Emergent Food Businesses Build Trust


October 7, 2009 Contact: Ken Meter; kmeter@crcworks.org; 612-869-8664 Emergent Food Businesses Build Trust A new study, “Mapping the Minnesota Food Industry,” concludes that an emerging cluster of food businesses drives economic change by building trust with their commercial partners. Ken Meter, president of Crossroads Resource Center and author of the study, said, “The most successful firms are creating new ways of doing business, not only providing higher quality foods.  They do this by building relationships of trust with both suppliers and customers.” Meter’s study was based on a thorough financial review of the state food industry combined with close interviews with key local firms.  The report was commissioned by Blue Cross and Blue Shield of Minnesota’s Center for Prevention, which has launched a Healthy Eating Minnesota initiative.  The full study is available for free download at http://www.crcworks.org/mnfood.pdf. “Even multi-million dollar firms told me they are having difficulty because the economic structures are not in place to deliver the highest quality products to consumers at an affordable price,” Meter added.

Minnesota is a global center for food business.  Of the state’s top 20 manufacturing firms, seven are food manufacturers and distributors.  These seven earn $114 billion of revenue each year, two-thirds of all revenue earned by the state’s leading firms.  The state has 17,000 food-related businesses, hiring a combined 316,000 employees who earn $7.8 billion of wage and farm income.

With 80,000 farms selling over $13 billion of crops and livestock each year, Minnesota is also the seventh-largest farm state.  However, over the past decade, state farmers have lost an average of nearly one half billion dollars each year producing these foodstuffs.  Despite doubling productivity, Minnesota farmers earned $1.1 billion less from commodity sales in 2007 than they did in 1969, in inflation-adjusted dollars.

Meanwhile, state consumers buy $12 billion of food each year.  Experts estimate that 90% of this ($10 billion) is sourced outside of the state, meaning consumers spend a great deal of money that leaves Minnesota.  Only $23 million of the foods farmers sell (three-tenths of one percent) are sold directly to consumers.

The study also documented that outcomes for consumers have not been positive.  Two of every three Minnesotans are overweight.  Nearly a third of all residents are obese.  The Centers for Disease Control estimates the costs of treating obesity-related diseases in the state to be $1.3 billion — and other researchers report twice those costs.  Food-related medical conditions, combined with a lack of exercise, have become a leading cause of death.  Although mortality rates for diet-related diseases in the Twin Cities are among the lowest for metro areas in the U.S., only 24% of adults eat the recommended five servings of fruit and vegetables per day.

Meter added that three themes characterize the emerging businesses that are leading the way in creating a new, more community-oriented food economy in the state.  “First, these firms value trusting relationships.  Second, they plan for an uncertain future — especially the fact we don’t know if we will have oil, or at what cost, in a few years.  Third, successful firms build a business that recycles resources within the state, rather than exporting them.”

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