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Learn Institutional Procurement Basics
- Public & Private
- FSMC & Self-Operated
Understand Vendor Types: Values-Based Vendors vs. Traditional Vendors
“Vendor” refers to a producer, food hub, aggregator, or distributor selling to an institution directly or through a management company. This Toolkit distinguishes between “values-based vendors” and “traditional vendors.” Understanding the different types of vendors will help an institution navigate the procurement process more effectively and make better use of other sections of this Toolkit.
Values-Based Vendors
In this Toolkit, “values-based vendors” refer to vendors that meet an institution’s food purchasing guidelines or values-based preferences and requirements. Historically, these vendors have not had a prominent role in selling into institutional markets. Experience will vary by vendor, but clear communication about standard operating procedures and orientation materials will be more important for vendors with less experience. Values-based vendors are primarily producers (farmers, ranchers, dairy product makers, etc.) and food hubs (businesses or organizations that aggregate and distribute source-identified food products). Food businesses may use many different terms to define themselves, but the key determinant of whether a business is a “values-based vendor” is whether it meets an institution’s purchasing guidelines.
Producers
“Producers” include farmers, growers, ranchers, product makers, and others contributing products in institutional markets. This Toolkit uses the term “producer” to refer to entities that an institution may purchase from directly or through an aggregator or distributor.
Food Hubs and Aggregators
This Toolkit uses the U.S. Department of Agriculture’s working definition for a “food hub,” which defines it as a “business or organization that actively manages the aggregation, distribution, and marketing of source-identified food products, primarily from local and regional producers to strengthen their ability to satisfy wholesale, retail and institutional demand.” [76] Not all businesses or organizations that meet this definition will call themselves a “food hub,” so it is important to look beyond an organization’s name and review the actual activities it performs. [77]
Traditional Vendors
In this Toolkit, “traditional vendors” include large-scale food distributors (broadline distributors), aggregators, and producers that have historically dominated institutional markets. [78]
Although values-based vendors are central to values-based procurement, traditional vendors remain essential to meeting institutional demand, and most institutions rely on a mix of both.
When working with traditional vendors, an institution can tailor purchases to support values-based goals. Traditional, broadline distributors often keep lists of approved suppliers that meet values-based priorities, such as local, sustainable, or minority-owned vendors. An institution should review these lists to determine whether the approved suppliers also meet the institution’s food purchasing guidelines. An institution may also encourage traditional vendors to increase the amount of values-aligned products available.
Footnotes
[76] The Role of Food Hubs in Local Marketing, USDA 5 (Jan 2013), https://vafairs.com/wp-content/uploads/2022/03/USDAReportFoodhub2013.pdf.
[77] Noel Bielaczyc, et al., Findings of the 2021 National Food Hub Survey Report, Mich. State Univ. Ctr Reg’l Food Sys. at 14-15 (2023), https://www.canr.msu.edu/resources/2021-national-food-hub-survey.
[78] Examples of traditional vendors include Best Food, Sysco, Performance Food Group, U.S. Foods, Purdue, and Tyson.