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Locally grown food now having national impact

Locally grown food now having national impact

Forget the feel-good aspect of buying and serving locally raised foods. This movement is so strong it’s changing the competitive landscape in the produce industry.

Good news if your restaurant emphasizes locally grown produce on its menu. So many consumers prefer it there’s been a noticeable demand shift in the produce industry. Among those doing the noticing: giant agricultural lender Rabobank, whose new study concludes its core customers—national-scale growers, many based in California—should adjust their business models to get in on the action.

The study is titled Local Foods: Shifting the Balance of Opportunity for Regional U.S. Produce. It was issued earlier this month by the bank’s Food & Agribusiness Research and Advisory Group, which numbers 80 analysts stationed around the globe. They looked at overall U.S. produce demand, both retail and foodservice.
Here’s the gist of what the Rabobank analysts found:

“The growing local food movement, in which consumers seek out and purchase foods grown in closer proximity to them, is causing smaller regional producers to take market share from established producers who don't qualify as locally sourced,” the study begins.  

What’s behind this shift?

“Local buying opportunities, such as farmers markets and roadside stands, have long existed, but in more recent years, have gained popularity with consumers who want a better understanding and connection to their food. Such interest has changed the competitive landscape of the U.S. produce industry as supermarkets and restaurants have latched onto the local trend. This movement has evolved into a permanent mainstream trend, which is generating more opportunities for regional U.S. growers who traditionally had less market share than larger, more well-established national suppliers.”

The biggest impact is felt in the summer, as local and regional U.S. producers have expanded their acreage to feed the growing demand found in their immediate marketing areas. That’s when California-based growers really feel the pinch.

The bottom line here:  “The local foods trend will continue to expand for fresh produce over the next five years and continue to offer opportunities for retailers and foodservice operators to attract customers. National growers, specifically in California, will need to adapt their business models to accommodate the desire for local, fresh produce.”

It’s rare to see a conservative bank like Rabobank use such strong phrases as “changed the competitive landscape” and “permanent mainstream trend” when describing a market into which it lends. If you were waiting for a clear signal that your restaurant should emphasize local produce and other foodstuffs on its menu, here you go.

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