There's little argument that wellness and sustainability took a hit during the recession. Sales in the natural, organic and green categories, which were blooming in excess of 20% annually, have been dialed back today to an average of 5%. While the boom days might be past, that's still a respectable showing, given that overall food sales are expanding at just over 1%.
What's more, health and wellness is diverse enough that there are still several bright spots where double-digit growth is not only possible, it's the norm. One of the stars belongs to local food products, particularly produce. A number of mainstream retailers recently announced that their own local programs were so successful, they are expanding them to cover additional products and volume: Meijer Inc., Grand Rapids, Mich., is increasing its commitment to local-grown items by 20% this year, to 75 fruits and vegetables. Sales of locally sourced produce now account for 27% of all department sales, according to officials.
Also in Michigan, Spartan Stores is tying its expanded “Michigan's Best” program to support for local jobs and the state's economy. On the West Coast, Tesco-owned Fresh & Easy is broadening its “Farm to Store in 24” program, which guarantees that local produce will be in stores less than 24 hours after it is picked. The list goes on.
Such strategies are validated outside the retail channel. Just last month, the U.S. Department of Agriculture released its annual census of farmers' markets. The resulting 2010 directory lists a total of 6,132 operational venues around the country, up 16% from the year before. The top three states with the most farmers' markets were: California (580), New York (461) and Illinois (286).
As consumer demand for local products grows, and availability expands, the industry needs to take steps to protect what it's worked so hard to achieve. A national supermarket chain learned a painful lesson this summer when one of its stores in Washington state erected a large, bright sign promoting a farmers' market “event” in the parking lot.
The problem is, there were no farmers at this market. The store was just promoting what was basically a huge, outdoor display of regular, conventional produce. A local farmers' market representative who saw the sign notified the chain that the promotion ran afoul of a state law defining a farmers' market as one where at least five farmers are present. The store quickly removed the sign.
The incident serves as an important lesson for all food retailers. As local products become more popular, the possibility of commoditization increases. Unwittingly, operators run the risk of expanding the definition to the point where its value as astrategy is worth much less than before. To keep this vibrant, worthwhile category healthy and growing, it's critical that supermarkets exercise restraint in employing the word “local” — even if it means not using it. To its credit, that's what the Washington state store did when they changed their sign — to “Weekend Outdoor Market.”