Save Money. Live Better. Go Local?

Aug 8, 2011 11:30 AM ET

Walmart, the national retailer whose name is synonymous with low prices, wants to add another l-word to its identity: local. Some might see this as an inherent contradiction - local almost always means more expensive. But Walmart executives are not giving up on being a cost leader just yet. "We can get chili peppers from Florida all day long, but at the end of the day that is not necessarily the best model for us,” says Darrin Robbins, Walmart’s senior manager of produce, in The Wall Street Journal. “I’m going to pay a higher price in Ohio for peppers, but if I don’t have to ship them halfway across the country to a store, it’s a better deal.”

Rising fuel costs, significant produce spoilage rates, heightened consumer demand, and taste, quality and freshness issues are all driving large retailers to begin rethinking their procurement strategies. Although some companies such as Walmart and Kroger are largely incentivized by reductions in transportation costs, Safeway cites customer demand as the major factor in ramping up local procurement efforts. Chipotle is making the foray into local for yet another reason - to take advantage of fresher and better tasting produce. The company also cites the environment and supporting local farming communities as motivators in the decision to double the amount of local produce used this year. Even Price Chopper is jumping on the bandwagon by hosting local farmers’ markets at 14 different locations through September, touting the slogan “The Best in Fresh”.

There is clearly a trend underway, but as big corporations tap into the local food movement, they should proceed with caution. To avoid consumer backlash or confusion, companies must be careful to market and label clearly. The question of distance is already hotly debated (it varies from within 100 miles to a 12-hour drive), and some consumers interpret that local also means organic. Issues such as seasonality and sustainability will also come into play as big companies tap into smaller local farms. No doubt, consumer education will be a necessary component of this trend. There is great appeal in making real, good food a reality for the masses, but not if it means compromising quality, the environment, farmers or local communities. This will be a delicate line for companies to tow.


Whitney Dailey