The “locavore” movement has taken root, and offering local foods can be advantageous to supermarket operators, according to a report by A.T. Kearney, the Chicago-based management firm.
“Forward-thinking retailers and restaurants with a distinctive definition of local and a focus on marketing and merchandising fresh, high-quality products at the right price will see an immediate impact and capture a long-term advantage,” the study pointed out.
It said 96% of consumers questioned defined “local” as within 100 miles, compared with 58% in 2014, while 65% said they consider products local if they were produced or grown within the same state and 57% if they were grown on an artisanal farm of less than 100 acres or produced nearby by a small business.
Walmart, Whole Foods Market and Sprouts Farmers Market define “local” as within the same state, the report noted, while Kroger Co. — as well as the U.S. Department of Agriculture — define it as within 400 miles.
Modifying the definition of local to a tighter radius could have supply chain implications, the report noted — with fewer sources of supply making it harder to consolidate volume; increased supply-base fragmentation increasing transportation and product costs; and smaller purchase volume limiting negotiating leverage.
Retailers who create differentiated signage on local products could boost sales, the study said, based on findings that 34% of respondents said they would make a special trip to the store to purchase local food, although 51% said their retailer does not clearly advertise local products.