Buying Local and the Importance of Retail Signage

The consumer trend of buying local has grown from being “hot” to being a central driver of growth in the restaurant and grocery retail industry, according to the results of a recent survey by A.T. Kearney. Two years ago, when the study was first conducted, local food was a differentiator for retailers—a nice offering that could set them apart from competitors. Now, merchandising local food is critical to growth. Importantly, the study found that retail companies and grocery stores can capitalize on increased interest in local foods by highlighting products through proper signage and advertisements.

“Localvore”

“Localvore” is the term that Randy Burt, co-author of the A.T. Kearney study, uses to describe this growing trend that’s especially popular among women and Millennials. It’s a movement that demands high standards for fresh food like seafood, meat, produce, and other assorted specialty items like jams, breads, and desserts. A recent survey conducted by the National Restaurant Association (NRA) supports the A.T. Kearney study regarding the importance of local. The NRA asked nearly 1,600 professional chefs to identify the top food trends for restaurant menus in 2016. Check out the top 5 of 20:

1. Locally sourced meats and seafood
2. Chef-driven fast-casual concepts
3. Locally grown produce
4. Hyper-local sourcing
5. Natural ingredients/minimally processed foods.

Forty-four percent identified local sourcing as the current food trend that has grown the most over the last decade. The key to the local movement is not only how local the food is, but also how well the food is marketed. This involves a rebranding of the term “local,” and majority rules on this issue. Of the 1,500 U.S. shoppers surveyed, 96% now describe local food as products grown or produced within 100 miles from the point-of-sale, up from 58% in 2014. Majority also rules on what “local” means to quality, with 93% of consumers now associating local with “fresh.” And if you sell specialty foods, this should be your favorite finding from the study: 78% of consumers are willing to pay a premium of 10% or more for local food, up from 70% in 2014. Indeed, premium is on the rise with the help of the “foodie” Millennial generation!

Availability is No Longer the Issue

Access to local food is no longer the roadblock to sales; only 27% of consumers surveyed said products were not available. However, communication is clearly a problem when more than half of the respondents said that they don’t buy local due to a lack of clear advertising/in-store signage. It’s amazing that with all of our technological advancements, a gap in sales can come down to the basics of a misplaced sign! That may be the bad news, but the good news is that the problem is completely avoidable and/or fixable with greater oversight.

“Did You Find What You Were Looking for Today?”

Make Local Food a Priority Consumers are drawn to local food and will pay a premium for it. Call attention to your offerings! It’s in the retailer’s interest to properly place signs designating where local food is available. Get the Basics Right Don’t just issue a memo or mass email hoping your managers take notice. Take action! Audit your stores in a way that includes promotional/signage auditing. Document store compliance and address issues at the store level. Help your customers easily find their favorite local foods, and you may just become their favorite local store.