Food hub is a buzzword among people involved in sustainable agriculture, efforts to increase access to healthy food and programs to reduce hunger in the U.S. But a new study from Michigan State University and the Wallace Center at Winrock International in Arlington, Va., is one of the first to show hubs also can be successful businesses with a commitment to bettering the communities they serve.

“At the center of the value chain, food hubs satisfy the needs of farmers as well as the needs of buyers and end consumers,” Jeff Farbman of the Wallace Center said during an online event releasing the results of the study.

By formal definition, food hubs manage the aggregation, distribution and marketing of food products, mostly from local and regional growers, and the survey of 107 hubs around the country found 96% reported increasing demand for their products and services.

“We really did find food hubs are financially viable businesses,” said study author Micaela Fischer of MSU’s Center for Regional Food Systems.

Food hubs may seem like farmers markets but they are aimed at helping producers gain a much larger market share. Main business models include  farm-to-business, farm-to-consumer or a hybrid, and the survey found all models can be successful.

Food hubs often have online portals that outline their reach and scope. Common Market’s website  shows it connects 75 farmers in New Jersey, Pennsylvania and Delaware to 150 customers, including schools, hospitals, companies, grocers and other institutions.

Survey responses back that up, showing 58% of food hubs sell to restaurants, caterers or bakeries, 39% to small grocery stores, 35% to elementary through high school food service programs, 27% to the same at colleges and universities, 22% to hospitals and 18% to farmers markets. Almost three-quarters of hubs said their customers are within 100 miles.

Median hub revenue for 2012 was $450,000 but that ranged from $1,500 for small hubs to $75 million for larger ones.

Most food hubs sell produce and herbs, and many sell meats. They report working with a median of 36 producers, most of whom are small-to-mid-size businesses with annual sales of less than $500,000. Hubs were most likely to require producers to provide products that are organic, antibiotic- or chemical-free, free-range or grass fed. In response, more than half of producers say their partnership with a food hub has led them to diversify their product lines.

About half of the hubs said they accepted Supplemental Nutrition Assistance Program benefits and nearly half have committed to increasing food access or community development.

There are challenges, though, mainly in managing growth, balancing supply and demand, getting access to capital and finding appropriate technology.

Wallace Center director John Fisk said the food hub models make good business sense but they need better access to credit. “Food hubs must innovate to be viable,”  he said. “Access to credit is a challenge. There needs to be more dealings between lenders and food hubs.”

About 66% of the food hubs surveyed said they operated without the help of grant funding.