Consumers want more local food, but are retailers geared up to give it to them?

By Elaine Watson contact

- Last updated on GMT

Picture: stockphoto-arinahabich
Picture: stockphoto-arinahabich

Related tags: Local food, Hartman group, Usa

While interest in many food trends tends to ebb and flow, consumer demand for ‘local’ food – which taps into many other movements, from organic to specialty – continues to rise. But what does ‘local’ really mean, which consumers are most interested in it, and are retailers doing enough to cash in?

When it comes to the latter question, the answer is probably ‘No,’ says David Ciancio, senior customer strategist at grocery data cruncher Dunnhumby, although some are clearly doing a better job than others.

As for the first question (what is local?),​ he tells FoodNavigator-USA, it depends who you ask. To some it could mean made in the USA (maple water), to others, it might mean food grown, raised or processed in a US state (eg. the Colorado Proud​ scheme), while to others it would cover ultra-local seasonal produce sold in a farmer’s market.

USDA, for example, acknowledged in a 2015 report ​that there is no agreed definition of what ‘local’ or ‘locally-sourced’ food is, although some of its grants define local as anything grown within 400 miles or within the same state in which it will be sold.

Consumers have a very different definition of local than large retailers do

And while all of the major grocery retailers talk about their commitment to ‘locally grown’ foods, few define what this actually means – or why it is necessarily better (while local supply chains would appear to be greener, for example, it depends how efficient they are).

But in general he says, “Consumers have a very different definition of local than large retailers do. If you ask consumers, they think of local as being their immediate locality, and if you ask them for a distance, they typically say within 100 miles, and sometimes a lot less than that. But for some retailers, ‘local’ means within eight hours, which is a pretty long way, unless they mean eight hours of walking…”

nra

According to the National Restaurant Association's 2015 culinary trends forecast​ ​(based on a survey of 1,300 professional chefs), locally sourced meat and seafood was the #1 restaurant trend and locally grown produce was the #2 trend.

Shopper data suggests local products are better integrated with other products in the store

When it comes to merchandising local foods, he says, “shopper data suggests local products are better integrated with other products in the store, with stickers or other signage highlighting local options in any given category, although I think it also makes sense to add a secondary display at the front of the store as well.”

And photos of farmers or manufacturers are the most effective ways to grab shoppers’ attention, he says. “Photos work really well as they establish a direct connection between the product and the producer.”

Communication is key, he says. For example, it’s a well-known phenomenon that consumers who claim that they don’t care about the appearance of fresh produce in surveys, will nevertheless spurn smaller, unusually-shaped, or mottled produce when they go shopping.

However, if you flag up ‘ugly produce' instore as part of a local sourcing initiative, consumers will buy it, and feel good about it, he says.

local

According to a 2015 survey by A.T. Kearney of more than 1,500 primary grocery shoppers, "Almost all consumers have coalesced around a stricter definition of local: 96% now describe local food as products grown or produced within 100 miles from the point of sale—up from 58% in 2014."

It adds: "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. For canned and jarred products, local increased in importance from 5% in 2014 to 13% in 2015; for prepared foods, the jump was from 10% to 23%; for bread, the increase was from 9% to 18%.

"So why aren't more people buying local? Shoppers say it is because they don't know where these products are in the store. 51% say their retailer does not clearly advertise local products."

Who buys local?

So which consumers are looking for local?  

In general, he says, consumers that buy local are interested in health, environmental benefits, organics, freshness, seasonality, and helping the local economy.

While these attributes are not the exclusive preserve of more affluent shoppers – and ‘local’ could work in a dollar store or in Walmart as well as Whole Foods, he says - wealthier shoppers do tend to over-index when it comes to buying local.

While local and specialty/gourmet trends obviously overlap, meanwhile, just because something is locally sourced does not necessarily make it a specialty or premium product, he stresses, especially to local people, although visitors from out of state may have a different perspective if they have not grown up consuming the local delicacy in question.

Hartman Group
Source: Hartman Group, Organic & Natural Report, 2014

According to Hartman Group (click HERE​), “Consumers believe local producers and small farmers have more integrity and are deeply invested in the quality of their products​.”

Meanwhile, shorter commodity chains, smaller scales of production and proximity to the sources of their food bolster consumer trust and a sense of authenticity, says Hartman Group, which notes that, “The ability to engage with and ask questions of local producers speaks to the desire for transparency and reciprocal relationships, which consumers feel is missing with bigger companies.”

Hartman Group Local sign

Local is also “seen as fresher and more seasonal and has strong linkages to organic shoppers​”, adds Hartman Group. “Consumers attribute better taste and, in some cases, nutrition, to local foods.

"Local is an on-trend cue of quality with strong links to healthier, more sustainable lifestyles and gourmet food experiences as well as even stronger ties to the sentiments of supporting one’s communities, economy and environment."

Retailers need to give store managers more autonomy to cash in on local trend

While dealing with very small suppliers can add complexity to retail supply chains and buying has become more centralized, smarter retailers should recognize that it is worth dedicating time and money to setting up an infrastructure that can support SMEs in terms of logistics, labeling and even financial assistance​, given that local products can create a real point of difference in their stores, despite the extra hassle, adds Ciancio.

“Store managers don’t have the freedom to procure locally in the way that they used to, but that kind of flexibility needs to be retained if retailers want to cash in on demand for local food.”

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