Farm Connex Grows Vermont Farm and Food Businesses
Story by Laura Hardie for the State of Vermont Working Lands Enterprise Initiative. All photos by Laura Hardie.
It’s 4 p.m. on a Friday at the Farm Connex warehouse in Hardwick, Vermont. Zach Hoppe, one of the drivers of their fleet of five vehicles, is returning from a day on the road delivering glass bottles of milk, cream, fresh produce, artisan cheese, craft soda, and other Vermont-made products to stores and restaurants.
He returns to the warehouse with cases of salumi from Babette’s Table and frozen plant-based food from Vermont Bean Crafters, picked up fresh from producers. At Farm Connex, it will be unloaded, prepped, and reloaded for deliveries to stores the next day.
Farm Connex, the distribution arm of the Center for an Agricultural Economy’s (CAE) Food Hub, delivers goods for producers whose operations are too small or rural to work with traditional distribution services.
While Hoppe is unloading products in the warehouse, another Farm Connex driver, Brandon Millett, returns with a truck full of Strafford Organic Creamery dairy.
“If you think about Butterworks Organic or Strafford Organic and the volume of value-added dairy they need to move off the farm - that is not a task they can easily do themselves without having their own trucking fleet and employees,” Jon Ramsay, executive director of CAE, said. “Rather than having to replicate that at every farm, we can do that for many different farmers.”
Yet, the space where an estimated 12 million dollars of food was moved from farm to shelf in 2022 is only 1,200 square feet. Millet is forced to wait in the parking lot because there’s only one loading bay.
“It’s like a Tetris game with pallets and boxes,” Corey Hennessey, Farm Connex general manager, said. “Because of space limitations, we handle things multiple times, which fundamentally increases our costs. We progressively move product through this single channel instead of having a dedicated staging area for each route.”
Cramped in her makeshift office in the loft above the loading bay (which she shares with Dispatch and Logistics Coordinator, Stella James and Ops Manager, Don Maynard), Hennessey says the lack of space in this middle part of the supply chain is a bottleneck preventing Farm Connex from serving even more farmers.
Setting the Stage for Expansion
Founded in 2009 by Maynard and transferred to CAE in 2020, Farm Connex has grown from serving about a dozen farms and food businesses when it began to nearly 100 today. Farms like Sweet Rowen Farmstead in West Glover have seen exponential growth because of the partnership.
“Don was going to Sweet Rowen with a van to load up ten milk crates each week, and now we’re picking up, on average, 250 to 300 a week. It’s an enormous amount of growth they’ve experienced as a result,” Ramsay said.
Sweet Rowen's story is one of many similar producer stories. In 2021, Farm Connex distributed products valued at 8 million dollars for producers. In 2022, that number rose over 50 percent to an expected 12 million dollars. In 2023, they expect to surpass that. Hennessey, an original employee in the company, says demand for their services has exceeded their capacity for as long as she can remember.
“This is why getting into a new facility is so critically necessary,” Hennessey said.
With a growing waitlist built on their reputation for scaling Vermont farm businesses to the next level, CAE received a nearly $250,000 grant in 2022 from the Working Lands Enterprise Initiative (WLEI) to scale their own business.
The grant will support building out infrastructure in a new warehouse, a new freight truck with one new trucking route with out-of-state delivery points, CDL driver training, and staff time for a general manager and dispatch and logistics coordinator.
“This was the first year Working Lands was able to make a grant of this size, known as a market-level grant, for the impact it has well beyond the business that receives it,” program lead Elizabeth Sipple of WLEI said. “Farm Connex is an example of a business that is supporting the success of many working lands businesses.”
Farm Connex currently works with producers in 13 out of 14 counties in Vermont. Those farmers steward over 10,000 acres of land. In 2022, Farm Connex ramped up its customer base with ten new producer relationships and hired a new CDL driver in anticipation of moving into an 11,000-square-foot facility in 2023, which will more than double local product storage capacity.
“We have five trucks and one loading dock. That creates a bottleneck and inefficiencies that will not be solved until we get into the new warehouse space,” Hennessey said.
The new facility will have a larger cooler, a staging area between the cooler and the loading dock, and three loading docks to simultaneously load multiple trucks.
The expansion will better position Farm Connex to distribute to Boston, New York City, and other regional markets in partnership with Vermont Way Foods – a collaboration of Vermont’s food hubs to move more Vermont food out of state.
The move will also support more frozen inventory for CAE’s Just Cut program. The Just Cut program is another part of CAE’s food hub that purchases raw produce from local farmers and then processes the raw vegetables into prepared produce products that are sold to institutional markets.
An Alternative to the Traditional Distributor Model
Farm Connex doesn’t want to displace the traditional food distributor model. Instead, they look at themselves as a complimentary service.
“In the wintertime, UNFI isn’t going to be sending their 18-wheeler up on the mountain, so we pick up everything for them and bring it back to our warehouse so that they can pick up here,” Ramsay said of their pick-up at Butterworks Organic for UNFI.
Doing things that large distributors can’t is their specialty. Ramsay recalled the many times their trucks got stuck in the mud on the back roads at Strafford Organic Creamery and how they ensure analog freight request alternatives are available to Amish producers who have to compete in an increasingly digital world.
Farm Connex also moves 400 pounds of cheese 55 miles weekly from Von Trapp Farmstead in Waitsfield to Jasper Hill in Greensboro, where the aging process is completed. It’s a collaboration cheese called Oma and another example of a product that depends upon the reliability of Farm Connex to exist.
“There are relationships we foster between farmers that a larger distributor cannot,” Ramsay said. Farm Connex also makes distributing food from the farm more affordable and accessible for producers.
“There can be significant barriers to working with larger distributors, where they may or may not have room for you as a smaller producer or demand for the product you are trying to sell,” Hennessey said. “While we do often have to implement a minimum case quantity for producers to qualify for our services, it’s often much less than a traditional distributor and depends upon a lot of other factors as well, some of which are mission-driven, and others logistically driven.”
Hennessey says in the traditional model, producers can pay up to 25 to 30 percent of the value of their products to a distributor. Farm Connex’s service costs significantly less, as they don’t buy the product and resell it as most distributors do; they’re solely a transport and logistics service. This allows farmers to retain relationships with their customers.
“The goal is to keep more money and more control in the hands of producers, access to a wider network of destinations, and more local food in our communities,” Hennessey said.
Generally, Farm Connex charges 15 to 20 percent of a product’s wholesale value, or on a per-unit basis (per case or pallet, etc.), depending on the farmer’s needs. As a non-profit, their goal isn’t to make a profit; but to simply cover their costs.
“Because of that, producers can be more profitable and diversify their customer base, which gives them more latitude,” Hennessey said.
Grant Supports Long-Term Viability of Farm Connex
Though Farm Connex expects net losses in 2023, they say the market-level grant from WLEI will allow them to expand and become more efficient so that income will catch up to their operating expenses in the next several years.
“To reach more producers and serve more of Vermont’s food system, it’s a matter of us having the infrastructure to be able to do that, so we are not overextending an already overextended infrastructure framework,” Hennessey said.
Hennessey says the grant will allow them to continue to offer affordable rates, which favors farmers over profit.
“This is why the Working Lands grant is so important in sustaining what we do because our work is so customized to each producer,” Hennessey said.
As Hennessey and Ramsay pitched in to unload the Strafford Organic Creamery dairy products that just came in, they described how Farm Connex lightens the load for producers.
“We do this sweeping scope of work that is physically demanding and logistically challenging,” Hennessey said. “We’re providing an added capacity for working businesses, working farms, and working lands throughout the entirety of the state.”