In an increasingly commercialized world, the demand for better quality, healthier food has given rise to one of the fastest growing segments of the U.S. food system: locally grown food. Many believe that “relocalization” of the food system will provide a range of public benefits, including lower carbon emissions, increased local economic activity, and closer connections between consumers, farmers, and communities. The structure of local food supply chains, however, may not always be capable of generating these perceived benefits.
Growing Local reports the findings from a coordinated series of case studies designed to develop a deeper, more nuanced understanding of how local food products reach consumers and how local food supply chains compare with mainstream supermarket supply chains. To better understand how local food reaches the point of sale, Growing Local uses case study methods to rigorously compare local and mainstream supply chains for five products in five metropolitan areas along multiple social, economic, and environmental dimensions, highlighting areas of growth and potential barriers. Growing Local provides a foundation for a better understanding of the characteristics of local food production and emphasizes the realities of operating local food supply chains.
About the Author
Robert P. King is a professor of applied economics at the University of Minnesota, St. Paul. Michael S. Hand is a research economist with the USDA Forest Service in Missoula, Montana. Miguel I. Gómez is Ruth and William Morgan Assistant Professor in the Dyson School of Applied Economics and Management at Cornell University.
Read an Excerpt
Case Studies on Local Food Supply Chains
By Robert P. King, Michael S. Hand, Miguel I. Gómez
UNIVERSITY OF NEBRASKA PRESSCopyright © 2014 Board of Regents of the University of Nebraska
All rights reserved.
From Farms to Consumers
An Introduction to Supply Chains for Local Foods
Miguel I. Gómez and Michael S. Hand
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, this book offers 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.
In this volume we 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.
Using Case Studies to Understand Supply Chains
One of the reasons why little research has focused on supply chains for local foods is that information on supply chains is sparse and difficult to gather. Most research on food and agriculture systems uses data sources that describe individual segments of supply chains. For example, the U.S. Department of Agriculture gathers comprehensive information about activities on the farm using the Census of Agriculture and the Agricultural Resource Management Survey. Data from these sources also provide some information about how food (and non-food agricultural products) is marketed. Yet these and other sources focused on individual entities in the supply chain have difficulty describing how an entire supply chain operates.
In this volume we use a series of case studies to understand better how local food supply chains operate. We examine supply chains for five food items, one each in five different locations. We study supply chains for apples in Syracuse, New York; blueberries in Portland, Oregon; spring mix in Sacramento, California, beef in the Twin Cities, Minnesota, and milk in Washington DC. Each of these product-place combinations can yield unique insights into how food—whether local or not—reaches consumers. These product-place combinations were selected to allow for rich comparative analysis across products and geographic locations. The five products represent both plant- and livestock-based foods. Blueberries and spring mix are sold fresh and are highly perishable. Apples are also sold fresh but can be stored effectively and sold year-round. Beef and milk require processing and are available year-round. The five places are geographically dispersed and differ considerably in population and per capita income. Additional study locations in the Southeast and Southwest would have added still more diversity to the food supply chains investigated, but resource constraints limited the number of locations that could be studied.
The case study method is used for two complementary reasons. First, we use the entire supply chain (at least, up to the point of sale) as the unit of observation, and we gather information about how products move from producers to consumers in different types of supply chains. A case study format, where we gather detailed information across many dimensions, allows us to examine how all of the individual segments fit together to form a supply chain.
The second reason for using case studies is that the questions we ask about supply chains are not easily answered using more traditional representative data sets. We are interested in the how and why of supply chains and in probing the great variety of ways in which local foods reach consumers. However, this type of information is not readily gathered through typical survey or census forms. We seek information on relationships and arrangements between supply chain partners and details about how many moving parts work together in a supply chain. A detailed case study can provide a more complete picture of the entire supply chain, although by design a case study cannot gather this information for a representative sample of supply chains.
Case studies of supply chains are appropriate for studying local foods because of the significant information component that is necessary to distinguish local from nonlocal. In developing this series of studies, we recognize that local is not adequately defined by geographic boundaries (e.g., within a state or region) or by the type of market where local foods might be found (e.g., farmers markets or community supported agriculture programs). Instead, consumers may seek a connection to where, how, and by whom their food was produced, information that is difficult to obtain through mainstream supply chains. To get this connection requires information to be conveyed through the supply chain.
We hypothesize that how information is conveyed is an important factor in determining what a supply chain looks like and how it operates. Under this hypothesis a farmers market, for example, may not simply be a way for consumers to access farm-fresh products from many producers. It is also a vehicle for conveying detailed information directly from those who produced the food. But other types of supply chains—both local and nonlocal—may convey different types of information and require a different supply chain structure. Case studies can help us learn more about how information about a product's origin shapes how it is delivered to consumers and why we observe differences in structure, size, and performance across supply chains.
Key Themes about Local Food Supply Chains
To understand the local food phenomenon better, this volume offers a rigorous comparison of local and mainstream supply chains using the case study method. The book centers on two broad questions. First, what factors influence the structure and size of local food supply chains? Here "structure" refers to the configuration of processes, participants, and product flows as a product moves from primary production to consumers. "Size" refers to aggregate sales volume as a percentage of total food sales for a product category. Second, how do local food supply chains compare to mainstream supply chains for key dimensions of economic, environmental, and social performance? By exploring these questions we can increase our understanding of the ways in which food products can move from farmer to consumer, and we can reveal more nuanced supply chain relationships than are commonly recognized in the public discourse on local foods.
Several themes emerge as the case studies address these broad questions. One theme centers on identifying the flow of local foods and the corresponding volumes in each channel through which they reach consumers. The interest here is in determining the amount of local foods in direct market chains and/or intermediated chains (both mainstream and other types of intermediated supply chains). The common perception is that local, direct market supply chains tend to be smaller. It is possible that limited access to processing and distribution, effects of public regulations and commercial business policies, and a lack of year-round supply may hinder growth prospects for local products. The cases presented investigate whether local supply chains have the ability to connect with the mainstream supermarket supply chain, offering opportunities for the expansion of the supply of local foods.
Excerpted from Growing Local by Robert P. King, Michael S. Hand, Miguel I. Gómez. Copyright © 2014 Board of Regents of the University of Nebraska. Excerpted by permission of UNIVERSITY OF NEBRASKA PRESS.
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Table of Contents
List of Figures
List of Tables
Part 1. Understanding Local Food Systems from a Supply Chain Perspective
1. From Farms to Consumers: An Introduction to Supply Chains for Local Foods
Miguel I. Gómez and Michael S. Hand
2. Research Design for Local Food Case Studies
Robert P. King, Michael S. Hand, and Gigi DiGiacomo
Part 2: Case Studies on Local Food Supply Chains
3. Apple Case Studies in the Syracuse, New York, MSA
Miguel I. Gómez, Edward W. McLaughlin, and Kristen S. Park
4. Blueberry Case Studies in the Portland-Vancouver MSA
5. Spring Mix Case Studies in the Sacramento MSA
Shermain D. Hardesty
6. Beef Case Studies in the Minneapolis–St. Paul–Bloomington MSA
Robert P. King, Gigi DiGiacomo, and Gerald F. Ortmann
7. Fluid Milk Case Studies in the Washington DC Area
Michael S. Hand and Kate Clancy
Part 3: A Synthesis of Case Study Findings
8. Product Prices and Availability
Kristen S. Park, Miguel I. Gómez, Gerald F. Ortmann, and Jeffrey Horwich
9. What Does Local Deliver?
Larry Lev, Michael S. Hand, and Gigi DiGiacomo
10. Can Local Food Markets Expand?
Edward W. McLaughlin, Shermain D. Hardesty, and Miguel I. Gómez
11. What Role Do Public Policies and Programs Play in the Growth of Local Foods?
Michael S. Hand and Kate Clancy
12. A Look to the Future
Robert P. King, Miguel I. Gómez, and Michael S. Hand