Beef/Lentil Crumbles
$24,072.00
$49,848.18
$54,175.00
Year 8 Total Revenue Breakdown
Office & Conference Room Rentals
House-Owned Products
Processing Facility & Storage Rentals
Survey: Business ModelLarge Configuration 8 – Year Startup Plan
Income: 3 Separate Revenue Streams
$-
$20,000.00
$40,000.00
$60,000.00
$80,000.00
$100,000.00
$120,000.00
$140,000.00
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
An
ual
Rev
enu
e p
er S
trea
m
Office & Conference Room Rentals: House-Owned Products: Processing Facility & Storage Rentals:
Survey: Business ModelLarge Configuration 8 – Year Startup Plan
Expenses
$-
$20,000.00
$40,000.00
$60,000.00
$80,000.00
$100,000.00
$120,000.00
$140,000.00
$160,000.00
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
Business Expenses
Non-Production Employee Salaries: Building & Utilities:
Licensing, Insurance, & Services: Marketing & Business Development:
Survey: Business ModelLarge Configuration Startup Plan
8-Year Financial Estimate
$-
$2,000.00
$4,000.00
$6,000.00
$8,000.00
$10,000.00
$12,000.00
$14,000.00
$16,000.00
$18,000.00
$20,000.00
Survey: Business ModelLarge Configuration Startup Plan
8-Year Profit/Loss Estimate
$(160,000)
$(140,000)
$(120,000)
$(100,000)
$(80,000)
$(60,000)
$(40,000)
$(20,000)
$-
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
Annual Profit/Loss (Large Configuration):
Annual Profit/Loss (Large Configuration):
Survey: Business ModelLarge Configuration Startup Plan
9 -Year Cumulative Profit/Loss
$(2,500,000)
$(2,000,000)
$(1,500,000)
$(1,000,000)
$(500,000)
$-
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
Total Cumulative Profit/Loss (Large Configuration):
Total Cumulative Profit/Loss (Large Configuration):
Business ModelJob Starts with Large Configuration
New Farm Revenue
• $33,000
• Means: 3 new farming enterprises
In-House Jobs
• 2 new salaried jobs
• 3 new processing jobs
Entrepreneur Jobs
• 2 new “Jobs” to cover processing in the model
Total:
• 10 new jobs by year 8
$2,646
$7,733
$1,737
$6,770
$8,429
$5,800
RootVegMedley
FrozenBrocolli
FrozenCornOnTheCob
PickledGarlic
SugarFreeJam
FrozenMeals
New Farmer (Produce) Revenue in Year 8
Business ModelSmall Configuration
• Intended Clients: • Production for building and testing markets• Startup scale entrepreneurs• Farmers with a value-added product to sell at Farmers Markets• Cottage industry food processors (candy, baked goods, etc)
Small Configuration Facility LayoutKitchen with Dishwasher
Small Configuration Facility LayoutKitchen with Commercial Range
Survey: Business ModelSmall Configuration 8 – Year Startup Plan
Income: 3 Separate Revenue Streams
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
An
ual
Rev
enu
e p
er S
trea
m
Office & Conference Room Rentals: House-Owned Products: Processing Facility & Storage Rentals:
Survey: Business ModelSmall Configuration 8 – Year Startup Plan
Expenses
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
Non-Production Employee Salaries: Building & Utilities:
Licensing, Insurance, & Services: Marketing & Business Development:
Survey: Business ModelSmall Configuration Startup Plan
8-Year Financial Estimate
$-
$1,000.00
$2,000.00
$3,000.00
$4,000.00
$5,000.00
$6,000.00
$7,000.00
$8,000.00
$9,000.00
Survey: Business ModelSmall Configuration Startup Plan
8-Year Profit/Loss Estimate
$(70,000)
$(60,000)
$(50,000)
$(40,000)
$(30,000)
$(20,000)
$(10,000)
$-
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
Annual Profit/Loss (Small Configuration):
Annual Profit/Loss (Small Configuration):
Survey: Business ModelSmall Configuration Startup Plan
9 -Year Cumulative Profit/Loss
$(600,000)
$(500,000)
$(400,000)
$(300,000)
$(200,000)
$(100,000)
$-
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
Total Cumulative Profit/Loss (Small Configuration):
Total Cumulative Profit/Loss (Small Configuration):
Business ModelJob Starts with Small Configuration
New Farm Revenue
• $ ??? – likely served by existing capacity
• Means: 0 new farming enterprises
In-House Jobs
• 1 new salaried job
• 1/2 new processing job
Entrepreneur Jobs
• ??? new “Jobs” – difficult to say… maybe 1 1/2
Total:
• 3 new jobs by year 8
Next StepsTowards Getting an Actual Processing Center
Fine tune the Facility Design
• Used equipment ?
• Rented space ?
Fine tune the Business Model
• Decrease operating costs
• Find anchor tenants ready to ramp up
Recruit key partners
• Partner organizations (ie, LINC Farmers Coop)
• Individuals with key skills
Search for grant funding
• Economic development
• Emergency Food Supply
Discussion and Comments
9/20/2017 69
• Nils JohnsonStevens County WSU Extension Ag Program Coordinator
Phone: (509) 684-2588
Mobile/Text: (509) 680-8659
Email: [email protected]
• Stevens Co. Extension Office:986 S. Main, Suite D, Colville WA
Contact Information
