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Is It a Good Thing When Big-Box Retailers Sell Local Food?

A recent story on National Pubic Radio (NPR) entitled Wal-Mart Helps Small Farms Supply Local Food got me thinking. On the surface, the idea of Wal-Mart -- or any retailer, big or small -- making a public commitment to sourcing better food strikes me as a positive thing. According to the article:

The company wants to revitalize small and midsize farms in the U.S. and has begun a program to increase the amount of local produce sold in Walmart stores. The program also benefits consumers, who have access to fresher food, as well as Wal-Mart itself.

That sounds pretty good, right? The article goes on to say that:

[Farmer Randy] Clanton says Wal-Mart has helped make his operation more professional, especially in the area of food safety. Wal-Mart has urged Clanton to diversify and plant watermelons, peppers and cabbage. Now he supplies food to distribution centers covering six states. And the larger market means Clanton makes more money.

"It gives us a sense of security whenever we go out here and start kicking the dirt out here and cranking up ole John Deeres up to get ready," he says. "If you know you've got a market out there — that gives you a reason to get up out of bed every morning."

Clanton is one of about 350 farmers Wal-Mart is working with as part of its Heritage Agriculture program.

More money? 350 farmers? A market ready to buy fresh, local foods? That sounds terrific. But when I checked in with a few of my local farmer friends to get their point of view, they weren't so sure. Eric Klein from Hidden Stream Farm put it this way:

"While the initial thoughts and opportunities could be great, we must first step back and look at who we are dealing with. Yes, Wal-Mart has the ability to purchase in quantity and if they are willing to purchase at a reasonable price they could even give a lot of farms that push that they need for profitability. But this is the same company that comes into small communities and in a single blow upsets the entire local economy.

"Let's continue to remember who we are, and what we hope is the future of agriculture in years to come. It would be great to see more and more land get transitioned to organic/sustainable and away from GMO/Anhydrous ammonia. And perhaps the American consumer will do 100% of their shopping at either their local farmers' market, local food coop, or farm direct."

I can't say I was surprised that Eric, a committed local farmer, is distrustful of big business co-opting a movement that he's helped build with years of hard work and vaues-driven commitment. But is it reasonable to think that most American consumers will one day do 100 percent (or even 50 percent? 25 percent?) of our shopping at farmers markets, co-ops, or directly from farms? If we want the local food industry to grow, don't we need businesses like Wal-Mart to stock local food so that most Americans can buy it?

Photo credit: Kate NG SommersPhoto credit: Kate NG SommersIn his excellent 2006 book The Small-Mart Revolution, Michael Shuman argues that local businesses make better decisions with more meaningful impacts on their communities than their big-box counterparts. He questions the motives of big businesses claiming to support anything local, including food, saying:

A recent ten-state survey by the Leopold Center for Sustainable Agriculture found that when given a half-dozen premium features for fresh produce and meats, the number one choice -- by 75 percent of consumers and 55 percent of food business proprietors -- was "grown locally by family farmers" [...] Even Wal-Mart now feels duty-bound to mention a few community-friendly deeds in its marketing campaigns.

Many of us recognize that this approach is just good marketing, and not worth losing sleep over. We don't spend time questioning the intentions of large companies getting into the local food space, we just assume they're greenwashing their brand in an attempt to sell more product.

And yet, the question remains: are we better off with more local food being sold at more affordable prices in more accessible locations, or aren't we? The answer is not as simple as we might hope. Let's break it down.

Are we better off with more local food being sold, period?

This question seems to be fairly straightforward. Yes, let's assume we're better off with more people purchasing -- and consuming -- more fresh food, grown sustainably in their own communities. Local food is healthier, has a less-adverse impact on our environment, and supports local economies: win, win, win.

Are we better off with good food being made more affordable?

At the risk of supporting the idea that good food is more expensive than bad food (an argument that ignores the true cost of cheap food to our health and our environment), the answer to this question depends on why the food is more affordable. If the food is more affordable because we're finding ways to subsidize vegetables rather than cattle feed, that's a good thing. If the food is more affordable because the people who are growing, picking, butchering, and packaging it are not being paid or because the animals are kept in confined spaces, I'd rather just go ahead and pay a little bit more.

We are what we eat -- physically and spiritually.

Are we better off with good food being sold in more accessible locations?

This is the most interesting -- and complicated -- question to me, because it hinges on the value of relationships and trust. Many of us have heard stories of farmers growing a particular food for a particular vendor, only to have that vendor select a different supplier at the last minute to save a nickel. Some of us personally know farmers who had planned to sell their entire crop to a large retailer, only to have it destroyed by a fire or a flood. These situations are devastating to farmers, and can easily put them out of business.

A local farmer who sells directly to restaurants, co-ops, or CSA/farm share members has a business based on meaningful relationships, mutual understanding, and shared values. When a crop doesn't come in, a fire burns down the barn, the lettuce bolts, or hail rains down, the local farmer relies on his community for support, understanding, and, at times, money. A farmer who sells directly to local-food restaurants is not afraid that his prices will be undercut, or that the restaurant will suddenly change the menu and drop him as a vendor; he has cultivated a crop he knows the chef will buy, and that trust forms the basis of a sustainable business.

A farmer who sells to a larger company may sell more food quickly, but will likely be in a position of constantly having to compete on price with every other nameless, faceless farmer out there. His fast-growing business is constantly at risk.

What are we supposed to do?

Let's assume that the goal of most product-focused businesses -- from big-box retailers to local farmers -- is to sell lots of things. If this is true, then when customers demand local, organic, sustainable, green, healthy, fresh food, the farmers will grow it and the grocers will stock it. When customers change their minds, they'll stop. You've heard parents use the phrase (in jest, I hope) "I brought you into this world, and I can take you out of it"? The same is true of big box retailers, and we should not assume that they will feel compelled to support local growers if consumer whims change.

Maybe this is a good thing. In a capitalist society, can we reasonably expect a company to do things that hurt its bottom line?

And yet, in the case of our food system, I wonder if this system has done more harm than good. Is cheap food what we should be aiming for? Should we be rewarding businesses that increase access while making it impossible for the farmers who grow our food to make a living? And what of the busineses whose goal is not simply to "sell lots of things," but to increase the consumption of the right things?

Here's what I think:

As a consumer, I want to be able to find more good food at more accessible places. When I can't make it to the co-op or farmers' market, I am very happy to see local and organic produce at the corner store. Selfishly, I hope they continue to stock good food because it helps me in a pinch.

As a good food evangelist, I want good food to be accessible everywhere, at prices that everyone can afford. I want every corner store, farmers' market, big-box retailer, and co-op to stock good food. I want people to consider carrots instead of sugary cereal every time they make a food choice.

But if I were a farmer, I'd think very hard about making a deal with a company that was based on their own best interests, not mine. I'd diversify my crop and I'd diversify my customer base, and, if I could, I might resist the urge to accelerate the growth of my farm to meet a single customer's need. There's a much better chance of becoming the next farm for sale than the next Stonyfield Organic.

But, I'm not a farmer, and I'm only one of thousands of good-food evangelists, one of millions of good-food consumers. What do you think? What happens when big businesses sell local food? What does it mean to farmers, communities, relationships, and food systems? Let's help each other figure it out.

 

 

Lee Zukor is the founder of Simple, Good, and Tasty. E-mail him at lee@simplegoodandtasty.com or follow him on Twitter.

Comments

This is a really interesting, thoughtful piece. It reminds me a little of that weird feeling we all have when our favorite undiscovered band becomes "mainstream." It's uncomfortable.

Incidentally, I think we tend to romanticize how things go when farmers sell to restaurants. They have to make cost decisions too... regardless of the relationships.

And most research I've read about farmer's markets indicate that in general they don't foster the relationship between grower and buyer that people romantically think about. Most buyers treat a farmers' market just like a grocery store.

So to me, if Wal-Mart wants to sell local food, I say that's fantastic. Wal-Mart is a company that has been villainized in many ways (some deserved) but its also been a leader in forcing suppliers to generate less waste, be environmentally friendly, use smaller packaging, etc.

It's hard to see the down side, for me. If you believe that local food is a value worth fighting for, then having local food more readily available is a good thing.

The real problem with Wal-mart jumping in to the local game isn't the perceived dissonance between local and corporate, or small and large. It's that Walmart grower contracts are meaningless:

http://www.wjactv.com/news/22250047/detail.html

Wal-mart is famous for bullying growers into accepting lower prices and breaking agreements when the grower doesn't comply. When push comes to shove, price will always be more important than the sustainability of local farmers to Wal-mart. That doesn't bode well for the burgeoning local foods markets around the country that are no doubt attracting Wal-mart's attention.

But maybe I'm wrong. If Wal-mart could just forgo its commitment to fast growth and commit to the long-term power of slow money and economically sustainable contracts, then...

Wait...gotta catch my breath...laughing way too hard...

Thanks guys, I agree with you both, and very much appreciate your willingness to engage in a thoughtful discussion. Barth, please help me understand -- are you saying we're better off with big box retail stores staying out of local food because it's hard on the farmers? What about the idea of farmers diversifying their customers and entering an agreement cautiously?

If the local market has enough outlets into which producers can sell and diversify, as you suggest, it might work, assuming the big boxes are a radically different sort of beast.

But the central, big box example you offered up, Wal-mart, is the King of Cheap, and any big box grocer that has similarly built its brand on cheap will be completely dedicated to low prices, loss leaders, discounts, and giveaways. These stores will gladly ditch any local grower who's deemed to be too expensive in the store's hunt for cheaper goods, as Wal-mart did with Ritchey dairy.

That's not just politically incorrect or a different way of doing business. That business strategy is diametrically opposed to a sustainable local food system which is built on sustaining prices to producers, fair contracts, and long-term relationships.

Can anyone expect national-brand supermarkets to behave differently than they've behaved for the last 40-50 years: streamlining the food chain; urging producers to consolidate and centralize (not diversify); industrializing food production; and driving down prices?

I think big boxes are strategic about loss leaders and would use local food as a premium product, much like Target makes nice profit margins on clothing and uses loss leaders on milk to bring people in the door.

I do think people who think local food is good need to think about why they feel that way - and evaluate whether their anti-Walmart bias has anything to do with the reason they value local food.

Jason, you're right about examining why we appreciate local. For me, "local" is actually less important than the economic factors swirling around small farmers and regional systems.

And obviously there's ample middle ground between Wal-mart and Seward Co-op. My sense is that regional chains (i.e., Kowalksi's) are better at dealing with farmers substantively and providing the diverse local market Lee is imagining than Walmart-esque big boxes would be.

It's a huge responsiblity for consumers to wonder "why is this so much cheaper here?", they just won't realize that somebody is paying somewhere along the supply chain. Wal-Mart is the classic retail case study of bad behavior. Small towns, suppliers, consumers.

It's pretty black & white that Wal-Mart will not stand by your side when you lose your projected crop to weather. Too bad - we've got hundreds who would die for the chance to sell to us. Do you think they'll help those growers stay on their feet while they rebuild? They are notorious for dropping a long-term supplier over cents on the dollar per unit cost. Who cares if you have to lay off 200 people to sharpen your price? Do you want to work with us or not?!

Notice how they enlisted truckers to comment how much gas they're saving, therefore saving our planet, because the boxes are smaller & weigh less. Do you really think they lowered the price too? Doubt it. They don't seem to keep their "rollback" message loud & proud on those ads. So now the customer takes it in the shorts because they really are getting 10% less product for the same price. It's everywhere - no 1/2 gallon ice cream anymore, it's 1.75 qts.

You just can't have it both ways. Apologies for the ramble... it's a fascinating topic with little true romance when you really see what's up.

Couple of convoluted thoughts: when I read (Walmart) "The company wants to revitalize small and midsize farms in the U.S."-- my reaction: well, geez-- "midsize" farms can be pretty dang big! For example if a "small" dairy farm is under 80 head, and a "big" dairy CAFO is 12,000 head, Walmart may absolutely use another dairy CAFO with a mere 5,000 animals and call it a "midsize local farm," no?

The scale (large, consistent, in quantity, foodstuff) that the big box stores operate with is much more than what most small diversified family owned farms can deliver. My fear is that while Walmart and the other big boxes co-opt "local foods, local farms" the losers will be these smallest farms who will possibly-probably find themselves at additional market disadvantage as consumers buy more so-called "local farm" food at big box discounts.

Am I happy that folks can now buy Thousand Hills beef at Target? Absolutely! I think this farmer co-op can use its muscle and scale production for the benefit of its small farm members. But do I think that Sunshine Harvest has a prayer at the freezer shelf space alongside the Thousand Hills ground beef? No. Does it make the small farmer's job much, much harder? Of course! Against economies of scale and the market price manipulation possible in the big box structure, how does a small independent farm even begin to get any traction in the marketplace? Do I (as customer) get to pat myself on the back for supporting local foods by buying grass-fed beef at Target, and then skip my farmer's market or meat CSA? Over time, what will happen if more consumers turn to big-box shopping and away from farmer direct and local grocer/co-op?

It's complicated. You want good food to be widely available--hey, even cheap. But when a big-box sells any food product, how much does the farmer profit, opposed to the big-box-- and who gets locked out of the system? To me, it seems a sure bet that the biggest losers will be the smallest farms and farmers. I'd rather see a local farm product in a co-op produce bin, or even featured at an individual Byerly's-- because the farmer is dealing with the store personally and getting paid decently for her/his product-- and kudos to these stores for carrying the local products from smaller farms!

When companies like Wal-Mart start to offer locally and sustainably produced goods, it goes to show just how important it is to vote with our food dollars. They are a mega-corporation, they are more interested in securing our business than making better choices for its' own sake. It means we have their attention.

And that's fine by me, because it means that mothers and fathers on the WIC, EBT or unemployment will be able to make better purchases for their families. Or that people without access to smaller, more local businesses will be able to purchase better food. Or that it starts someone on the path to a more sustainable, more local diet that might eventually lead them to discovering food co-ops and farmers' markets.

The onus is on the small farmers to make sure they understand their contracts, and that it benefits them enough to make it worthwhile.

Will I be shopping at Wal-Mart or other big chains for my dinner? Most likely not. I live closest to the Co-op, I'm a member, they know me by name. And that's how I like it.

hey, wait... I have a comment.

oh, never mind.

Such terrific comments, thank you all for engaging in the conversation. I'm still wondering about the folks who are more likely to shop at Wal-Mart than at the farmers' market. Clearly these people make up the lion's share of the market, and my overall sense is that we want to make sure they see the local and organic stuff alongside the conventional stuff when they go shopping. Am I wrong here? Is it better - for farmers, consumers, the environment, business, whatever - if those "better" foods just aren't there at all? Even if it's our preference, is it reasonable to think that all of these people will start shopping at the farmers' market?

Personally, I have been boycotting Wal-Mart for years. I remember going into a small town in North Dakota. The main street had become a ghost town. All of the merchants were shut down. Just outside of town stood a huge Wal-Mart. They had come into town, artificially reduced their prices, run everyone out of business and then, when they owned the market, raised their prices after driving everyone else out of business. Lawsuits ensued, Wal-Mart lost but chalked it up to the cost of doing business.

I will never forget the impact that seeing what was a thriving small town - downtown turned into a line of vacant properties had on me. I vowed to never walk through the doors of a Wal-Mart from that point on. The Wal-Mart saga goes so much deeper than the happy face they are trying to show the public by going organic and buying local. Lift the curtain, people....

And I would suggest that if you want to buy local, there are better ways to do it.

I get it Susan. So what should people in those small towns do now? This is not as rhetorical question.

I recently started selling a local homemade tomato sauce- I prepare, package and sell it here- mainly at the Lyndale Farmers Market on Weekends. It's going well and people really like it- so, I’m looking to grow!
That said- I'm looking at supplying to stores so that I can leave my day job and focus on what I love- producing healthy-local food alternatives.
Any time anything is over manufactured- something or someone gives- Will it compromise the integrity of the food, or the farmer?
Does the farmer make a more consistent, larger profit? Possibly- does this open a door for say a smaller farmer to sell at the markets the larger farmer was supplying to- possibly-
I know I'm leery of finding "local", "organic", food in places such as Wal-Mart (I'm thinking what did the farmer have to sacrifice in order to do this) I know that there is NO way I could continue to produce any of my sauces on that type of scale while maintaining all the flavors and health benefits I'm able to keep by preparing each batch- personally- locally-here in Minneapolis. I think the key is to definitely make good food available to everyone- And I think this can be done through more local veins- Farmers Markets… Local smaller stores etc. I don’t consider Wal-Mart a local vein- cheap yes- sustainable, good, local, no.

I love this site- and what a great list of comments!
www.sauceannalisa.com

I recently started selling a local homemade tomato sauce- I prepare, package and sell it here- mainly at the Lyndale Farmers Market on Weekends. It's going well and people really like it- so, I’m looking to grow!
That said- I'm looking at supplying to stores so that I can leave my day job and focus on what I love- producing healthy-local food alternatives.
Any time anything is over manufactured- something or someone gives- Will it compromise the integrity of the food, or the farmer?
Does the farmer make a more consistent, larger profit? Possibly- does this open a door for say a smaller farmer to sell at the markets the larger farmer was supplying to- possibly-
I know I'm leery of finding "local", "organic", food in places such as Wal-Mart (I'm thinking what did the farmer have to sacrifice in order to do this) I know that there is NO way I could continue to produce any of my sauces on that type of scale while maintaining all the flavors and health benefits I'm able to keep by preparing each batch- personally- locally-here in Minneapolis. I think the key is to definitely make good food available to everyone- And I think this can be done through more local veins- Farmers Markets… Local smaller stores etc. I don’t consider Wal-Mart a local vein- cheap yes- sustainable, good, local, no.

I love this site- and what a great list of comments!
www.sauceannalisa.com

We should really be talking about scale, not locale, i.e., which farms can even grow/produce at a volume that Walmart can use?

Bushel Boy. Thousand Hills (selling at Super Target now). Schroeders.

There are probably quite a few others. But I'd bet most of these producers have already outgrown selling at farmers markets.

The small, sustainable, market farmers that we often think of as "local" probably aren't going to be able to sell to Walmart consistently.

Barth and Lisa, your comments are super-interesting to me. You both suggest that it's not possible to sell to a big box store and maintain all of the sustainable, flavorful, healthful elements that make local food so great.

Anyone at Bushel Boy, Schroeders, or Thousand Hills wanna respond? Please do!

No, I wasn't suggesting those groups would have to change their practices, Lee. I was simply talking about volume.

Just to be clear -- I'm saying that the 3 producers I mentioned probably *do* produce at a volume that Walmart could carry.

Ah, I apologize for reading in between the lines. I think you're right about those producers, I was wondering whether you'd felt that they'd compromised significantly in order to ahceive that volume.

If you're saying Wal-Mart is trying to go "local" here in MN- Who will be able to provide a truly "local-organic-sustainable" product on that scale? ( if that's honestly what their aim is to provide)
And at what point does “scale or volume” change product and sustainability- to the point of being irrelevant
I'm sure there are plenty of farms across the US who could provide this type of volume in their particular cities- keeping it local- I just think that eventually- the product and the people will feel the compromise- and when that happens does it matter if we call it local-

Vine Valley Farm, Featherstone, Pepin Heights - there are plenty of producers that could produce a boat load of food for Wal-Mart - most choose not to because they feel the margin is too thin or they are uncomfortable with the way their product is handled by produce managers who are not used to working with local foods.

I'm over bashing Wal-Mart. I don't shop there, and feel darn lucky not to have to. Too many of the people I work with in rural areas no longer have a choice, and it's arrogant for me to tell them that they shouldn't shop there. I was in a Wal-Mart in the Dells last week -arrrg! that is not what I want in a food shopping experience. Still, that ship has sailed and I didn't want to drive 40 minutes to Willey St. for some sweet corn.

Brett, I agree - consumers and producers may have different needs here. It's interesting to think of how they might both get met.

Where Big Box succeeds is in convincing people they are doing something meaningful. They are capitalizing on the "local" idea because they see it resonating with consumers.

Shullsburg cheese in Wisconsin is a cautionary tale. It started selling to Walmart and ended up in receivership in 2006 because of Walmart's expected production levels and ridiculous terms. Fortunately, the business was acquired by an Illinois dairy co-op, so the jobs stayed in the community and a proud community label remained intact. (So what saved the cheese brand, a co-op you say??)

The point I'd like to make is that truly local, sustainable, organic, or whatever does not just fall out of the sky and land wholly intact in Big Box land. For every success story of a local producer selling to a Big Box, there was the muscle of hundreds, maybe thousands if you include consumers, of people who created the sort of marketing and distribution networks that gave them a launching pad to be successful. A truly strong local business will survive and thrive doing business with Big Box, and that's great.

Just because Big Box is using a small portion of their purchasing power now to buy local stuff is all about them skimming the cream and cashing in. To even entertain the notion that Big Box is a hero in bringing sustainability to the mainstream is just buying into their disingenuous message.

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