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An Old Vision: A producer-led ‘supermarket’

A Design for a Real Food Market | Re-envisioning a sustainable food system

Food Hub - Central New York Regional Market Saturday

*An open air supermarket infrastructure that houses independent producer (farmer) led suppliers and final food products made from locally identifiable sources under a single location that is open 24/7 and supports small businesses to emulate the ‘farmers market community experience’.

A Real Food Supermarket

This is nothing more than a traditional market (think Ho Chi Minh’s Ben Thanh Market or Central New York’s Regional Market) with extra bells and whistles to support local producers and processors and backed by smart policies (land, taxes, wages, etc.) to incentivize and stimulate local production.  I’m not thinking Union Market because it is not affordable (the top 1% clientele) and there is too much physical building nor am I thinking of Eastern Market where I couldn’t tell you where the food (vegetable, fruit, meat, etc.) is coming from (appears to all be re-sale; I’m talking inside, not the farmers market) however the infrastructure there aligns with my thinking on this.  The Embarcadero Farmers Market in SF gets closer, but not enough infrastructure; and the Hunt’s Point Product Market in New York is also close but it doesn’t have the local production base I’m thinking of.  Philadelphia’s Progress Plaza, Pennsylvania’s Bloss Holiday Market, California’s Gonzalez Market, or New York’s MyTown Marketplace all resemble conventional supermarkets and also miss the boat.  In essence, the idea is a convergence of all retail strategies into a single location – so a farmer’s market, food hub, and grocery store all owned by its members (like a co-op) and located at many locations like a cornerstore (although, not that convenient) but inclusive of all the services of a food hub.   The closest thing that I have seen is the People’s Community Market in Oakland, CA. 

Food System Depiction

Food Value Chain Samples: USDA and KPMG

Where did this idea originate from?

I am a sustainable food system advocate and consumer – I always take the time and energy to research what I am eating, where it comes from, what ingredients are included, if it was made from GE seed or has toxic synthetic fertilizers and pesticides, and the impact it has on the folks along the supply chain and in our greater community.  One of the few options to really cater to all these ideas is to shop at my local farmers market, which takes place every Sunday about 2 blocks from my place.  The problem is that Sunday’s are my day of fast.  I have cultivated a full consumption fast each week that integrates a sense of awareness and understanding for my coming week – think Ghandi’s or Martin Luther King’s weekly renunciations (i.e. a spiritual focus that leads toward understanding).  My options for buying local are as a result limited, however if you do the research you’ll find that there is a farmers market every day of the week (in DC).  Yet the issue is not simply traveling to the market but remembering that it exists in the varied locations on the day you need something.  And so it was my fast that prompted the dive into the depths of the food system, not such an ironic thought, but one that has uncovered some interesting food system, enterprise, and historical insights.

These illuminations also surround my auntie from Thailand who visited the US for the first time in 2010 and every morning she would take a walk around the block (several blocks in fact) of a rural town in the Central Valley of California surprised not to find any services, businesses or anything that resembled commerce and trade.  Where she comes from, food trucks, all variety of vendors, and small markets flourish at the local level with lots of people and within walking distance to any town.  Supermarkets in Thailand are for the elite and wealthier families (although this trend is changing).  The masses shop at the local market and pick up wholesome fresh food from the gardens and farms of their rural base.  And there are many small farmers to boot, unlike in the US where primarily large mono-cropped agri-business oriented farms paint the landscape, the small farms in Thailand are much more diverse and can cater to local customer tastes and preferences much easier.

These two experiences – my weekly Sunday fasts and my auntie visiting from Thailand – got me thinking of how our food markets work in the US and the possibility of decentralizing supermarkets and re-introducing what every other country in the world (outside the West or North) has:  thriving daily local food markets.  I’m not talking about a once a week farmers market which has its own unique experience that caters to a specific ‘counter-culture’ or earth based personality.  Nor am I talking about a health food store or even a small mom & pop shop that sells re-traded manufactured products made from unknown companies in far off places but simply re-distributed using extensive transport systems.  I’m talking about a fully centralized and managed local market (decentralized and re-organized if considering how our current distribution networks work with producers aggregated in distant lands, warehouse centers that store and then deliver to retail stores in  a region, likely crossing paths again with their source; or you can just think about all the players at Hunt’s Point) that is open 7 days a week, just like a supermarket and which is a partnership between the public and private sectors and is financed using community capital.

When I think of why the supermarket is so pervasive in our society today, I think of convenience and variety, I don’t think of low prices – however the price wars between the late 50’s and 80’s and even the corner store food price research will demonstrate otherwise.  An informative supermarket history is written by David Gwynn at Groceteria.  He covers the development of the supermarket from the first self-serve stores opening at the end of WWI, the quick expansion of chain food stores in the 20’s after foods began being mass processed and packaged, an increasingly intimate relationship to Wall Street and financing the ‘growth’ industry which would evolve into the 70’s.  Supermarkets were an industry in itself with few barriers to entry and plenty of expansion opportunity due to the burgeoning suburbs (and therefore the move away from the urban center).  Then came the discount and warehouse stores which was prompted by the fuel price spike in 1974 and corresponding food price spike that has existed ever since – see the graph calculated by the Economic Research Service (ERS) with data sets from the US Census Bureau – Table 13:

Food Expenditure per Capita US

So what, really, is it about supermarkets that make them so… prevalent in our society?

Well, the ‘better’ (or more invasive) supermarkets are typically large chains who survive because they are already physically larger (think warehouse size) than competitors and provide:

  1. easy access for consumers with parking,
  2. independence of choice with self-service,
  3. high volume turnover so the appearance of spoilage is veiled but waste is prevalent – see Tristram Stuarts’ recent book “Waste”,
  4. facilities made for high volume transactions including methods of transport and delivery,
  5. a variety of perishable offerings including fruits, vegetables, meats, fish, seafood, poultry, dairy products, and flowers among others,
  6. (at the same time) a conformed product offering (leading to more waste and suffering for farmers), and
  7. low wages for employees.

There are also some other common characteristics of the supermarket business-model which help them spread (and often times die).  Here is what I’ve noticed:

Operational Design – grocery stores were originally designed by Clarence Saunders in 1916, and their evolution, the supermarket, now allow for easy and quick transactions since everything is labeled and inventoried/tracked (using electronic registers, electronic scanning, and UPC – Universal Product Code or barcoding).  Food products are easy to pick up and identify, especially with all those commercials featuring fully recognizable national brands and the standardization (uniformity) of products, including product location, within the store.  Supermarkets use a franchise ‘self-service’ model where you can place your food in a quite sizeable cart.  The building and staff espouse a clean appearance, offer product discounting, and have the infrastructure, like cold storage, to keep product longer.

Mass Distribution and Logistics System – there is always a link to a mass distribution system that includes large warehouses, large trucks, a government that paves roads and brings in fossil fuels to gas stations, and the back end software that analyzes and tracks all the associated data of sending goods to and from.

Scale and Expansion – the historical business model for supermarkets was never to remain in one community or region, but to continue to expand and spread like a virus.  This was fueled by the financing of the supermarket, due in large part to the legal structures of how a supermarket was established, and which was primarily via investments on Wall Street through share purchases.  The ownership structure of Penn Fruit was a privately traded firm with responsibility to its shareholders to deliver “value”.  Therefore, it was not the quality of the products offered or relationships with vendors that store managers aimed to cultivate, but quarterly earnings for unknown shareholders.  In addition, supermarkets were not just in the business of selling food – they needed to entice developers in order to expand and to do this they needed to be attractive both aesthetically and on the books.  To get space in the suburbs, they needed to work out deals with developers and cut out their competitors – this prevented supermarkets from focusing on food and food related issues.

Convenience – the idea was that customers required the entire shopping experience to be not only easy and stress-free, but that their visit could encompass all their needs in a single stop to the supermarket – a one-stop-shop.  Developers supported supermarkets with accessible roads and parking, something that a grocer could not afford on their own.  And more non-food products were added to the store so that customers could go to one store instead of multiple stores to find household items, attracting customers in the door who would then consider picking up something for the kitchen.   In addition, as the Penn Fruit example informs us below, when they limited their variety and service for higher volume they were able to lower waste by 40% (in perishables) while seeing 30% higher productivity in their employees.

Marketing and Prices – accessibility to lowest income consumers is an illusion, just think about where those supermarkets are in your community.  In researching this (pricing) aspect of supermarkets, I came across an article by the former CEO James Cooke of Penn Fruit in Pennsylvania who authored a detailed reflection of the supermarket environment from the 40’s on through the 80’s.  Does the story of Penn Fruit offer any lessons? Here is why Mr. Cooke believes his company went under:

  1. the low price game (or price wars as they are known) of both Penn Fruits and A&P was a personal grudge initiated between the owners,
  2. innovation from a first mover meant that its competitors just waited until something caught on the market and then they copied it!  (it was a first movers disadvantage),
  3. Penn Fruit’s decision to expand was too late since they needed to compete with rivals to win new consumers by the time they opened in contrast to having a monopolized consumer base,
  4. high transportation costs in comparison to competitors volume,
  5. the management team was dispersed among distanced stores, so there was not a cluster of stores to share management responsibilities and be more profitable; similarly there were too many markets and too few stores so the growth was ‘scattered’ and not research oriented,
  6. supermarkets had to play the developer game to ensure rents were paid and to ‘anchor’ the shopping developments,
  7. supermarkets shifted from a growth industry in 1930’s to 70’s and began merging with other companies to expand their operations (M&A industry),
  8. with a price war to the bottom came advertisements disparaging the competitors which was something new,
  9. a ‘foreign subsidy’ existed where competitors who owned stores in other (distant) markets (e.g. California) could lose out in smaller markets while their bottom line and volumes remained unaffected whereas Penn Fruits volume was 90% concentrated in Philadelphia so any shocks were felt immediately,
  10. the credit game to suppliers was exacerbated by the price wars; eventually this model would backfire due to the system design; with Penn Fruit’s suppliers it was different because their suppliers were friends and noticed that when their (primary buyer) supermarket was weak, they could move to a cash basis and offer credit themselves as a loyal buyer/customer relationship!

In addition to Penn Fruit’s characterization of marketing and prices, there was a general shift to discounted warehouse-style supermarkets (think Costco) in the 80’s where a) assortments were limited (less choice, but can buy in bulk), b) consumers had to become a ‘member’ and pay an annual fee, c) consumers marked prices and weighed their products (think food co-op), and d) consumers bagged their own orders.

*However, this model did not work in Philadelphia since Seattle (where the idea came from) already had a rich and pervasive food culture and Philadelphia did not in the same ways, so losses on consumers who could not mark products correctly and who noticed that price differences in Seattle were higher than in Philadelphia caused distrust.  Penn Fruit then innovated by:  a. eliminating the membership requirement, b. adding a fresh meat department, and c. marking items themselves – all resulting in 8% lower than conventional supermarket prices and double the weekly revenue streams than conventional supermarkets.

Accessing Capital – supermarkets have found a sweet spot in Wall Street execs by utilizing a legal entity that is attractive for investors and an entire financial package that works with developers.  There was a system already in place and it worked for the financier and the developer to gain, but this left out the rest of the food chain to the benefit of a few.  Supermarkets were established as privately traded firms with responsibility to their shareholders to deliver “value”.  When we consider Penn Fruit’s decision to shift from conventional supermarkets to discount warehouses, the company increased overall sales by 27% (a record $372 million) with profits increasing to 39% and their smaller supermarket sales jumped 70%.  This demonstrates that the price war to the bottom, in the market view, attracted more customers and increased sales – which was good for the firm, however, no other view is incorporated – the producer, the trader, the processor, the distributor, and the wholesaler all were forced to accommodate and stress their internal systems to the benefit of their buyer.

Raj Patel’s “5 things you did not know about supermarkets” also covers a few more aspects which a real food supermarket might take into consideration (but not copy!).  In summary, supermarkets: 1) rule the food chain and therefore are the dominant voice on pricing, 2) cater to local preferences on a regional or country level so they do not completely alienate consumers, 3) track copious amounts of data on shoppers preferences and house extensive database systems, 4) do not cater to poor people, and 5) impose an illusion of variety even though they are sourcing from few mega suppliers who look for uniform product specifications.

Are supermarkets (retail food distribution) sustainable?  Eventually (if not already) our current form of food production (processing, distribution, policy environment, etc.) will be met with widespread resistance because it fails to recognize all the stakeholders in the food system and fails to treat them fairly.  Although supermarkets have proliferated throughout the world, I do not believe they will be the future of food consumption; they simply waste too much and compensate their staff with extremely low wages.  Their ultimate focus is in the wrong place – shareholder expectations and developer demands.  What was not focused on at that time was 1) how food was produced, traded, processed, distributed, or stored, 2) who it came from, 3) how important fair labor is, or 4) the lack of distributive policies that guide the system in favor of the elite.  The relationship for food to be identified with its source was not a widespread consumer demand for supermarkets and that’s why we have found the unprecedented growth of farmer’s markets throughout the US:  over the last 14 years, farmer’s markets have grown at a compound annual growth rate (CAGR) of 8.37%. (There were 2,863 farmers’ markets in 2000 and 8,144 farmers’ markets in 2013, according to USDA’s ERS)

Farmers’ Markets

The farmers’ market is one of the simplest and most widespread forms of direct trade that agrarian society has continued to offer us all the way up to the present day, except for in the US where it has resurfaced only in the last decade due to one hundred years of supermarket dominance.  The market itself is simply an agreed upon location where both the buyers and sellers converge upon any number of times during the week, month, or year.  They have traditionally used very little physical infrastructure, however, in France, ‘le marche couvert’ is a covered upscale version of our farmer’s market and a prime example of what a real food supermarket can be like in the US.  The USDA has a full listing of all 8,144 farmers’ markets here.

Why the buzz?

It turns out that people are choosing to shop at farmers’ markets to identify with their community and to have a more integrated food shopping experience – so it is not just the fruits and vegetables folks are after, but the music, the conversation with farmers and friends, and the general atmosphere invoked from these markets.  According to a USDA Survey in 2010 in Washington, DC (with a USDA 2006 national survey supporting these results) the top three reasons people shop at farmers markets include:  1) freshness and taste (26.9%), supporting local agriculture (22.1%), and convenience (18.4%).  It was interesting to learn that most people will walk to their farmers market, if it is within .5 to 1 mile of their home or location.  But this then draws the attention to the possibility of scaling farmers’ markets which can be limited due to population density – or so many market managers believe.  Farmers’ markets also open up new channels for the economically poor consumers since many markets accept both WIC and SNAP benefits, increasing the likelihood that healthy food is consumed by those most in need.

Farmers’ Markets By the numbers 

Farmers Markets By the Numbers*Source:  USDA AMS Farmers Market Listing http://search.ams.usda.gov/farmersmarkets/

Talking to Farmers

Based on my informal conversations with farmer’s market staff and farmers selling produce at farmers’ markets and CSA’s – everywhere from Washington, DC to Seattle, WA and from Cambridge, MA to Berkeley, CA – they each have pointed to a core set of issues that shape the idea for a more traditional form of food market.

  • The costs for transportation / distribution are fixed per site, meaning, it will cost a significant proportion of the revenues to meet fuel, staff, time, and location demands.  Minimum revenues of $1,000 have been identified as threshold levels for profitability or worthiness for a local farmer to attend a market and break even.
  • The ability for the farm to find trustworthy support is also a factor since this is traditionally a cash-based business.  Often times a market will be foregone due to trusted labor – the inconvenience to the farmer and extra revenue is not worth their time, so local production is reduced!
  • Sharing a direct relationship with their consumers is important and what brings joy to the farmers, but they have to balance this with long lines and limited retail equipment (weighing scales, payment systems, shelf space, etc.).
  • They want to make sure the customer base is there if they make the trip out – since setting up and taking down the market, plus travel time to and from requires a lot of time – not to mention the entire day selling.

This means that even though the farmer could support more for his or her farm, they choose not to because the social and financial capital required are lacking.  This is not a good sign if we are looking to feed an additional 2.6 billion people by 2050 and our current response is to just ‘increase production’ – which means more land for food and the ensuing negative impacts on our natural environment (i.e. deforestation, evaporating water ways, greater inefficiency, etc.) including the propagation of our current supermarket food system.  Clearly we need to allow for more efficient production and this is found in diversified planting, mixed farming, sustainable agriculture, incorporating the natural environment through agro-ecology and agro-forestry, and better managing and distributing our food (see Tristram Stuart’s “Waste”).  To abate this risk, we need to care for the soil.  This isn’t a digression, but a recognition that we are dealing with a very complex system that continues to see challenges at every step of the value chain, no matter how narrow or wide you define it.

In relation to local farmers’ markets, a farmer’s ability to scale or increase their production and market are due to a series of factors such as their own interest in expanding (or not), access to land or production systems making the land they have more efficient, availability of market (customers), and the administrative burden therein (among many other factors).

Are growing farmer’s markets a feasible solution to fundamentally shift practices within our food system?

Farmers’ markets, today, reflect just .65% of the total food sales in the US – see my calculations.  Considering a massive figure like $908 billion in total food sales from all retail outlets, less than 1% represents a mere $5.9 billion in farmer’s market sales; now that’s not small change, but if we are talking about fully influencing the food chain and the way our food system works, even increasing the number of farmer’s markets or their size by a factor of 10 will only shift the total food sales from farmer’s markets by a mere 6% of total sales.  That means 94% of the food system will continue on as it is.  And this is another reason to dispel the myth that farmers’ markets success will depend on population density.

A recent report published by the USDA titled “Comparing the Structure, Size, and Performance of Local and Mainstream Food Supply Chains” and authored by Robert P. King, Larry Lev, et al. found that in the local food system, the supply chain structure and size along with its performance were key to understanding if this alternative system could work.

The study’s main findings for the local supply chain structure and size include:

  • Aggregate direct market and intermediated supply chains account for a very small portion of total demand for each product-place combination.
  • Access to and costs associated with processing and distribution services are not currently limiting the size of the direct market and intermediated supply chains.
  • Fixed costs for compliance with regulatory and operating standards (public or private) are not currently viewed as a major constraint on the ability of low-volume local food products to use mainstream supply chains.
  • Lack of year-round availability imposes some limits on market opportunities for local fresh produce products.
  • Growth of direct market sales is most likely to be achieved through entry of new producers, while intermediated chains are more likely to grow through internal expansion.

Basically, both local and mainstream products find their way into retail outlets even though it is difficult for smaller producers to do so.  Also, local chains tend to handle small product demand or ‘load’ where per unit costs are typically higher in local chains but can be re-compensated for by a) differentiating with unique product characteristics or services, b) diversifying operations (e.g. mixed planting, agroforestry), and c) accessing processing and distribution services (they value add and have a truck).  Consumers, however, are not willing to pay a premium just for knowing the source of the product and who made it; the tipping point to pay premiums appears to be recognizable labels (e.g. USDA organic, grass-fed, non-GMO, fair trade, etc.) or other detailed information (such as traceability).  The local system also has more small farms offering a diverse set of products and which do not rely on national infrastructure developed primarily for national industry, therefore small farms do not see any value in those subsidized benefits.

With respect to the study’s findings on supply chain performance, “advocates have suggested that expanded local food systems can improve [mainstream] supply chain performance along a number of dimensions. Evidence suggests that local supply chains perform differently than mainstream supply chains.”  For instance:

  • Producers in local food supply chains tend to receive higher revenues per unit and retain a larger share of the retail price.
  • Retail price premiums are difficult to maintain when “local” is the only differentiating characteristic.
  • Almost all of the wage and business proprietor income generated in the local food supply chains (direct and intermediated) accrues within their respective local areas.
  • Food miles in the local food supply chains are lower than in the mainstream cases, but fuel use per unit of product varies across locations and products.
  • Local food supply chains tend to place more emphasis on social capital creation and civic engagement, although results vary widely across supply chain types and locations.

Again, to summarize, local food chains allow producers to realize 7x the amount they would receive if they worked in the mainstream system however, because producers assume responsibility for additional supply chain functions such as processing, distribution, and marketing to capture this revenue, often times this includes the owner’s unpaid labor.   Although farms in direct market supply chains retain nearly 100% of the retail price, costs incurred to bring their product to market total between 13% and 62% of the retail price; wages and income (including capital) typically remain local in the local chain, however, only some wages remain when working in the mainstream system.  In the mainstream chain, due to the seasonal nature of food production, local producers fare far worse since products are obtained from national and international growers and suppliers, completely bypassing local producers.  The report will have us believe that fuel use is more closely related to supply chain structure and not food miles traveled because the load quantity (or volume) can be greater for mainstream supply chains – so on a per unit basis, fuel ‘efficiency’ is greater, but on an overall basis, fuel efficiency is worse for the mainstream supply chain.

Another study highlights why farmers’ markets will need further analysis if we are to scale them.  In an June 2008 report titled, “‘I’m getting desperate’:  what we know about farmers’ markets that fail”, Garry Stephenson, Larry Lev, and Linda Brewer identify five factors that cause farmers markets to fail:

  1. Small market size,
  2. Need for more products (lack of farmer vendors/suppliers) – especially for smaller or micro-markets since they face two challenges:  less vendors and lower fees per vendor compared to larger markets,
  3. Administrative revenue ‘have-nots’ or those markets without sufficient revenues to coordinate the market itself,
  4. Manager was a volunteer or paid low salary (and over half in study had less than 2 years’ experience), and
  5. High manager turnover existed.

Clearly we need to consider these challenges and find ways to infuse the supermarket behavioral characteristics that are regenerative and just if we are to help fix our food system.  I also believe there is a larger question we need to be asking – why is it, for example, that in Washington, DC, 27 supermarkets are able to profit in the Northwest quadrant (Wards 1, 2, 3, and 4 – with population of 309k as of 2010 and average annual household income of $91,750) while the remaining quadrants (NE, SE, SW; Wards 5, 6, 7, and 8 with population of 292k and average annual household income of $46,500) only have 16 supermarkets, but they can still profit!?  We know that over 65% of those attending a farmer’s market spend less than $15 per visit and 82% spend less than $20, but if more variety was offered, like that of a supermarket, and consumers could take more away than a single carry bag, these figures are likely to shift upwards.

The density and income variables typically eluded to are seriously called into question and offer the idea for a farmer’s market or farmer’s supermarket to be a viable solution in so called ‘food desserts’.

DC Supermarket Overview

Food Hubs

Food hubs are an excellent re-invention of moving food from farmer to consumer in an organized and thoughtful way.  It’s one of the outgrowths to solving our food system challenges and it builds off of the first step, the farm and farmer themselves.  And over the last 20 years, there has been a significant shift in the value system for why food hubs operate:  whereas older food hubs were there to support the farmer, today, the number one reason is to get access to local food.  What is also striking is that profits never really play a role in the value system for food hub management.  See Michigan State’s 2013 National Food Hub Survey.

What are they and how do they work?

Summarizing from the Healthy Food Access Portal, a food hub – as defined by the National Food Hub Collaboration – is “a business or organization that actively manages the aggregation, distribution, and marketing of source-identified food products primarily from local and regional producers in order to satisfy wholesale, retail, and institutional demand.

The differences between a farmers’ market and a food hub are in scale.  The food hub is a wholesale experience managing larger volume transactions, while the farmers’ market is a direct trade retail experience, typically geared at urban consumers.  Food hubs have multiple functions too, often times much more robust in what they offer to the farmer.  They can act as:

  • an aggregation and distribution point for food
  • a place to build relationships between the farmer and consumer
  • a center for ancillary (and broker) services like insurance, quality control (and safety) training, marketing, and branding or labeling
  • a storage facility
  • a processing and packaging center
  • a transportation hub

Yet even with all the buzz around food hubs, they will still need a retail outlet in order for food to reach the masses (outside of wholesale or institutional buyers).  Don’t get me wrong here, I’m for food hubs, but they’ll have to figure out how to reach more than the business to business/institutional customers and they’ll have to figure out ways to doing this using the internet.  Farmplicity is a business to business online marketing information channel, which is a great model to inform and connect restaurants to farms all the while incorporating the farmer view, solidifying a buyer arrangement and lots of demand with fewer customers to track and manage.  I could imagine a system like this would be ideal for a real food supermarket.

Food hubs also have some constraints as well:

  • Managing growth (staffing, consistent supply, transport/delivery, and storage listed as top 4 reasons as barriers to growth)
  • Balancing supply and demand
  • Access to capital (with 61% in COGS and 23% in staff salaries, that only leaves about 16% to work with in managing all the things necessary for a hub to work, i.e. payment systems, utilities, transport, packaging, advertising, insurance, etc.)
  • Finding appropriate technology to manage operations
  • Negotiating prices with producers and/or customers
  • Finding reliable seasonal and/or part time staff

So does a farmer’s supermarket help us move towards a more sustainable food system?

I believe so.  All the market (economic), community (social), environmental (natural), and political aspects are integrated and help better shape the commons – from the physical market itself to the land practices throughout our nation and ultimately with the affordable food that is a right and should now be re-politicized (*we should get rid of the word ‘food security’ – it de-politicizes the idea of hunger and starvation by taking out the emotional aspects to not having food).  Using an anecdote from Penn Fruit, they expanded once they figured out that perishables were the key to success (at that time) because ‘supermarkets’ were not managing perishable sales well; their competitors were focusing on non-perishables which had lower margins.  This is the basis for why producers at farmers markets are able to survive with minuscule market share compared to supermarkets.

There are many challenges…

Will there be enough local producers to fill these new markets throughout the week?  At the beginning, there will be a lag, so pushing a Farm Bill that further alienates us from a sustainable food system does not help.  We will need public policies that offer incentives to local producers to start businesses and also land reform that can offer recognition of the commons.  I’m fairly certain there are many entrepreneurs and knowledgeable gardeners and ex-farmers that would love to get back out on the land, if it was affordable and there was a business case.  Right now, the barriers are simply too high, unless you are already involved.

Will variety suffer?  Another big challenge for the hybrid farmer’s market supermarket approach will be to manage perishables so that waste doesn’t burden producers pockets.  Where supermarkets were most cost-effective when limiting their variety, this idea goes in opposition to how a sustainable farm should function – which is through the use of mixed farming and integration of different supportive crops.  However, there is no reason this would not be solved with more education and awareness about what these foods could be used in (recipe sharing) and how nutritious they are (health benefits).

How will we get many more and smaller vehicles into these new real rood markets?  We would have to devise a way, possibly aggregate, following in the footsteps of what food hubs do and possibly making concentrated deliveries from these ‘hubs’ using larger vehicles (but this could happen by pooling resources together from all the producers).

This is not a simple solution and there are many more challenges at the same time I do not believe that with such a complex food system we can offer solutions that do not help people make money along the way (along the food chain within the food system).  Money or profit does not have to be a bad word here (although I think profits should be redefined); there are significant parallels to the direct public offering system and then the food certification systems which have mushroomed on the market.  These two examples demonstrate that if you cannot make money along the way, then the systems will not be accessible to the masses.  For DPO’s, there are not enough regulations in place to support business activity – and in the finance world, regulation is how money is made.  For certification systems (like Rainforest Alliance, UTZ, or Fair Trade to name a few private players), the cost is primarily born by the consumer as a premium on the product price, however, no one from the beginning of the chain up to the consumer can gain at the moment, within our current food certification system, unless there is a public system (say USDA Organic where the added value can be redistributed down to players along the value chain).  The point here is that in our current food chain and food system, people make money along the way – from post production harvesting, packaging, distribution, alternative services, branding, marketing, wholesaling, and retailing.  We have to be able to follow this example for a new food system, but do it in a way that is more local, less toxic, and more equitable to those involved, including the earth.

Please do pick this idea apart, edit it, and make suggestions to improve it – I would like to see the idea evolve into something that could work for communities throughout the US. 

Here is an example of beginning the shift!:  Real Food Challenge + their website.  

2 thoughts on “Redesigning Our Food Markets

  1. http://www.bbc.com/news/business-29442383

    I did not mention technology (the internet) as a factor in my analysis above where I indicated that supermarkets were not the wave of the future in terms of where we get our food. I talked more about values alignment, however the reality appears also to be driven by consumer wishes for convenience over what is ‘right’ or healthy / sustainable.

    What would make this interesting is if businesses aligned more sustainable practices and outcomes with this technology – THAT is exciting. Some new food enterprises are sowing the seeds of what our future could look like for retail food consumption:

    Plated, CropMobster, Something GUD, Good Eggs, Relay Foods, and Farmigo, to name a few.

    Like

  2. A couple articles have sprung up that talk more in depth about reports of supermarket’s dwindling market share. First, Time Magazine put out an article around the same time I published
    ‘Redesigning Our Food Markets’. In Oct 2013, @bradrtuttle penned “The Grocer Store May be on It’s Death Bed.”

    http://business.time.com/2013/10/08/the-grocery-store-may-be-on-its-death-bed/

    And more recently, @BrianHalweil of Edible Brooklyn did an interview with Mike Lee of Studio Industries titled “How We Will Buy Food in 2065.”

    http://www.ediblebrooklyn.com/2014/12/11/will-buy-food-2065/

    They are looking at physically redesigning supermarkets to reflect some of the values and trends in the food retail market today. In particular, grocery delivery (the distribution segment of the food value stream) which is on the retail end (and therefore not really impressing upon the rest of the value stream for any shifts in economic behavior around environmental degradation, slave/indentured/trafficked labor, fair wages, transparency, etc.). But another idea was communicated: a Food ID tag that transmitted detailed information to grocers, restaurants, etc. about that persons food preferences. Getting closer to the customer and consumer – and reducing feedback times – has been an issue for most food artisans, entrepreneurs, and small food enterprises.

    Lot’s of change in just one year. It will be interesting to see what 2015 brings in the food enterprise space!

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