Supermarkets Are Responding To Local Food

by Stowe Boyd

Major supermarket chains are trying to integrate local food into their operations, and the problems they encounter reminds me of a saying from Lee Bryant: "When you try to adopt bottom-up practices, everything has to be bottom up."

[from Supermarket Chains Narrow Their Sights by Marian Burros]

“Regional agriculture systems in the Northeast, mid-Atlantic and Southeast are really quite broken,” said Karen Karp, the president of the company. “Small farmers can sell direct, but there is no infrastructure for middle-sized farmers to get stuff into supermarkets.” There are no warehouses, limited trucking facilities and few distributors.

These growers are used to picking the zucchini and bringing it to a stall at a farmers’ market. In order to sell to grocery stores, they have to learn pricing, invoicing and ordering systems as well as post-harvest handling techniques that include chilling, sorting and grading for size and color.

Big retailers have even more work to do. Used to making just a few phone calls to large produce distributors, often thousands of miles away, they do not have the setup or the personnel to deal with individual farmers who deliver to the back door.

Some of them are reluctant to do so and small farmers either have to join a co-op or find a distributor who can deliver to the supermarket’s warehouse.

The chains also have to change their purchasing practices to make room for seasonal local produce instead of being locked into a year-round contract with one source in order to insure the lowest prices.

“It takes innovation and reallocation of resources,” said Mr. Nicholson of Red Jacket Orchards. “It takes passion, and patience to get good collaboration. They have to be willing to spend more money because it’s costlier buying from small growers.”

Ms. Karp said: “If retailers want to deal with these farmers they can no longer push all the risk about food safety and quality assurance back on the individual farmers, who can’t bear those costs.”

Which could be called the 'Walmart effect' -- as when Walmart ordains the dimensions, variety, and price for tomatoes, effectively controlling all aspects of the entire agricultural food chain for tomatoes based on their control of the end point of sales.

One of the attractions of a fully localized economy is taking control out of the hands of large chains, and seeing the possibility of small groceries buying in smaller quantities from local, small food producers. Cutting out the (growing) costs of long-distance transport -- and the subsidies implicitly being provided to the transport industry by taxation and government support of the highway systems and related infrastructure -- could translate to good economics around local distribution.

At certain times of the day, in many American cities, 30% or more of the traffic is related to food distribution. The costs of that are reflected in the atmosphere, the funds allocated to roads and intrastructure, and the direct costs of food.