Producers grapple with UW Health's shift from local food

MADISON, Wis. (AP) - In February of this year, Tommy Stauffer of Vitruvian Farms in McFarland went to meet with UW Health. Vitruvian had been selling salad greens, tomatoes and microgreens to the hospital's cafeterias for more than three years.

"We met with the whole chef team," said Stauffer, who runs Vitruvian with Shawn Kuhn. "They reaffirmed to me they were going to be keeping us on board, buying the same stuff. They talked about expanding a few things they were not getting locally."

A few weeks later, Stauffer got a brief letter from a University of Wisconsin Hospitals and Clinics Authority employee he'd never met. "A decision has been made to move this business to another vendor," it said. The termination date was 30 days later, the Capital Times reported.

For the past four years, UW Health has touted its wide-ranging commitment to local farms and sustainable sourcing. UW's goal to source 20% to 30% of its meat, cheese and produce in an "environmentally, economically and socially responsible" way was rare enough to merit stories with headlines like "Wisconsin hospitals want more local food for patients' plates."

On Instagram and Facebook, the culinary team showcased mushrooms from a farm in Waunakee and beef from Boscobel. In summer 2016, a weekly farmers' market popped up outside the Wisconsin Institutes for Medical Research. Purchasing data compiled in 2018 won the hospitals a Circle of Excellence in Food Award from PracticeGreenHealth, an industry organization dedicated to environmental sustainability in health care.

Yet this past winter, many of the small scale, local producers praised by UW Health in recent years received letters like the one Stauffer got. In the Four Lakes Cafe at University Hospital, a silhouette of Wisconsin under the words "Made Locally, Served Here" has been wiped clean of farm names and cheesemakers.

When an institution the size of UW Health stops buying from a small producer, it affects not only that smaller company's bottom line. It also impacts these producers' visibility to a local audience with a vested interest in healthy food. Many of those partnerships came about under the leadership of Ellen Ritter, UW Health's executive chef, who left the company at the end of 2018 and has not been replaced.

"People love to know where their food comes from and making that connection," Ritter said. "The biggest piece was the economic impact on the farmers and the community."

Megan Waltz, director of culinary services and clinical nutrition at UW Health, said its list of farms is "ever evolving." Waltz cited efficiency, cost savings and a new accounting system as reasons to shift back to broadline distributors like Sysco (which UW had used all along, in addition to smaller farms). The promotional push now is around antibiotic free meats, sourced primarily through Sysco and UW Provisions.

"You only have so much money," Waltz said. "In a health care institution you have a variety of needs. If you're spending more money on food, that's less money for the latest machine for patients."

UW Health has a net revenue of $2.9 billion. Its food budget was around $10 million in 2018. Last year, Vitruvian saw $36,000 in sales from UW Health. The relationship was important enough to Vitruvian that Stauffer offered UW a discounted rate for an event held on their farm.

"When I got that stock letter I was so frustrated," Stauffer said. "It's one thing for them to say we're cutting costs everywhere. It's another thing to not have their chef even call me when we've developed this relationship."

UW Health serves about 2.5 million meals per year to employees, patients and their families. Changes on the culinary side first made headlines when, in 2015, it stopped selling sugary drinks.

The kitchen got rid of fryers and revamped the salad bar, sprucing up options with local kale and greens, putting the cost of a plant-based lunch below a burger. Salad sales nearly doubled in two years. By February 2017, Nancy Stohs reported in the Milwaukee Journal-Sentinel that UW Health's culinary services bought directly from 50-60 small Wisconsin farms.

Then last year, Culinary Services cut $2.1 million (about 20 from its food budget. One producer that dropped in the first wave of cuts was SuperCharge! Foods, which had been making prepackaged grab-and-go salads and growing microgreens for the salad bar.

Jamaal Stricklin said purchases from UW Health had a real impact on his company's bottom line."We're pre

tty small. A couple thousand dollars a month is a big deal for us," said Stricklin, SuperCharge's director of sales. SuperCharge!, like Vitruvian, hopes to work with UW again. The microgreens producer has yet to replace the lost revenue.

"I don't want to close that door," Stricklin said. "I need to make sure I don't burn bridges."

Belle Pleva at Paleo Mama had been supplying UW Health with cheesecakes, granola, candied pecans and cheddar crisps at about $600 to $1,000 a month for more than three years. She got her termination letter on March 11.

Paleo Mama has been adding stores every month, so it won't be a huge financial hit. But for Pleva, selling to UW Health was a boon to visibility for her gluten-free, keto-friendly snacks.

"A lot of customers have come to me and told me they found our products there," Pleva said. "We did reach a lot of people and had the potential to continue to reach more. It's frustrating and sad they decided to make these cuts and eliminate all these local products."

Waltz attributed recent changes to a need for greater efficiency. She'd hoped to get Paleo Mama snacks through L&L Foods, a distributor in Verona. (Pleva said she does not work with a distributor).

"We like purchasing through local farms but we have challenges with that because of volume," Waltz said. "We have limited loading dock space. If you have 40 small farms delivering to a loading dock where they are also delivering medical supplies, we have to be mindful of that."

A partnership with UW Health gave Underground Meats the incentive it needed to develop deli-style salamis and deli meats to fit into UW's program. Jonny Hunter, founder and co-owner of Underground, said Meats was able to "hit the same price point as the product they were using," sourced through Neesvig's. (UW Health now stocks Applegate Farms, available from Sysco.)

"It was a good amount, $700 to $1,500 a week, in deli meats and sausage crumble," Hunter said. "They would use it for sandwiches, for pizza and the salad bar. We knew we could do this type of product, and she (Ritter) gave us the quantity that they would use."

Underground's products appeared in UW Health's cafeterias in March 2017. In April of this year, they got a termination letter. Hunter, like Pleva, was less concerned about losing business and more disappointed in the larger changes at UW.

"It was really exciting the way they were doing it, as a big institutional buyer," Hunter said. "It was something I thought could be a model for other companies, other institutions in this area. You can work with small producers, you can support your local economy."

"We were trying to create a local food system," Ritter said. "Any time you can eliminate the middleman you put more money in pockets."

Hunter said it felt like they were helping each other out.

"She was using the size and the customer base of UW Health to support the local food economy and build something that could be modeled elsewhere," Hunter said. "It adds strength to our local food systems and farmers' capacity, their durability to survive."

If UW Health does source locally, Waltz wants it to be through distributors, the way most food-related institutions and restaurants work.

Distributors take 10-20% on top of already discounted wholesale prices, so it's not a one-to-one financial swap with direct distribution. But when a company like Cadence Cold Brew partners with a broadline, they get greater reach around and outside the state.

Compared to the direct relationships Ritter and her team cultivated, this kind of system has layers of processing.

Wisconsin Innovation Kitchen makes applesauce from Wisconsin apples, and Sysco distributes it to UW Health. JRS County Acres buys cage free brown eggs from Amish farms and packs them for distribution by Fifth Season Cooperative in Viroqua. Fifth Season, in turn, is distributed by Sysco. Every business takes a cut.

More than a decade after the first big boom of the farm to table movement, it's unusual for large institutions to commit to the kind of sourcing UW Health was trying to do. Ritter had insisted it was complicated, but possible.

Some of the attrition has been to changes on the farms themselves — Peacefully Organic Produce is no longer producing. Twisted Oak founder Heather Oppor said it was difficult to turn a profit on antibiotic-free, free-range pork without selling the whole animal. Twisted Oak made its last deliveries last fall.

UW still works with some local bakeries, among them Greenbush Bakery, Just Bakery and Fosdal Bakery in Stoughton. And some farm relationships developed during the years of focus on local sourcing have remained.

Rufus Haucke at Keewaydin Farms, a certified organic CSA farm in Viola, dropped off his first UW Health order of 2019 on May 15. In the past, UW Health has purchased cabbage and kale, cherry tomatoes and rhubarb from Keewaydin. It has been a steady buyer for the past two years, he said ($7,000 in 2018, $5,000 the year before).

"I've been in the business long enough to know that in these institutions, it's how much the director is involved and passionate about the purchasing," Haucke said. "Our sales have gone up in the last two years and we talked about them going up again. They have been an important customer."

Mark Bearce founded Kettle Range Meats, an aggregator of beef from about 50 Wisconsin farms, after the closure of Black Earth Meats. In summer 2016 he worked with Ritter on a purchasing plan for UW Health that kept in mind both cost constraints and whole animal butchery.

"When we started the program, they were interested in finding a way to optimize their purchasing to use whole animals as much as possible," Bearce said. "People get used to being able to order 200 cases of rib-eye steaks without thinking about how many animals need to be sacrificed and processed to get 200 cases of steaks.

"UW was conscious of the fact when they ordered large quantities they weren't using the whole animal," he said. "We tried to optimize how the animal got used, to minimize number that needed to be processed to meet the hospital's needs."

Bearce and others working in local food systems recognize why it's hard for schools, large companies and hospitals to work with small farms.

"One of the problems is finding a way to meet the needs of bigger customers on a regular basis at the prices that they need," he said. "Kettle Range fills that gap by consolidating and wholesaling to make it easier."

Becker Family Farms has been selling to UW Health for a couple of years, having worked with St. Mary's Hospital before that. Matt Becker's Lodi farm is not certified organic, so it was hard to break into the community supported agriculture market. He decided to focus on grocery accounts like Woodman's, Hy-Vee and Piggly Wiggly, Capitol Lakes retirement community, and several restaurants.

"For wholesale you need to move more product to make it profitable," Becker said.

In January and February of this year when UW Health was paring down the farms it worked with, Becker said they upped their commitment to him. He's happy about this — it's more profitable for a farm to sell directly to an institution than to a wholesale market, he said.

"That helps us," he said. "We know that if we're able to plant certain amount of tomatoes or broccoli, we can say you're willing to commit to 100 pounds of tomatoes every week. At UW, instead of wholesale, we can get a similar or little better price than what Sysco would charge."

Waltz said UW Health wants its "food environments" to support the wellness of its employees and staff, to "model behaviors we're asking them to do outside our building."

"You teach people how to eat within a budget," Waltz said. "It's a balance of the choices you're making and we balance that every day. We try to best support local farms, best support people's health and wellness and well-being, have healthy foods available, fresh foods. But we also need to work within a budget."

Haucke at Keewaydin Farms is glad to work with institutions when he can, for as long as he can. He said UW Health has been an "easy and enjoyable" partner.

"Institutions would have a greater impact on our business if they put more of their purchasing power behind us," Haucke said. "We're bringing in a pittance compared to what they do serve. I'm happy to get any sort of business I get.

"Whatever they do do is better than nothing."