Supermarkets need to seek local

The Lempert Report
October 03, 2014

More and more, consumers are looking for local foods and often they are willing to pay a little more for it.

The problem is, stores can't seem to get enough to meet demand.  According to a recent annual study on local foods by A.T. Kearney, Ripe for Grocers: The Local Food Movement, supply may be improving, but a significant problem still exists.  Nearly half of U.S. grocery shoppers polled (47%) still cite “products are not available at my retailer” as their top reason for not buying more local food.

However, for the third straight year, the 2014 National Grocers Association-SupermarketGuru Consumer Survey Report, shows that consumers eat locally grown foods more than they eat organic foods.  Consumers clearly want it. Which explains why often, when Supermarkets have local produce in supply, they advertise it prominently. 

Whole Foods Market claims that 25% of its offerings are local, its Local Loan Producer program helps independent growers with about $10 million in low-interest loans, and its produce signage declares states of origin – a bet that demand for local foods will persist, notes A.T. Kearney.  Indeed, its study states “sales of local food have increased an estimated 13% per year since 2008, and are now worth at least $9 billion.”

Many consumers want both fresh and local in categories such as fruits and vegetables, prepared foods, meat, fish and seafood, dairy and eggs, and bread, the study adds.  When asked, “Are you willing to pay at least 15% more for local,” many say yes. A majority of consumers from high-, middle- and low-income groups say they’d pay up to a 5% premium for local foods.

So our advice? Food store operators may want to get on a first-name basis with nearby farmers - the demand is there.