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Waiting For The Dust To Settle On Sales Of Locally Grown

Jim Prevor’s Perishable Pundit, October 25, 2010

That local is all the rage is not subject to question.

However, there is a real question about the degree to which sales of “locally grown” are actually increasing and what any increase might mean.

Supermarkets are promoting local vigorously, but the vast majority of these local promotions are nothing new — it is the same summer sweet corn promotion that has gone on for decades. Because these traditional local products account for such a large share of local sales, if they do not go up, it is very hard for local to increase significantly. Yet we are hearing from many chains that, although they are marketing local heavily, their total local sales are in traditional ranges.

Now it could be that this is because of competition. As we mentioned here, there has been a tremendous growth in the number of farmer’s markets. Yet at least some of the farmers who man these stalls are grumbling a bit. They tell us that there are a few high volume markets that are worth their time, and that at least some of these new farmer’s markets are just sucking the strength out of the old ones.

This is very problematic for the local movement. The notion that farmers get a higher return by selling direct to consumers is completely dependent on the fact that family members are willing to work for free selling the family produce. Most farmer’s markets require the farmer or his family to be doing sales. The number of family members available to sell is limited. So, more farmer’s markets in the same geographic region run the same risk that retailers run of cannibalizing their own stores.

There is also an explosion in various forms of community-supported agriculture (CSA’s), which seems to indicate a lot more produce being sold locally. Yet, the bottom line is this, the best information we have is that overall produce consumption is flat, so if local is up robustly, one would expect everything else to be down.

Either the local volume is up over such a small base that it is just doesn’t matter very much or perhaps supermarket sales of local are not that robust. It is just the effort to show affinity with the community through marketing that is robust.

Maybe all these farmers markets are stealing sales from each other or are opening in progressively weaker locations so, as the number of farmers markets increases, the average sales per market may be going down.

It is also possible that a lot of things purchased at the farmer’s market or bought as part of a CSA are really a different kind of purchase than what people buy in a grocery store.

CSAs deliver what they choose, not what customers select, so maybe consumers don’t eat a lot of the stuff or still buy their regular shopping list in addition to whatever they get.

The farmer’s market has become a social event, even a tourist outlet. Perhaps consumers buy interesting things in such places, such as unusual varieties, and then don’t eat the purchases. Or they try them but not to the extent where they cut back on their normal grocery order.

In a couple weeks, we have a national election coming up. Don’t be surprised to hear TV commentators’ announcing that they are getting word that turnout is exceptionally high or exceptionally low. Typically, when the dust settles and the numbers come in, the turnout was not “exceptionally” anything.

There is a lot of marketing going on around local right now. Don’t assume sales are as intense as the marketing until we see real numbers.

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