Think closer to home

Consumer interest in local food is showing no signs of waning. In A.T. Kearney’s 2014 survey of U.S. shoppers’ local-food buying habits, more respondents indicated that local foods are an important factor in what they buy and where they buy it than did so in 2013, the first year for the survey.

“More than 40 percent of respondents say they purchase local food on a weekly basis, and another 28 percent buy local food at least once a month,” notes the Chicago-based global management consulting firm. “A majority of respondents (66 percent) say that local food helps the local economy and brings a broader and better assortment of food (60 percent).”

What counts as “local”?

Although no official definition exists for “local food,” Mike Goldblatt, A.T. Kearney consultant and coauthor of the company’s study-related report, says consumer respondents were consistent during the past two years in their definition.

“Nearly 60 percent define local food as that grown or produced within 100 miles,” he states. “Nearly 50 percent of respondents also define local as those foods that support the local economy or are grown in the same state.”

Consumers are looking primarily for freshness and quality, Goldblatt adds, and view local food as being able to deliver on these attributes.

Greg Mueth, vice president, account planning and shopper marketing for St. Louis-based GROUP360 Worldwide, agrees that the 100-mile radius is a widely understood guideline. And outside of fresh foods such as vegetables and fruit, he believes authenticity is a selling point.

“Locally produced products tend to reflect the flavors and preferences of the area,” he says. “Local may also signify a small batch or hand-crafted aesthetic.”

An opportunity for store brands

For retailers, loyalty-building with shoppers begins with “building engagement,” Goldblatt says. And local food, including that branded under the retailers’ own brands, can play a unique role in that engagement if the food is marketed via a story about its origin.

“For example, a product sourced near a consumer’s community or within the same state will give that consumer comfort in knowing where the product was grown/produced and will allow the consumer to show he or she is supporting the local community,” he says.

Going local on the store brand side is easier for smaller regional chains, of course, than it is for large national retailers. According to the A.T. Kearney report, big-box and national retailers still lag in customer perception when it comes to providing high-quality, affordable fresh and local foods.

Goldblatt says the national chains should consider segmenting the market if they are to introduce locally sourced store brand items.

“In some cases, that may be by region or by state,” he says. “Retailers will need to pilot whether higher willingness to pay for local — particularly in key ‘fresh’ categories — will offset the efficiency losses of regionalizing store brands.”

Good supplier partnerships also are critical, no matter the size of the retailer. Goldblatt believes local autonomy is very important.

“Retailers on the cutting edge of local — for example, Whole Foods — have [been] given autonomy at the local and regional levels to make sourcing and marketing decisions,” he notes. “Fostering relationships with local farms and local suppliers requires a local touch.”

Mueth believes social media resources such as Facebook and Pinterest also can be excellent sources for local ideas and potential partners in that they can lead to what a retailer’s “local fans” are showing interest in.

“That allows you to find remarkable providers before your competition does,” he adds. “Waiting to discover them at a food show may be too late.”

Talk them up

Local food is a draw only if shoppers are privy to the food’s “story,” so retailers will need to make that story part of the store brand marketing plan. And retailers need to remember that freshness is the biggest purchasing driver, followed by quality and price, when it comes to local food, Goldblatt suggests.

“Source more local; tell your customers it’s local, and tell them exactly where it came from,” he advises. “Some retailers, like H-E-B in Texas and Wegmans in the Northeast, will carve out sections of their stores dedicated to local, which is a good way to spotlight the retailer’s dedication to freshness/local.”

Mueth also sees the value of that “store within a store” concept.

“This could take the form of a special shelf section — or perhaps a free-standing kiosk — that proudly displays locally sourced products,” he says. “And certainly an own brand could create a local ‘sub-brand’ or simply add a burst to their existing package design.”

They've got local appeal

A number of retailers recently have taken a plunge into the local food waters on the private brands side.

In 2011, Sunbury, Pa.-based Weis Markets announced the rollout of an annual “Your Neighbors, Our Farmers” local produce program. Tied to products under both local brands and the Weis Quality store brand, the campaign highlights the contributions of farmers and their families who supply Weis stores with produce. Weis stores display “Your Neighbors, Our Farmers” banners with photographs of the farmers supplying Weis.

“We were local before local was cool,” Kurt Schertle, then executive vice president of sales and merchandising for Weis Markets, said at the time of the 2013 campaign. “Although this is the peak season for buying local produce, we are year-round customers of locally sourced agricultural products, including milk, eggs, pork, beef and poultry.”

Another Pennsylvania-based retailer, Giant Food Stores of Carlisle, Pa., announced the availability of PA Preferred store brand milk, in several varieties, at 200 retail locations. In 2013, when it made the announcement, Giant was the first national retailer to qualify its store brand milk as PA Preferred, meaning 100 percent of the milk is produced in Pennsylvania. The program’s trademark, a gold checkmark inside a blue keystone, appears on the milk products.

And San Antonio-based H-E-B has celebrated Texas Independence Day during the past couple of years with its “TexFest” promotion, which allowed shoppers to find “all the best Texas products, all in one place.” The retailer announced that it would place “Go Local” tags on a number of national brand products, as well as store brand products — including H-E-B Creamy Creations Ice Cream, H-E-B Seasoned Beef Fajitas, H-E-B Premium Smoked Sausage Links, H-E-B Heritage Hot Dogs, Hill Country Fare Seasoned Split Leg Quarters and more.

Even ingredients are fair game when it comes to creating local appeal. Here, Haggen Inc., Bellingham, Wash., recently announced a partnership with Portland, Ore.-based Shepherd’s Grain under which all baked goods offered in Haggen Northwest Fresh and TOP Food & Drug in-store bakeries will use Shepherd’s Grain’s flour. Shepherd’s Grain is an alliance of 43 progressive Northwest family farms dedicated to practicing sustainable agriculture.

“Shepherd’s Grain is in complete alignment with our core values of local and sustainable,” said Clement Stevens, co-president and senior vice president of merchandising at Haggen Inc. “By partnering with them, not only are we offering our customers baked goods made with premium flour, but we are also supporting local Washington wheat farmers and their sustainable farming practices. It’s a winning combination for everyone.”