Already a Bloomberg.com user?
Sign in with the same account.
How the strengthening local food movement in towns across the U.S. is reshaping farms and food retailing
Drive through the rolling foothills of the Appalachian range in southwestern Virginia and you'll come across Abingdon, one of the oldest towns west of the Blue Ridge Mountains. If it happens to be a Saturday morning, you might think there's a party going on—every week between 7 a.m. and noon, more than 1,000 people gather in the parking lot on Main Street, next to the police station. This is Abingdon's farmers' market. "For folks here, this is part of the Saturday morning ritual," says Anthony Flaccavento, a farmer who is also executive director of Appalachian Sustainable Development, a nonprofit organization working in the Appalachian region of Virginia and Tennessee.
It's a relatively recent ritual. Five years ago, the farmers' market wasn't as vibrant and it attracted just nine local farmers who sold a few different kinds of veggies. Today, there's a fourfold jump, with 36 farmers who regularly show up with a dizzying array of eggplants, blueberries, pecans, home-churned butter, and meat from animals raised on the farms encircling the town. It's a sign of the times: Hundreds of farmers' markets are springing up all around the country. The U.S. Agriculture Dept. says the number of such markets reached 4,692 in 2006, its most recent year of data, up 50% from five years earlier. Sales from those markets reached $1 billion.
The rise of farmers' markets—in city centers, college towns, and rural squares—is testament to a dramatic shift in American tastes. Consumers increasingly are seeking out the flavors of fresh, vine-ripened foods grown on local farms rather than those trucked to supermarkets from faraway lands. "This is not a fringe foodie culture," says Flaccavento. "These are ordinary, middle-income folks who have become really engaged in food and really care about where their food comes from."
It's a movement that is gradually reshaping the business of growing and supplying food to Americans. The local food movement has already accomplished something that almost no one would have thought possible a few years back: a revival of small farms. After declining for more than a century, the number of small farms has increased 20% in the past six years, to 1.2 million, according to the Agriculture Dept.
Some are thriving. Michael Paine, 34, who started farming in 2005 on just one acre in Yamhill, Ore., today has six acres of land and 110 families who buy his lettuce, cabbage, peppers, and eggplants. "I like to surprise my families with odd varieties of tomato or an odd eggplant variety, and they love it," says Paine.
Patrick Robinette saw a growing interest among Americans in specialty beef, and in 2001 started raising 10 cows at Harris Acres farm in Pinetops, N.C. Soon his grass-fed beef was in high demand. He now raises 600 head of cattle and delivers beef to the North Carolina governor's mansion. He has standing orders from 37 restaurants, three specialty stores, and six cafeterias.
Large Retailers Act
The impact of "locavores" (as local-food proponents are known) even shows up in that Washington salute every five years to factory farming, the Farm Bill. The latest version passed both houses in Congress in early May and was sent on May 20 to President George W. Bush's desk for signing. Bush has threatened to veto the bill, but it passed with enough votes to sustain an override. Predictably, the overwhelming bulk of its $290 billion would still go to powerful agribusiness interests in the form of subsidies for growing corn, soybeans, and cotton. But $2.3 billion was set aside this year for specialty crops, such as the eggplants, strawberries, or salad greens that are grown by exactly these small, mostly organic farmers. That's a big bump-up from the $100 million that was earmarked for such things in the previous legislation.
Small farmers will be able to get up to 75% of their organic certification costs reimbursed, and some of them can obtain crop insurance. There's money for research into organic foods, and to promote farmers' markets. Senator Tom Harkin (D-Iowa) said the bill "invests in the health and nutrition of American children…by expanding their access to farmer's markets and organic produce."
The local food movement has not been lost on the giants of food retailing. Large supermarket chains like Wal-Mart (WMT), Kroger (KR), and even Whole Foods (WFMI) depend on their scale to compete. Their systems of buying, delivering, and stocking are not easily adapted to the challenges of providing local food, which by its nature involves many diverse groups of farmers. People have gotten used to eating tomatoes and strawberries at all times of the year, and many parts of the country are too cold to produce them in the winter. Thus, even Whole Foods, which bills itself as the world's leading retailer of natural and organic foods, has committed to buying from barely four local farmers at each of its stores.
Wal-Mart, which in the last couple of years ran a "Salute to America's Farmers" program, says that buying from local farmers not only satisfies customers' desires, but also fits the company's commitment to sustainability and cutting down on food transportation. However, the company admits that local farms can never take over the produce aisle completely. "It gets complicated since not every state grows apples and lettuce, and even when they do, it doesn't grow at all times of the year," said Bruce Peterson, formerly Wal-Mart's senior vice-president of perishables, in an interview 17 months ago. He has since left the company.
Nonetheless, all the giants are devoting a small but growing share of shelf space to locally bought produce. Some are even inviting the farmers into the store to promote their goods. "Obviously supermarkets don't want to lose that business," says Michael Pollan, author of the best seller The Omnivore's Dilemma. Neither Wal-Mart nor Whole Foods will quantify how much business they get from locally grown food.
The very definition of "local" food presents a ceiling of sorts for successful small farmers. If they start shipping more than 250 miles or so, they cease to be local and their appeal vanishes. The optimal solution is to locate near densely populated areas, but that's where acreage is scarce. "Land prices are very expensive around metro and urban areas, which is a barrier to entry," says Pollan. He thinks the solution will be for farmers to look for ways to farm more varieties of food (BusinessWeek.com, 5/21/08).
The local food movement has many of the same hallmarks of the organic foods movement, which sprang up in the 1970s to place a premium on foods grown without pesticides and synthetic fertilizers. Indeed, almost all of today's small farmers use organic techniques. But many consumers believe that organic foods, though seemingly healthy, may still damage the environment. For instance, organic fruits that are grown in Chile and Argentina and then shipped halfway around the world require fossil fuels and carbon emissions to power tankers and trucks thousands of miles. Instead of just focusing on pesticides and chemicals, consumers who have been educated by movies like An Inconvenient Truth now pore over "food miles" and "carbon footprints." The message seems to be: If you buy organic, you care about your own body; if you buy local, you care about your body and the environment.
As more and more consumers take those values to the store with them, the impact is being felt far from the predictable centers of "green" consciousness. In Bloomington, Ind., supermarket chains such as Kroger still dominate, but an upstart called Bloomingfoods Market that specializes in local fare lately has been stealing market share. Today the cooperative has 7,000 shopping members, up from 2,000 five years ago. It works with 180 farmers to offer everything from strawberries and persimmons to squash and shiitake mushrooms. "We're seeing a real renaissance," says Ellen Michel, marketing manager for Bloomingfoods.
As the local food movement grows more mainstream, it's showing up in unexpected places. Corporations such as Best Buy (BB) in Minneapolis, DreamWorks (DWA) in Los Angeles, and Nordstrom (JWN) in Seattle are providing local options in their cafeterias. "We try to purchase as much as we can from farmers in a 150-mile radius," says Fedele Bauccio, CEO of Bon Appetit Management, which runs more than 400 cafeterias for companies like Oracle (ORCL) and Target (TGT).
As many as 1,200 school districts around the country, from Alabama to Iowa, have linked up with local farms to serve fresh vegetables and fruit to children. Colleges such as Brown, Cornell, the University of Montana, and the University of California at Berkeley are buying from their state's own producers. Last year, Iowa's Woodbury County mandated that its food-service supplier buy from local farmers for places where it serves food, such as its prison and detention center.
And in hundreds of towns, people are signing up for CSAs, or community-supported agriculture organizations, where they pay a local farmer for a weekly supply of produce during the harvest season. In 2000, there were around 400 farms that had CSA programs; today there are more than 1,800 nationwide. Families typically pay a farm $150 to $650 each year in return for a weekly basket of vegetables, fruit, eggs, meat, or baked goods. In New York City, where 11,000 residents participate with 50 farms, the demand is so high that there's a wait list. And in some inner cities, like the Bronx, a borough of New York City, organizations are training community gardeners to grow vegetables like collard greens, herbs, and beets for their community, changing food habits in the process.
"We are even teaching people how to prepare seasonal produce," says Jacquie Berger, executive director of Just Food, a nonprofit that helps fresh-food growers sell to residents in the Bronx.
That may be less of an issue in more pastoral settings such as Abingdon. But residents of the Virginia town look forward to Saturday at the farmers' market, mingling, passing out petitions, and letting the kids snack on berries while their parents shop for the week's groceries in a fresh setting. "There's a groundswell of interest not just for vegetables and fruits, but also eggs, poultry, and meat—people want it close to home, as fresh as possible, and produced sustainably," says farmer Flaccavento.