MODULE 6 - DISTRIBUTION CHANNELS FOR
HEALTHY FOOD

Overview
This module will look at the challenge of distributing your healthy
food product. Learners will gain a better understanding of different
distribution systems and the benefits that each offers.

Food Distribution
Distribution is a critically important part of your business
strategy and must be seen as central to success.
Distribution covers both the physical movement of goods and
the establishing of intermediary relationships to support such
product movement.
Successful distribution is intrinsically linked to the level of a
company’s sales. It must be part of an integrated and well-
managed supply chain.

Issues surrounding FOOD DISTIBUTION
Food is responsible for a quarter of the distance lorries travel
in the UK, and shoppers drive around 12 billion miles a year to
buy it.
In the UK, the Government puts the social and
environmental costs of food transport at £9 billion a year, with
well over half this figure resulting from congestion. The scale
and visibility of food distribution have helped to make it a focus
for public, government and business efforts to promote
sustainable development and most effective approaches.

Distribution Chains
Long Supply Chains
• Intermediaries involved
• Reduced Costs
Short Supply Chains
• Few intermediaries used
• Usually more costly
• Greater control over
marketing of product
• More time consuming for
the producer
v
s

Short Food Supply Chains
Long Food Supply Chains
Producer Consumers
Producer Retailer Consumers
Producer Retailer Consumers
Wholesaler

LONG SUPPLY CHANNELS
can be very complex!
Exports
Growers and
grower-shippers
General line
grocery
wholesalers
Imports
Specialty
produce
wholesalers
General line
grocery
wholesalers
Retail
Direct Markets
Food Service
Establishments
Brokers

ISSUES WITH
LONG SUPPLY CHANNELS
• Contribute excessively to climate change, especially when food
travels by air
• Depend on dwindling oil reserves and are geopolitically
vulnerable.
• Widen the gap in understanding between consumers and
producers.
• Can compromise animal welfare by transporting livestock long
distances.
• Can harm local economies and the communities they support.
.

Local Sourced Food – UK Strategy against Long
Supply Chains
The market for ‘locally sourced’
food has boomed, with around
two thirds of people in the UK
saying that they buy local food.
In response to this, Government
and business initiatives such as
the UK Food Industry
Sustainability Strategy have
sought to mitigate some of the
problems attributed to long
supply chains.
https://www.gov.uk/government/uploads/system/uploads/attachm
ent_data/file/69283/pb11649-fiss2006-060411.pdf

Local Food -
Healthy and Sustainable Distribution
• Short Supply Chain - The premise of local food is
minimising the distance between agricultural producers
and food consumers.
• As a rule, local foods use less processing and packaging
which results in a fresher, healthier product
• Local food builds community vibrancy and retains local
traditions while establishing a local identity through a
unique sense of community.

Local & Regional Food Systems

Local and Regional Food
Commonly, “local food” refers to food produced near the
consumer (i.e., food grown or raised within X miles of a
consumer).
However, because there is no universally agreed-upon
definition for the geographic component of what “local” or
“regional” means, consumers are left to decide what local
and regional food means to them.
2008 survey in the US found that half of consumers
surveyed described “local” as “made or produced
within a hundred miles” (of their homes).

What is a “local (or regional) food system”?
The term “local food system” (or “regional food system”) is used to describe a
method of food production and distribution that is geographically localized,
rather than national and/or international. Food is grown (or raised) and
harvested close to consumers' homes, then distributed over much shorter
distances than is common in the conventional global industrial food system.
In general, local/regional food systems are associated with sustainable
agriculture, while the global industrial food system is reliant upon industrial
agriculture.
They are particularly relevant to the area of ‘healthy’ foods.

Who Buys Local and Regional Foods and
Why?
Studies suggest that consumers who buy local/regional
foods are:
• concerned about supporting the local economy
• strongly influenced by others around them, and felt
confident that their actions “make a difference” for public and
private outcomesconcerned for the environment which
increased the likelihood of buying locally

Food Distribution: the Way Local Food
Reaches the Consumer
The ways in which food reaches the consumer vary widely.
Local food systems value a shorter distribution distance between
grower/producer and consumer. In addition, local food systems often cut
out the middlemen involved in processing, packaging, transporting, and
selling food.
Local food distribution networks rely on two primary markets: the direct-to-
consumer market and the direct-to-retail, foodservice, and institution
market.

The Direct-to-Consumer Market
The direct-to-consumer market is currently the
most established sector of local food distribution.
Direct-to-consumer means that middlemen are cut
out of the food distribution equation – producers
sell their products directly to consumers, rather
than through third parties, such as supermarkets.
Examples include
Farmers Markets, Regional Food Distribution
and Online /subscription models

Farmers' Markets
Farmers’ markets are usually held out-of-doors, where producers
can sell their produce to the public. Products at such markets are
typically locally-grown, very fresh, and sold directly to the public
by the producer themselves.
Farmer’s markets in Ireland - www.irelandmarkets.com and
www.bordbia.ie
Farmer’s markets in Northern Ireland -
http://www.discovernorthernireland.com/Ulster-Farmers-Markets-
A1930
Farmer’s markets in UK –
www.farmers-markets.co.uk

Community Supported Agriculture
Community Supported Agriculture (CSAs) are direct-to-
consumer programmes in which consumers buy a “share” of a
local farm’s projected harvest.
Consumers are often required to pay for their share of the
harvest up front; this arrangement distributes the risks and
rewards of farming amongst both consumers and the farmer.
CSA participants often pick up their CSA shares in a communal
location, or the shares may be delivered directly to customers.

A community supported agriculture system is extremely
beneficial to a community because it “enables consumers to
support local farmers, obtain food that might be fresher than
store-bought food, and learn more information from farmers
about how the food is grown." Local eating can promote
community interaction by fostering relationships between
farmers and consumers.
Community Supported Agriculture

Community
Supported Agriculture –
EXAMPLE in Ireland
Derrybeg Farm is a
Community supported
agriculture (CSA) scheme
based in Celbridge.
They grow organic produce for
their members and everybody
shares a portion through their
weekly box scheme
http://derrybegfarm.ie/

The farm also produces goats milk
dairy products but also free-range
pork, woodland poultry and honey.
http://www.chagfood.org.uk/
Community Supported Agriculture
EXAMPLE in UK
Chagfood is a subscription farming scheme based on the idea of
Community Supported Agriculture. This is a relatively new approach
to farming where consumers become members of the farm and
commit to buy a share of the farm’s harvest for 12-months at a time.

Other Direct to Consumer Routes to Market
A much smaller proportion of the
direct-to-consumer market are
options such as pick-your-own
farms, on-site farm stands and
stores, and gleaning programs, in
which consumers are invited to
harvest crops that are left in
fields, usually after harvest.

Regional Food Events
Collaborative events where producers come
together to market their products.
Eg. Cork & Kerry Food Forum,
IRELAND
The Cork and Kerry region is renowned
nationally and internationally for its high
quality food produce. The Cork & Kerry Food
Forum is an annual showcase of more than
70 local food producers all under one roof,
with tastings and demonstrations of an
incredible variety of food as well as cookery
demonstrations
http://www.foodforum.ie/

Regional Food Events
Eg. Cork and Kerry Food Forum, IRELAND

Local Food Distribution Co-operative
Collective ownership to enable members
access markets for their produce which they
could not supply on their own.
Being trialled in Ireland and some success …

Irish Food Coop
• A producer owned not for profit
co-operative of artisan food
producers
• For the Producer: Nationwide
reach, increased exposure,
increased sales
• For the Retailer: One contact
access to quality artisan
products, a single non- disruptive
delivery, one invoice/ payment

How Irish Food Coop Works
http://www.irishfoodcoop.com/
Order Comes
in to Trade
Desk (email
or phone)
Product
Consolidation
Non-disruptive
‘drop’ to
customer
A Single Invoice
is Produced
Sales for
Individual
Producers
Reported
Cope of Order
sent to
Warehouse &
Producers
Order is Packed
& Dispatched
Delivery
Confirmed to
Trade Desk
Customer pays
Co-op
Sales less
Commission

Local Food Systems
Selling to Food Service

Direct to Food Service Market
A growing component of local food systems is the direct
supply to retail, foodservice, and institutions either directly by
the producer or through a “food hub,” which is a centralised
location where many producers drop off their food products
for distribution amongst multiple establishments.

Colorado Crop to Cuisine (CCC) was organized to promote
relationships between Farmers and Chefs and increase
market opportunities for local producers of fruits, vegetables,
herbs, artisanal produce and lightly processed foods.
The CCC provided direct marketing opportunities for a group
of small and specialized agricultural producers who were
looking for appropriate distribution strategy for their niche and
value-added products.
Eg.- Farmer to Chef
- Colorado Crop to Cuisine Example

Colorado Crop to Cuisine – How it worked
Although, no longer operational, the business model
for CCC is very interesting and adaptable in an EU
context.
It promoted partnerships between local food
producers and food service. It targeted:
• Northern Colorado farmers produce high quality, specialty
produce that has superior flavour and freshness.
• Chefs, consumers and food institutions looking to make a
local connection, become a member and partner in our
organization!

E-commerce - An Emerging Method Of
Direct To Consumer Distribution

Sell online
There are more mobile
phones in the world than
toothbrushes!
Technology is reshaping
how consumers buy food
and it’s easier
than you think !!
UK online
grocery
sales profile
Compelling
headline
statistics…
Total UK Grocery sales
2014-2015
178 billion
Online accounts for
12% of retail sales
Online sales are growing
at 12% per year
Grocery accounts for
12% of online sales
80%
UK Households
have
broadband
54%
Smartphone
owners have
made a
purchase on it
74%
UK Residents
now own a
smartphone

https://www.ocado.com
Ocado is the world’s largest dedicated online grocery retailer including the
largest selection of nutritionally “free from” products in the UK and a strong
ethos to minimise environmental impacts. Stocking over 43,000 items on their
award-winning webshop and mobile app, they ship over 200,000 orders per
week throughout the UK. https://youtu.be/wKpyPO76yZ4
http://www.ocadogroup.com/our-responsibilities/eating-well.aspx
Eating Well pillar, is a plan to support the
role of food in health and nutrition and help
reduce food poverty in the UK.

Selling online for the small producer
Selling your healthy food
products online is
profitable and easy!
The costs for selling
online are really low but
you need to carefully put
an online sales strategy
in place.

6 Steps to Selling Online
1. Customer
2. Online Store
3. Products and Offers
4. Safe Payment
5. Expeditioin
6. Delivery
Online Store
(e-commerce
B2C)

To sell products on your website, you need 4 things:
1. Your website with a shopping cart
2. an SSL certificate
3. A merchant account
4. A payment gateway
Getting Started

There are three essential elements to a website:
1. Clear navigation.
2. Easy-to-read information.
3. A definite focus for the site - make it clear you are selling your products
You should also keep the following points in mind when setting up your
site:
• Keep it simple. Make sure the site works with all web browsers,
not just Internet Explorer.
• Ensure your contact information is clearly visible on every page
of the site.
• If you are collecting personal information from customers,
you must have a privacy policy in place.
Website

Ease of navigation is critical - consider how your customers would
shop for your products - by variety, size, feature etc. there are 5
key things to think about ….
1. Product image
People eat with their eyes-
invest in great photography
Website
2. Product code
A product code is a series of
characters that defines the
product for inventory - tracking
purposes.

3 Product name
Your product name is self-explanatory – it’s the name of the
product that you’re selling.
4 Product price
Its very important to establish and clearly display your price so
customers know how much they’re paying for the product.
5 Product description
A well-written product description is important so customers can
learn about the intricate details of said product
Well-written product descriptions are also NB for SEO and
helping your products and your online shop get found!
Website

SSL CERTIFICATES deliver essential data security for
you and your customer. Having an SSL cert not only
keeps your customers safe, it also gives your business
credibility.
When customers see “https” in their browser when visiting
your site, they know you care about their security. And
keeping your customers’ information secure from online
threats is every business owner’s top priority.
SSL Certificates

A merchant account is offered by a financial institution
and offers businesses the ability to accept and process
payments by credit and debit card, in store,
on the phone and online.
It also deal with chargebacks, installation and
service of credit card terminals and many other credit
and debit card related services that are necessary
to keep an online store running smoothly.
Merchant Account

PayPal's Website Payments Standard combines the
payments gateway with the internet merchant account.
This will provide you with a secure server to accept
payments, whether customers are paying by credit card or
PayPal. WorldPay (http://www.worldpay.com/emea)
offers a similar service.
Paypal

Start with Shopify ?
Examples:-
http://www.shopsanctuaryt.com/
speciality teas online
www.mouth.com
a webshop for US indie food products
Shopify makes it possible for you to have your online food and
beverage store up and running in minutes. Choose from hundreds of
professionally designed templates to create your website and sell
food and beverages online. Their seamless shopping cart system
supports inventory tracking, customer management and reporting.
https://www.shopify.com/sell/food-and-beverage

HEADING
Paleo Meal Deliveries
‘is here to ensure that you
maximize your returns from all
that hard work in the gym or
simply to ensure you don't
graze on junk on a daily basis!
We make eating right easy,
giving you structure and
exactly weighted macro
nutrients to align with you,
your activity levels, goals and
of course taste!’
Online – combining health & convenience
www.paleomealdeliveries.ie

http://biabox.ie/
Producer Boxes Delivered

HEADING
Bewley’s Coffee Ireland set up
Coffee Project a subscription
service of delivering speciality,
hand-roasted coffee to your door
each month.
https://youtu.be/hBVSnQxSPr8
Subscription
is €109 for 12 months
or €9.09 per month
New Business Models – Subscription Service
www.coffeeproject.bewleys.com

HEADING
Online Health Shops
Healthy shopping delivered to your door.
http://www.goodnessdirect.co.uk/

Selling to Retailers with a Focus on
Local/Healthy Food

Supervalu is Ireland's
biggest supermarket chain.
Most SuperValu stores now
have at least one aisle
devoted to health foods,
from quinoa to cashew
butter to coconut oil.
Supervalu – Ireland

Supervalu – Health and Wellness Aisle

1. Centrally – central billing
Through Supervalu Head
Office, Tramore Rd., Cork -
021 4803000.
Selling to Supervalu, Ireland - Two options
2. Locally
Take the approach of
targeting individual store
owners. There is a listing of
all Supervalu’s on
www.supervalu.ie with
contact names of all
owner/managers. It’s up to
each store owner if they
decide to stock your product.

Click here to type
HEADING
www.supervalu.ie/real-people/food-academy-programme
Selling to Retailers – Supervalu Food Academy
Supervalu Food Academy, a
multi agency effort by LEO, Bord
Bia and Supervalu to help develop
Ireland's artisan food industry, to
provide a foundation to progress to
shelves of retailers.
You participate in a series of
workshops. Pitched your product
to a team of SuperValu buyers and
managers. Chosen to take part of
a 12 week Food Academy trial with
a view to wider distribution in their
top stores.

Source: www.aldi.ie
Focus on
health - eg.
affordable
‘Has No’
gluten free
range
Selling to Multiples – Aldi Ireland

Source: www.aldi.ie
Selling to Multiples – Aldi Ireland
Aldi Ireland also
has a strong
commitment to
supporting Irish
farmers and
suppliers. Over
50% of total sales
in Ireland are from
Irish bought
products

Source: www.aldi.ie
Similarly Aldi, UK has a strong commitment to
supporting British farmers and suppliers.

http://hisbe.co.uk/
hiSbe - UK
hiSbe is a new type of Supermarket, with a social enterprise
model that serves the interests of people and communities.
Here are some of the ways that we’re different:

hiSbe - UK

Food that’s farmed or produced in your
area is freshest and hasn’t had to travel so
far.Where possible and where the quality
exists, hiSbe choose to source from
producers/growers based locally.
Looking to Sussex-based suppliers first
helps them provide a boost to the local
economy and reduces unnecessary food
miles. It also means working more directly
so they know exactly where and how the
food has been produced.
hiSbe - UK

Case Studies

https://www.dublinfood.coop
This is Ireland's leading member-owned cooperative
operating from premises near St Patrick's Cathedral, Dublin
8. It is run by members for members concentrating on local
produce from local producers including organic wholefoods,
vegetables & fruits, dairy, and bakery.
Ethical basis…
100% vegetarian
Alcohol-free and family-friendly
No Genetically Modified (GMO) ingredients
Dublin Food Co-operative

They moved to a large indoor space in 2007 and operate
interesting opening hours:-
Wednesday, Thursday, Friday 12 noon - 8pm - Wholefood
dry goods shopping; with fruit and veg stall or boxes available
Saturdays 9.30am to 4.30pm – Main trading day with 5
growers supplying organic fruit and vegetables, 2 organic
dairy producers and 3 producers of breads and baked goods
and an organic wine merchant
There is also a permanent section for wholefoods and dry
goods in supermarket style.
Dublin Food Co-operative

As a mutual organisation, according to their constitution,
they can only trade with members.
Membership fees from January 2014 are:
•New members: €15+€1 share
•Renewals: €15
•Household membership: €20 +€1 share
•Once off visitors are welcome but must purchase a visitor
card for €2 which is valid for 3 visits to the Co-op.
It has created a supportive and loyal community.
https://www.dublinfood.coop/join
Dublin Food Co-operative Membership

commercial growers of chillies,
herbs and vegetables
• Product range includes chilli
plants, fresh, dried and pickled
chillies, along with our own
gourmet range of fiery sauces
and salsas
• Distribution > Online shop, farm
shops, delicatessens, farmers
markets, food and wine shows,
and specialist chilli companies
throughout the United Kingdom
Edible Organics - UK
http://edibleornamentals.co.uk

Edible Organics - Farm Shop

Edible Organics
Online Shop
http://edibleornamentals.co.uk/sh
op

Direct to Consumer
Distribution Model:
• Online Shop
• Retail Shop
•Pop up Farm Shop
• Wholesale
www.castleminefarm.ie
Castlemine Farm – Ireland

Castlemine Farm – Ireland
Pop up Farm
Shop allows
Castlemine Farm
to sell their
produce at local
and regional
markets across
Ireland.

Castlemine Farm - Very Strong Online Presence
www.castleminefarm.ie