Grocery Stores Taking Stock of Local Foods

Grocery store display of local apples

Written By

Sylvia Fagin

Written on

June 01 , 2009

Pyramids of green apples and red tomatoes elbow each other for space. Not far away is the deli, where wedges of cheese mingle with lunch meat and sliced bread. Shoppers meander through aisles of canned soup and boxed cereal, and navigate a maze of produce and dairy. The lights are bright but not overly so.

This is, of course, a supermarket, and the size and ambience of these chain grocery stores is the opposite of what you find at small neighborhood farmers’ markets, where Vermonters tend to shop for locally produced food. Vermont has the highest number of direct farmer-to-consumer sales, per capita, of any state in the nation, proving that our farmers’ markets and community supported agriculture (CSA) shares are strong. Yet it is estimated that between 95 and 97 percent of food consumed in Vermont is still imported from out of state.

How can Vermont farmers and food producers expand the availability of locally-produced sustenance by selling more of their products in chain supermarkets? After all, these stores are where most of America shops for its food. If Vermont localvores who buy directly from farmers can nearly fill their plate with local foods, why can’t Vermonters who shop in grocery stores do the same?

A variety of factors, including the type of product, production capacity, market price, and distribution opportunities—not to mention the more slippery element of relationships between producers, distributors, retailers, and consumers—influence what food is available in supermarkets. Even a slight shift in a consumer’s or retailer’s philosophical perception of whether food is merely a commodity or the nourishing end-product of a farmer’s sweat and worry can make all the difference in whether a local food item finds its way onto supermarket shelves.

A Story in Every Bag

A recent perusal of several Shaw’s, Hannaford, and Price Chopper stores in central Vermont revealed a number of Vermont items already available. The dairy cases offered cheese and butter from Cabot and Vermont Butter and Cheese Company, with Cold Hollow apple cider nearby. Local apples from Sunrise and Champlain orchards were in the produce sections. The meat departments stocked Vermont Smoke and Cure bacon and pepperoni. Several local bakeries had artisan loaves in the bread aisles. Freezer cases showcased American Flatbread pizzas, Vermont Mystic pies, and Ben & Jerry’s ice cream.

But these are some of Vermont’s largest food producers. What can smaller farms do to break into these markets?

One thing that helps is when farmers present supermarket customers with a story about their food item—a story that explains how the food is the result of a real person’s effort. This story makes the product unique and more desirable to consumers, and therefore eligible to garner a higher price. The strategy is at the heart of a burgeoning initiative called “local into retail.”

“The more you can give a unique identity to a product, the more value you can add to it,” explains Susan Futrell, communications manager of Red Tomato, a Massachusetts-based nonprofit that helps family-scale farmers in New England brand and market their produce to supermarkets, co-ops, and distributors. The goal is to retain a farm’s story through the distribution and sale process so that it reaches the consumer, Futrell says.

Maintaining a farmer’s story can be challenging in the supermarket model. Unlike food co-ops, which are mission-driven to support local producers, grocery stores mainly seek to offer low prices. They’re not required to promote the goods of local farmers, so farmers have to do the marketing themselves if they want to reach a supermarket audience. Red Tomato assists farmers in these efforts; for example, it created an “Eco Apple” label that helps sell apples grown locally under strict criteria. Eco Apple bags can be found in a number of Vermont supermarkets.

Bill Shur, owner of Champlain Orchards in Shoreham, sells his apples in Shaw’s and Hannaford stores throughout Vermont. To give his apples the “unique identity” that Futrell says is necessary for good marketing, Shur makes his packaging unique, making sure it reflects the orchard’s philosophy. There’s a story on the back of every bag that describes the farm and its horticultural practices. Shur even spends extra money to brand the tiny PLU stickers that are attached to apples sold individually. The stickers bear the Champlain Orchards logo, making the fruit traceable to his orchard.

“We made an effort to customize and brand our name,” he explains. “We wanted to tell our story so people would recognize us.”

A Friend in the Produce Department

In addition to marketing, another challenge for small farmers is accommodating the requirements of a high-volume grocery store. Products must arrive ready to sell—packaged in an industry-standard form such as a 3-pound bag of apples or a 10-pound bag of potatoes, complete with a bar code. What’s more, local producers almost always operate at a lower volume than their larger-scale counterparts, and while that often appeals to consumers, it creates challenges when it comes time to sell in a big-scale system that requires a constant and plentiful supply of product.

To ensure the highest possible margin, Champlain Orchards delivers directly to stores, rather than using a distributor; an orchard employee calls the produce manager at each store three times a week to take the store’s order. For the produce manager, this is a different procedure than simply punching a number into a computer to order from the franchise warehouse. A personal phone call is a bit of a nuisance, Shur says, so Champlain Orchards strives to provide superior quality and service.

Some produce managers are more willing than others to work with small producers. Shur has found a friend and ally in Joe Anderberg, produce manager at the Hannaford supermarket in Brattleboro.

“Joe is the best promoter of our product,” Shur says. “He is going out of his way to get organic and new products into his system.”

Anderberg says that working with local vendors is part of his store’s daily operations. He buys from 10 local produce vendors, responding to his customers’ demand for local produce. He notes that the quality of local produce is higher than that from larger producers. “They’re very prideful,” he says of the local farmers from whom he buys. “They want to show off what they’ve got.”

Another such vendor is Bill Johnson of Westminster. Johnson Farms supplies the Brattleboro Hannaford with produce that includes lettuce, cucumbers, and a variety of winter squashes. Johnson and Anderberg are “continually talking about products he can grow and we can sell,” Anderberg says. As a result of this collaboration, Johnson grows enough winter squash to supply the store through Thanksgiving and Christmas.

Dealing with 10 individual vendors runs counter to the supermarket model of dealing with as few vendors and deliveries as possible, but Anderberg has the support of Hannaford’s corporate office, which supports a campaign called “Close to Home.” Whether in the produce department or in the aisles, local products are tagged with a sign that hangs from the shelf and that notes the name and location of the producer, as well as the tagline, “Celebrating local products, discovering local legends.”

A Special Section of the Store

Finding local produce in a supermarket is easy. It can be harder to locate Vermont products in the aisles. Local producers of “ambient,” or non-refrigerated, products usually don’t have the capacity to produce enough jam or maple mustard to garner a space alongside nationally distributed products. Slotting fees, the fees that stores sometimes charge producers to have their products shelved in the aisles, are also prohibitive.

As with produce, these small-scale specialty foods have a story that adds value to their product, says Kim Crosby, president and owner of Vermont Roots, a Rutland-based distributor of Vermont specialty foods. To ensure that these products find an audience, Vermont Roots distributes them to a variety of stores throughout the state, including the Shaw’s chain. Each of the state’s 19 Shaw’s stores hosts a “Made in Vermont” section of ambient products stocked by Vermont Roots. Crosby estimates that about 35 Vermont specialty food products are sold via these special sections.

Vermont Roots takes orders from the stores, stocks the sections, and rotates products. It also shepherds individual producers through the process of getting their wares into a store’s computer system; Crosby says it can take up to 45 days to get a single product SKU number into the system. After the process is complete, though, producers benefit from shelf exposure at a major chain retailer, while retailers benefit from stocking nearly three dozen local products with only one phone call.

Vermont Roots also supplies Mac’s, a Vermont chain of a half-dozen small grocery stores. In addition, two Vermont-based produce distributors—Black River Produce of Springfield and Squash Valley Produce of Waterbury Center—have worked to bring more food into retail outlets such as Mac’s stores, co-ops, country stores, and restaurants. While neither supplies the big chain stores, both have worked with producers to ready them for a competitive marketplace. Some of those producers may later decide to contract with a bigger chain.

Large producers may forgo a distributor, however, selling and delivering directly to stores themselves. But smaller producers usually need the services of a distributor because the services they provide—contacting retailers, negotiating prices, and transporting goods—are prohibitively expensive for small producers. Plus, many farmers and food producers are in the business to do what they love—grow and produce food. They’re happy to let distributors do the rest.

A Push from the Customers

A farmer’s decision to produce for wholesale may be an issue of personality as much as profit, says Lisa Johnson, director of Valley Food and Farm in White River Junction. She notes that while most small farmers make more money selling directly to consumers, some turn to wholesale to avoid the details—such as customer service and parking—associated with a farm stand or farmers’ market stall. For similar reasons, others may decide to sell just a few products and focus on growing. But if they have the volume and are lucky enough to find a produce manager like Joe Anderberg in Brattleboro, they might sell all their produce to one retailer and benefit from the buying power of a big store.

Just as farmers build relationships with individual consumers, farmers selling to retailers must build relationships with produce buyers, says Margaret Christie, special projects director with Community Involved in Sustaining Agriculture (CISA), a nonprofit based in western Massachusetts. But those produce buyers—and their bosses at corporate headquarters—also have relationships with their customers, so consumers who care about local food availability in supermarkets should press retailers for more local food.

“Pushing from consumers is very helpful,” Christie notes. “Stores don’t hear that much from customers, and when they do, they do respond—that’s their business,” she says. So consumers who want to support local farmers might consider shopping for local food at their neighborhood grocery store and having a conversation with the produce manager while they’re there. Interaction with shoppers who understand that food is more than a widget, and who value the work of their farmer neighbors, might be the nudge a retailer needs to become an ally to local farms.

As long as low-priced food is imported from across the country and the world, consumers will have choices about what they eat. Deciding how to balance taste, affordability, and personal values about food will increasingly be the task of consumers—and retailers—as they strive together to support the stories that farmers around them are writing every day.

Photo by Caroline Abels

About the Author

Sylvia Fagin

Sylvia Fagin

Sylvia Fagin writes about food and agriculture from her home in Montpelier. To make sure that Vic, Marianne and the Bobs were making wine correctly, she recently took a tour of the Calchaquíes Valley winemaking region of northwestern Argentina. She is happy to report that they are right on track. Contact Sylvia via Twitter: @sylviafagin.

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