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The Food Economy

This article appears in the 2015 Mackinac Policy Conference edition of the Detroiter Magazine. Click here for more information on the Conference.

Page 50

By Melissa Anders

The ingredients are all there — a diverse array of crops, abundant supply of water, logistical infrastructure and manufacturing talent — to grow Michigan’s food and agriculture industry.

Agriculture is already big business in Michigan, but there’s plenty of room to grow through exports and capitalizing on its resources to become a food-processing powerhouse.

Michigan is second only to California in agricultural diversity, with more than 300 commercial commodities. But as California battles a severe drought, Michigan is in a prime position for growth with its plentiful water supply.

The Great Lakes State boasts more than 52,000 farms, 10 million acres of farmland and more than 300 farmers markets, according to the Michigan Department of Agriculture and Rural Development (MDARD). Michigan farmers export one in every three rows grown annually, generating nearly $3.2 billion in 2012, according to MDARD.

Yet many of the crops grown in Michigan are shipped elsewhere for processing. The state ranks 19th nationwide, with 1,841 licensed food processors that employ more than 130,000 residents, according to a 2012 MDARD report. U.S. Sen. Debbie Stabenow views that as a prime opportunity to boost jobs in the food industry.

“What processors need are space and water, and we have both,” Stabenow said. “We already do a lot of processing in Michigan, and we certainly do in Detroit, but there’s a lot more that we could be doing.”

Walter Robb, co-CEO of Whole Foods Market, said he was surprised at the relative lack of a value-added food economy in Detroit, especially given its robust urban agriculture scene. The city is home to hundreds of gardens, some with commercial operations. But compared to other cities its size, Detroit isn’t as involved in producing value-added food products, Robb said.

“We’re in the early innings of the value-added food economy in Detroit,” he said. “I’d say you’re one of shining stars in the country with respect to your urban agriculture food economy.”

He said Detroit has one of “the great jewels of the world” in Eastern Market, a large facility where farmers sell directly to consumers. Austin, Texas-based Whole Foods, which opened its first Detroit location in 2013, has partnered with Eastern Market on several projects, including a shared community kitchen. The kitchen program provides low-cost access to mentoring, technical assistance and production space.

As president of Detroit’s Eastern Market Corp., Dan Carmody is working to build an ecosystem for small and medium food processors to flourish through community kitchens, micro-grants and other programs. Carmody said he wants to see more success stories like Detroit-based McClure’s Pickles, which grew from a home-based operation to taking over a former auto parts manufacturing facility and shipping nationwide.

Garden Fresh Gourmet is another success story. Founded in the back of a failing restaurant in Ferndale, it’s now the nation’s largest producer of fresh salsa and the biggest employer in Ferndale with nearly 460 workers. It ships over a million units a week and brought in $170 million in revenue last year.

“People are disillusioned with big food,” said Garden Fresh President Dave Zilko. “They don’t want some industrialized commoditized food product anymore. They want local, genuine, authentic, hand-crafted, preservative-free food.”

Zilko said market forces favor small, upstart food entrepreneurs to a greater extent than any time in the last half century. And the state already has a culture of supporting local businesses, with Michigan-based grocers Busch’s and Meijer providing shelf space to locally sourced items.

Now it’s just going to take some more publicity to encourage people that it’s a good time to launch a food business, he said. “It can be done, and it can be done here in Detroit,” Zilko said.

There’s also opportunity for job growth through import and export logistics. Carmody said it’s faster to ship food to Europe through Canada than through the U.S. because the Canadian government has invested more in logistics and port facilities.

Half of North America’s population and income is within 500 miles of Michigan, according to MDARD, and the state offers toll-free highways, railroads, airports and cargo ports for shipping food worldwide.

Stabenow is working to open up Cuba to the state’s agricultural and food products in an effort to boost exports. She’s met with President Raúl Castro and other officials, and is a sponsor of a bill to lift the trade embargo. Michigan’s dairy producers are excited about the chance to sell milk to Cuba, which currently buys milk from New Zealand.

“I think what we do best in Michigan is make things and grow things,” Stabenow said. “And there are real opportunities for us to leverage our ability to grow things and create jobs from it.”