Small Maine farms and niche food makers must be crafty to distribute to broader markets

Sitting at the kitchen table in his Nobleboro farmhouse, Robert Spear, a third-generation farmer, juggles conversations between his guest and a series of phone calls to and from prospective produce buyers.

“Do you need tomatoes?” he asks one caller. “We're sitting on top of a lot of tomatoes.” One caller wants peppers, but Spear's short on them. However, the caller, from the Poland school district, says he might be able to take some cherry tomatoes. Spear says he has small tomatoes, but has to check if they're cherry or grape tomatoes, and will call back.

Although it's the brink of fall and already pumpkin season — large bins of orange and white pumpkins sit ready for him to drive to places like Five Fields Farm in Bridgton, some two hours away — he's focused on selling the tomatoes, which could start to go bad in a matter of days. And that translates into lots of phone calls and polite “er-ums” as prospective buyers tell him there are already flush with tomatoes.

“Everybody is trying to make it on their own,” says Spear, a former commissioner of Agriculture, Food and Rural Resources under former Gov. John Baldacci, and treasurer of Spear Farms Inc. “I'm not saying we don't work together. Farmers compete against each other, but we work together to fill a gap if someone doesn't have enough peppers, for example, to deliver to a customer.”

Constant negotiating with buyers and other farmers is a way of life in Maine's fragmented food distribution system, especially for small farmers and purveyors of specialty items like jams and honey. Those small operations practically define the local food and farm-to-table movements that sparked consumer interest in where food comes from and how it is grown or produced.

But that curiosity hasn't helped broaden Maine's food distribution system for the small producers to any significant degree, says Spear. The result: many small operations sell only within Maine or at most a day's delivery drive, thus limiting their market.

Also working against the smaller producers are Maine's more than 35,385 square miles and comparatively small population of 1.3 million, which translates into a limited number of buyers. By comparison, greater Boston alone has close to 4.6 million people. That means farmers must be creative and run their operations like businesses.

“A lot of farming is marketing,” Spear says. “Finding markets for a product is tough, especially with things being very seasonal now. You need to juggle different outlets. We have our own farm stands, other farm stands buy from us and we have four to five different distributors.” He also sells at farmers markets twice a week, in downtown Brunswick and Crystal Spring, and says those alone are big compared to his sales to Hannaford supermarket. His farm, which is run by his family, raises more than 300 acres of vegetables, but the income must support his family as well as those of his sons and brother.

Spear adds that the buying local phenomenon is real, with schools, universities and more organizations pushing it. The movement started about 15 years ago, he says, in just about every state. “When I was commissioner we did the initiative, 'Get Real, Get Maine,'” he says, to push local food. “It kept evolving to 'buy local.'”

Bigger farms and specialty food makers benefit from the larger food distributors that pick up goods and distribute them to stores or farmers markets, like United Natural Foods Inc., a national independent distributor of natural, organic, specialty foods, and Associated Buyers, a New Hampshire-based food distributor. Both operate in Maine. Some small farmers sell through them, but the added overhead eats into their income.

There also are aggregators like Crown O' Maine Organic Cooperative, which distributes goods for some 100 farmers from its North Vassalboro warehouse, and Farm Fresh Connection, which delivers down the East Coast to Maryland.

But many small- to medium-sized farms like Spear's drive their own goods to buyers — sometimes sitting for hours in lines of trucks, including those big brand companies, in a large supermarket's delivery area — and then go home with an empty truck, making the delivery costly. That's why small food sellers try to make as many stops at customers as possible during a delivery run.

No empty trucks

“I'd like to see us do more pickups in a loop,” says Jason Merritt, operations manager at Rosemont Market & Bakery's warehouse. Rosemont Market has four stores, a facility to cook foods for those stores and the warehouse/distribution center. Most are in the Portland area.

Merritt says producers also need to work together. There isn't one central listing where farmers can note what they have and stores can enter what they want so more collaborative distribution among small farms and niche goods could be possible, he says.

Before joining Rosemont four months ago, Merritt did try to set up such a central information point with the aim of having “no empty trucks.” But he stopped after finding the producers wanted all the benefits of a larger and more expensive distributor, including promotional activities, logistics support, merchandising and in-store product demonstrations.

What he tries to do at Rosemont, meantime, is to buy enough volume to make it worthwhile for the farmer to deliver to the warehouse. “For $10,000 worth of product, the trip could cost $100,” says Merritt. Rosemont buys each item from four to five farmers to assure it has enough. One of his suppliers is Spear, from whom he buys carrots. He also buys from aggregators like Crown O' Maine and Farm Fresh, which in turn also sell to large supermarkets like Hannaford.

“So much is built on relationships,” says Merritt. Rosemont, with gross revenue of $7.5 million, was founded in 2005 and has about 65 employees. He adds that customer demand for local foods continues to grow.

Rosemont, which in the height of farming season gets some 70% of its produce locally, buys from 40 to 50 different farms, which deliver their goods on Wednesday and Saturday afternoons to the market's warehouse on Riverside Street in Portland. Rosemont then sends out two trucks every morning to deliver the goods to its stores.

Unsold produce goes to the company's kitchen to be made into soups and other prepared foods sold in its stores, says John Schreiber, a produce worker in Rosemont's warehouse.

Rosemont also sends its own truck daily to the Boston Produce Market to get items that aren't grown locally, such as lemons and avocados.

Rosemont is in the process of looking for a larger warehouse, says John Naylor, co-owner and treasurer of the grocer. He's looking for a space that would more than quadruple the current 2,200-square-foot warehouse space to 10,000 or more square feet.

“We're looking for a building where a truck can back up and we can use pallet jacks to unload produce rather than carrying it by hand [at the current warehouse],” he says. “That knocks the cost off of moving the goods. And it expands the window of [food] perishability.” He says he hopes to have the new warehouse going by next spring, pending finding a suitable location and funding.

“We want a large enough warehouse to be a landing zone for lots of extra produce,” he says. “We go to Boston twice a week, and we will try to fill the trucks going down, too.” He says there is demand for the produce, since the city of Portland has been designated one of the federal “food hub” cities.

And having full trucks is critical when travel prices keep rising. Naylor says that in the mid-1990s, it cost $3,000 to $4,000 to run a tractor trailer with food across the country. Nowadays, he says, it's risen to $12,000 to $13,000. “What it's done is increase the cost of food,” he says.

But those high trucking costs also leveled the playing field for local producers, he contends. California asparagus that used to cost $1.99 a pound now costs $3.99, bringing it on an equal footing with local costs.

The big stores

When it comes to distributing to the big stores, persistence can pay off. Take Mother's Mountain, a Falmouth-based maker of mustard, jam, pepper sauces, honey and other specialty products. Dennis and Carol Tanner, also known as Mr. and Mrs. Mustard, make 32 different products in manufacturing space tucked into the back of their home on Mustard Hollow Way.

The 32-year-old company is a story of survival, shifting products to meet market demand and dealing with a variety of distributors. Dennis also drives products directly to stores. He describes his efforts to expand his market over the years as guerrilla marketing by Carol and himself.

Some distributors pick up his product for free, while others charge for the trucking. Distributors generally charge 30% to 35% of his wholesale cost for their services. Mother's Mountain also sells online and through farm stands, including the two owned by Spear. Annual sales are about $250,000, and he draws a salary of about $35,000, but the rest goes back into company overhead.

Mother's Mountain also has gotten onto shelves in Shaw's and Hannaford, though it only sells four products to Hannaford now. The company uses Progressive Distributors, which distributes to Hannaford, and Associated Buyers, which distributes to Whole Foods.

“The sales to Hannaford using Progressive are about six times more in volume and dollars than through Associated Buyers,” Dennis says. He sells more than 100 cases a week to Hannaford of two types of jam, jelly and Habanero Heaven pepper sauce.

Dennis believes part of the challenge his company faces is that unlike green beans and other farm products, the specialty food business is not taken seriously. And it's tough to stay in business. “I bought half of my equipment from a guy in Kittery who was making olive oil,” he says.

He also says some stores prefer high-volume products to sell, so mom and pop shops like his take a back seat. “We're not a priority,” he says. “But we need to have some products out of the door each day [to make a living].”

According to Hannaford spokesman Eric Blom, the supermarket chain offers more Maine-grown and produced food to customers than other grocers. It works with hundreds of Maine producers and has a Farmer's Market section in the store, along with Close to Home shelf tags. He says many items, such as 3 million gallons of Maine milk, are sold under the Hannaford brand each year.

Small operations bring their product directly to the stores they work with. Operations that can supply 10 or more stores bring their product to Hannaford's distribution center in South Portland, where it is trucked to individual stores, he adds.

Spear also sells to Hannaford, as well as Whole Foods and Shaw's. He says he sells a tremendous amount to Hannaford, where each farmer deals with the produce manager in each store. At Shaw's, he says, it's necessary to work through the headquarters in Massachusetts. “There can be a big difference in price,” Spear says of Hannaford compared to Shaw's, though the two stores can be equal in price for some products at certain times of the year.

He's also been creative with casting his net to potential buyers. The Good Shepherd Food Bank, for example, will send a truck to his farm. The food bank does take donated food, but also has a budget to buy a lot of local products, he says. He also donates about 25% of the total the food bank takes.

“They've been very good to work with,” he says.

Spear has three trucks that make daily deliveries from Ellsworth to Portland along Route 1 and in Waterville and Augusta, selling direct to stores rather than through wholesalers.

Still, he couldn't give a revenue figure, because it varies so much. In a good year he could see a $50,000 profit, and in a bad year a $100,000 loss.

“We make a living off our farm,” he says. “But we're trying to support three to four families [who run the farm] here.”

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