UK study: Local chefs, institutions want more from Lexington’s food economy

The Lexington Farmers Markets, which sells fresh seasonal produce like tomatoes, has built a following with consumers that resulted in at least $3.2 million sales in 2014. That is expected to grow by 5 percent to 15 percent, to at least $5.2 million, in 2020, according to a new University of Kentucky study on the local food economy.
The Lexington Farmers Markets, which sells fresh seasonal produce like tomatoes, has built a following with consumers that resulted in at least $3.2 million sales in 2014. That is expected to grow by 5 percent to 15 percent, to at least $5.2 million, in 2020, according to a new University of Kentucky study on the local food economy.

When Central Kentucky chef Ouita Michel opens her new restaurant, Honeywood, at The Summit at Fritz Farm in March 2017, she anticipates increasing her local food purchases by at least half a million dollars a year, primarily in pork, beef and chicken.

And she’d like to buy more local produce too, but the question is, where will it come from?

Central Kentucky’s burgeoning local food scene is hampered not by lack of interest, but by lack of availability, according to a new University of Kentucky study.

“It absolutely is supply,” Michel said. “Nobody in farming really wants to be a vegetable farmer because there’s no money in it. It’s backbreaking and it’s really hard, and to be organic you have to be really expensive. Then you get knocked for being really expensive. ...

“That’s one reason we’re doing this restaurant, because the best way to drive the local food economy isn’t through a non-profit and the government ... when you’re talking about business, you have to do it through business.”

UK College of Agriculture researchers found that the local food movement is strong and growing in Lexington, but it could be bigger if supply bottlenecks could be resolved.

About $14 million was spent in 2014 on food grown here, including fruits, vegetables and meats, and that is expected to grow to about $24 million by 2020, by at least 5 percent a year. But there are barriers holding back more growth, including a lack of consistent quality product, according to the study done by The Food Connection at UK and Bluegrass Farm To Table.

“There was zero information on trajectory of local food market in Lexington,” said Scott Smith, faculty director of The Food Connection.

He said he hoped the study would help figure out how to assess it by setting a baseline to measure future growth and define where the growth faces hurdles.

“Why is more not being sourced from Kentucky farmers now?” Smith said. “What prevents it? Is it a lack of supply of farm product, transportation, distribution, price?”

To make significant increases four main issues need to be resolved, the researchers found:

▪ Kentucky farmers can’t yet provide enough quality produce and protein at a competitive price.

▪ Local products often cost significantly more than non-local.

▪ Providing out-of-season fruit and vegetables can make them cost a lot more.

▪ Buyers and sellers don’t always understand each other’s expectations of quality, price, quantity or presentation, highlighting the need for better communication and the importance of local food coordinators and advocates.

“Lack of supply is a more complicated thing than what the farmers can grow,” Smith said. But “supply” means different things for a grocery store, which might need food chopped and packaged uniformly, than to a chef like Michel, who is fine with farmers driving just-picked produce straight to her, he said.

And, Smith said, there’s tremendous variation among farmers in what they want to do.

“I think there’s been a mistake in looking to a population of farmers market suppliers to supply for UK or Central Baptist,” Smith said. Many farmers who grow for the direct-to-consumer channel like that model and don’t want to scale up to a more production-oriented style of farming.

“We like to think in Kentucky we’re very diverse, but in fresh fruits and vegetables we’re surprisingly thin,” Smith said. “The farmers markets flourish and some CSAs (community-supported agriculture) flourish, but for bigger suppliers it’s tough. We don’t have a lot of producers and don’t have the infrastructure to get it in the right package, chopped and ready to be frozen for storage in the off season.”

The researchers gauged the sales meat, produce and value-added products but not items such as coffee, soda, wine or personal care products which might be made in Kentucky but of material grown elsewhere.

The biggest purchasers were restaurants, which bought $5.5 million in goods in 2014 and expect to buy up to $9 million by 2020. The study surveyed chefs and restaurateurs at 20 Lexington restaurants. Many said they would use more locally grown goods if the quality and supply increased and the price was competitive with nationally sourced products.

“The restaurants have been doing it the longest, working with farmers locally and making that part of their concept. You also see larger retail operations getting interested in sourcing locally, and a few institutions as well, as evidenced by UK’s contract with Aramark,” said Jairus Rossi, the study’s lead author. “A tremendous amount of money is being spent on local food but it pales compared to what comes from other parts of the country. ... Kentucky currently doesn’t have the scale and diversity of production to fully supply larger institutions, and where there is supply, it is more expensive than what they are budgeting.”

Shares in community-supported agriculture arrangements and farmers markets that sell direct to the consumer accounted for $3.2 million sales. By 2020, that is estimated to grow to $5.2 million.

While chefs at restaurants and farmers at the market educate consumers on the bounty that can be had from local farms, the biggest shift in the supply system could come from institutions, including universities, schools and hospitals that buy millions of dollars of food annually.

The study found that these institutions spend less than 5 percent of their total food budget on Kentucky-based products.

“As institutions are just beginning to integrate local food into their purchasing decisions, buyer choices will have profound effects on Central Kentucky’s food system and on small and medium Kentucky farm enterprises,” the authors wrote.

With institutional purchases, another problem is price, particularly if state contracts are involved.

“If the price is there, they would buy more,” Smith said. “Kroger and the K-Lair cafeteria have very different price points.”

The study comes in the wake of controversy over food purchases by Aramark for the University of Kentucky dining system that included locally bottled Coca-Cola, water and ice among the products considered as local purchases.

The authors emphasized that “institutions can develop trusting relationships with producers by having strong contractual language that specifies first what producers are considered local and secondly which food products are eligible for inclusion.” They also recommended that lawmakers re-examine existing laws that require state-funded institutions to buy and track local products to see if they are having the desired results.

The Food Connection, Bluegrass Farm to Table, UK’s extension service and others are working on ways to address the problems highlighted in the study, Smith said.

“One of the things we all want to work on ... is helping those producers who want to go to larger scale but lower margin production – growing four vegetables instead of 40,” Smith said.

Michel, the chef, said that regional, rather than local, may be the way to think about food.

“Why not a regional market, with Tennessee, Ohio, Virginia, West Virginia? That’s a good strategy,” she said. “Hyperlocal is never going to be accessible to everybody.”