Taking a Closer Look at the Local Food Supply Chain

The rapidly growing local food movement promises a range of public health benefits, such as lower carbon emissions and stronger local economies—but can local food supply chains actually generate these benefits?

Farmers market

One prominent image of the local food movement is the farmer's markets that appear in spring with fresh vegetables and fruits.

Photo by Fotolia/william87

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Growing Local (University of Nebraska Press, 2015), edited by Robert P. King, Michael S. Hand and Miguel I. Gómez, reports the findings from a coordinated series of case studies on how local food supply chains compare with mainstream supermarket supply chains. The editors posit that a deeper, more nuanced understanding of how local food products reach consumers is required to determine how—and if—the benefits of “relocalization” of our food system can be achieved. The following excerpt is from chapter 1, “From Farms to Consumers.”

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The term local foods conjures vivid and specific images among consumers, food connoisseurs, and scholars. Many people think of the fresh young vegetables and the first ripe strawberries that appear in farmers markets in the spring and the apples and winter squash that herald fall’s arrival at the end of the market season. For others, what comes to mind is a roadside farm stand, discovered by accident during a Saturday drive out of town and packed with a variety of straight-from-the-field produce. More and more, the picture of local foods also includes signs in supermarkets identifying certain products as local, and stories from farmers about how their food was produced.

These images are a growing part of how people think about their food when they fill their grocery cart (or canvas bag or farm share box). Yet these images tell only a part of the story. Where we purchase food and where it comes from (in particular, its geographic origin) does not always reveal how local food gets to the point of sale or why it is sold touting some characteristics and not others. The promotional flyer we might read at the supermarket meat counter about the nearby farmer of grass-fed beef likely does not describe the importance of interdependent business relationships between the farm, slaughterhouse, and retailer. Neither does the bin full of the season’s first apples at the farmers market tell you about the grower’s significant investment in transportation and marketing activities that allow him to sell in multiple markets each week.

The stories behind the images describe the people, processes, and relationships—that is, all the segments of the supply chain—that put local foods into consumers’ hands. The supply chains for local foods, like those of more mainstream products that account for the vast majority of food consumed in the United States, remain largely hidden from consumer view. Yet it is within these supply chains that the food characteristics and the information consumers value are determined. As local foods become a more important part of the U.S. food system, our understanding of the inner workings of food supply chains deserves more attention.

A Growing Trend in Food and Agriculture

U.S. consumer interest in local foods has increased sharply in recent years. Although sales of locally grown food still account for only a small share of total domestic food sales, this is believed to be one of the fastest growing segments of the U.S. food system. Interest in local foods stems from a variety of potential and perceived benefits, including economic, environmental, health, food safety, and rural development benefits. Some believe that local food supply chains provide several advantages over the mainstream supply chains that provide products to supermarkets. These might include preserving local landscapes and family farms, strengthening of local and regional economies, and providing fresher, higher quality food products. Certain consumer segments are actively seeking local foods in a variety of outlets, and there is evidence from anecdotal observations and from controlled economic experiments that some consumers are willing to pay higher prices for local foods.

These trends are prompting changes across a spectrum of food supply chains. Farmers’ increased utilization of direct marketing channels such as farmers markets and a variety of community supported agriculture business models is providing an important market mechanism linking farmers and consumers. Some argue that direct market channels give farmers more control over distribution and allow them to capture a higher share of retail value in comparison to selling through mainstream intermediaries. At the same time, these channels offer an alternative outlet for consumers to seek local fresh products directly from the source. But direct marketing channels are not the only channels through which locally grown foods are made available to consumers. A number of mainstream supermarkets, which are remarkably resilient and quick to adapt, see these trends as an opportunity to satisfy customer demand for local foods and to increase customer loyalty. However, it is not clear that this is an effective channel for meeting the rapidly growing demand for local food products; and there is uncertainty about the long run prospects for a significant “re-localization” of supermarket offerings.

Interest also extends to federal, state, and municipal policymakers, who seek to marshal significant resources to support local food systems. Local foods are increasingly being incorporated into programs to reduce food insecurity, support small farmers and rural economies, improve healthy eating habits, and foster closer connections between farmers and consumers. Local governments, for example, are implementing an array of training programs for vendors and farmers market managers to improve skills in running local food supply chains. Municipalities are also making capital investments in infrastructure to facilitate the development of supply chains for local foods. Today many states and cities have food policy councils centered on promoting local foods. In addition, there is strong interest in increasing the share of local foods, in particular fresh fruits and vegetables, in the federal Supplemental Nutrition Assistance Program (SNAP).The U.S. Department of Agriculture (USDA) administers several grant and loan-guarantee programs that can potentially support local food supply chains. In the regulatory arena, an emerging issue is the differential treatment regarding food safety and product traceability that the federal government uses with direct market supply chains relative to their mainstream counterparts.

Despite the growing importance of local food supply chains to consumers, food supply chain members, and policymakers, relatively little is actually known about them. Nor is the performance of local food supply chains well understood in terms of economic, human health, environmental, and social effects. To understand the local food phenomenon better, we offer a rigorous comparison of local and mainstream supply chains in multiple social, economic, and environmental dimensions, using the case study method. The fifteen case studies and the systematic comparison of case study findings are intended to shed light on the factors that will influence the structure, size, and performance of local supply chains in coming years.

What Can We Learn About Local Food Supply Chains?

A consequence of the rapid growth in local foods is that our understanding of these marketing arrangements has struggled to keep pace with interest in them. In some ways, this makes for a more interesting environment to study. Producers large and small are trying new strategies to enter different markets or create new market niches where none existed before. Consumers are seeking a broader array of products and product characteristics and are increasingly open to obtaining food through different market outlets. This results in an abundance of new and creative approaches to food supply chains, some more successful than others and many not yet well understood.

Much has been written about the different examples of local food marketing, the demands and motivations of consumers, and the potential costs and drawbacks of an expanding local foods sector. There have also been numerous attempts to probe the potential of local foods, or other alternative food marketing arrangements, to contribute to a more just and sustainable food system. Yet our current understanding of local foods often either ignores how food moves from producers to consumers or makes assumptions about this process that may not be realistic.

We will attempt to “catch up” with the growth in local foods by better understanding how local foods move from producers to consumers. We focus on the relationships and arrangements that make up food supply chains, observe how they are organized when food moves through local supply chains compared to mainstream supply chains, and ask why these arrangements may differ between supply chain types.

At the most basic level, these observations help illustrate how local foods are being introduced or reintroduced into the broader food system. For example, do we tend to observe local foods moving through entirely new pathways from producers to consumers, or do they rely on existing infrastructure, knowledge, and relationships (which may have been developed for more mainstream supply chains) to provide consumers with the food and product characteristics they demand? The answer to this type of question has implications for how we think local foods will develop in the future.

Understanding the “how” and “why” of local food supply chains also provides a basis for answering some of the thornier questions about local foods, such as whether barriers to growth in local foods exist (and why they might exist), and how barriers could be removed. In all sorts of markets there are barriers and costs to entry, and there are structural market forces that determine who participates and what supply chains look like. These features depend on relationships between supply chain partners upstream and downstream from any one entity. Yet we know little of these relationships as they pertain to local food supply chains.

Other topics are increasingly making their way into the public discourse on local foods, with a particular focus on the role of local foods in public policies and programs. Questions about measures of supply chain performance, such as the prices and availability of local foods, the potential of local foods to provide public benefits (like improved environmental quality or better nutritional outcomes), and the prospects for growth in local foods are difficult to answer for a segment of the food sector that is growing so rapidly.

Of particular difficulty is answering the question of why we might think that local foods, and the supply chains that deliver them to consumers, differ from other marketing arrangements in how they perform. That is, what aspects of local food supply chains suggest that they may provide certain public benefits, and what does this mean for public policies and programs designed to support local foods? Our goal is to use observations from supply chain case studies to begin to describe better the distinguishing characteristics of local food supply chains and to ground the resulting discussion more concretely in how food supply chains operate.


Reprinted with permission from Growing Local: Case Studies on Local Food Supply Chains edited by Robert P. King, Michael S. Hand and Miguel I. Gómez and published by the University of Nebraska Press.