Low Q4 sales and investor withdrawl causes Two Rivers to restructures

Posted on: February 14, 2018

Two Rivers Food Hub

As of February 14, 2018, Two Rivers Food Hub is ceasing its distribution operations.  The commercial kitchens and long-term freezer and cooler storage rentals will continue as usual at the hub.  Two Rivers Food Hub is a not-for-profit social enterprise based in Smiths Falls Ontario with a mandate to support the small and midsize local farm and food community.

In over three years of operations, the food hub has created over 50 jobs in the local food sector, opened up new markets and boosted new farmers and entrepreneur food producers into the marketplace.

The food hub operates commercial kitchens for rent to farmers, food processors and small businesses.  According to in house surveys, annualized sales of products produced in the kitchens in 2016 topped $2 million.  35 clients have used the facility to start or grow their businesses in the last three years, including such familiar names to the local foods community as Artizen Kombucha, Oat & Mill Ice Cream, and rND Bakery.

The food hub has also been a local foods distributor, expanding markets and moving over $1 million dollars’ worth of food since distribution services began in 2015.  Working with over 90 producers, Two Rivers filled a niche in local food distribution in the middle between the farmers’ market and the large scale ‘broad line’ distributors servicing the wholesale purchasing community.  Restaurants purchasing from Two Rivers include some of the city’s and the country’s best.

Two Rivers is closing distribution operations because of a confluence of factors, the most significant being a decision last week that saw an expected investor pull out of negotiations.  Board Chair Peter McKenna stated: “It would be irresponsible for the food hub to continue operations without being able to guarantee payment to its producer base, which is our reason for being.”

Two Rivers cites three factors in the “perfect storm” leading to the closure of distribution operations:

  • Withdrawal by enterprise partner 5 days ago
  • As a not-for-profit social enterprise, the food hub has limited access to conventional financing
  • Worse than predicted sales in Q4 2017

Two Rivers officially opened its doors in December of 2014, but really started with a series of public meetings called ‘Stirring the Pot’ hosted by EcoPerth/Lanark Local Flavour in Lanark County in 2012. Bruce Enloe was hired as General Manager of Two Rivers in 2015: “The reason I got involved with this is to support farmers. As a local food chef and former restaurant owner (the critically-acclaimed Branch Restaurant in Kemptville, prior to 2016, when new owners purchased it), I fully support, and feel very strongly about, our local food producers. They work so hard, and contribute so much to the quality of our lives with amazing, fresh food.”

Katie Nolan, Agriculture and Rural Economic Development Advisor with the Ontario Ministry of Agriculture, Food and Rural Affairs, voiced her support of the food hub concept and how the Smiths Falls-based Two Rivers Food Hub provided much-needed “middle,” connecting producers with consumers.

“The Two Rivers Food Hub distribution met a clear need to strengthen our local food system. The community of local food practitioners has long agreed that mid-scale infrastructure is necessary to build a local food value chain. With my colleagues in Eastern Ontario, I’ve offered programming over the years to support and encourage this type of development. The expertise that they have developed in this uncharted territory of our regional food system will be invaluable as we continue to build that system.

It has also been a very successful initiative. Over just a few years, their services have supported over 150 businesses, led to the creation of over 50 jobs, and helped new products from our region reach local people in ways that weren’t possible before. The board and staff have been professional, creative and innovative; and even in their decision to wind down distribution operations, they always kept true to their core mission of helping local farmers and food businesses.”

Challenges remain in getting the majority of our region’s bounty onto the plates of the communities where the food is produced. Often, producers have high-quality, delicious, healthy products, while restauranteurs, retailers, and institutions are unable to access it the way they need to: in large enough quantities, at the right times, at the right price. That’s why local food hubs were invented. A food hub is a very loosely defined term that can mean different things in different communities. But at its heart, a food hub is an initiative that tries to form a link to complete the local food value chain, from local farmers to a wider range of consumers.