PL Buyer: Retailing to Localvores

Discussion
Jul 23, 2010
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By Randy Hofbauer

Through a special arrangement, what follows is a summary
of a current article from Private Label Buyer, presented here for discussion.

As
the population of “localvores” — consumers who regularly
purchase locally grown/procured products — grows, retailers will continue
to think of interesting ways to better serve this consumer type with their alternative
store formats and private brands.

Brian Dyches, FRDI (Fellow of the Retail Design
Institute), managing director of

Atmospheric Group, a Laguna Nigel, Calif.- based international retail strategy
firm, said he believes the days of the parking lot are highly numbered — years
from now, some retailers in certain U.S. regions could replace parking lots
with their own miniature farming communities.

And Mr. Dyches noted that retailers
won’t limit these “community
farms” to where the parking lots used to be.

“They’re going to use those rooftops to grow their own items and
become localized farmers,” he added. “And those [retailers] that
are community-oriented will actually lease out space in those environments
[to consumers], so that if you want to come and grow melons, you can grow melons.”

How
does this relate to locally procured products the retailer exclusively offers?

“What you don’t consume, you’ll be able to sell to the grocery
store for credits,” Mr. Dyches said, adding that stores can turn around
and retail those products to consumers under their own brands.

Discussion Questions: Are community farms an answer for retailers looking
to address the increased demand for locally grown fresh food? What other alternative
strategies should retailers explore to reach localvores?

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9 Comments on "PL Buyer: Retailing to Localvores"


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Alison Chaltas
Guest
Alison Chaltas
10 years 9 months ago

Local products are hot and likely to get hotter as we pay more attention to food freshness and safety. Local produce is a simple competitive advantage for regional supermarkets who should take advantage of their nimbleness and buy local and market their local roots in everything they do.

For national chains, local is of course where they should go with produce but the execution is very difficult. Building the capability to buy from local farms takes a very different approach to procurement. Different vegetables and fruits in different geographies at different times from different sources. There’s a huge opportunity here for an entirely new approach to “fresh” procurement, either internal or through a new wave of produce distributors. Whole Foods has figured it out. Now we need a retailer to figure it out with a lower cost model!

Ron Margulis
Guest
10 years 9 months ago

If my recent experiences at farmers’ markets on weekends here in New Jersey are any indication, there is a pent up demand for local or at least nearly local fresh food. We went to the farmers market two towns away last Sunday and it was packed. The week before I was at one a few blocks away from three large supermarkets on a Saturday and it was packed. I’m not sure why the local supermarkets haven’t used their parking lots more productively to emulate a farmers market, but they certainly should consider it.

David Rich
Guest
David Rich
10 years 9 months ago

Stores must always adapt to what consumers want, and localvores will only become a bigger part of retailers’ established and potential customer base. Stores that can think of innovative ways to attract localvores will be greatly rewarded in the retail race.

Locally grown products are a necessary addition to stores, and nationwide retailers need to find a way to do it–and soon–so as not to be left behind in this new movement. Walmart has been doing it for over two years now. This is not a trend that retailers can wait for it to pass.

The bottom line? It’s good for business buzz, consumers, farmers, and the environment.

Christy Ashley
Guest
Christy Ashley
10 years 9 months ago
I personally believe there are benefits associated with supporting local producers. In fact, my students (at East Carolina University in Greenville, NC) worked with local farmers in the Spring in anticipation of the 10% campaign–a campaign NC’s Center for Environmental Farming Systems recently launched that asks people to pledge they will allocate 10% of their grocery spending to local foods. That said, in many markets, the demand/margins available have not reached a level that justifies the retailer’s expense associated with adding local foods. As a result, farmers’ markets and co-op programs continue to be the main players that bring local foods to the end-consumer. In both retail formats, self-selecting consumers are willing to tolerate inconsistent product availability and willingly make the trade-off for fresh, locally produced foods. Two key challenges at a mass retail level continue to be lack of consistency in supply and (related) higher costs, especially when merchandise decision-making is centralized. Local food producers, especially those with smaller operations, can have dramatic changes in their available inventory (e.g. due to weather and other… Read more »
Ed Rosenbaum
Guest
10 years 9 months ago

Absolutely worth a try. The Farmer’s Market model has always attracted traffic, especially weekend traffic. I would venture to say sales will grow; but not to the level of the tasty products. I love shopping the local Farmer’s Markets when I am in the Maryland area for corn, tomatoes, etc. Nothing I know beats it for taste and freshness.

Veronica Kraushaar
Guest
Veronica Kraushaar
10 years 9 months ago

While the comments above are all true, folks are forgetting to note that during the winter in most parts of the U.S., no produce is grown. In fact, produce from Mexico is the answer, representing around 70% of all fresh produce eaten in the U.S. during that time.

While the concept of home-grown appeals to all of us, the reality is that we will continue to import greater quantities of fresh produce, not only because of the seasonality issue, but also because to farm in America is getting more and more expensive, not to mention the water shortage.

The locavores are romantics and need to consider the entire global supply scenario before they make U.S. consumers feel “guilty” for not buying local.

Mark Johnson
Guest
Mark Johnson
10 years 9 months ago

You consistently read that local farms are more inefficient, they contribute more to the “greenhouse” effect and are usually not the most effective/efficient way to produce. Yet it makes one feel “good.”

Bernice Hurst
Guest
10 years 9 months ago

While I absolutely agree that this concept is worth a try and can only be a win win, I also agree that it can only ever be limited in scope. This does not mean it isn’t worth doing. I am never in favor of either-or concepts but always prefer combinations in order to offer sufficient choice. Having locally produced food next to supermarkets (as opposed to IN them where the store has to purchase the products to sell) can only improve the one-stop shop concept and increase both loyalty and traffic. It could even present a perfect storm of opportunity. Adding in the opportunity for those who want it to grow their own and sell their surplus makes it even better still. And it does not have to mean making people feel guilty when they ALSO buy imported and/or processed food. This is an ideal way to improve retailing for retailers, consumers and manufacturers/growers.

Bernice Hurst
Guest
10 years 9 months ago

I have just – coincidentally – received this link with a comment from my daughter that it is very funny, supermarkets trying to make people think they are farmers’ markets and capitalising on their popularity….

wpDiscuz

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