Demand for local up, as is price consumers will pay, survey reveals

By Elizabeth Crawford contact

- Last updated on GMT

Demand for local up, as is price consumers will pay, survey reveals

Related tags: Local food

As demand for local food grows, so too does consumers’ willingness to pay more for it, but manufacturers and retailers must clearly label local products to reap their full sales potential, suggests new research. 

“Demand for local food is expanding beyond produce, meat and seafood. More consumers say local is also an important attribute for prepared foods and dry groceries,”​ according to a survey of more than 1,500 consumers in the US conducted by A.T. Kearney.

Specifically, the report released Oct. 26 found current interest in local compared to 2014 is up 8 percentage points for canned and jarred products, 13 percentage points for prepared foods and 9 percentage points for bread, according to the survey.

In addition, the report notes that the local food movement, which was estimated at $12 billion in 2014, is expected to grow 9% annually through 2018.

Paying a premium

Consumers – especially women and children – are willing to pay more for locally produced food, according to the survey. A whopping 78% of all respondents said they would pay a premium of 8-12% for local foods. In addition, more than a third of shoppers said they would go out of their way and make a special trip to purchase local food.

But in order to capitalize fully on this demand and maximize sales of local products, manufacturers and retailers must clearly identify local products.

About half of the survey respondents said that their retailers do not clearly label local – hindering their ability to buy these products intentionally. Another 27% said the products simply are not available.

“By investing in the in-store experience with differentiated signage that identifies local foods, retailers can point shoppers toward sections that contain local products,”​ according to the report.

Manufacturers also could drive sales of local products by labeling them as “made in”​ certain locations.

Retailers could further direct consumers by promoting local products’ availability, the report suggestions. It notes that 64% of respondents said they would visit a store if they received a promotion about local food, and 63% would visit if they were notified about in-season or in-stock local food options.

Defining local

When advertising local products, retailers and manufacturers should take care to ensure their definition of local aligns with that of their shoppers, the report cautions.

Most consumers – 96% – now define local as grown or produced within 100 miles of the point of sale, according to the survey. This is up dramatically from 58% in 2014. In addition, 44% define local as natural or organic, which is nearly double that of 2014.

Notably, consumers’ definition of local is much more stringent than that of the US Department of Agriculture, which defines it as within 400 miles, and of some major retailers that define it as within the same state, the report points out.

This tighter definition could cause supply problems as there would be fewer sources of the products – a factor that retailers would need to weigh when considering how they will define and advertise the term. 

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