Local food: Staying relevant in changing times

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by Tamara Scully

“Successful farmers will always be aware of changes in the marketplace,” Myrna Greenfield, owner of Good Egg Marketing, said during a webinar hosted by The Farmer’s Office.

While the local foods market has definitely evolved, it isn’t going away. According to Greenfield, local food has reached its market maturity, indicating that mainstream customers are now seeking local products too. This increased awareness of local food is due to the education the early advocates of local food systems provided. But along with a growing pool of customers, challenges have arisen along with awareness.

“Local, organic and specialty foods are now available pretty much anywhere,” Greenfield said. “The local foods market is maturing. It’s not shrinking. Customers are getting more interested in what’s in their food.”

Challenges

While the pool of customers seeking local foods has grown from the early customer base of innovators and trendsetters, who shop primarily based on their values, the customers entering the marketplace today are those who purchasing decisions are based on cost and convenience too. While your customer base is growing, the tried-and-true techniques used to find diehard customers aren’t going to help attract new potential customers, she said.

Another challenge comes from the many larger entities entering the niche food marketplace. Foods with “clean” labels (non-GMO; grain-free; no antibiotics; no artificial ingredients; gluten-free) are now available from major food labels, making it easier for customers to find products which have desired attributes.

Farmers markets and CSAs, which were the primary sales outlets for local food in its earlier days, are now seeing declines in growth. After astounding growth in the past two decades, farmers markets are now stabilized, and some markets are reporting declining sales. CSAs are having trouble attracting and retaining customers. Some of this is due to the widespread availability of value-driven foods, which are now conveniently found in all types of stores, are accessible online and come delivered to your doorstep.

But local food is preferred by many due to its impact on local economies, the ability to know the farmer, freshness, nutrition and environmental factors. Many people do value local production even over organic food, Greenfield said.

Reaching new customers and retaining some of your existing ones will take some creativity.

“The market is bigger, but you can’t assume that they’re all going to be like those early customers, who are excited about what you’re doing and willing to go to a lot of effort to support you,” Greenfield said. Instead, farmers will need to adapt to the needs of the marketplace and find a way to connect with this new customer base.

Opportunities

The natural foods and “clean labels” trend gives farmers the opportunity to promote their food to a wider audience, including customers who may not have been interested in health or environmental claims previously. With increased awareness, the potential is there to attract customers who are seeking natural foods but are new to purchasing directly from farms.

Greenfield cautioned that “healthy” is not a term associated with positive food experiences, however, and urges farmers to avoid it.

In order to capitalize on the clean label trend, farmers need to be aware of other trends. Convenience and grab-and-go items are a huge market focus, as more people don’t know how to cook or don’t have time to cook. Meal delivery kits, prepped food items like pre-chopped vegetables and online ordering are important. With 45% of meals consumed alone, small portion sizes are also a factor, she said.

Snacking is taking over sitting down for meals. Prepared foods that can be consumed on the go – drinkable yogurt or packages of single serve cheese – are in demand.

Strategies

Not all farmers are going to want (or be able) to attract new customers based on every food trend. But finding the “sweet spot” where your farm’s needs, your existing consumers’ desires and the tactics that can attract new customers overlap is key, Greenfield said.

The traditional six “P’s” of successful marketing still apply, she said. Products, pricing, placement, people, presentation and promotion can all help position your farm to attract and retain customers in a growing local foods marketplace.

Products can be adapted for convenience. If processing is an option, slicing and dicing produce is always a good bet. Growing specialty products for a defined market – such as an ethnic crop in demand in your area, or smaller size produce that is snack-able or good for single portions – can be effective.

Pricing can be adaptable as new customers may be more familiar with per package pricing – and willing to pay more for a known quantity than having to weigh out items by the pound. Adding descriptive labels or making items more convenient (maybe in meal kits) for purchasers can be low cost ways to command a higher price.

Placement or distribution refers to getting your product into the marketplace. Wholesale sales to grocery stores and distributors are getting more challenging, with very low margins involved. Differentiation is key. Other outlets, such as farm-to-institution, however, are booming, and opportunities here, as well as via e-commerce, are available and can be lucrative.

“People” refers to customers, employees and yourself. Customers are attracted to upbeat, knowledgeable and passionate vendors, and the customer experience can drive sales, so much so that “the customer experience is critical and is much more important than almost anything else you can do to build customer loyalty,” Greenfield said. Micro-targeting a specific consumer demographic by gearing products toward their needs can be very successful.

Presentation involves branding, packaging and displays. Consistent branding with attractive logos, websites that drive traffic, creative packaging and telling your farm’s story are crucial when all the big outlets are using these strategies to make customers think they are small farmers like you.

“We’re competing against the big guys and we really have to up our game,” Greenfield advised.

Going beyond what your farm produces and offering customers an experience – U-pick, farm dinners, meal kits, workshops or open houses – where they can develop an insider relationship to your farm can increase sales, develop loyalty and help you engage new customers and capitalize on the growth in the local foods marketplace as it becomes mainstream. The changes seen in the local food marketplace are many, and farmers will need to adapt to shifting consumer demands in order to stay relevant and profitable as our relationship to food, and how it is procured, evolves.

“The changes that I’m talking about are long-term trends,” Greenfield said. “But there are always new trends.”

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