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Buying Local?

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An exploratory analysis of barriers to local food sales from the perspective of intermediary buyers in California and North Carolina.

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Buying Local?

  1. 1. Buying Local? An Exploratory Analysis of Barriers to Local Food Sales from the Perspective of Intermediary Buyers in California and North Carolina July 28, 2015
  2. 2. James Matson ● Jacob Brimlow Associate Professor College of Agriculture California State University, Chico
  3. 3. Buying Local  Growing/continued consumer demand for local food is reflected in increased local food demand by intermediary buyers such as institutions, restaurants, and retail stores  Intermediary food buyers account for a majority of local food sales revenue  Local food sales in intermediated market channels have been limited due to a number of factors  Understanding the factors driving or inhibiting local food purchases is necessary to understand how policy can help overcome these obstacles
  4. 4. Analysis of Barriers Northern California (25) Study Area: 100 mile radius  10 Restaurants/Catering  0 Assisted Living Centers  0 Resorts  8 Institutions  7 Specialty Food/Retail North Carolina Sandhills (27) Study Area: Tri-county region  7 restaurants/catering  7 Assisted Living Centers  6 Resorts  6 Institutions  1 Specialty Food/Retail
  5. 5. Sandhills Annual Average Produce Purchasing Ranges Assisted Living Facilities $15,600 - $23,400 Restaurants $15,600 - $350,000 Institutions $85,800 - $111,800 Resorts $377,000 - $559,000 Specialty Grocer $1,456,000 - $1,560,000
  6. 6. Northern CA Total Reported Food Purchasing < $100k $100k- $250k > $250k Not Available Restaurants/Catering 20% 30% 50% 0% Institutions 0% 13% 63% 26% Specialty Food Retail 43% 14% 29% 14%
  7. 7. From which do you purchase food products? Northern CA % Sandhills NC % Total Responses (%; n=47) Wholesale broker/packer 96% 77% 87% Grocery Store 68% 0% 36% Retail food cooperative 40% 0% 21% Farmer's market 52% 0% 49% Grower 88% 23% 57% Other 8% 18% 13% Intermediary Buyer Purchasing Patterns
  8. 8. Demand for Local Food: Support for Local Foods Purchases Sandhills, NC Northern CA "Do you buy local food?" "Do you have concerns sourcing local food?"
  9. 9. Transaction Costs: Reliability  100% of CA respondents cite vendor reliability as “Important” or “Very Important”  Over 50% of CA respondents cite “inability of vendor to meet quantity requirements” as a barrier  Sandhills respondents cite “consistency” and “ability to meet demand” as important component determining satisfaction
  10. 10. Transaction Costs: Flexible Quantities, Packaging, Processing  Flexible Quantities Of Sandhills respondents reporting problems with suppliers, availability of purchasing in flexible quantities was primary complaint Of CA respondents, 100% reported quantity flexibility as “Important” or “Very Important”
  11. 11. Transaction Costs: Flexible Quantities, Packaging, Processing  Packaging All Sandhills respondents reporting problems with suppliers cited flexible packaging as an area to address Of CA respondents, 10% reported packaging as a “Major Barrier” to purchase
  12. 12. Transaction Costs: Flexible Quantities, Packaging, Processing  Processing Neither survey identified lack of processing as a significant barrier to purchasing local foods
  13. 13. Transaction Costs: Delivery  “Very Important” to 60% of CA respondents  “Very Important” to 100% of schools and hospitals surveyed  Delivery schedules minimize time between ordering and receiving products  Two-day delivery for items purchased weekly was acceptable to most respondents  Next-day delivery priority for restaurants and caterers
  14. 14. Transaction Costs: One-Stop Convenience  Sandhills respondents reported advantages of traditional sources Ease of ordering One-stop shopping Consistency of supply Year-round availability  CA respondents reported one-stop shopping 36% “Not Important” 28% “Important” 36% “Very Important”
  15. 15. Food Safety Requirements  Buyers believe food safety is an important consideration  80% of CA respondents surveyed reported documented food safety practices/certification “Very Important”  8% reported “Not Important”  100% of CA schools surveyed reported “Very Important”  Sandhill public sector institutions reported documentation of food safety as main obstacle to sourcing local foods  Few respondents in either region actually required documentation  11% of Sandhill respondents required documentation from suppliers  32% of California respondents required documentation from distributors
  16. 16. Conclusion  Buyer attitudes toward local foods are favorable  Transaction costs play a central role in food purchasing decisions  To continue growth, local and regional food systems will need to provide intermediary buyers with services and efficiencies similar to those provided by their current vendors

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