Grocery Business Ideas: How Local Food Can Benefit You
What does it take to run a successful grocery store? Adding more local food to your shelves builds customer loyalty, healthier margins, and a more sustainable food system.
By growing local greens steps outside the store, New Horizon Co-op is giving northern Alberta customers high quality produce options year-round.
Grocery store owners have always faced numerous challenges in the commonly misunderstood world of grocery. In recent years, the challenges have doubled.
Supply chain disruptions, decades-high inflation driving up the cost of goods, and a greater focus on sustainable practices increased the pressure on our grocery stores and food supply chain as a whole.
In North America, grocery profits are under a magnifying glass, with many feeling gouged as they look at their expensive grocery bills. This has even culminated in the boycotting of major chains in Canada.
As these issues persist, an increasing number of businesses are getting creative and turning to local food systems as a viable solution. This shift not only addresses supply and sustainability challenges but also can provide competitive advantages in terms of quality and pricing.
Let’s explore how local food systems can benefit grocery businesses and why, when done properly, can be a tool to help strengthen our food systems.
Benefits of more local food in grocery
Supply and Sustainability Challenge
Supply Chain Disruptions
Sustainability Concerns
Leveraging Local Produce for Competitive Advantage
Quality and Freshness
Pricing Benefits
Building Community and Customer Loyalty
Decreasing Food Waste
Supporting Sustainable Farming Practices
Supply and Sustainability Challenge
Grocery stores are under constant pressure to keep shelves stocked with fresh (and good looking) produce. However, the globalized nature of our current food system poses significant challenges.
For instance, a large portion of produce in Canadian grocery stores comes from imports, traveling thousands of miles before reaching consumers. This lengthy journey not only increases the risk of supply chain disruptions but also contributes to a significant carbon footprint. In many Canadian and American cities, the growing season lasts four to six months, making local produce increasingly difficult to source for large parts of the year.
Supply Chain Disruptions
Supply chain issues are becoming more pronounced in recent years due to various factors, including extreme weather events, geopolitical tensions, and the fallout from the pandemic. These disruptions lead to shortages, delays, and increased costs, all of which impact grocery businesses, and by extension, those who grow and ship the food we eat. By sourcing food locally, grocery stores can mitigate some of these risks, because local supply chains are generally shorter and less complex.
Muskoka North Good Food Co-op’s general manager explains that growing on-site allows them to offer their greens at a more affordable price than what they were when they were bringing in produce from California and Southern Ontario.
Sustainability Concerns
The environmental impact of our globalized food system is another major concern. The transportation of food over long distances contributes significantly to greenhouse gas emissions. According to a study by the Food and Agriculture Organization (FAO), transportation accounts for about 11% of the total emissions in the food supply chain.
By contrast, local food systems naturally require less transportation, reducing the overall carbon footprint and promoting sustainability. It also allows communities to become more resilient in the face of these ongoing disruptions.
For example, the environmental cost of transporting food from southern U.S. states to Canada is substantial. The long distances result in higher fuel consumption and more greenhouse gas emissions. For example, transporting a pound of strawberries from California to Ontario can result in over 500 grams of CO2 emissions.
“Grown Clean. Grown Here.” This label helps customers know that the produce was grown locally and was harvested recently (sometimes as recent as hours before!)
5 Reasons to Leverage Local Produce for Competitive Advantage
Independently owned grocery stores and chains can gain a competitive edge by integrating more local produce into their stores. Here’s why it makes a difference:
Quality and Freshness
Local produce reaches the consumer much faster than imported goods. Less time in a truck means the fruits and vegetables are fresher and retain more of their nutritional value (and most importantly, their flavour).
Local produce also reduces shrink at the store level, by lasting longer both on shelves and in customers' fridges. Customers are increasingly seeking fresh, high-quality produce, and by offering locally sourced options, grocery stores can meet this demand and set themselves apart from competitors.
Verdures Dorey uses a Growcer modular vertical farm to grow greens and sells the harvest to local independent grocery stores in the area - which means the entire community can support her and her farm.
2. Pricing Benefits
At first, you might think that local produce is more expensive because of its smaller scale production, but this is a misconception and local produce can be cost effective in many ways.
Local food systems can offer competitive pricing because they eliminate the costs that come with long distance transportation and import tariffs. The pricing for local food is also more shock absorbent - less pieces in the puzzle means less reasons the price can go up. Plus, having direct relationships with local farmers can lead to better pricing agreements which can enhance your store’s competitiveness.
3. Building Community and Customer Loyalty
Supporting local farmers and producers helps build a sense of community. Customers appreciate businesses that contribute to the local economy, and this support can translate into increased customer loyalty. Marketing the store’s commitment to local sourcing can attract conscientious consumers who prioritize sustainability and community support.
The Reena Foundation uses their Growcer modular farm to hydroponically grow greens and achieved Kosher certification because of its controlled environment. This allows them to sell culturally relevant produce to grocery stores and catering businesses.
4. Decreasing Food Waste
Another issue linked to globalized food systems is food waste. The longer the supply chain, the greater the likelihood of spoilage, disease transmission, and waste. The percentage of food lost after harvest and at the transport, storage, and processing stages is 13.8% globally, according to the State of Food and Agriculture report, and this amounts to $400 billion USD. Consider all the water, soil, and inputs used to grow that food that is now wasted as a result too.
Locally sourced food spends less time in transit and is less likely to perish before reaching consumers. This not only reduces food and resource waste, but also ensures that customers receive fresher, more appealing produce.
5. Supporting Sustainable Farming Practices
Local food systems often emphasize sustainable farming practices. Smaller, local farms are more likely to use environmentally friendly methods such as organic farming, crop rotation, and reduced use of chemical fertilizers and pesticides. By supporting these farms, grocery stores can contribute to a more sustainable food system overall - something many modern consumers care about when making decisions in the produce aisle.
Conclusion
The benefits of local food systems for grocery businesses are clear. By addressing supply chain disruptions and sustainability concerns, local sourcing can provide fresher, higher-quality produce at competitive prices. Additionally, supporting local farmers fosters community and builds customer loyalty.
In a market where consumers are increasingly conscious of the environmental impact of their purchases, leveraging local food systems is not just a sustainable choice but also a strategic business decision.
As grocery stores continue to navigate the challenges of a globalized food system, turning to local solutions offers a pathway to resilience and sustainability. Embracing local food systems can help grocery businesses thrive in an ever-changing market landscape.
How Controlled Environment Agriculture Can Increase Access to Local Food
Controlled Environment Agriculture (CEA) is a form of agriculture where crops are grown indoors within a highly controlled environment to maximize their yields and minimize the time from seed to harvest. This type of technology allows for crops to be grown consistently, year-round regardless of the climate outside. CEA is another tool for food businesses to gain access to fresh produce that is otherwise grown hundreds, if not thousands, of miles away. For example, businesses are taking advantage of greenhouses, vertical farms, and modular container vertical farms, to create a more local food system. Food businesses - including grocery stores and food Co-ops in North America - are in a unique position to invest in and adopt CEA-grown produce by partnering with and investing in this fast growing industry.
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