What is the New Version of Scale Efficient: A Values-Based Supply Chain Approach
Although the growth in direct markets suggests a significant jump in local food purchasing by households, direct marketing still only accounts for a small percentage of total food sales because conventional food supply chains account for the great majority of food dollars. Since these traditional outlets are often unable to integrate local products from small and mid-size producers, new opportunities have arisen for farmers to reach wholesale markets. But the economic question is whether these innovations can compete in terms of efficiency, since the transaction costs associated with product distribution are likely to rise if new systems do not achieve scale economies. The goal of this study is to determine what scale would be needed for a local food distributor located in Northern Colorado to be financially feasible. Since the mission of the distributor is to increase local food access for wholesale buyers and provide a market outlet for small and midsize producers; financial feasibility is a necessity but profit is not the primary goal.
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