By Maggie Mills
In the summer of 2017, I had the pleasure of working with Grace and Paul from 100 KM Foods in Toronto, Ontario. 100 KM Foods is an award-winning local food hub that picks up food from local farms near Toronto and distributes it to retailers, including restaurants in the City of Toronto. Paul and Grace are so passionate about their business and provide an opportunity for Torontonians to enjoy the produce and livestock that is harvested right here in Southern Ontario. They have a dedicated team that works collaboratively to ensure that their business runs smoothly, and Paul and Grace are wonderful mentors.
While the food hub business model is still relatively new, 100 KM Foods is paving the way to ensuring that food hubs can be financially sustainable. As part of that work, Paul and Grace requested that we design a tool that food hubs can use to determine the minimum farm order required for a food hub to breakeven on a given food item. So, together we created the Food Hub Breakeven Analysis Tool.
Using the well-archived historical data from their food hub, I was able to construct a model that determines the orders in dollar amounts that need to be placed at a farm in order for any food hub to cover their costs. I then altered the model to make it more general in the form of a total route order in order to breakeven. This shareable model makes it possible for any food hub that has transportation costs to make better business decisions regarding pricing and minimum orders. It also helps them decide which farms should be on their routes during specific times of the year. Food hub owners simply need to enter their information down the left column of the model and it will generate, using tested formulas, these minimum orders in dollar value.
Please direct questions or comments about the breakeven analysis tool and this story to the FLEdGE Project Coordinator at firstname.lastname@example.org.