What is considered “local”?
While there is no universal, standard definition of “local,”
consumers are almost unanimous on one geographic constraint. According
to recent research by consulting firm A. T. Kearney, 96% of U.S.
consumers describe local food as products grown or produced within 100
miles from the point of sale, up from 58% in 2014.2
In addition, local foods now reflect a broader product assortment.
Today’s consumers – especially women and young people – have come to
expect high-quality local meat, seafood, and produce, as well as jams,
ice cream, and bread.3
Factors fueling the hunger for local foods
- Millennials love local: Today’s Millennials, who account for 24% of the U.S. population (77 million), value authenticity and locally made products.4
They are leading the “buy local” movement, a $29 billion industry for
both food and non-food products, which has doubled in size in the last
10 years, according to AdWeek. Edelman Digital found 40% of Millennials
prefer to shop? local, even if it costs more.
“Retailers are sourcing food products from
local suppliers to simplify supply chain management, save time and
transportation costs, and build goodwill within their communities.”
- Consumers associate local with “fresh”: Nearly all consumers (93%) associate local with “fresh,” the primary purchasing factor for grocery consumers.5
That may explain why, regardless of the category, 78% of consumers are
willing to pay a premium of 10% or more for local food, up from 70% in
2014.6 Surprisingly, even lower-income grocery shoppers say they (63%) would pay more for local food.7
The availability of local foods also impacts retailers’ brand loyalty,
as almost 30% of grocery shoppers say they consider purchasing food
elsewhere if their preferred store does not carry local foods.
- Farmers markets: Strong demand for local foods has
driven the 350% increase in the total number of farmers markets between
1994 and 2013, according to the U.S. Department of Agriculture (USDA).
This explosive growth has prompted suppliers, grocers and restaurants to
adapt by adding locally produced food offerings all year round.9
The diverse benefits of local sourcing
The trend toward locally sourced food products benefits businesses
and consumers alike. By working with local suppliers, grocery retailers
simplify their supply chains, which boosts certainty and predictable
delivery, and lowers transportation costs. Local sourcing can also
distinguish retailers’ brands and lead to flattering PR by demonstrating
their investment in jobs in the local community.
Local suppliers benefit from increased speed to market by selling to
nearby retailers. Also, since suppliers are literally closer to their
end consumers, they can promptly apply shopper feedback and adapt their
products to satisfy local preferences.
Buying local foods helps consumers feel good.
Choosing products
sourced closer to home allows consumers to support people in their
community. These products also often align with consumers’ environmental
and ethical demands and expectations.
Market leaders invest in local foods
The massive growth in demand for local foods has captured the
attention of retail leaders and shaped their purchasing strategies.
Retail giant Walmart is the largest purchaser of locally sourced and
sold produce in America, selling $749.6 million of locally grown produce
annually; Supervalu buys between 25% and 40% of its produce locally,
according to A.T. Kearney.10
Whole Foods Market remains committed to buying from local producers
that meet its quality standards and some regional stores have an
employee known as a “forager,” whose sole duty is to source local
products for each store.
3 ways to win with the local food movement
- Be authentic: To attract Millennial shoppers who
lead the “buy local” movement, suppliers and retailers can help them
feel an emotional connection to their brands by sharing the history and
heritage of local products.11 Companies can use packaging, as well as in-store and digital communications to share their meaningful brand stories.
- Share facts: Voluntarily offering product data can
build brand trust, as Millennials and locavores want proof of how, when
and where products were made.12 13 As such, companies should proactively and transparently share more detailed information about their local products.
Emphasize “fresh”: In grocery,
product freshness and quality are paramount. When displaying regular and
local alternatives, retailers should distinguish local products with
signage that states its local origin to benefit from the perception of
superior freshness and quality. For similar reasons, suppliers should
use their packaging as a marketing opportunity to state the location of
their product’s origin.To know more visit our site
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