US: Local food movement presents challenge to established producers
The report finds the growing local food movement, in which consumers seek out and purchase foods grown in closer proximity to them, is causing smaller regional producers to take market share from established producers who don't qualify as locally sourced.
Local buying opportunities such as farmers markets and roadside stands have long existed, but in more recent years, have gained popularity with consumers who want a better understanding and connection to their food. Such interest has changed the competitive landscape of the U.S. produce industry as supermarkets and restaurants have latched onto the local trend.
This movement has evolved into a permanent mainstream trend, which is generating more opportunities for regional U.S. growers who traditionally had less market share than larger, more well-established national suppliers.
"Fresh, local produce has become a signature part of the produce section in many U.S. supermarkets and consumers are taking advantage of the option," said Karen Halliburton Barber, assistant vice president and senior agricultural analyst with FAR and the author of the report.
The report highlights the explosion of regional U.S. production in areas such as Oregon, Washington, Michigan, the Ohio Valley, Georgia, Florida, Wisconsin, New York, New Jersey and the Carolinas. Many growers in those regions have seized the opportunity and expanded their acreage to accommodate the increased demand.
Barber's report goes on to note that the local food movement appeals to various consumer groups for several reasons, including an interest in sustainability and the reduction of 'food miles,' a desire for organic and natural foods and ethical issues. Many consumers view agriculture as the core of their community identity and feel compelled to make local purchases they believe have a greater social impact.
However, a move to a stronger local focus isn't without its challenges. The conventional industry view is that locally grown food is more expensive and less efficient simply relating to economies of scale.
In addition, global food production compared to local offers the advantages of year-round accessibility to specific foods, thus increasing global free trade - ideally leading to the reduction of global hunger and driving economic growth.
The report concludes that the local foods trend will continue to expand for fresh produce over the next five years and continue to offer opportunities for retailers and foodservice operators to attract customers. It points out that national growers, specifically in California, will need to adapt their business models to accommodate the desire for local, fresh produce.
Source: Rabobank
Regards,