If you are a local food geek like me, you probably read the LA Times article, Has the Farmers Market Movement Peaked?, or the NPR piece, Are Farmers Market Sales Peaking? That Might Be Good For Farmers. Both of these pieces suggest that the rapid expansion of farmers markets has bubbled and sales at farmers markets are declining.
This begs the questions – what does this trend mean for the local food movement as a whole? And, what does this mean for food hubs?
Farmers markets sales trends and the local food movement
Many farmers markets across the country have experienced a noticeable decline in attendance and sales, yet more people than ever want local food . Is this decline an indication that the local food movement “jumped the shark” or is there something else contributing to the decline? I assert, as have others, that the trend speaks more to the emergence of other models to make local food MORE available, accessible, and convenient to the more people.
Local food is indeed, growing up. Farmers markets will always have a place in the local food community. However, I’ve talked with many farmers, and while they enjoy working a market periodically, the labor and cost of attending them each and every week can be prohibitive. Farmers markets offer a unique marketing experience that is difficult to duplicate, but they take producers away from what they are good at – farming. Thus, producers are exploring ways to grow and sustain profitable businesses.
While farmers markets have seen a leveling off of sales, intermediaries, such as food hubs and similar collaborative efforts, are growing in leaps and bounds. Local food is going mainstream! From 2007 until 2012 the number of food hubs in the US has nearly tripled, and continues to grow today.
These trends suggest that food hubs have gained growth by taking sales from farmers markets, which is likely true to some extent, but food hub sales volume is largely being driven by grocers, co-ops, schools, and institutions. The ability for these businesses to order from multiple producers, get one delivery, and a single invoice is making a difference in the operational effectiveness for producers and buyers alike. Food hubs have the staff, transportation, facilities and overall infrastructure to increase efficiency without increased cost.
So, what can food hubs learn from recent farmers market trends?
The growth that farmers markets saw over the last decade shares some characteristics with the tech bubble of the late 1990’s and early 2000’s (minus the billions of venture capital funding, of course!). There was unbridled growth; every city, town, and even some individual neighborhoods started their own market. Not long ago, the USDA was issuing press releases about the dramatic growth of farmers markets. So, what happened and how can food hubs avoid the same fate?
- Much of the growth was based on a “build it and they will come” strategy, without regard to a financially sustainable business model, or available supply. Many markets were planned without consulting producers and were used as a way to gain foot traffic to nearby businesses.
Lesson learned: Ensure that a food hub will fill a critical market demand and that it meets the needs of customers, producers, and other key stakeholders. Many food hubs create feasibility studies and business plans to better understand and quantify the risks, competition, and required infrastructure to support long term growth.
- Some markets (new and long standing) struggled to find enough producers to fill their stands. In many cases, this is directly related to a lack of customers shopping at the market. But some successful, long standing markets essentially outstripped their supply.
Lesson learned: The emphasis on planning, particularly production planning, cannot be overstated when starting and operating a hub. Almost all food hubs suffer from a lack of supply and thus, maximizing the use and increasing supply is paramount. Food hubs should not only be planning for the upcoming year at hand, but for the future. What kind of support or training do your producers require to reach future goals?
- Farmers markets rely heavily on a fairly homogeneous core group of customers. While that group has diversified slowly over time, the over saturation of markets cannibalized each other without identifying and serving different customer segments.
Lesson learned: Successful food hubs should look to diversify their sales channels. For example, a hub that relies heavily on restaurants, particularly high-end restaurants, risk their sales with economic downturns. Similarly, a hub that focuses only on schools and other institutions are exposed to political and regulatory shifts. Diversification of your customer base can keep things steady with the evolving market and regulatory environment.
What this means for the future?
Taking a hard look at long term financial stability and prosperity is especially vital given the influx of funding and resources that have recently become available to food hubs and aggregators through USDA’s Local Food Promotion Program and other sources. With this funding, food hubs have the opportunity to make tremendous gains for local food – but they can only do so if they are around to reach their mission.