The retail industry has seen its fair share of trends and advancements
this past year – ecommerce is up and millennials are driving experiential
shopping. However, one that has inescapably stood out has been the development
of food hubs and food halls all across the country. In fact, earlier in 2016,
UrbanLand
predicted that food was to be the ‘anchor of retail developments’ based on the
rising proportion of store growth being attributed to restaurants. From Detroit
to Irvine, cities and developers are catching onto the culinary-oriented
developments in their own unique ways but are these places simply
sexier, marketable versions of the
traditional food courts? Let’s find out what constitutes food hubs and food
halls and what impacts they are having on economic revitalization and food
access.
Marketplaces have been a key economic, cultural, and social
component of villages, towns, and cities for thousands of years and food, particularly
fresh produce, has always been a vital commodity for trading at these markets.
A food hub, as defined by the National Food Hub Collaboration and Michigan
State University, is a “business or organization that actively manages the
aggregation, distribution, and marketing of source- identified food products
primarily from local and regional producers”. By doing so, food hubs bridge the
gap between food producers and consumers and satisfy wholesale, retail, and
institutional demand all under one roof much like traditional marketplaces. Today,
many fresh food producers lack the capacity and financial resources to access
these markets on their own so food hubs are indeed making it possible for these
producers to gain entry into new markets, increase their incomes, and up scale
production.
Not only are food hubs profitable to producers, distributors
and retailers, they are also vital in improving neighborhood access to local
foods by offering complementary programs and resources such as shared community
kitchens for healthy cooking classes and food incubators for budding
restaurateurs. All of these components that make up a food hub differentiate it
from farmers markets that simply provide platforms for producers to sell
directly to consumers like you, but what about the difference between food hubs
and food halls?
As it turns out, the term ‘
food halls’ is increasingly being used interchangeably with food
hubs. However, food halls are more often than not one of the many programs within
a food hub (complementary to grocery stores, food education facilities, food
distribution centers, and kitchen incubators). When food halls function
separately and independently, they are often less community- and
agriculturally-based. While they may claim to support locally-owned businesses
and chefs, they often do not guarantee as tight a policy of local produce-sourcing
as food hubs do given their varying administrative organizations and missions.
Often, these food halls simply bring together multiple vendors, carefully
curated to meet the targeted consumers’ taste and preference, and provide them space
in high traffic areas at potentially lower rental rates.
Regardless of semantics, both food halls and food hubs are cooking
up destinations for local food and providing opportunities for local businesses
to grow – albeit to different degrees. Given the infancy of these food-based
developments, we can only begin to predict their position as catalysts for
redevelopment and socio-economic revitalization.
The Eastern Market in Detroit, Michigan, for example, demonstrates
the potential for food hubs to be really sustainable and efficient food sources
for communities. The food hub is the “largest historic public market in the
Unites States” and has been connecting small farms with customers from metro
Detroit for over a century. It has done more than just organize farmers markets
for locals; the Eastern Market also hosts a massive wholesale market for local
restaurants and grocers from midnight to 6am on weekdays. In addition, the
market has incubator spaces for food entrepreneurs and provides professional
kitchens for entrepreneurs who would otherwise be unable to access such
resources. At Eastern Market, entrepreneurs can develop and test-market their
products before expanding regionally. Take for example, McClure's Pickles. The
firm got its start at the market and has since expanded nationally.
The Eastern Market not only meets the scope of a regional food hub but
has certainly met its mission to “build facilities and critical infrastructure
that fortifies the food sector as a pillar of regional economic growth while
improving access to healthy and affordable food choices in Detroit”. A survey
conducted by Michigan State University found that the majority of food hubs in Michigan helped
increase access to healthy foods in underserved neighborhoods, thereby
supporting a healthier population. More than 95 percent of Michigan's food hubs
are experiencing an increase in demand of their products and services with
restaurants, small grocery stores, and kindergarten through 12th-grade school food
services being their number one customers. Furthermore, among the food hubs
surveyed, about half of food hubs were equipped to accept federal Supplemental
Nutrition Assistance Program (SNAP) benefits.
Food hubs also have the potential to act as arts and
cultural centers for their neighborhoods. The large halls and spaces located in
the hubs are conducive to art and design festivals. Eastern Market, for
example, is home to the Detroit Design Festival every fall and many other
creative pop-up events and programs. Like other food hubs, it is increasingly
becoming a mixed-use building and yet food-based hub. Even food halls that simply
feature chef-driven vendors and tenants are becoming arts and culture centers
hosting a myriad of events throughout the year. In a time where millennial
customers seek out unique retail experiences, the merging of the arts and culinary
worlds was only an inevitable next step.
On the other side of the coin, when food-based developments do
not serve the wider community, however, it stands to run into accusations of
causing gentrification and rising property values. In Anaheim, California,
where a former fruit packing and distribution center was transformed into a
food hall dedicated to local vendors, it has quickly evolved into a selling feature for new residential
developments in the neighborhood. Broookfield Residential for example is hoping
to “attract young buyers with units priced between $300,000 and $400,000” in a
neighborhood that was once a sleepy town known only for Disneyland. Whether
intended or not, the Packing House food hall in Anaheim has led to huge inflow
of development into the neighborhood, raising prices of property in the area.
Furthermore, food halls that only serve ready-made meals or
chef-made meals are often too upscale for the average customer. While they may
help fill gaps in a food desert, prices often prevent lower income bracket
groups from accessing these freshly-made and locally-grown foods since most
prepared foods are not even eligible for SNAP benefits. So while food hubs and
food halls may have a right to celebrate their contributions to the local food
system and local communities, there are a few implications to also be wary of.
If that didn’t scare you enough, there are also a set of
complex challenges involved in setting up and running food-based developments. Start-up,
administrative and operational costs can run up high, especially when run by a
nonprofit. Although finding capital through donations, grants, and city funding
is a common strategy, these funding sources can easily go away. The many moving
parts of food hubs also means that overhead costs can arise at all points on
the operational chain.
Further still, site development has proven to be a huge
challenge for food hubs. This is due to requirements for cold storage, space
for processing food, distribution, and strategic marketing. The non-profit
Boston Public Food Market, for example, is already spending close to $14 million
to turn a state-owned building into a market.
Indeed, food hubs and food halls
can take several years to achieve financial profitability. However, it is food hubs that work with various partners, including
local farmers’ associations and school districts, which are able to increase
their earnings easily by establishing distribution agreements. These partners often also help with advertising
and marketing efforts – lowering food hub overhead – and provide food hubs with
a consistent yet diverse customer base.
On the other hand, food halls that function separately and
independently with only chef-driven vendors open with 100 percent occupancy before
quickly running into problems of high operation and marketing costs. This often
leads to high lease rates for vendors. Since local entrepreneurs are
particularly susceptible to rent charges and often are unable to make their
businesses work in the long run without continued support from the food hall,
these food-based developments hollow out and struggle to find replacement chefs.
As we move into a new year, and the trend of food hubs and
food halls catches on rapidly across cities, let’s watch out for the saturation
point in food-based developments. More importantly, let’s beware of its real impacts
on food access and our local neighborhoods and communities.
