Shoppers Are Demanding More Transparency

The Lempert Report
September 27, 2016

"Localize" is a new Canadian start up that wants to maintain some integrity in this unregulated market in order to help retailers capitalize on the local food trend.

Take a walk up and down the aisles and it’s easy to see why so many shoppers are confused. Local has been one of the biggest trends in supermarketing in decades, but picking up a product that is marked local that is made in Mexico is bewildering to many. As are foods grown in California, marked local and sold in New Jersey. 

Localize is a new Canadian start up that wants to maintain some integrity in this unregulated market in order to help retailers capitalize on the local food trend. It is a platform that includes a product evaluation process and a shelf-labeling system. 

Localize first evaluates individual food items and assigns a score showing just how local that product is, accounting for factors such as where ingredients were grown or processed, where the item was produced, how sustainably it was done, and if the product is owned by a local company or a member of big food thousands of miles away. The score is then posted on the shelf with a QR code that when clicked on, shows the detail behind the score. 

Do shoppers really want this much info on what is and what is not local? CEO Meghan Dear reported to that one (unidentified) local retail chain saw a quick jump in profits—with nearly a 10 percent increase in dollar sales—for the products it had the Localize labels for. 

New Hope writes that participating grocers have even been able to increase their prices—incrementally and by small amounts, say 1 or 2 percent—once the program is established, according to Dear, because people really come to value these local offerings and the greatest impact is in the grocery category. “The biggest jumps we see are in the center of the store—the packaged items,” she said. Wow! Eye opening information that could help supermarkets stave off the continuing decline in center store. 

Localize is currently in more than 300 stores in Canada and expects a growth spurt within Canada and plans to expand to the U.S.  

The story and need goes beyond local. Larry Olmstead, Forbes Columnist has just released his new book, Real Food Fake Food, that explores just how common consumers are fooled in thinking what foods they buy are the “real thing” versus a less expensive knock-off selling at the real food price. 

Kobe Beef is just one example he shares. When in Japan he discovered the premium priced steak and found it on US menus when he returned. He ordered it at a few restaurants and found that it looked and tasted different. He did his research and found that “at the time, the importation of Japanese beef was completely banned by the USDA. There was no Japanese beef in the U.S. at all so all these places that were claiming to serve Japanese beef, were not serving Japanese beef, which is why it didn’t look or taste right.”

In the book he also cites that statistically more than half of seafood labeling is incorrect and that the fraud is happening in the restaurant or at the retail store; since he says “the FDA just did a study determining that 85% of the seafood was correctly labeled at the last point of wholesale distribution, meaning before it went to either a restaurant or a retailer or before it reached the consumer-facing point of sale.”

To gain consumer confidence, transparency and truthfulness is key.