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Agriculture Enterprise Center Feasibility Study

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Agriculture Enterprise Center Feasibility Study S H E N A N D O A H V A L L E Y AGRICULTURE ENTERPRISE CENTER FEASIBILITY STUDY Prepared for the Central Shenandoah Planning District Commission by New Venture Advisors, May 2021 This study was conducted by New Venture Advisors for the Central Shenandoah Planning District Commission. Central Shenandoah Planning District Commission The Central Shenandoah Planning District Commission (CSPDC) was formed to help communities and agencies within the Central Shenandoah Valley work together by providing high quality planning technical assistance and facilitation services that address local, regional and state needs in an innovative, timely and cooperative. The CSPDC is comprised Bonnie Riedesel, Executive Director of five counties, five cities, and eleven towns in the heart of Elizabeth McCarty, Deputy Director the Shenandoah Valley in the western part of Virginia. A Rachel Salatin, Marketing Coordinator Board of representatives from each governmental subdivision oversees the activities of the Commission. https://www.cspdc.org New Venture Advisors LLC New Venture Advisors (NVA) is a consulting firm that specializes in food system planning and infrastructure development. Since 2009, NVA has helped more than 100 communities across North America identify strategies to develop food systems, food enterprises and food policies that Kathy Nyquist, Principal are good for farmers, food entrepreneurs, consumers, and Caroline Myran, Project Leader the intermediaries that connect them. Melissa Hamilton, Engagement Leader https://www.newventureadvisors.net Andrea Carbine, Kitchen Operations Specialist Anna Kalavagunta, Finance Specialist Joel Berman, Kitchen Design Specialist Sheree Goertzen, Research Analyst Emmy Nyquist, Research Assistant Funding for this study was generously provided by: 1 Contents Executive Summary .................................................................................................................................................... 4 I. Project Background ................................................................................................................................................. 8 II. Market Analysis .................................................................................................................................................... 12 III. Primary Research................................................................................................................................................. 26 IV. Business Analysis and Operating Model ............................................................................................................. 57 V. Building Program and Facility Layout ................................................................................................................... 60 VI. Financial Model ................................................................................................................................................... 69 VII. Site Selection ...................................................................................................................................................... 83 VIII. SWOT Analysis, Risks, and Recommendations ................................................................................................. 84 Appendix 1: Outreach Lists – For Interviews and Surveys ....................................................................................... 92 Appendix 2: Interview Guides .................................................................................................................................. 94 Appendix 3: Primary Research Analysis – Interview Synthesis ................................................................................ 99 Appendix 4: Survey Template ................................................................................................................................ 114 Appendix 5: Primary Research Analysis – Full Survey Results ............................................................................... 125 Appendix 6: Proposed Operating Models (3) ......................................................................................................... 155 Appendix 7: Operating Model Components and Supporting Research—Detail.................................................... 162 Appendix 8: Equipment List ................................................................................................................................... 167 Appendix 9: Case Studies ....................................................................................................................................... 172 Appendix 10: Site Selection Criteria ....................................................................................................................... 178 Appendix 11: Funding Guide .................................................................................................................................. 179 Appendix 12: List of Sites Mapped ......................................................................................................................... 185 Appendix 13: Works Cited ...................................................................................................................................... 188 Appendix 14: New Venture Advisors Team Bios .................................................................................................... 190 2 List of Tables Table 1: Population of Counties and Independent Cities, 2019 .............................................................................. 13 Table 2: Major Employers in the Shenandoah Valley, 2019 .................................................................................... 14 Table 3: Meat Products and Farmers Market Prices in the Shenandoah Valley ..................................................... 16 Table 4: Top Crops (total number of producers/total acres in production) in the Shenandoah Valley (2017) ...... 17 Table 5: Local Food Supply and Demand (2017) ...................................................................................................... 19 Table 6: Food Processing Exemptions ...................................................................................................................... 22 Table 7: Hub Space Components ............................................................................................................................. 60 Table 8: Revenue-Generating Hub Activities ........................................................................................................... 66 Table 9: Upkeep, Scheduling and Oversight considerations.................................................................................... 67 Table 10: Personnel for All Enterprises .................................................................................................................... 69 Table 11: Food Hub Overview .................................................................................................................................. 72 Table 12: Food Hub Revenue Model ........................................................................................................................ 73 Table 13: Food Hub Sensitivity Analysis ................................................................................................................... 74 Table 14: Meat Hub Overview ................................................................................................................................. 76 Table 15: Meat Hub Revenue Model ....................................................................................................................... 76 Table 16: Cost of Goods Sold ................................................................................................................................... 78 Table 17: Meat Hub Sensitivity Analysis .................................................................................................................. 78 Table 18: Shared Kitchen Overview ......................................................................................................................... 79 Table 19: Shared Kitchen Revenue Model ............................................................................................................... 80 Table 20: Profit and Loss Statement ........................................................................................................................ 81 Table 21: Funding Uses ............................................................................................................................................ 82 Table 22: Potential Sites ........................................................................................................................................... 83 List of Figures Figure 1: CSV Agricultural Production Map (see Appendix 12 for list of producers)............................................... 15 Figure 2: CSV Production Infrastructure Map (see Appendix 12 for list of businesses) .......................................... 20 3 Executive Summary The Central Shenandoah Planning District Commission (CSPDC) identified an opportunity to perform a feasibility study to determine the viability of a certified, commercial, shared-use Agricultural Enterprise Center located in the Central Shenandoah Valley. In March 2020, the CSPDC issued a request for proposal (RFP) for a consultant to undertake a feasibility study. New Venture Advisors (NVA) was selected and began work on this project
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