America's largest food distributor was too big for local farmers. Not anymore.
When Michigan State University wanted to serve more locally
grown produce, Mike Passorelli's basil would have been ideal. He grows it in a
greenhouse two hours west, and labels it organic gardens. But the school can't buy
directly from tons of farms; that would be an organizational nightmare. So in
2007, it asked its food supplier, Sysco, to provide. That turned into a lesson on
just how complex our nation's food system is: To distribute local food, Sysco had
to first spend three years restructuring its produce division in Michigan--a feat
it's now reproducing nationwide.
Just 2% of Americans produce food for the rest of us. Companies like Sysco sell in bulk--which means they find it more cost effective to haul an 18-wheeler filled with basil cross-country rather than to let Passorelli fill up part of a Sysco truck. Even if Passorelli drives the basil 25 miles to a Sysco warehouse himself, the company has no way to enter his produce into its system.
Sysco put Grand Rapids produce manager Denis Jennisch on the case. "In the past, procurement of produce was a phone call and a fax. Relationships were missing in this business," he says.
Step one: He met with farmers to learn their growing practices and costs, and counseled them on the food-safety-certification process. (Sysco customers typically insist on only certified food, but many small farmers consider the process too costly and time-consuming.) Then Jennisch explored ways to aggregate the farmers' production, integrating their produce into Sysco's bulk operations.
Now Jennisch has a blueprint for local sourcing that Sysco executives say lessens the company's carbon footprint and provides fresher produce. That hasn't yet led to huge profits, but Sysco is excited anyway. "The minute you cut a fruit or a vegetable out of its natural growing environment, it starts to die," says Sysco VP of produce Rich Dachman. "The sooner you can get it to the consumer, the better off you are. And that makes our customers happy."
[Click to enlarge]
[Illustration by Loulou & Tummie]
A version of this article appears in the November 2011 issue of Fast Company.