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Planning Time

It’s time to start planning! I’m not referring to the holidays. I’m talking about the 2009 local season. Throughout the 2008 season, we provided over 150 locally grown items sourced through 25 farms. As of November 1st, our local purchases totaled just over $300,000, which will contribute to 20 percent of the Produce department’s annual sales. The numbers look good and express positive growth, but we need to do better.

Local history

For over two decades, Willy Street Co-op has been working with local farms to provide its membership and customers with superior quality, locally grown produce. Why? Because it is what you, the membership, have asked for. You understand the values of supporting a local, sustainable system.

When I started at the Co-op in the early ‘90s, the ‘local’ thing was just starting to take off. At the time, Loretta Wilson was the Produce manager, and there were a handful of farms supplying us with local produce and less than a handful of other retailers offering it. Loretta had a system where she would meet with individual farms in January and agree on product, price and delivery schedules. Everything was documented on a hand-written spreadsheet and a non-binding contract was signed by both. It worked well and equally served the farmers’ and our needs. Although we don’t handwrite much anymore, we’re basically using the same system today.

Growing local

Over the last 15 years, support of local production has boomed and not just at the local level. What was once regarded as grassroots hippie idealism is now a multi-billion dollar industry. It’s everywhere! Almost every major publication and newspaper in the last year has run stories and columns on the “local scene.” Big box and fast food chains are marketing local. Even the biggest of the big box, the one that starts with a W, ran advertisements promoting its sourcing of local produce and its benefit to the consumer. Health insurance providers offer cash rebates for joining a CSA. “Local” is big business.

Around Southern Wisconsin, I like to think that “local” is still more of a grassroots movement. Organizations like MACSAC, the REAP Food Group, and Dane Buy Local provide networking and education as a means of supporting local production in our area.

These groups are not driven by profits. They value the social, economic, and environmental benefits provided through supporting sustainable local food systems.

So what does all this mean for retailers like the Co-op? Obviously, there’s increased demand, which should increase sales volumes if you can keep up with the ever-increasing competition! What competition? I live just outside Oregon, and both the supermarkets in Oregon and Verona offer some local produce. In Madison, who doesn’t offer local produce? And, ironically, through farmers’ markets and CSAs, weoften compete directly with the farms we support.

Yep, that’s right, even our good farmer friends are providing us with some competitive pressure. CSAs and farmers’ markets are great avenues for unloading product at premium prices. They provide a one-on-one interaction with the farm—an excellent marketing opportunity. You can get a direct account of what’s going on at the farm and establish a relationship with that farm. For the consumer, this alone is added value and is worth a premium.

Now, let’s add Mother Nature into the equation: increased demand + increasing competition + Fall ’07 flood + Spring ’08 flood = reduced yields = price increases! And who are you most likely to feel good about giving your money to—the cashier at register four or directly to the farm? My guess: the farm.

We send spies (not really) down to the Saturday market to do some price comparisons (again, not really, it’s just fun to go to). While acquiring some goods, we can’t help but notice that often, prices are higher than our retail prices, and folks are happy to pay that premium price. Even though the Co-op offers the same product from the same farm for less, there’s not the direct association of supporting a local farm that there is at the market. And, if you were a farmer, why would you sell your limited supply to the Co-op for less than what you would be able to sell it for at the market? That doesn’t make sense, or does it?

Sustainable systems

This year we were faced with some new challenges. The floods devastated some of our primary suppliers. Overall, yields were down, and keeping local product on the shelf meant sourcing from multiple farms. Pricing became an issue. When you have four sources on a single item with costs ranging between $1.25/lb and $2.50/lb, where do you set your retail price? What is a fair price that will sustain the farm? Is Farmer A low-balling to take business away from Farmer B? Should retailers who provide a high volume sales outlet and a guaranteed check in the mail pay farmers’ market prices? If we contract with a farm that also provides to a CSA and farmers’ markets, how do we ensure that we’re going to get what we asked for?

These questions are just the tip of the iceberg! And, looking forward to 2009, we’ve been brainstorming on how to better handle these challenges. We have some good systems in place. Sure, there’s a little tweaking to be done here and there, but that can be said of just about anything. Change may not be easy, but it’s necessary. It’s what we’re looking forward to!