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Natural Foods Merchandiser

Cashing in on the local food craze

Experts suggest retailers work with or create their own farmers' markets to capitalize on fresh and local trends, including how to get started, being authentic and how important community support really is

Consumers increasingly see farmers’ markets as a place to connect with their food sources. These modern-day village squares link shoppers and local producers to the community and serve as a hub for local events. The concept appeals to natural products shoppers and gets right to the heart of the mission many natural products retailers have long held.

Rather than considering these markets a competitive threat, innovative retailers are partnering with existing markets or creating their own version of a farmers’ market to capitalize on the fresh and local trends. Done right, there is plenty of upside—the strategy grows your customer base and your brand in the community. But it also involves a lot more than just putting some produce in a tent.

Getting started
The first step in determining if your store should host a farmers’ market is to conduct an assessment of existing supply in the region, says Stacy Miller, executive director of the Farmers Market Coalition, based in Cockeysville, Md.  “And don’t think you can start the process in March and be ready to open in May. It will take more than a couple of months to pull everything together.”

Miller suggests talking to existing markets, farmers and cooperative extension services to see if they feel the community can sustain another market. This input will help determine if enough farmers are looking for a new outlet to sell product. If they aren’t keeping pace with existing markets, then additional competition doesn’t serve anyone, Miller says. Retailers also need to look at existing markets’ business. Are they crowded? Is there enough demand for another market on the same day or would you need to find a different time and day to attract enough customers to your store?

If the demand for a new market isn’t sufficient, a better option may be to look at how your store can partner with existing farmers’ markets by offering financial help and marketing, branding and merchandising expertise. “Many farmers’ markets receive annual financial sponsorships from stores,” Miller says. “This provides the same community recognition and benefit for a retailer without reinventing the wheel.”

Authenticity brings success

Early farmer input helped Rainbow Blossom Natural Foods Markets assess nearby demand before it opened a new market in Louisville, Ky., in 2006. Farmer perspective helped Rainbow Blossom create an authentic, old-fashioned feel and offered insight on the shortcomings of other Louisville farmers’ markets, says Summer Auerbach, chief operating officer for the five-store chain. The feedback showed Rainbow Blossom managers they needed to host their markets on a new day that farmers would support but that would also attract new customers.

They found an unused but shoppable day on Sundays from noon to 4 p.m. The time frame caters to a formerly unserved population—the after-church crowd and young shoppers who sleep late on weekends. Open from May to October, the growing market now features an average of 12 vendors with fruits, vegetables and other Kentucky goodies such as meats, jams, baked goods and pottery. The market is one of the few in Louisville that doesn’t charge farmers a fee, and it also accepts credit cards and food stamps.

A cooperative, no-compete approach serves the market well. For example, Rainbow Blossom helped the entire Louisville farmers’ market community by forming an umbrella organization in collaboration with the city of Louisville, which applied for a $20,000 advertising grant from the Kentucky Department of Agriculture. “We used the funds to create a map to promote all of the markets around town,” Auerbach says.

The market’s success prompted Rainbow Blossom to further pursue its support of local foods. It started by donating a store parking lot as a pickup location for a distributor with a multifarm community-supported agriculture organization. “Ultimately, people want local food, and they are going to find it, regardless of whether we help them or not,” Auerbach says. “It is our responsibility as a retailer to figure out how we can be a part of that.” The chain now owns a farm that produces eggs, but the long-term goal is to grow more items to sell in the store and eventually in a Rainbow Blossom CSA.

Community support creates competitive advantage

Helping local growers and giving customers a connection to their food was also a key objective for The French Broad Food Co-op in Asheville, N.C. The co-op created its farmers’ market 10 years ago, well ahead of the current trend. This early branding in fresh and local built the co-op’s current reputation as Asheville’s top resource for regional and sustainable food, says Kelly Fain, marketing manager. “For us, there is tremendous value in connecting consumers with their food and putting a face to it. It is not just about the bottom line. It is very important to support that sense of community and sustainability.”

The market now features locally produced vegetables, meats, honey and eggs. As many as 15 vendors set up shop in the co-op’s parking lot every Wednesday afternoon from late April to mid-November. Vendors must be part of the co-op to participate and must adhere to its requirements. This is not an issue for most producers because many of them already sell products in the store.

The market serves shoppers who want both a greater variety of local foodsand a personal relationship with growers. This prompts loyalty to the co-op, Fain adds, giving it a competitive advantage over big-box stores.

Good value goes a long way

Whether you decide to create a new market or partner with an existing one, you should look for ongoing synergies and ways to add value to the market. Natural foods retailers and farmers’ markets have a natural affinity, says Joel Wachs, president of the Washington State Farmers Market Association, because they both understand how difficult the retail climate is and know they have to constantly educate customers.

Retailers shouldn’t underestimate the value they bring to the picture either. “Stores have a good sense of merchandising and promotion. Many farmers don’t,” Wachs says. “There are a lot of creative ways retailers can help growers make their product look great.” Retailer marketing expertise also adds value for farmers’ markets with very small budgets. “In many cases,” Wachs says, “even a small store can provide double the budget a market would otherwise have.”

Miller says joint promotional programs are a great idea as long as retailers don’t overstep their bounds. As a for-profit entity, she says, a store has to avoid the perception that it’s cannibalizing the business of nonprofit farmers’ markets. “You need complete transparency between the market and producers so that everyone knows the protocol,” she says.

Having a strong mission for the market that is beyond just selling food, and then clearly communicating it to customers will help, Miller says. “It’s OK if the mission is partly about attracting more customers to your store,” she adds, “but it needs to be more than that. Let the community and farmers have input in the evolution of your market.”

Keeping the ‘faux’ out of your farmers’ market

The popularity of farmers’ markets is prompting a proliferation of all kinds of outdoor markets, many of which have nothing to with farmers. Critics say these “faux” farmers’ markets create confusion among consumers and muddy the mission for everyone. But a little legwork can help you make sure your market is adding value for producers and the community. Stacy Miller, executive director of the Farmers Market Coalition, offers this checklist.

  • Create policies that bolster the mission. Will your market be producer-only or will you allow other products? If it’s the latter, determine the ratio of farm products to other artisanal items, and stick to it.
  • Develop enforcement protocols. If you want your market to have integrity as a place for local food, conduct farm visits and scrutinize vendor applications to make sure everything you sell is produced locally. “Get a map of the farm that shows where the tomatoes and okra are grown. Then if the farmer shows up with cucumbers, you can start asking questions,” Miller says. “If you don’t have rules in place, there are instances when well-intentioned growers will go to a wholesaler and bring something to your market that doesn’t fit your parameters.”
  • Be true to seasonal and local eating. It’s especially important for farmers’ markets to recognize seasonal gaps in production. “That means you won’t always have stuff, but that is part of the education process with customers. Don’t blur the lines between your store’s produce department and your farmers’ market,” Miller says.
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