Home » Study: Majority Of Grocery Shoppers Will Pay A Premium For Local Food
Grocery Industry National

Study: Majority Of Grocery Shoppers Will Pay A Premium For Local Food

Global management consulting firm A.T. Kearney has released a report entitled, “Buying into the Local Food Movement,” a consumer study that assessed how shoppers make decisions about buying local vs. non-local food.

The study results clearly show that local food is a trend that consumers have embraced. Across a variety of measures, consumers indicated that local food is a much more important consideration than organic food. The study also revealed that consumers have trust issues when buying local food at national and big-box retailers.

“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, A.T. Kearney partner and leader of the study. “But the additional work and costs are worth the effort in the customer loyalty gained.”

Study results

The study results show that 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). Nearly 30 percent of grocery shoppers say they would consider purchasing food elsewhere if their preferred store does not carry local foods.

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. To overcome the trust gap, national supermarkets and big-box retailers need to excel in assortment and presentation.

When asked if they believe organic and local food contributes positively to sustainability, 68 percent of respondents say that local food contributes positively, while only 50 percent believe organic foods contribute. The implication is that environmentally conscious consumers will seek out local food more actively than organic food.

The study also found that across all income segments, consumers indicated that they were willing to pay a premium for local food—70 percent of consumers were willing to pay more.

Retail recommendations

Understand that fresh matters. No matter the format, freshness and quality are paramount. It is critical that local food products are adequately presented in terms of shelf space and location.

Convey local products’ authenticity. It is important for national grocers and big-box retailers to overcome consumer suspicions and generate trust for local products merchandised in their stores. Developing dedicated sections with in-store signage is a strategy for highlighting local food assortments. Another option is to create a store brand for local food products.

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 reconsideration and redesign of the traditional supply chain model.

Go here to read the full text of the report.


Featured Photos

Featured Photo ROFDA Spring Conference
Renaissance Esmeralda
Indian Wells, CA