As technology, consumers and times change so does the food industry. Food has always been sourced, sold and traded locally so I have a hard time saying that there is a local “trend” or “movement” that we are seeing. In my opinion, the grocery industry spent the last few decades investing in technology and making the global supply chain more effective, today the supply chain is simply correcting its self to balance out the number of products people buy from global vs. local suppliers. This correctional period is swinging the pendulum back from focusing mostly on the global supply chain and highlighting the need to make the local supply chain more effective. Why are people buying local? Well, there are a number of reasons and preferences vary from person to person. Some of the main ones that I hear most often through my research are:
- Fresh – Many people feel that local foods taste fresher and better because they were not held in a warehouse, refrigerated truck or spent much time in transit from farm to store.
- Healthy – Consumers find local foods contain less artificial ingredients and most are organically produced meaning they are free of chemicals such as pesticides and preservatives.
- Sustainable – Local foods may produce less pollution through fewer miles traveled and natural resources are conserved through producing only what is needed.
- Local Economics – Buying local food supports farmers and merchants keeping jobs in the area. More of a dollar is kept in the local economy and can be reinvested in local economic development.
- Safe – Buying locally provides consumers the opportunity to understand where the product has come from, who made it and how it was made. That means there is an incentive for a producer to maintain a strong reputation for producing high quality foods.
As such, it is critical for retailers that see the benefits of sourcing locally to be at the forefront of this issue and cater to more consumers demands. Retail stores, restaurants, and tourism businesses can make a significant impact on the change in consumer’s buying attitudes. Larger businesses can help change the perception of those who agree buying local is beneficial.
Many consumers complain buying local products are:
- Expensive – Many consumers believe there is a premium charge added to locally produced products. In some cases I will agree, however, economies of scale are the cause for the higher price for local products. Margins for local food are generally razor thin and the reason grocery stores can sell similar products at a lower cost is because of the massive volume they sell. Local suppliers sell lower volumes and have to make up for the low margins by charging a higher price.
- Inconvenient – Consumers generally have to go to a specialty store to find locally produced foods. Those with busy schedules do not have the time to make multiple stops and favor the “supermarket” so they can find everything they need in one store. Also, seasonal products cannot be sourced year round making it difficult to find in the “off season” and sometimes during the peak season when demand is high consumers will find products out of stock.
It is no surprise that many retail stores have not fully committed to supporting their local producer. Retail businesses either fail to realize the differences between a global supply chain and local supply chain or they are hoping that this “trend” or “movement” will pass and they will avoid having to make changes to their current supply chain. The local supply chain is not less complex or easier to manage than the global supply chain simply because the distance between the purchaser and supplier is shorter. There are challenges to both types of supply chains and each has different obstacles to overcome that are not insignificant.
