by Megan Minnick, Purchasing Director
My great hope for this Eat Local Month was to give you, our Ownership, a clear, concise, and positive update on the state of our local food system as we continue the long recovery from the COVID-19 pandemic. Indeed, earlier in the summer it looked as if I could write that article—mask mandates were ended and we lifted the capacity limits in our stores and opened areas (like the Bulk departments and Juice & Coffee Bars) that had been closed for over a year. People began to feel comfortable gathering again; restaurants and farmer’s markets began to get busy; and for a time, life began to feel almost like normal.
Unfortunately, that sense of normalcy was not to last. As the summer of 2021 has progressed, it's become more and more clear that—even setting aside the ramifications of the Delta COVID-19 variant—the situation we find ourselves in, while different than what we faced last year, is definitely not normal. In fact, for many of us in the local food business, things have in some ways begun to feel even stranger and more unstable than they did a year ago.
The challenges facing local businesses right now are extremely complex, but can generally be grouped into three categories: labor, rising costs, and general uncertainty about the future. To some degree, these challenges are being felt by almost every business in the food supply chain—from large publicly traded distribution firms to the smallest of local businesses. However, given their smaller size and in many cases their depleted financial reserves, many small and mid-sized local businesses are inherently more at risk.
Labor Shortage
If I had to pinpoint the largest obstacle to the growth of our local food system at this moment, this would be it. While the cause of the current shortfall in available workers is up for debate, the reality of it is not. Simply put, many local food producers aren’t able to find the staff they need to make enough food to meet demand—and this is creating a significant barrier to growth and recovery.
How exactly is this playing out? In the last few months we’ve seen local vendors canceling scheduled promotions, scaling back on the types of products they make, and in some cases not being able to fill our orders at all. Many of these local businesses are operating with depleted resources after the pandemic, and they need to see a rebound in revenue in order to remain solvent. Being held back by an inability to fill open jobs is a huge obstacle.
The labor shortage is certainly not limited to local food producers. Other local businesses are feeling the pinch as well, as is, unfortunately, your Co-op. We’ve been operating with much lower staffing levels than in previous years—with many job openings going unfilled. This has made it very difficult to open and maintain all of the services (like our Juice and Coffee Bars, Deli hot bars and service cases) that we took for granted before the pandemic.
Rising Costs & Product Shortages
Communications Director Brendon Smith wrote about rising food costs in our August newsletter, and unfortunately it doesn’t look like this problem is going away anytime soon. Transportation, labor, and raw material costs are the biggest contributors to the increase in prices, and at times supply disruptions have been so dire that products necessary to make local foods (like ingredients or packaging) are not available at any cost.
On the bright side, many local food producers are somewhat insulated from cost increases due to transportation, simply because they don’t have as far to transport their goods to market. However, they are not immune to the increased cost of ingredients or labor. In fact, because they don’t have the economies of scale necessary to negotiate with large suppliers, many small local businesses are more susceptible to ingredient price increases and product shortages than larger companies.
Most local food businesses operate with a very small profit margin, and they simply can’t afford to absorb the increased costs they are facing without passing some or all of that cost on to the consumer. This is especially hard since many local products, because of their smaller economy of scale, are already more expensive than similar products from larger manufacturers. The necessity of raising prices even higher may lead to diminished sales as customers choose cheaper non-local options.
Uncertainty
I find myself feeling too uncertain about the future of the pandemic to even know what to say here, but I suppose that’s a perfect illustration of what I mean by COVID uncertainty. Masks have been mandated in public places again, and the Delta variant of the COVID-19 virus is looking like quite a setback for a full pandemic recovery. However, by the time you read this in early September, I have no idea where we will be. This is uncertainty. It makes planning for the future seem like an impossible task and—especially for local food businesses looking to build back their businesses—it is a very frustrating place to be.
So where does all of this leave us?
It’s been such an exhausting 18 months, it is more than discouraging to know that we are not out of the woods yet.
That said, no matter how challenging things may be, one thing remains certain: right here in South Central Wisconsin we have one of the most dedicated communities of local food eaters anywhere in the world. This is a community that has shown their support for our local food system again and again—through floods, droughts, pandemics, and so many other challenges, and there’s no reason to think that we won’t all work together to pull through this time as well.
The actions that we collectively take (or don’t take) right now will have a real and direct effect on the outcome of our current situation, and ultimately, the fate of many of the small local food businesses operating in our community. It is imperative now, more than ever, that we all remain steadfast in our resolve to seek out and purchase local foods—whether that be at your local Co-op, at the farmer’s market, at local restaurants to support local producers, or any other way you can.
Given the challenges of labor and supply, buying local may require a bit more flexibility than we’re used to. So your favorite loaf from your favorite bakery isn’t available today? Perhaps try a different type of bread from that bakery so that your dollars are still going to that local producer. Maybe your favorite local kombucha is out of stock—instead of opting for a national brand, why not try a different local brand that you’ve never tried before.
Load Up On Local
This month, we’re offering a little extra incentive with our Load Up on Local sale. Every day in September, when you buy $50 worth of local products, we’ll give you an extra 10% off those products. It’s a perfect opportunity to try something new and delicious, and feel good knowing that you are supporting our local food economy when it needs it the most.