Through an innovative partnership, Balls Food Stores has taken local sourcing to a new level
Supporting local agriculture was just the way things were done in 1923, when David Ball's grandparents founded Balls Food Stores in Kansas City, Kan.
But that was then. Now, local sourcing programs can be a puzzle to put together unless it's done on a small scale. Many small farms are going out of business, and the logistics of distribution can be daunting.
But David Ball, now president and chief executive officer of the family-owned business, which has 29 supermarkets in Kansas and Missouri operating under Balls Price Chopper and Hen House Market banners, has found a way to source local products on a large scale — efficiently and successfully.
“We've been doing this [buying from local businesses and local farms] informally for all the years we've been in business,” Ball told SN.
“My grandparents [Sydney and Molly Ball] were doing this in 1923. They were supporting local, sustainable farming back then. My grandfather went out into the market every day to buy stuff. Then, he'd go back and tell his customers what he got. That was one store, taking care of about 30 families.”
As the Ball family expanded the business slowly over the years, Ball, his father Fred, who is now chairman, and their management team sought out additional local sources.
As a result, local food sales grew a little each year, and in 2004 totaled $2 million. Ball pointed out that he has just been building on what was already there.
“My family has always supported local businesses. We just really put a little bit different — a more formal — process in place about six years ago, and that's brought more volume with it. That was when we aligned with Diana Endicott [founder of Good Natured Family Farms, Bronson, Kan.]”
In fact, these initiatives have resulted in high double-digit increases in sales of local food ever since then.
The bulk of the fresh produce sold at Balls is still made up of traditional, commodity products shipped in from much farther away. Even in the midst of the local growing season, only about 10% of produce offerings are local products, Ball said.
An increasing number of consumers, however, want local product whenever it can be obtained, and Ball aims to give them access to as much of it as he can.
Buying local — which in Ball's definition means buying product grown, raised or made within a 200-mile radius of the store — provides the chain with a valuable niche.
“We hope it gives us an edge on the competition,” he said, adding that it does other good things as well.
“It's good for the farmers and the community. And getting these superior products to as many people as possible at a reasonable price is my job.”
Ball explained that in his attempt to increase local sourcing, Endicott became “the conduit between us and additional local farmers.”
Endicott's Good Natured Family Farms is an alliance of more than 100 family-owned farms in the region, all of which have made a commitment to sustainable agriculture and humane animal care.
Working with Endicott, Ball saw an opportunity that would bring multiple benefits to his business, and benefit independent local farms as well. But his meeting up with Endicott was chance. So his big step forward also involved a bit of good luck and timing.
Farmers needed the business and consumers were becoming more concerned about the origin of their food.
“Farms were around here, but they'd have to go to the weekend city market or a farmers' market, or drive around from door to door,” Ball said.
“They spent more time selling than they did growing.”
Indeed, Endicott was doing just that when she first came in contact with buyers at Balls.
Here's how it happened, as reported by The Wallace Center, a part of Winrock International, a nonprofit organization that works to increase economic opportunity, sustain natural resources and protect the environment.
A bumper crop of greenhouse tomatoes that Diana Endicott and her husband Gary had produced on their 400-acre Bronson farm was the catalyst. What Endicott did with those tomatoes formed the early foundation of what has turned into an ongoing effort to sustain small farmers and distribute local products to retailers.
It led to the creation of the Good Natured Family Farms alliance and, ultimately, to the unprecedented partnership with Balls Food Stores.
At that time, in the late '90s with too many tomatoes on hand, Diana Endicott thought, “Why can't locally grown food be sold directly to the grocery stores?”
So she approached Hen House Markets and passed out samples to produce managers in an effort to convince them to take the tomatoes off her hands at a fair and reasonable price.
The two selling points she used to convince Hen House buyers were the tomatoes' taste and local origin. The strategy worked. At that time, there was no discussion of providing marketing support. It was simply a matter of taking the crop and selling it in Hen House stores. Soon thereafter, Diana and Gary Endicott became a regular tomato supplier of Hen House Markets.
“I worked with Lou Malaponti, director of produce operations, but David was always involved,” Diana Endicott told SN.
“At the same time we were expanding our lines, and we began adding other products, but not on a planned basis,” she said.
It wasn't until 2004 that a formal procedure was designed. “That was the turning point,” she said.
She and David Ball and other Balls Food Stores officials sat down to talk about planning. At that point, David Ball became committed to the process, Endicott said. Offering support to some of the farmers to get them started was part of it.
“We bought seeds for some of the farmers,” Ball said, as he described the fledgling partnership with the alliance that Endicott was already putting together as part of a community supported agriculture (CSA) group.
Balls Food Stores sometimes offered financial support to the alliance-member farmers and expedited payments to them.
The stores are drop-off points for the group's CSA as well.
“We have 1,600 members in the CSA. It's probably the biggest in the United States,” Ball said.
“We have trading tables in the stores. Each CSA item has a value attached to it. So people, for example, who are vegetarians can trade the meat [in their CSA box] for something else on the table.”
The alignment with Endicott, however, goes beyond the CSA.
The alliance, which now includes more than 100 farmers, supplies fresh product each day to Hen House Markets and Price Chopper stores. The chain also deals with about 25 other local producers who are not part of the alliance.
David Ball's produce director and buyer work with Endicott and the farmers to determine what they should grow. One observer pointed out that, in a way, Ball's stores serve as a research lab, because Ball keeps track of what his customers are interested in.
“They may ask about okra, and David may ask one of the growers to plant some okra, then see how it goes.”
Right around the time that Endicott and Ball made their deal, the budding farmer-to-retailer alliance received another shot in the arm by partnering with a division of the national nonprofit FoodRoutes Network and its “Buy Fresh, Buy Local” marketing program.
“That raised consumer awareness,” Ball said.
Otavio Silva, the local administrator of Buy Fresh, Buy Local, said Ball had never done any television advertising before joining the organization.
“It indicated he was really committed to this,” Silva told SN.
“David has created such a good business model that other retailers come to see how he does it,” he said. “Diana brought the idea [of the alliance and her brand] to David and he embraced it. They're both pioneers.”
Ball's 70,000-square-foot-plus warehouse plays a major role in the efficiency brought to the system that supplies his stores with not just local produce, but also locally raised meat, honey and poultry, locally made grocery aisle staples and even some cleaning supplies.
“All the farmers and other producers can deliver right to our warehouse, and then we shoot it out to 29 stores,” Ball said. “We go pick up some stuff, too, from a couple of Mennonite farmers.”
Recently, Ball began sharing part of his warehouse with the local division of Sysco, a Houston-based foodservice distributor, for deliveries of local products.
Marty Gerencer, National Good Food Network manager at The Wallace Center, told SN she too sees Ball's system as an ideal business model for any retailer in the food industry who wants to support sustainable farming and source a large variety of local products.
“When we [at Good Food Network] tell the story of David Ball and Diana Endicott, our role is to show how [their system] can be replicated,” Gerencer said.
“We are working with others, including foodservice operators, but if I were a regional grocer I'd be interested in this business model.”
Retailers across the country are making progress with local sourcing, Gerencer pointed out, even if on a smaller scale than that at Balls Food Stores.
The Wallace Center supports entrepreneurs and communities as they build a new, 21st century food system, the center's report states.
“We just don't want to be locked out of [today's traditional food] system,” Gerencer said.
The Midwest, unlike some other parts of the country, had a good growing season this year, Ball told SN.
“This year has been a great year for pumpkins, so we'll have a lot of good pumpkins at a good price,” Ball said, adding that Balls buys all its pumpkins from one local farmer.
In its complete profile of the workings of the Ball-Endicott system of sourcing local products, The Wallace Center reports that in 2008, local food sales made up $9.5 million at Ball's stores. As the totals go up, it will be a challenge to maintain double-digit growth each year, according to the report.
Ball confirmed that for most of the last five years, local food sales have grown 25% to 30% annually.
“This year, I don't know yet. But it'll be double-digits,” Ball said.