The impetus behind Food Hubs tends to come from groups of people in communities that are seeking to create more scale for their local food initiatives. Farmer’s markets and CSA’s have demonstrated demand for local foods, but they have not been sufficiently scalable to serve larger customers. This has led to the desire to create mechanisms for aggregation, the idea being that a Hub could aggregate production from multiple farms to serve the needs of larger customers, whether they be large retailers, food service distributors, schools or other institutional buyers. Many initiatives are being implemented around the country, with many different services being offered to farmers and many different go-to-market strategies and business model paths.
There are cross-docking brokerage food hubs, which act as a sales agent and organizes its suppliers to consolidate shipments at a central facility without holding inventory. There are stocking distributor food hubs that purchase large quantities (typically pallet or truckload quantities) at wholesale prices from a wide range of suppliers, hold them in inventory, and then sell and transport smaller quantities of a range of products to a wide variety of smaller retail and/or food service businesses.