Checking in from Anaheim after a full day of workshops and the food truck- fed outdoor opening reception last night, big props to the Produce Marketing Association for a well-run show so far.
If I heard right, the show has more than 1,000 exhibitors and is a cinch to soar well past 20,000 attendees. Pretty gaudy numbers, with a big assist from the Southern California locale for the plus-sized crowd.
I attended workshops on the food safety regulations and the Eat Brighter! Initiative, both of which were standing room only. More observations on those sessions – and the State of the Industry remarks by Bryan Silbermann and Cathy Burns – a little later.
One topic that didn’t get much play at PMA this year - and is generally scarce on the agendas of most industry conventions - is the local food trend. That’s understandable, since commercial fruit and vegetable shippers are by definition anything but direct- to-consumer marketers. PMA is geared global, not local.
Still, the trend is hard to ignore.
A study released in 2014 by A.T. Kearney concluded that local food is fast becoming a necessity for grocers in attracting and maintaining customers.
All of us support local food at some level, even if it is just buying tomatoes at a roadside stand.
But advocates of the local food movement – locavores, if you will - expanded their influence in the early 2000s, fueled by the conviction that the modern ag system in the U.S. is unsustainable and unhealthy for people and the environment.
Most local food consumers aren’t so severe in their convictions. Seekers of local food have specific motivations which may include perceptions of better food safety and a freshness advantage over conventional produce.
Of course, it is widely known that there is no mandated definition of local food, and retailers have stepped in with their own definitions.
Wal-Mart defines local as grown within the same state, while other retailers have definitions measured in hours or miles.
A report from Rabobank last year on local foods said that local usually is defined in terms of distance from point of sale and ranges from 30 to 150 miles. It can comprise a single city, state or even a multi-state region.
The fuzzy definitions of “local” don’t seem to bother consumers too much.
The 2014 AT Kearney study found more than 40% of consumers say they purchase local food on a weekly basis, and another 28% say they buy local food at least once a month. About half of consumers don’t buy local foods because they say their retailer doesn’t stock them, and less than one third don’t buy local food because they think the products are too expensive.
Consumers will also pay more for local food, according to the AT Kearney report, with 70% of consumers reporting they will pay a premium for local food.
In fact, the research found 77% of high income consumers would pay up to 5% more for local. In fact, the study found more people are willing to pay extra for local food than organic.
Backing that point up, a 2012 Mintel International survey of 2,000 adults found that 52% of U.S. consumers say buying local produce is more important than buying organic produce.
When consumers buy local food to eat at home, they place the most trust in farmers markets to deliver locally grown foods, followed by natural food markets, locally owned supermarkets, nationally owned supermarkets, big box retailers and online grocers.
If local food still represents a small slice of total ag sales, local food demand is the mouse that roars - at least in the produce department. A Rabobank study last year said “local” fruits and vegetables made up as much as 25% of some retail produce department sales, with that share expected to expand during the next few years. The Rabobank report said that some retailers have enjoyed as much as a 50% increase in sales because of a locally grown program during certain times of the year.
And retailers get a public relations bump by selling local food.
The National Grocery Association’s 2014 Consumer Panel revealed that 87.2% of consumers said the availability of locally grown produce and other local packaged goods are major influences on grocery shopping decisions, up from 79% in 2009.
So retailers can ignore local food at their own peril. Besides high end retailers like Whole Foods and Wegmans, Wal-Mart has made its local food initiatives a big deal in recent years.
Is local food a passing fad or a mega trend? Here are some questions I have about the future of local:
• Like the meaningless “natural” moniker, will the marketing punch of “local food” diminish from overuse?
• Will anything displace “local” in the mind of consumers in future years?
• Will organic demand suffer with the rise of local food?
• How will a change in the White House alter USDA support for local food?
• Is the long-term effect of the California drought another reason for retailers to invest in local food procurement?
• Will the most ardent “local food” consumers shun all produce that isn’t “in season” for their particular region?
• With consumers enamored with the romance of local, does the “commercial” fruit and vegetable supply side need to tell its story to consumers in a more effective way?
To answer this question of the ongoing influence of local food marketing at the retail level, we can look at data from the USDA and glean some useful knowledge.
The percentage of produce ads that are marked local varies by region and time of year.
The USDA’s national retail price report shows the percentage of fruits and vegetables promoted as local in different regions. For the week of Sept. 5, for example, the USDA said that 100% of the collard greens advertised in 91 stores in the Southeast U.S. were marked local.
This market report from the USDA may inform retailers what their competitors are doing to promote local produce and give signals to what may work for them.