Over the past 3 years the South East Food Group Partnership (SEFGP)  have been investigating the need for a London Food Hub (LFH) to improve supply chains into London for local and regional food.  The hub would also open up new markets for food producers and strengthen the link between London and its surrounding regions.  A feasibility study was undertaken in 2009 and as a consequence, a business plan was commissioned.

The business plan proposes the development of a commercial pilot whereby an E-Marketplace Food Hub is developed, a business that acts as a matching agency using a web based portal, to facilitate trading between suppliers and buyers of local and regional foods.  The business would be aimed primarily to meet the needs of foodservice sector buyers.  The portal would incorporate the following functions:

•    provide a sales platform for wholesalers and individual producers

•    optimise logistics by developing IT systems that search for best performing distribution solutions

 

It is envisaged that the hub will, by the end of the first year of trading, be selling products from 100 suppliers to approximately 40 buyers. Whenever an order is placed by a buyer, the hub would generate a sale for both a supplier (the product) and a distributor (distributing it).  The money collected from the buyer would be paid both to the supplier and the distributor with the hub retaining a margin from both for the provision of sales and services.  This is the basic model from which the hub generates its income.  

 

According to our forecasts, whilst a net loss after interest and depreciation is projected for years 1 and 2, as the business grows and loan repayments are made, the business moves into significant profitability. The business concept has been thoroughly and exhaustively researched during which the market demand has been firmly established. 

 

We are now in the process of securing the required investment and making sure that the Food Hub is established in a commercial pilot by parties with the right knowledge and skills. As soon as we have confirmation of funding for the realisation of the IT platform we will publicise this. In the mean time a lot of hard work goes on behind the scenes....