Catch the Local Express
All politics are local–so the cliché goes.
I'm not sure that applies literally any more, given the international concerns that have pushed to the forefront in this season's presidential race. But I do think that, even if localness is less important in politics, it's steadily becoming more so in groceries.
Just a few years ago, merely offering local foods was a point of distinction in a supermarket. Now it's almost expected. In fact, consumers are getting ever more stringent about just what constitutes "local." According to A.T. Kearney's annual survey about local foods–just the third one they've done–shoppers are already narrowing their definition of what constitutes local. An overwhelming majority (96 percent) say it's within 100 miles. By contrast, the USDA's definition is 400 miles.
Just a few years ago, merely offering local foods was a point of distinction in a supermarket. Now it's almost expected.
This preference for local food results from the convergence of several trends familiar to everyone in the industry. Not only do people want less processed food; they're increasingly mistrustful of what they perceive as Big Food, which is one factor that is driving mega-mergers like Kraft Heinz.
This presents retailers with a dilemma. As Kroger CFO Mike Schlotman pointed out recently, the center store may not be "hot," but it still accounts for half of sales. The solution probably will require some strategizing, like identifying the processed products where "local" carries the most cachet (the Kearney report suggests these include ice cream, jam and popcorn) and merchandising them to emphasize their local nature when possible. Additional potential may exist to "make a virtue of necessity" with foods, like baked goods or fried savory snacks, that are often produced regionally due to their short shelf lives.
On a personal note: After two years on the staff of this magazine, I've moved into the hot seat as executive editor. My fondest regards and best wishes go to departing chief editor Jennifer Acevedo, who has guided the magazine expertly and given me invaluable assistance in learning about CPG retail strategy.