10 Reasons Why “Local” is Challenging Industrial Food

Over the last several months, I have noticed a change in tone in online conversations (i.e., Twitter, blogs, comments, etc.) regarding local food.  At first I couldn’t quite put my finger on it, but then it became clear.  The “established” sustainable food online community was joined by people from the food industry (farmers, marketers, Monsanto, etc.), putting agendas, visions, and turf front-and-center.

Personally, I think this is a good thing, since I believe all sides need to be considered when initially trying to solve the complex problem of making our food supply sustainable.

Unfortunately, entrenched positions are difficult to get around. Industrial food appears to think that people advocating for sustainable food, whether large or small scale, local or national, are out to get them.  While at the same time, sustainable and/or local food advocates seem to believe that industrial food can’t or won’t change.

What we all need to try to understand is that sustainable food isn’t about industry and advocates.  It’s about consumers and communities. It’s about finding effective solutions to meet the needs of consumers based on where they live and what they value (see Pro Food Is post for list of core principles all interested parties can rally around).

In that spirit, I offer the following list of reasons why I believe “local” is making industrial food nervous. I strongly encourage readers to consider this any opening comment in what must be a constructive dialog. The objective is to get more people from all sides of the problem on the same page, so we can get to work on solving the problem.

1. Alternative Food Systems: There is no question that local, organic and sustainable are here to stay. How much market share products in these categories will take away from existing food companies is a big question, which is likely one reason why players in the industrial food system are paying more attention.  If I were them, I would be looking for signs of real traction in regional food systems, which could move consumers to a “tipping point” that changes America’s food systems for good.
2. Location, Location, Location: Given its size, industrial food can’t effectively scale down to meet the spirit of local, but this isn’t stopping it from trying. Consider the multi-million dollar budget and marketing campaign to position Lay’s as a local product. Never mind that Frito-Lay uses two billion pounds of potatoes every year. If it can redefine local, then it can slow or stop the threat.
3. Values-Driven Movement: Consumers interested in local foods are looking for more than cheap, widely accessible food, whether processed or fast food. They want flavorful, nutritious foods that come from local farmers and processors. They want enriching food experiences. Some want to keep their dollars in the local community to build value, which will drive more local supply. Judging by some of industrial food’s recent actions, it may try to spin its way through this latest challenge. That might work, for a while, but not likely if the local movement stays on course.
4. Brand Leadership: An important tenet of local is knowing where things come from. In the case of food this means that attribution goes to farms and farmers, not corporate brands. It’s hard for me to imagine how leading food brand companies could give up such recognition in an effort to be local. Consider Disney Garden, a full line of fruits and vegetables offered by Imagination Farms, which licenses the Disney name (see Disney Garden: A Figment of Our Imagination). The packaging is 100 percent dedicated to the Disney brand. If you want to know about the farmers, you have to visit the I-Farms web site and dig down a couple layers. It’s there, but clearly in a supporting role at best.
5. Traceability: How will industrial food offer transparent traceability (i.e., publicly available information on food sources on demand) to its business?  Can it realistically trace where every item comes from that is used in their products?  As recent food safety scares have shown us, it is very difficult to trace commodity and large-scale food products given the number of hands that touch them between farm and plate, even after weeks or months of effort. In the case of local foods, consumers will easily know where food comes from, and in some cases will know farmers first-hand.
6. Supply Constraints: Industrial food might have a point when it claims that local suppliers can’t meet potential consumer demands.  This is especially true in concentrated population centers, e.g., New York City, where it’s hard to envision enough local suppliers within 100 miles (often cited as meaning “local”) to feed NYC’s 8.2 million inhabitants.  At the same time, the amount of food being consumed from local suppliers is nowhere close to its potential.  The hard part for large food companies is envisioning how their products, dependent on commodity supplies and heavy processing can meet emerging consumer demand.
7. Profit Margins: Over the last 25 years, the amount of every consumer dollar spent going to the “marketing bill” (beyond the farm) has substantially increased.  At the same time, farmers have seen their income drop over 40 percent (from $0.31 to $0.19) during that time period (see Is Industrial Food Stealing Farmers Lunch Money?).  There are lots of contributing factors in this shift, but one thing seems clear, reversing course will be very difficult for top-heavy food companies.  Part of the problem with “real food” is that it can’t be marked up much beyond the farm, since the value-add really happens in restaurant and home kitchens.  Perhaps some well-known global brands (e.g., Disney) might be able to pull off premium pricing without adding much value, but those will be exceptions, and may not be that for long.
8. New Competition: While the market potential of local food sales may be limited by geography, demographics and supply chains, it still represents the type of competition that should make conventional food players nervous.  The development of local food retailers offering disproportionately local foods represents a beachhead for related products to thrive, e.g., sustainable, Fair Trade, etc. Over time, these competitors will be less reliant on the conventional food infrastructure to grow, which will likely result in a wave of “foodpreneurs” taking advantage of alternative food systems (see Slow Food with Entrepreneurial Twist and The Five Stones of Pro Food for more).
9. Government Subsidies: While recent news regarding the USDA’s support of small and/or organic farms has been encouraging for local food advocates, the vast majority of federal funds in support of agriculture continue to go to commodity crops.  Industrial food producers wanting to shift toward local markets will therefore have to give up at least some of those subsidies when converting acreage to specialty crops (e.g., fruits, vegetables).  The financial impact of losing subsidies may prohibit many large-scale commodity farms from moving toward organic and/or local market supply.
10. Consumer Demand: Possibly most important is the fact that consumers aren’t waiting for industrial food to “get it.”

One thing that should help industrial food sleep more comfortably at night is that developing regional food systems will not be easy work.  Government regulations continue to hamper local processing, thus impacting supply capacities.  Government subsidies are dominated by non-edible food commodity crops, although smaller amounts of money are being allocated to local, sustainable and organic farmers. And multinational food companies have the capability to saturate the airwaves and print with sophisticated marketing to shape perceptions and drive consumer behavior.

But all of that can, and likely will change over time. So, rather than fight what seems inevitable, it seems time for industry to embrace local, organic and sustainable foods, and work in concert with advocates and innovators to bring the right local, sustainable and other related products to market.

It won’t be easy, but what worth having ever is?

Follow me on Twitter: Jambutter

Can Farmers Markets & CSA Farms Really “Grow” Sustainable Food?

Like its cousin, community supported agriculture (CSA), farmers markets offer significant appeal to fans of local, sustainable and organic foods.  And with more than 4,600 such markets across America, along with over 12,500 CSA farms, the retail landscape is changing, if even just a little.

When considering all direct food sales, data released by the USDA Agricultural Census show such sales rose 49% to $1.2 billion in 2007 from $812 million in 2002, an inflation adjusted increase of just under 30 percent.  The number of farms selling direct also increased from 116,733 to 136,817 over the same period, a gain of 17%.  The USDA first began collecting direct sales data in 1997, when 110,630 farms had sales of $592 million.

And while this is impressive growth, the magnitude of direct food sales is still a drop in the bucket of overall farm commodity sales, representing 0.4% of the $300 billion of farm sales in 2007.  This leaves me with the nagging question of how much direct food sales can fundamentally affect the much-desired growth of sustainable food in our country.

Consider the USDA’s recently announced Farmers Market Promotion Program (FMPP), which allocates approximately $5 million for FMPP in fiscal years 2009 and 2010 and $10 million in fiscal years 2011 and 2012.  FMPP is designed to “help improve and expand domestic farmers markets, roadside stands, community-supported agriculture programs, agri-tourism activities, and other direct producer-to-consumer market opportunities.”

Sounds like a step in the right direction, right?  Yes, until you contrast it with U.S. farm subsidies, which the USDA is required by law to provide to over two dozen commodities, and which were budgeted to reach nearly $17.0 billion in 2006.  The $5-10 million for promoting direct food sales isn’t even in the noise level when compared to farm subsidies. For those wondering how much of that $17.0 billion in subsidies finds its way to specialty crops (e.g., edible fruits and vegetables), here is how the 2006 subsidies were expected to be distributed:

Commodity	US Dollars (in Millions)
Feed grains	$7,573
Soybeans	$3,249
Upland and EIS cotton	$2,636
Wheat	$2,319
Rice	$632
Dairy	$195
Peanuts	$290
Minor oilseeds	$85
Honey	$26
Vegetable oil	$16
Wool and mohair	$11
Other crops	$34

Source: USDA 2006 Fiscal Year Budget

One thing that jumps out is that each subsidized commodity crop was expected to receive more in government subsidies than the largest annual allocation to the FMPP, which clearly shows the entrenched financial interests that sustainable food champions are up against.

What is needed reminds me of a somewhat typical episode of Star Trek (for the record, I am not a Trekkie, so forgive me if I don’t get this just right).  The USS Enterprise has once again found itself in a battle against significant odds.  The ship is damaged and its destruction seems imminent.  Suddenly, Captain Kirk orders his crew to concentrate all the ship’s energy to the front deflector shields to stage a last, heroic counterattack.  It works (it always works) and the good guys win the day.

Sustainable food needs a similar concentrated strategy, one that catches the “enemy” off-guard and unprepared by not hitting them where they are strongest. For example, going after industrial food in the halls of the U.S. Congress plays into their hand, since significant energy will be required to make very little progress (see FMPP). And, rather than destroying the enemy (i.e., conventional and industrial food systems), one goal should be to convert them, thus accelerating progress toward a truly sustainable food system for all.

For me, such a strategy must center on consumers and how they shop for, cook and eat food.  By getting enough citizens (or voters) interested and committed to sustainable food in their everyday lives will be the most effective way to change policy, as well as entrenched corporate interests. The odds are great, but the determination is there to go where no food has gone before…or something like that.

Rob Smart is a food entrepreneur focusing on regional food systems and consumer retail experiences. He blogs on alternative food systems at Every Kitchen Table and Civil Eats (guest blogger), and micro-blogs on Twitter as Jambutter.

Further Reading:

• 10 Thoughts About Farmers Markets (A Rebuttal)
• Why Community Supported Agriculture Isn’t Enough
• 10 Innovative Sustainable Food Retailers
• 7 More Innovative Sustainable Food Ventures
• 10 Ways to Save Real Food
• Innovating the Food Buying Experience
• Is Organic Food the Answer?
• Follow me on Twitter: Jambutter

10 Ways to Save Real Food

Yesterday, I wrote about a confluence of factors that helped create the substantial sustainability problems our food system now faces (see “The Rise and Fall of Nutritionism Ideology“). The post’s title suggests that the “Fall” has occured, but we know better.  I was simply setting up today’s post which describes one coordinated strategy for accelerating what I hope is nutritionism’s eventual decline.

My suggestions primarily focus on the marketing side of food, since people like David Murphy at Food Democracy and others are attacking food related issues at the legislative and policy level.  There are obviously overlaps where lobbying Congress and the Administration will be required, and I look forward to joining coalitions of sustainable food advocates fighting for the necessary legislative changes.

Rather than wade into such political battles, my focus is on a “death-by-a-thousand-cuts” strategy, where regions, retailers and consumers have the power to ultimately rule the day. The following list outlines the major components of that strategy.  I strongly encourage any and all comments, suggestions, etc. to these recommendations, especially if you see something missing!

1. Food Labeling – Reinstate the Food, Drug and Commerce Act of 1938’s “imitation” label requirement, which may be the most important label for consumers since it instantly identifies fake food.  Taking the food industry head-on faces steep odds, so I am recommending a new breed of food retailers applies such labels on its shelves, moving consumers’ focus from products and packaging.
2. Industry-Sponsored Research – Outlaw the use of nutritional claims from “independent research” funded by corporate interests, unless the sponsoring companies are listed as the lead in the study.  As long as industry is able to regularly shift its “nutritional orthodoxy” using the sophisticated marketing of these studies, consumers will be kept off balance and less able to make informed decisions on a regular basis.
3. Regional Food Systems – Accelerate the development of regional food systems that expand the production of sustainable crops and livestock, and allow for affordable local and/or regional processing of those foods, e.g., slaughterhouses.  States and regions should also evaluate land use laws, land trusts and other measures to preserve (and hopefully expand) valuable crop land.
4. Consumer Access – Rapidly expand consumer access to regional and other (e.g., Fair Trade) sustainable foods, including raw foods and lightly-processed products.  While farmers markets and CSA programs are very popular right now, we must develop new retail formats that bring food to a greatly expanded customer base (see Why Community Supported Agriculture Isn’t Enough).  One caution: This may require some regional foods be temporarily diverted from restaurants and institutions (except K-12 schools) until supply can catch up.  A happy problem to solve!
5. Food Experiences – Create intimate food buying experiences to build consumer confidence in cooking at home and positively reinforce such behaviors over time.  For example, many farmers market shoppers state that they enjoy talking to the farmer that grew the food they are buying.  It gives them confidence in the food and makes them feel good at the same time.  Now imagine replacing the farmer (who I hope will grow even more real food) with chefs and cooks capable of creating similar positive experiences around cooking that same food.
6. School Kitchens – Bring cooking back to every school kitchen in America and utilize as much local food as possible, including food harvested from edible schoolyards.  This will help reacquaint a generation with real foods and where they come from, and will be made even more powerful if it is accompanied by a creative and fun “farm-to-table” curriculum.
7. No Food Marketing Zones – Progress is being made in some school districts already, e.g., NYC, but what I am recommending calls for the removal of all branded food products and related advertising from K-12 schools (exceptions: branded foods used in school kitchens).  Our children need “safe zones” where industry can’t reach them, and where they can objectively learn the pros and cons of different types of foods. District by district we can do this!
8. No Fast Food Zones – Ban fast food restaurants within an appropriate distance from schools, making it inconvenient or impossible for kids to get there and back during lunch time.  The more we can do to “expand” healthy food options for the children the better.
9. Low-Income Programs – Provide financial incentives for low-income households to purchase sustainable food by making benefits go further when making such purchases.  While this may require additional funds be made available up front, improving the diets of children and parents in these households offers significant returns on the investment, e.g., better health, better grades, etc.
10. Food Pyramid – Tear down the long standing food pyramid, which simply repackages the food industry’s play book, and replace it with a message that encourages people to eat less, which is what the U.S. Senate initially recommended in 1977 before an onslaught of industry pressure got them to back off.  We could also channel Pollan: “Eat food. Not too much. Mostly plants.”  Or we might consider Harvard’s alternative Healthy Eating Pyramid.

The common theme running throughout these recommendations is improving how consumers (households, really) interface with food at the point of purchase.  Currently, the typical American consmer is at the mercy of the “nutritional industrial complex” that Pollan describes.  What I am envisioning are innovative retail experiences that answer to consumers, not food giants or the government (except as required by law, of course), thus giving consumers back the control over their experience with food.

Thanks to Foodimentary (via Twitter), I have a new favorite quote from J.R.R. Tolkien that sums up this post rather nicely…

“If more of us valued food and cheer above hoarded gold, it would be a much merrier world.”

Related Information and Links:

• 10 Innovative Sustainable Food Retailers
• Innovating the Food Buying Experience
• Supporter of Food Renegade’s Fight Back Fridays
• Follow me on Twitter: Jambutter