An excerpt from Growing Local: Case Studies on Local Food Supply Chains edited by Robert P. King, Michael S. Hand, and Miguel I. Gómez. For more books in Our Sustainable Future Series, click here.
1 From Farms to Consumers
An Introduction to Supply Chains for Local Foods
Miguel I. Gómez and Michael S. Hand
The term local foods conjures vivid and specific images among consumers, food connoisseurs, and scholars. Many people think of the fresh young vegetables and the first ripe strawberries that appear in farmers markets in the spring and the apples and winter squash that herald fall’s arrival at the end of the market season. For others, what comes to mind is a roadside farm stand, discovered by accident during a Saturday drive out of town and packed with a variety of straight-from-the-field produce. More and more, the picture of local foods also includes signs in supermarkets identifying certain products as local, and stories from farmers about how their food was produced.
These images are a growing part of how people think about their food when they fill their grocery cart (or canvas bag or farm share box). Yet these images tell only a part of the story. Where we purchase food and where it comes from (in particular, its geographic origin) does not always reveal how local food gets to the point of sale or why it is sold touting some characteristics and not others. The promotional flyer we might read at the supermarket meat counter about the nearby farmer of grass-fed beef likely does not describe the importance of interdependent business relationships between the farm, slaughterhouse, and retailer. Neither does the bin full of the season’s first apples at the farmers market tell you about the grower’s significant investment in transportation and marketing activities that allow him to sell in multiple markets each week.
The stories behind the images describe the people, processes, and relationships—that is, all the segments of the supply chain—that put local foods into consumers’ hands. The supply chains for local foods, like those of more mainstream products that account for the vast majority of food consumed in the United States, remain largely hidden from consumer view. Yet it is within these supply chains that the food characteristics and the information consumers value are determined. As local foods become a more important part of the U.S. food system, our understanding of the inner workings of food supply chains deserves more attention.
A Growing Trend in Food and Agriculture
U.S. consumer interest in local foods has increased sharply in recent years. Although sales of locally grown food still account for only a small share of total domestic food sales, this is believed to be one of the fastest
growing segments of the U.S. food system. Interest in local foods stems from a variety of potential and perceived benefits, including economic, environmental, health, food safety, and rural development benefits. Some believe that local food supply chains provide several advantages over the mainstream supply chains that provide products to supermarkets. These might include preserving local landscapes and family farms, strengthening of local and regional economies, and providing fresher, higher quality food products. Certain consumer segments are actively seeking local foods in a variety of outlets, and there is evidence from anecdotal observations and from controlled economic experiments that some consumers are willing to pay higher prices for local foods.
These trends are prompting changes across a spectrum of food supply chains. Farmers’ increased utilization of direct marketing channels such as farmers markets and a variety of community supported agriculture business models is providing an important market mechanism linking farmers and consumers. Some argue that direct market channels give farmers more control over distribution and allow them to capture a higher share of retail value in comparison to selling through mainstream intermediaries. At the same time, these channels offer an alternative outlet for consumers to seek local fresh products directly from the source. But direct marketing channels are not the only channels through which locally grown foods are made available to consumers. A number of mainstream supermarkets, which are remarkably resilient and quick to adapt, see these trends as an opportunity to satisfy customer demand for local foods and to increase customer loyalty. However, it is not clear that this is an effective channel for meeting the rapidly growing demand for local food products; and there is uncertainty about the long run prospects for a significant “re-localization” of supermarket offerings.
Interest also extends to federal, state, and municipal policymakers, who seek to marshal significant resources to support local food systems. Local foods are increasingly being incorporated into programs to reduce food insecurity, support small farmers and rural economies, improve healthy eating habits, and foster closer connections between farmers and consumers. Local governments, for example, are implementing an array of training programs for vendors and farmers market managers to improve skills in running local food supply chains. Municipalities are also making capital investments in infrastructure to facilitate the development of supply chains for local foods. Today many states and cities have food policy councils centered on promoting local foods. In addition, there is strong interest in increasing the share of local foods, in particular fresh fruits and vegetables, in the federal Supplemental Nutrition Assistance Program (SNAP).The U.S. Department of Agriculture (USDA) administers several grant and loan- guarantee programs that can potentially support local food supply chains. In the regulatory arena, an emerging issue is the differential treatment regarding food safety and product traceability that the federal government uses with direct market supply chains relative to their mainstream counterparts.
Despite the growing importance of local food supply chains to consumers, food supply chain members, and policymakers, relatively little is actually known about them. Nor is the performance of local food supply chains well understood in terms of economic, human health, environmental, and social effects. To understand the local food phenomenon better, this book offers a rigorous comparison of local and mainstream supply chains in multiple social, economic, and environmental dimensions, using the case study method. The fifteen case studies and the systematic comparison of case study findings are intended to shed light on the factors that will influence the structure, size, and performance of local supply chains in coming years.