Supply Chain Basics: The Dynamics of Change in the U.S. Food Marketing Environment (PDF) came out earlier this month. (I've been behind in getting through all of the news to get it posted on this site. Forgive me, work's been killing me.) This report is for small to mid-size farmers to help them "take advantage of the shifts in today's retail food marketplace" in the words of the USDA's press release. (As a non-farmer, I find it useful too... it tells which states have the most farmers' markets, for example. I consider things like that when I decide where to live.)
This report examines the changes in the retail marketing environment, especially as it affects the relationship between grocery stores and their vendors. It covers such areas as consolidation in the retail food marketing sector, increases in direct collaboration between retailers and vendors, and the ways retailers can differentiate themselves from their competitors by featuring greater varieties of specialty or locally produced or manufactured items. This evolving marketing environment, combined with the increasing flexibility of individual stores to make procurement decisions, offers new opportunities to smaller-scale growers and processors. The report discusses ways to highlight their unique product offerings and geographic proximity to retail buyers as a competitive advantage.
Highlights are noted below the flip - hat tip to Luis Sierra for going through the document and sending around the highlights. |
Meals Away From Home
People under 25 now spend over half their food dollars away from home. In fact, only Americans over age 60 spend less than 40% of food dollars outside their homes. Small surprise, since most people under that age have to go to school or work every day, leaving little opportunity to eat at home.
Farmers Markets & CSAs
We've gone from 1750 farmers markets in 1994 to 4475 in late 2007. Top states for farmers markets are (in order most to least): CA (almost 500); NY, IA, IL (200-300 each); PA, WI, MI, MA, OH, and KY (over 100 each). The report says the farmers' market trend was primarily in the West and Northeast at first, so it's news that the Midwest is catching on. Also, we've gone from 60 CSAs in 1990 to 1150 in early 2007.
What surprised me is that the Organic Trade Association associates that only 7% of organic sales come from direct sales (i.e. farmers' market or CSA). A good statistic is the projected growth of local food - from $4b/yr in 2002, to $5b/yr in 2007... to a projected $7b/yr in 2012. Oh - and 2% of Americans now use farmers' markets as their primary place to buy food!
Organics
No surprises here. Nothin' but growth. U.S organic sales rose every year between 1997 and 2006. In 1997, Americans spent $3.59 billion on organics, and in 2006 they spent $16.9 billion on them ($16,900,000,000 to put some perspective on that). In other words, sales have more than quadrupled in 10 years.
Among the most dedicated "core" organic consumers (accounting for 21 percent of organic food and beverage shoppers), most prefer to support brands that "are not owned by conglomerates" and that have "an authentic story
behind their creation." The interest of core organic consumers in learning where their food comes from and in supporting small businesses creates unique opportunities for those food producers and processors that can satisfy this interest.
Also interesting? Caucasians are the least likely ethnicity to buy organic. Asians are #1, followed by Native Americans, Hispanics, and African Americans.
The Food Gap
The report also comments on the gap between rich and poor, which in food terms means the gap between local/organic and diabetes. The report remarks on how well supermarkets with a small number of stores that are well targeted to niche markets do compared to mainstream supermarkets. In other words, it pays to only locate your stores in affluent, educated areas where there are lots of rich yuppies to buy your food. Congratulations, Whole Foods! |
