I just posted an interesting article on Facebook. It’s an NPR segment from Feb. 2015 and basically discusses the health of Farmers Markets in the country. You can see it at:
The conclusion is that Farmers Markets have peaked as a venue for selling local/sustainable products. I don’t dispute this. I’ve seen this trend over the last year.
The real issue is why?
The segment talks somewhat about “buyer’s fatigue” that maybe local/sustainable has just hit its saturation point. It also notes that any new customers beyond the traditional “local food buffs” that are starting to look at local foods are going to look for local/sustainable or for that matter organic want it in a more traditional venue – like a grocery store.
So here are some observations:
The market for local/sustainable – be it veggies, fruit, meats, whatever is growing. Organic alone is growing at over thirty percent a year.
That market is now of interest to more people including the more traditional shopper who wants the convenience and price of the big grocery store.
Small farmers and ranchers who have used the farmers markets need to find other venues if they are going to continue to sell into the market.
But here’s the rub – small farmers and ranchers – who are usually way too small for a traditional grocery store to be interested – don’t have any other venues.
As a grass fed, local beef provider BCC has developed a wholesale market of non-traditional grocery stores – Wheatsville Coop, Royal Blue and Bastrop Producers Market – along with several restaurants in Austin. However, this represents a substantial investment of time, money, energy and transportation. It means constant negotiation with chefs and butchers. Even then success is not assured.
I question whether or not this approach can even be done today in Central Texas on the
“shoe string” budget we started out with eight years ago. I have competitors coming into the market today – but with much deeper pockets – and still only finding limited success in breaking into the market.
Meanwhile, I see the “big boys” – Cargill, Tyson, ADM, and the like – “suddenly seeing the potential size of the market for grass fed beef. They have an infrastructure of distributors, wholesalers, and groceries already in place. Often what they don’t have is the “local” beef. But grass fed can be had in Uruguay, Australia and Argentina. Chilled meat that meets the standard for grass-fed, free-range, hormone and antibiotic free with plenty of traceability can be killed, processed and transported into the US chilled and ready to sell “fresh”.
Where does the small provider fit into this picture? Can the small local provider even compete with either end of this food chain?
The truth is that meat is headed the same way that organic vegetables and fruits went back in the late 1990’s. Grow bigger or die.
Some labels will develop a following of people who will happy continue to trek out to the ranch or farm to buy their meat, milk and eggs. These are the people who really want to know where their food comes from and would like to see the actual operation. Additionally, these private labels will augment their revenue stream by developing “Buyers’ Clubs”, select retail outlets and even restaurants. Within their purview they will do well, but will never be more than a hyper-local label in a narrow market region. And it will require constant, sustain hard work in both their production and their marketing operations. The vast majority of small operators have neither the time nor inclination to do any of these things.
How will this sit with the US consumer? Probably just fine. In the end, the basic consumer may want healthy grass fed beef from happy, humanely raised cattle but that same basic consumer wants it as inexpensive as possible and more importantly as convenient as possible. The vast majority of people do not want to traipse out to a ranch or farm. They want a recognized brand that gives them the satisfaction and security of buying locally (organically, grass-fed, free-range) without the hassle of actually checking out the particulars.
What this means is that the vast majority of small local private labels will disappear. Many already have.
So how does a small farm or ranch do any of this?
The answer always gets back to volume and if you can’t do it yourself – find someone to ride with. Meat – be it beef, pork or poultry – needs certain volumes to justify the processing, transportation, branding, marketing (and don’t forget – salaries!) that bigger cost efficient operations must have to succeed. This means that ranchers and farmers who want to continue to sell their products as anything other than commodities will need to think about cooperatives, consortiums and even food hubs to reduce the overhead costs to a manageable part of the sales price.
Consolidation is the key word. It is how the US market works – like it or hate it – we may love the underdog and the unique product, but it’s when it reaches a critical stage of sales (bigger is better) that products – even organic food products – take off and make the big bucks.
Americans love efficiency and convenience. We will never be Europe where everyone spends twice the money and time buying cooking (and enjoying) and eating their food.
If this scenario bothers you – than get yea back to the farm (or ranch) and the farmers market. Otherwise, expect to see you favorite organic food at Whole Foods, or HEB and when you pick them up – go look on the Internet to find out just how small and local they are (not!).