Initiative aims to encourage plant-based food companies to source directly from U.S. farmers

By Ken Roseboro

Published: August 31, 2022

Category: Regenerative Agriculture

Plant Based Foods Institute’s Domestic Sourcing Initiative wants to create more markets for U.S. farmers, build more resilient and regenerative supply chains for plant-based foods

The one grocery store in tiny (population 788) Latimer, Iowa prominently displays Oatly oatmilk and creamer products. That’s because the store owners, Anne and Landon Plagge, who are also farmers, grow the oats that end up in Oatly’s products.

“It’s been fun to be able to sell Oatly products in our store; it’s a nice way to demonstrate the farm-to-market cycle for domestically sourced crops,” Anne says.

“I think people are surprised that the food they eat can actually be grown around here,” adds Landon.

The Plagges are part of a unique initiative by plant-based food companies to source ingredients directly from U.S. farmers for their products. The Domestic Sourcing Initiative (DSI) was launched by the Plant Based Foods Institute (PBFI), a sister organization of the Plant Based Foods Association (PBFA), as a way to create more resilient and transparent supply chains for plant-based food companies. The goals are to reduce their carbon footprint, provide new markets for U.S. farmers, and advance regenerative agriculture.

90% of plant-based food companies import ingredients

According to PBFI agriculture consultant Carl Jorgensen, the domestic sourcing initiative resulted from a survey of members of the Plant Based Foods Association in 2019.

“One of the learnings from that survey is that 90% of U.S. plant-based food companies import ingredients, a pretty heavy reliance on imports,” he said. “We really want to make sure that the opportunities developed by this industry flow to American agriculture.”

Jorgensen and the PBFI team, which includes Nicole Negowetti, vice president of policy and food systems, and Renee Smith Nickelson, policy associate, recruited PBFA member companies to participate in a pilot project and source ingredients directly from U.S. farms.

“We’re asking the question: ‘how can the plant-based foods industry help create markets for farmers who are growing ingredients in a regenerative system?’” Negowetti says.

Surveys show that personal health is a primary driver for people who purchase plant-based foods.

“How can we as an industry, in knowing those motivations in consumers, help to be that connector between the farmers and all the other supply networks that help create those markets?” Negowetti asks.

Smith Nickelson adds: “We’re looking to create a sustainable supply chain with growers, distributors, and processors as well as market access that allows for domestic sourcing to be reliable and a first choice.”

“The aspiration is to develop a strategy for a transition to a regenerative agriculture system in the U.S.”

DSI pilot projects

A range of plant-based food companies, large and small, are participating in the DSI pilot projects. Oatly is buying oats from 20 farmers, such as Anne and Landon Plagge, in Iowa and Minnesota for its oatmilk products. Upton’s Naturals is working with farmers and an ingredient supplier in Kansas to buy wheat and process it into wheat gluten for the company’s seitan meat substitute products. Buttery spread maker Country Crock is encouraging farmers in Kansas to use regenerative agriculture methods such as no-till and cover crops to produce soybeans for the company’s products.

Montana farmer Michael Deakin, shown here with Lupii owner Isabelle Steichen, supplies lupini beans that are used to make Lupii protein bars

Lupii, a sustainability-conscious snack food company, connected with Timeless Seeds and Deaking Farm in Montana to grow lupini beans for the company’s protein bars. Idaho-based Snacktivist is working with regenerative farmers to grow millet for the company’s baking mixes.

Anne Plagge is happy to have Oatly as a buyer of their oats. “The brand has been excellent to work with,” she says. “This has been our first experience where the buyer of our crops has been involved and excited about the work we’re doing.”

Upton’s Naturals offers a good example of how the DSI helped solve a supply chain challenge. The Chicago-based company had been sourcing wheat gluten from Australia because they couldn’t find a U.S. source. Kansas-based Purefield Ingredients saw the problem and realized that it could produce wheat gluten and use the by-product, wheat starch, in ethanol production. The result was a win-win-win all around for Purefield, the Kansas wheat farmers who get another market, and Upton’s Naturals which gets a Midwest source for their wheat gluten.

Increased transparency

The DSI is realizing other benefits. It encourages regenerative farming practices that build soil health and biodiversity, such as diverse crop rotations, cover crops, and reduced tillage. The greater crop diversity increases farm resiliency, which is critical as the climate changes with its extreme weather events. Shorter supply chains also reduce the carbon footprint of agriculture and food production.

“Regional food systems tend to be incredibly strong. In the southeast there’s plenty of examples of farmers having direct connections through distribution channels to local institutions,” Smith Nickelson says.

Another advantage to shorter, farmer-direct supply chains is greater transparency where everyone in the chain becomes a partner, which adds to the sustainability story.

“Every business practice all along the chain from the grower to the brand and the retailer is known by all participants,” Jorgensen says.

The transparency extends to the consumer as plant-based food companies can tell their story about sourcing directly from farmers.

“Having that transparency and communicating it back to the consumer offers added value to their products,” Smith Nickelson says.

Infrastructure challenge

The DSI also revealed challenges in building new supply chains, particularly a lack of infrastructure. The current grain handling system is designed to handle commodity crops like corn, soybeans, and wheat, not small or ancient grains like oats or millet.

“We need to rebuild the infrastructure in the U.S. if we are going to create the sustainable system we’ve been speaking about,” Negowetti says.

Such an infrastructure won’t be the one-size-fits all system of the commodity grain markets.

“There’s a need for many unique solutions; there are unique ingredients, unique companies, and unique marketplaces,” Jorgensen says. “We’re really looking at a local and regional effort.”

As an example of the infrastructure challenge, an oat-based pudding manufacturer in Chicago has to buy certified organic and gluten-free oat flour from Canada. That’s because there are no mills in the U.S. that make the flour.

“They would like to buy here, but so far there’s nobody able to provide what they want,” Jorgensen says.

Fortunately, there is a growing trend in the U.S. of local and regional milling; smaller mills are emerging nationwide to provide supply chains for unique grains and ingredients.
Transition to a regenerative agriculture system in the U.S.”

PBFI plans to publish a report with the findings of the DSI this fall. Another report published in conjunction with Tufts University and the Freidman School of Nutrition Science and Policy will look at farmer incentives to grow crops for plant-based foods.

“The reports will help inform us, farmers, and plant-based food companies, as well help us understand what will it take to incentivize growers to shift their production to plant-based ingredients,” Negowetti says.

Looking forward, Negowetti says: “We’re really hopeful that as the project continues to scale, we learn more about the market pieces and bring them all together. The aspiration is to develop a strategy for a transition to a regenerative agriculture system in the U.S.”

In Iowa, the Plagges are setting a good example for that. “It’s nice to add a third crop into our rotation of corn and soybeans to improve organic matter, soil health, and profitability,” Anne says.

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