By Chris Dubois
More and more “local” signs have been popping up in my grocery store. While I’ve seen them in the produce section for years, their presence throughout the store is growing including in the beer, wine, meat and cheese aisles.
The importance of eating local food and supporting local businesses is growing, especially among younger consumers. Food is now less of a commodity and being seen more as the route to a better and healthier way of life.
As you can imagine, these changes are impacting all parts of the grocery business. For CPG manufacturers and retailers to be successful in this shifting landscape, they will need to reevaluate the food they are selling, the way it is marketed and even the retailer’s position in the community in order to fulfill consumers’ growing desire to support local food and local businesses.
It’s About Connection.
Consumers want to connect with both the land that their food and its ingredients were grown on as well its producers. Of the $62 billion in produce sales in the United States in 2016, $18 billion to $20 billion was spent on local goods. Local is growing two times faster than total produce sales and has seen an eight to 10 percent increase from 2015 to 2016. As technology continues to advance and become more accessible, it will get easier for smaller companies to grow more quickly.
Similar to the organic trend, consumers are buying local because they think it is healthier and can even be leveraged as medicine. Not only do they perceive local products as being fresher, those products are also perceived to be higher quality. By taking part in supporting local, consumers are also trying to make a direct impact on their economy, and they get satisfaction from these types of purchases. When talking about what they’ve bought recently, consumers like to share that they got their food from their favorite local butcher, farmers market or fruit stand.
The food distribution industry as we know it is changing. Advancements in technology are making produce available during more times of the year. Farmers who were once faceless are now going directly to the consumer. And the small and local entrepreneurs who were once dwarfed by large global manufacturers are being given more opportunities to grow faster than ever before.
What’s Next?
There are many ways retailers and manufacturers can stay ahead of this trend and in line with consumer demand. While the ingredients and preparation of food continue to drive consumer purchases, and value always matters, consumers want to know that they are supporting local businesses.
Retailers and manufacturers can better resonate with consumers when they emphasize how they are a local business and/or support local businesses. This can be through enticing shoppers to come to the store by hosting cooking demos with local chefs, growing their own produce in a vertical garden or partnering with businesses and others in the community in a variety of ways to promote and support local connections.
As we look toward the future, the shift toward hyperlocalization will only increase. Now is the time for retailers and manufacturers to partner locally and spur innovation for new growth, in the perimeter and beyond.
To learn more about the localization trend, check out my webinar “Hyperlocalization” with FMI, or contact me directly at Chris.DuBois@IRIworldwide.com.