Locavores: hunter-gatherers with a 100-mile radius are making an impact on agribusiness and retailers
As the country spent the latter part of August amid an egg recall throughout much of the country
, the push was on for consumers to buy local. In an already tight economy, farmers can open up new markets right around the corner from their own farms.In Pennsylvania, local farmers have cultivated strategic partnerships with local grocery stores and have managed to bring in an impressive $370 million in the process. In western Pennsylvania, the push for locally grown food has created a demand from large retailers, including local supermarket Giant Eagle, restaurant chain Eat n Park, and Whole Foods Market. All are purchasing products produced within 125 miles of their store locations. The term "locavore" was coined in 2005 by San Francisco Bay Area resident Jessica Prentice for World Environment day. The definition of a locovore is one who limits their diet to food gathered or harvested from within a 100 mile radius. In 2007 the New Oxford American Dictionary even chose it as its word of the year!
The demand for locally produced food has been so strong that farmers have gone to extremes to extend their normally short growing season. Domed fields are now a common sight, with low tunnels and high tunnels, as they're called, serving as makeshift greenhouses over fields of produce. The tunnels add three months to the growing season. Even livestock growers are seeing a 25 percent increase in business thanks to an increase in farmers' markets and consumer demand. One livestock grower realized a 20 percent increase in revenue thanks to the growing interest in locally grown food.
If you're interested in building one or more partnerships with local stores and farmers' markets, consider what types of risks such partnerships might expose your business to. Areas to consider:
Transportation and delivery How often will you need to supply your partners with product?
Food safety in various locations Farmers' markets may not be automatically conducive to safe storage processes. What will the costs/risks be to set up in a temporary location regularly?
Product recall concerns Even on a micro level, products can suffer the same contamination as any large-scale operation.
Review now your risks before taking on a more local market. With some common sense planning, you could increase your profitability without increasing your risk exposures. Another thing to consider, of course, is your insurance! If you begin something new - delivering to local vendors, or operating at a farmer's market, or your own vegetable stand, you should certainly let your agent know. The change in risks could affect your premium and your coverage.
Locavores: hunter-gatherers with a 100-mile radius are making an impact on agribusiness and retailers
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