Local sourcing in the supermarket industry is a complex, imperfect process. However, there are often happy endings that, unfortunately, don’t get publicized often enough. Take the story behind the local produce programs at two Virginia-based supermarkets, Ukrop’s and K-VA-T.
Both chains started sourcing locally nearly 10 years ago, and both grew by buying through a regional cooperative called Appalachian Harvest, which gathers products from farmers throughout southwest Virginia and northwest Tennessee. Working through intermediaries like this is nothing new to the supermarket industry, where the emphasis is on centralization as much as possible. But Appalachian Harvest’s story is a unique one. Started in 1995, the organization is largely comprised of former tobacco farmers who, seeing their subsidies dwindle throughout the ‘90s, decided it was high time they make a switch to food farming (federal subsidies for tobacco eventually ended altogether in 2004).
Partnering with retailers like Ukrop’s and K-VA-T was ideal. All three parties were looking to grow, and they were willing to think outside the box to do it. The former tobacco growers, like so many others in the region who found themselves out of work at the time, wanted desperately to stay in the farming business. In joining together, Appalachian Harvest’s farmers would become an authentic piece of the local movement, growing the tomatoes, lettuce, butter beans, squash, and more that Ukrop’s and K-VA-T customers wanted. Al Oliver, Ukrop’s produce manager, said he started out sourcing from five AH growers. Now, he buys from around 30. “It’s been a real success story with what they’ve done out there,” is how he puts it. K-VA-T CEO Steve Smith echoes that sentiment, crediting the health of his local produce program — which he says is almost 10% of the entire category — to tobacco country’s determined growers.
The interest in local products is booming right now. This is both an opportunity and something of a quandary for the supermarket industry. After all, these retailers want to take advantage of the trend, but it goes against their “buy it cheap, pile it high” business scheme. To operate a truly authentic local program requires supermarkets to adapt their business model to accommodate area farmers like those with Appalachian Harvest. While such changes might hurt short-term profits, the long-term benefit is better food, more robust relationships and a transparency that customers appreciate — and buy into. It becomes a different way of feeding the bottom line.