A year ago, customers came to Alex and Miranda Koltze’s Sioux Falls house to pick up their homegrown produce.

That was the start of Sweetgrass Farm – their small business that now sells weekly at The Prairie Farmers’ Market at Cherapa Place downtown.

After a decade in HVAC construction, Koltze quit his job to focus on Sweetgrass Farm.

“I needed to do something different, and I loved doing this, so I thought I’d make it full time,” he said. “Right now, it’s mostly produce. We’ve been selling a lot of mushrooms that we grow. We’re hoping to get eggs and a lot of baked goods.”

But a weekly farmers market offers only so much exposure and opportunity to grow, and selling and delivering to businesses can be too time-consuming and labor-intensive for small producers such as Sweetgrass Farm.

So Koltze and other area producers are forming the Dakota Fresh food hub. It will centralize ordering, marketing and distribution for local producers and connect them with businesses from restaurants to hospitals that want to buy local food.

“Because of the demand, it is exciting to move this forward,” said Kari O’Neill, a community development specialist with SDSU Extension, who is spearheading the effort using a federal grant.

Getting growing

On five acres north of Beresford, Mary Storo grows “everything from A to Z” for her small business, Mary’s Kitchen and Gardens.

“We do all the leafy greens, the root vegetables, all the squashes; we do some fruits, pretty much everything,” she said.

She sells to consumers at several markets as well as to some grocers and restaurants.

“Some of the bigger institutions, for us, will be a longer-term goal because some of them have strict guidelines,” Storo said. “But I think there is flexibility, and we have to do a good job of education and making it convenient.”

That’s why she’s planning to participate in the food hub.

“It’s a group of farmers from really different sizes and shapes working together,” Storo said. “So we’re able to funnel multiple producers to those vendors instead of being called 15 different times. So we’re trying to streamline that and develop our own reputation as far as good, quality food.”

The food hub will not be certified organic because of the testing and fees involved, she said. But food-safety classes will be provided, and there will be guidance in the handling and look of the produce sold.

More than two dozen producers have shown serious interest, O’Neill said. There likely will be four sites in the hub – Brookings, Sioux Falls, Yankton and Wagner – where producers can drop off food. A central system will show what items are available, and businesses can place orders online.

A manager will coordinate ordering and delivery.

“The producers will keep their identity,” Storo added. “It’s not all melded in one box. The chefs will know whose items are whose.”

The producers plan to form a limited liability corporation, O’Neill said. A future grant also might help cover the costs of implementation.

“My list just keeps growing because we keep adding new people,” she said. “And we’re reaching out to any chef, food service manager, grocery manager, anyone interested in buying local foods on a wholesale level.”

Dakota Fresh will find out in August if it received a grant to help with implementation and a part-time manager to formally launch. The group already has a list of more than 170 potential business clients.

The organizers will hold a kickoff chef’s reception July 6 featuring guests from the Illinois-based Stewards of the Land food hub, which is serving as a model for Dakota Fresh.

It was started 10 years ago by farmer Marty Travis and quickly capped at 25 members. Five years later, it was up to $1.2 million in annual sales.

“And many of the original farms got large enough pretty quickly that they didn’t need the limited liability insurance the LLC offered and didn’t need the marketing and delivery,” Travis said.

Those farmers became part of a food hub advisory group and mentored new producers who joined the hub.

“It worked beautifully,” said Travis, who will be in Sioux Falls along with a chef who uses his food hub frequently. “We’ve got poultry producers, pork producers, eggs, small grains, flour, honey; it’s pretty diverse.”

He delivered almost every week last year and has up to 30 restaurant customers. Farmers are charged 10 percent for marketing and invoicing and 6 percent for delivery. They access bulk rates for packaging, group marketing and a central website, although they can link their individual web pages to it.

“Almost all our chefs say: ‘You make it so easy for us. I don’t have to go hunting for 25 different things from 25 different farms,’ ” Travis said. “It’s all about the relationship … you build among the farmers and the chefs and the whole restaurant community.”