LOGISTICS OF LOCAL
Locally sourced products are an increasingly big draw for supermarkets, with sales growing from $5 billion to $12 billion between 2005 and 2014 and expected to hit $20 billion by 2019, according to Rockville, Md.-based Packaged Facts. Creating and managing relationships — especially the deliveries — with local producers can be cumbersome and time-consuming. One of the largest departments for local products is the produce department, and stores and distributors are taking several different paths to make offering these products easier.
One method is to use aggregators, or farmers’ exchanges. The aggregator serves as a central repository for farmers to sell their produce to, and for stores to buy the produce from. Several stores across the country are turning to such businesses to ensure that they always have the items they need in stock and aren’t relying solely on one farmer’s crop to supply their stores. “What we’re trying to do is to introduce as many opportunities and revenue streams as possible for the farmer and for the store,” says Marty Travis, owner of Fairbury, Ill.-based Spence Farm, a food aggregator that supplies Harvest Market, in Champaign, Ill., as well as more than 250 restaurants in Chicago. Harvest Market receives a shipment once a week, and all billing is handled by Spence Farm.
Sourcing and billing are two of the largest pain points for the stores, which is where Forager comes in. The startup, located in Portland, Maine, has built a platform for both sides of the equation: suppliers and grocers. It allows farmers to post what they have for sale, and stores to compare prices, see what’s available, place items they want in shopping carts and make purchases. Forager handles all of the billing and payments, which helps reduce time on the grocer’s end. Portland Food Co-op, which uses the platform, has seen sales of local products increase 11 percent; overall, the store’s local sales have hit 40 percent.
Other stores have turned to hosting farmers’ markets to satisfy their customers’ need for local products. Macey’s, Lin’s, Dan’s, Dick’s Market and Fresh Market in Utah host Eat Fresh, Eat Local farmers’ markets in partnership with 26 local growers. The farmers’ market, which runs from July 10 through the beginning of September, is held on Saturday mornings. Farmview, in Madison, Ga., also hosts a farmers’ market on Saturdays. Brad Kelly, business development and farm operations manager for Farmview, notes that the store was slightly concerned about possible poaching of sales when it started the farmers’ market, as the store itself is focused mainly on sourcing local products. “It’s been a draw,” he says. “If anything, it brings more traffic to the store.” Further, the farmers’-market vendors are typically different from those that supply the store.
No matter how grocers choose to bring local products into the store, there’s no question that local is a draw. “Sixty-four percent of consumers will make a special trip to the store if they know their favorite grocer has local produce in season,” says David Stone, founder of Forager. “That person going to the store to buy asparagus in asparagus season — they’re more likely to put something in the shopping basket besides just that one item. It’s incumbent upon the grocer to get as much high-quality local produce on the shelves as possible and promote it to the consumer.”