Does Sentiment For ‘Local’ Translate Into Sales?

By Jim Prevor, Editor-in-Chief, Produce Business

It is, of course, inspiring to hear that consumers claim they are seeking locally grown foods, better nutrition for their children and foods produced in an environmentally friendly way. It is, however, always a quandary to know precisely what consumers are trying to tell us when they answer surveys in this way. Such data must be assessed in the context of other data points. For example, McDonald’s recently announced that in February 2012, its U.S. same-restaurant sales for units open more than 13 months are up 11.1%. The big drivers: Chicken McBites, the new coffee program and other beverages, breakfast and the Filet-O-Fish sandwich.

Though there is, of course, a rarified Farm-To-Table restaurant segment, it can’t possibly account for even 1% of foodservice sales. It is also rife with fraud. Time after time, a quick overview of Farm-to-Table menus indicates local sources being claimed for a product that is highly unlikely. One recent visit to a Florida restaurant that claimed to be serving Florida broccoli, which does exist but is unlikely to be in this restaurant’s supply chain, bore this out when the restaurant gave the name of a local farm that supposedly was growing Florida broccoli.

Knowing this operation, we thought this unlikely and we’re going to check it out. The point was moot, though, as what the restaurant actually served was Mann Packing’s Broccolini – not broccoli, local or otherwise.

Without any kind of third-party certifications and no standard definitions, one hesitates to attribute too much to consumer statements in this area. Add in the propensity for survey subjects to say the “politically correct” thing, and one wonders precisely how this actually plays out in sales.

The data regarding restaurants that sell locally grown produce is also somewhat meaningless. Some might call it the Wal-Mart problem: Wal-Mart defines locally grown as grown in the state of the store it is being sold in.

This is a political definition and actually accords with a lot of consumer sentiment that revolves around consumers supporting their own “tribe,” but many, for example, environmentalists, would find fault with such a definition as it encourages purchasing across the broad reach of, say, Texas, rather than just across the state border in Oklahoma.

In the end, the Wal-Mart definition — because it includes both products always sold locally, say California citrus in California, and any special local buy efforts — creates a kind of absurdity. In the case of Wal-Mart, it means that in light of heavy produce procurement in California, if Wal-Mart wants to announce an increase in the sale of local produce, the most effective technique involves no change in merchandising or procurement; it just involves opening more stores in California.

Equally one wonders what the restaurants that sell “local” actually sell. A few – mostly white tablecloth types – do direct procurement from small-scale, bio-diverse farms. They might also adjust menus to take advantage of local items. Some college foodservice programs also reach out in this manner. Certainly, there is more consciousness on these issues so that distributors are more likely to offer more local options and restaurants to order them.

Still and all, for the vast mass of foodservice outlets, one suspects that their trumpeting of local is more marketing than substantive change. This is not surprising. Even at retail, marketing of locally grown options has increased far faster than any local sales.

Another issue related to consumer surveys is that consumers may assume that all other things are ceteris paribus – or all other things are equal – but that is not necessarily so.

It is interesting that when one looks at a concept such as Darden’s Seasons 52 – a concept one would think would fit right in with the local phenomenon – one sees very little reference to local. One suspects this has more than a little to do with Darden’s rigorous food safety program, which would make buying from random, local, small-scale, bio-diverse farmers – or from local farmer’s markets — almost impossible.

Surely incorporated into consumer perceptions of food quality, value and the idea of eating healthier are the idea that the food will be safe. Yet consumers really don’t have the ability to evaluate whether a local vendor is able to execute to the food safety standards of a national shipper. Most chefs who make a big deal of going to the local farmer’s market to buy ingredients haven’t the foggiest idea of the sophistication or integrity of the food safety practices of the producers of the food they are buying.

This leads to the obvious question, what are the assumptions behind consumer expressions of preference for particular types of food? Does the rise of the Filet-O-Fish express dissatisfaction with rising beef prices, or do people believe that the deep fried patty is nutritious or healthy?

Do consumers prefer local per se, or in that expression, are consumers expressing beliefs that local is less expensive, fresher, better for the environment, etc.? And if these things are not the case, perhaps consumer interest won’t translate to purchase activity.

Clearly, the research on these topics is just beginning.