Student Corner: Value-Added Production as Economic Development

Community and Economic Development – Blog by UNC School of Government

https://ced.sog.unc.edu

Student Corner: Value-Added Production as Economic Development

By CED Program Interns & Students

Published January 17, 2013

Pickled bamboo shoots, gourmet jams, and unpasteurized tea are just a few of the products coming out of Blue Ridge Food Ventures, a value-added food production and manufacturing facility based on Asheville, North Carolina. BRFV is an 11,000 square foot facility with a shared-use commercial kitchen, processing areas, and storage capacity. Creating or supporting value-added production (VAP) facilities is one way communities are reinvesting in their agricultural roots and committing to stronger, local economies.

VAP is essentially any process that creates a product into a more valuable product. For example, a tomato farmer can turn her tomatoes into tomato sauce and sell it at a higher price. A VAP facility is an incubator where food entrepreneurs have access to the necessary space, equipment, and training needed to help make an idea into a safe, marketable product. Clients of a VAP facility vary widely depending on the focus of the organization, from farmers to artisans to carpenters or restaurateurs. Clients have access to services at every level of the production process including business planning, production safety, packaging, and more.

BRFV is supporting local food entrepreneurs as part of a greater regional job creation strategy.  The organization is owned and operated by AdvantageWest, a regional economic development group serving 23 counties in Western North Carolina.  Through the space and services provided by BRFV, clients are able to nurture their business in the beginning years.  And, it’s working for many clients. In a recent New York Times article, Jeannine Buscher and Sarah Schomber, the founders of Buchi, which makes fermented and unpasteurized tea, were quoted: “We could never have afforded the kind of place we have now two years ago,” Ms. Buscher said. “It’s hard to say what kind of business we would have today if we didn’t have Blue Ridge Food Ventures to help us get started.” Buchi now has its own 6,000 square foot facility.

Value-added production facilities have gained popularity over the past few years. Based on Blue Ridge’s experience and that of other value-added producers, a few themes critical to success emerge.

• Many VAP facilities offer a diverse set of uses and services based on the needs of the community.  Blue Ridge Food Ventures offers separate areas for wet-product preparation, dry-product preparation, another area for natural products, dry storage, and walk-in coolers and freezers. Other VAP facilities offer woodworking courses or cheesemaking capabilities. It is important to conduct an initial feasibility study to understand your potential client base and what diverse services and equipment they will need to be successful.

• Strong partnerships are the foundation of many VAP facilities. Organizations collaborate with economic development commissions, city and county governments, or foundations.  VAP facilities can also partner with local educational or research institutions to provide business and trade training to the clients of the facility. Whether cooking courses or business planning, an educational component can support the mission of the VAP facilities, and payment from the courses can provide a sustainable funding source for the organization.

• A diverse set of funding sources is another crucial component of many VAP facilities.Local, state, federal, and private resources are often leveraged to create and maintain the facilities. BRFV receives funding from the Gold Leaf Foundation, Appalachian Regional Commission, North Carolina Department of Justice, North Carolina Department of Agriculture, USDA, and in-kind support. Some agencies even have funding opportunities that are specific to VAP.  The U.S. Department of Agriculture has a Value-Added Production Grant (http://www.rurdev.usda.gov/BCP_VAPG.html) and NC State University has a Value-Added Cost Share Program (http://plantsforhumanhealth.ncsu.edu/extension/programs-resources/cost-share/). Facilities can also provide services at a cost to the client as a sustainable funding source.

The Agricultural Marketing Resource Center offers information on commodities & products, markets & industries, business development, related curriculum, national resources and resources specific to North Carolina. They also compiled over fifty case studies, highlighting the diverse capabilities of VAP facilities. Examining these case studies provides insight into how communities across the country are using VAP to support agriculture, create opportunities for food entrepreneurs, and strengthen their local economies.

Alexandria Murnan, a current graduate student in the UNC Department of City and Regional Planning, is a Community Revitalization Fellow at the School of Government.