Consumers prefer local over organic food… and will pay for it
When it comes to eating, U.S. consumers are thinking locally. Buying local food is a trend that consumers have really embraced, according to A.T. Kearney’s recent report “Buying into the Local Food Movement.”
Consumers embrace local food options because they believe it helps local economies (66 percent), delivers a broader and better assortment of products (60 percent), and provides healthier alternatives (45 percent). And almost 30 percent of grocery shoppers say they would consider purchasing food elsewhere if their preferred store does not carry local foods.
Meanwhile, trust is a major issue with consumers when purchasing local food.
When asked about the trustworthiness of different formats to deliver local food, farmers markets and farm stores rank first, followed by natural food markets, local food markets, national supermarkets and big box retailers. Online retailers were ranked last.
“Clearly, local food cannot be ignored as a growing segment for the grocery industry, and we’ve learned that larger-format food retailers still have much work to do to earn the trust of consumers in providing quality local food products,” says James Rushing,an A.T. Kearney Partner and study lead. “But the additional work and costs are worth the effort in the customer loyalty gained.”
When asked if they believe organic and local food contribute positively to sustainability, more than two thirds (68 percent) say that local food contributes positively, while only 50 percent believe organic foods contribute.
The study also found that across all income segments, consumers indicated that they were willing to pay a premium for local food with about 70 percent of consumers willing to pay more.
• Understand that fresh matters. No matter the format, freshness and quality are paramount.
• Convey local products’ authenticity. It is important for national grocers to overcome consumer suspicions and generate trust for local products merchandised in their stores.
• Consider the implications for buying and category management. Category buyers must establish visibility within each defined region with regard to price and quantities, and make decisions on local assortments.
• Don’t underestimate the supply chain impact. Having local farmers supply nearby stores, even in limited quantities, will force a redesign of the traditional supply chain model.
To compile the report, A.T. Kearney conducted an online survey of 1,300 U.S. respondents, with a 50/50 split between men and woman, to asses how shoppers make decisions about food.