Business Models

Wholesale Market

A wholesale market does not typically sell directly to consumers but instead supplies area restaurants, retail markets, institutions and caterers.

Subscription CSA

In the subscription CSA model, the farmer (or farming family) owns or leases the land and equipment needed for production. The farmer makes most of the management decisions and, together with farm employees, provides most of the labor, while CSA members provide needed capital through their purchase of shares. This model differs from the shareholder CSA.

Shared-Use Commercial Kitchen

A shared-use commercial kitchen is a licensed kitchen facility where local entrepreneurs, caterers and instructors can prepare and process their food products for the consumer market or hold cooking classes and demonstrations. These facilities are generally rented by the hour or for longer time slots. Instead of taking on the considerable financial commitment of opening a private commercial kitchen, new or expanding small food businesses can take advantage of shared-use commercial kitchens to help grow their enterprises. Equipment that is generally available includes ovens, ranges, mixers, prep counters, coolers, freezers and storage space. Some shared-use commercial kitchens also rent out event equipment, such as chafing dishes, drink coolers and linens. These facilities may be found in food venture centers and food innovation centers, but they commonly exist as separate entities as well. Some food producers with their own production facilities will rent out their licensed commercial kitchens when they are not in use.

Shareholder CSA

This CSA model functions similarly to a cooperative, with the member-driven CSA itself owning or leasing the land and equipment needed for production. The CSA body may hire a farmer to manage the land, but members often provide much of the labor involved in production, marketing and distribution. This model is an alternative to the more common subscription CSA.

Public Market

Public markets are usually large, permanent city markets with a variety of vendors including local farmers, specialty food producers, artisans and food resellers. Rochester Farmers’ Market in Rochester, New York, and Pike Place Market in Seattle, Washington, are two examples of this type of market.

Producer-Only Market

The term producer-only is sometimes interpreted differently among farmers’ markets, but it usually means that a market’s vendors grew or produced all the goods they are offering for sale.

Pick-Your-Own (PYO)

Pick-your-own (also referred to as U-Pick and You-Pick) is a form of agritourism applied to many fruit and vegetable crops, most commonly berries, apples, stone fruits, small tomatoes and pumpkins.

Municipal Farmers’ Market

A municipal market is a market where farm products are sold. This type of farmers’ market is organized and regulated by a city. See also Public Market.

Market Garden

Market gardens produce fruit, vegetables and flowers on a larger scale than a home garden but employ many of the same principles as home gardening. Market gardens tend to supply local markets.

Low-Profit Limited Liability Company (L3C)

An L3C is a hybrid business model that combines features of a limited liability company, or LLC, with a 501(c)(3) nonprofit entity. This hybrid model allows L3Cs to pursue a social mission, with profit as a secondary business goal, and it gives them access to a wider variety of investment options since the designation allows foundations and other donor-directed funding sources to consider their contributions as program-related investments (PRIs). Vermont was the first state to enact legislation legalizing this business model and it currently exists in seven states and two Native American territories.

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