Locally Grown Continues To Take Root

Exploring the supply chain ripple effect

The ongoing demand for “local” produce is propelled by many factors, from consumers seeking ultimate freshness to the desire to reduce food miles and environmental impact. Others claim it just “feels right” to consume local food. However you explain the surging sales of locally grown products, they have created a ripple effect throughout the entire food industry and the fresh produce sector in particular.

Consumer Demand
Walmart, the largest purchaser of locally sourced and sold produce in America, has big plans: to double its local produce sales by 2025. Doug McMillan, the mega retailer’s CEO, made the announcement last November, upping the ante for the nation’s independent supermarkets and chain stores.

While everyone is well aware of the local craze, these foods represent but a sliver of the total market, bringing in about $12 billion in sales in 2014 according to the USDA. This figure, however, is projected to climb to $20 billion—or beyond—in just two years. Such growth is further backed up by a recent Harris Poll, which found more than two-thirds of Americans confirmed the importance of having access to locally grown or sourced food in a grocer’s produce department.

Most consumers (72 percent) consider local to be within their state; and not only do the majority think local is fresher (68 percent), but many (37 percent) believe it tastes better, and 32 percent think it is of higher quality.

In addition to federal programs that support local and regional food systems, 36 states and the District of Columbia enacted laws between 2012 and 2014 to support local food production and access. In addition, farm-to-school programs exist in every state, from rural towns to big city centers, and more than 42,000 schools nationwide buy local produce.

Buying and Selling
The demand for local is nothing new; access to local, however, is the sticking point. “There’s been a steady increase in demand from local retailers, wholesalers, and foodservice,” confirms Dominic Russo, buying and sales director for Rocky Produce in Detroit.

“We sell as much local produce as we can get,” Russo adds, sourcing from growers in and around the Great Lakes region. Unfortunately, availability is limited to the summer months and a few weeks in the spring and fall; but during this time, as much as 25 percent of the supplier’s business is local.

Like Russo, account manager Curtis Turner of Capital City Fruit Company, Inc. in Des Moines, IA has seen demand for locally sourced produce climb in his three years with the company. About half of Capital City’s produce is grown locally during the summer, mostly from large- and medium-sized farms.

Defining Local
The controversy over what constitutes ‘local’ is akin to judging a beauty contest: it seems to be in the eye of the beholder. The 2008 Farm Act defined locally grown as produce grown within a state or a distance of no more than 400 miles between origin and point of sale. But this is by no means universal.

“We work with each individual partner and adopt their vision of local. It’s what makes sense for our customers and their consumer base. Hy-Vee, for example, which operates 240 retail stores in eight Midwestern states, defines local as Midwestern-grown,” Turner says.

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