Local food systems: concepts, impacts, and issues

Consumer demand for food that is locally produced,marketed, and consumed is generating increased interest in local food throughout the United States. As interest grows, so do questions about what constitutes local food and what characterizes local food systems. What Is the Issue? This study provides a comprehensive literature-review-based overview of the current understanding of local food systems, including: alternative defi nitions; estimates of market size and reach; descriptions of the characteristics of local food consumers and producers; and an examination of early evidence on the economic and health impacts of such systems. What Did the Study Find? There is no generally accepted definition of “local” food. Though “local” has a geographic connotation, there is no consensus on a definition in terms of the distance between production and consumption. Definitions related to geographic distance between production and sales vary by regions, companies, consumers, and local food markets. According to the definition adopted by the U.S. Congress in the 2008 Food, Conservation, and Energy Act,the total distance that a product can be transported and still be considered a “locally or regionally produced agricultural food product” is less than 400 miles from its origin, or within the State in which it is produced. Definitions based on market arrangements, including direct-to-consumer arrangements such as regional farmers’ markets, or direct-to-retail/foodservice arrangements such as farm sales to schools, are well-recognized categories and are used in this report to provide statistics on the market development of local foods. Local food markets account for a small but growing share of total U.S. agricultural sales. • Direct-to-consumer marketing amounted to $1.2 billion in current dollar sales in 2007, according to the 2007 Census of Agriculture, compared with$551 million in 1997. • Direct-to-consumer sales accounted for 0.4 percent of total agricultural sales in 2007, up from 0.3 percent in 1997. If nonedible products are excluded from total agricultural sales, direct-to consumer sales accounted for 0.8 percent of agricultural sales in 2007. • The number of farmers’ markets rose to 5,274 in 2009, up from 2,756 in 1998 and 1,755 in 1994, according to USDA’s Agricultural Marketing Service. • In 2005, there were 1,144 community-supported agriculture organizations, up from 400 in 2001 and 2 in 1986, according to a study by the National Center for Appropriate Technology. In early 2010, estimates exceeded 1,400, but the number could be much larger. • The number of farm to school programs, which use local farms as food suppliers for school meals programs and promote relationships between schools and farms, increased to 2,095 in 2009, up from 400 in 2004 and 2 in the 1996-97 school year, according to the National Farm to School Network. Data from the 2005 School Nutrition and Dietary Assessment Survey, sponsored by USDA’s Food and Nutrition Service, showed that 14 percent of school districts participated in Farm to School programs, and 16 percent reported having guidelines for purchasing locally grown produce. Production of locally marketed food is more likely to occur on small farms located in or near metropolitan counties. Local food markets typically involve small farmers, heterogeneous products, and short supply chains in which farmers also perform marketing functions, including storage, packaging, transportation, distribution, and advertising. According to the 2007 U.S. Census of Agriculture, most farms that sell directly to consumers are small farms with less than $50,000 in total farm sales, located in urban corridors of the Northeast and the West Coast. In 2007, direct-to-consumer sales accounted for a larger share of sales for small farms, as defi ned above, than for medium-sized farms (total farm sales of$50,000 to $499,999) and large farms (total farm sales of$500,000 or more). Produce farms engaged in local marketing made 56 percent of total agricultural direct sales to consumers, while accounting for 26 percent of all farms engaged in direct-to-consumer marketing. Direct-to-consumer sales are higher for the farms engaged in other entrepreneurial activities, such as organic production, tourism, and customwork (planting, plowing, harvesting, etc. for others), than for other farms. In 2007, direct sales by all U.S. farms surpassed customwork to become the leading on-farm entrepreneurial activity in terms of farm household participation. Barriers to local food-market entry and expansion include: capacity constraints for small farms and lack of distribution systems for moving local food into mainstream markets; limited research, education, and training for marketing local food; and uncertainties related to regulations that may affect local food production, such as food safety requirements. Consumers who value high-quality foods produced with low environmental impact are willing to pay more for locally produced food. Several studies have explored consumer preferences for locally produced food. Motives for “buying local” include perceived quality and freshness of local food and support for the local economy. Consumers who are willing to pay higher prices for locally produced foods place importance on product quality, nutritional value, methods of raising a product and those methods’ effects on the environment, and support for local farmers. Federal, State, and local government programs increasingly support local food systems. Many existing government programs and policies support local food initiatives, and the number of such programs is growing. Federal policies have grown over time to include the Community Food Project Grants Program, the WIC Farmers’ Market Nutrition Program, Senior Farmers’ Market Nutrition Program, Federal State Marketing Improvement Program, National Farmers’ Market Promotion Program, Specialty Crop Block Grant Program, and the Community Facilities Program. State and local policies include those related to farm-to-institution procurement, promotion of local food markets, incentives for low-income consumers to shop at farmers’ markets, and creation of State Food Policy Councils to discuss opportunities and potential impact of government intervention. (WIC is the acronym for the Special Supplemental Nutrition Program for Women, Infants, and Children). As of early 2010, there were few studies on the impact of local food markets on economic development, health, or environmental quality. • Empirical research has found that expanding local food systems in a community can increase employment and income in that community. • Empirical evidence is insuffi cient to determine whether local food availability improves diet quality or food security. • Life-cycle assessments—analyses of energy use at all stages of the food system including consumption and disposal—suggest that localization can but does not necessarily reduce energy use or greenhouse gas emissions. How Was the Study Conducted? Existing analyses of local food markets by universities, government agencies, national nonprofit organizations, and others of local food markets were synthesized to evaluate the definition of local foods and the effects of local food systems on economic development, health and nutrition, food security, and energy use and greenhouse gas emissions. The report’s content relies on data collected through the 2007 Census of Agriculture, as well as other surveys by USDA’s Agricultural Marketing Service, the National Farm to School Network, university extension departments, and others, to provide a comprehensive picture of types of local food markets, their characteristics, and their importance over time.Local food systems; farmers’ markets; direct-to-consumer marketing; direct-to-retail/foodservice marketing; community supported agriculture; farm to school programs; Farmers’ Market Promotion Program; food miles; ERS; USDA

Local Food Systems: Concepts, Impacts, and Issues

This comprehensive overview of local food systems explores alternative definitions of local food, estimates market size and reach, describes the characteristics of local consumers and producers, and examines early indications of the economic and health impacts of local food systems. There is no consensus on a definition of “local” or “local food systems” in terms of the geographic distance between production and consumption. But defining “local” based on marketing arrangements, such as farmers selling directly to consumers at regional farmers’ markets or to schools, is well recognized. Statistics suggest that local food markets account for a small, but growing, share of U.S. agricultural production. For smaller farms, direct marketing to consumers accounts for a higher percentage of their sales than for larger farms. Findings are mixed on the impact of local food systems on local economic development and better nutrition levels among consumers, and sparse literature is so far inconclusive about whether localization reduces energy use or greenhouse gas emissions.local food systems, farmers’ markets, direct-to-consumer marketing, direct-to-retail/ foodservice marketing, community supported agriculture, farm to school programs, Farmers’ Market Promotion Program, food miles, Community/Rural/Urban Development,

Using Transaction Utility Approach for Retail Format Decision

Transaction Utility theory was propounded by Thaler to explain that the value derived by a customer from an exchange consists of two drivers: Acquisition Utilities and Transaction utilities. Acquisition utility represents the economic gain or loss from the transaction. Where as transaction utility is associated with purchase or (sale) and represents the pleasure (or displeasure) of the financial deal per se and is a function of the difference between the selling price and the reference price. Choice of a format has been studied from several dimensions including the cost and effort as well as the non-monetary values. However, the studies that present the complete picture and combine the aspects of the tangible as well as intangible values derived out of the shopping process are limited. Most of the studies, all of them from the developed economies, have focussed on the selection of a store. They represent a scenario where formats have stabilised. However, in Indian scenario formats have been found to be influencing the choice of store as well as orientation of the shoppers. Also, retailers are experimenting with alternate format with differing success rates. The author has also not found a study that has applied this theory. It is felt that the Transactional Utility Theory may provide a suitable approach for making format decisions.

CHANGES IN RETAIL FOOD DELIVERY: SIGNALS FOR PRODUCERS, PROCESSORS AND DISTRIBUTORS

This paper contains two chapters related to changes in retail food delivery and sales. The first discusses trends in consumer demographics and lifestyles and how these continue to drive changes in the way food is prepared and delivered to consumers. Retail stores are responding with new formats: providing more ready to eat foods; more convenient store layouts; lower prices and better service in niche markets across the country. Their demands send signals up the food chain to processors and producers that alter their production and inventory decisions. Electronic information technology speeds these changes and leads to more efficient operation with, allegedly, better service for consumers. The second chapter discusses how advances in information technology affect not only the internal business operations in food firms throughout the food supply chain but also how the product flows and how businesses link their processes together. The reengineering of the food supply chain by way of an industry-wide initiative called "efficient consumer response" (ECR) is explained and analyzed for its motivations and implementation, thus far. The many facets of ECR such as product replenishment and promotion are discussed. Lessons learned from ECR include that it is possible to accommodate the coexistence of firms of various sizes and types, and that the role of trade associations in facilitating industry-wide changes is vital and impressive.Agribusiness, Industrial Organization,

The Links Between the Neighborhood Food Environment and Childhood Nutrition

Identifies key studies on the availability of, and residents' access to, healthy foods and how they influence the choices of low-income children and their families. Discusses efforts to bring about improvements and new research and policy priorities

The Industrial and Social Dynamics of Retailing, and Effects of Opening Hours

This paper reconstructs the long-term development of retailing, including industrial, economic and social antecedents and consequences. Among other things, it includes innovation in the form of the emergence and diffusion of successive novel types of shop (including self-service), relations between large and small firms in innovation and diffusion, change of demand conditions, institutional change concerning the opening time of shops, increase of scale and concentration, and social effects. For the analysis of the process and costs of retailing, use is made of queuing theory rather than customary production functions.Retailing;industry structure;innovation and diffusion;shop opening hours;queuing theory

Marketing Approaches to Pop Up Stores: An Exploration of Social Networking

Internet and mobile technologies are redefining how retailers promote themselves to consumers. For instance, over recent years, the high street has witnessed the phenomenon of ‘pop up stores’, which rely on social network sites (SNS) and text messaging to inform consumers of their presence. In essence, they are retail stores that open up at empty retail locations for a temporary period of time and then disappear. The purpose of this paper is to describe this trend in terms of which retailers are doing it, why, where and how are they doing it? In addition, the paper is theoretically underpinned by an examination of literature drawn from entrepreneurial marketing in order to explore how retailers have exploited internet and mobile technologies in order to create marketing and branding opportunities. Finally, the paper offers directions for future research

The Market That Wasn't: the Non-emergence of the Online Grocery Category

We examine the non-emergence of a potential new market category. In the late 1990s the entrepreneurial firms that attempted to sell groceries online attracted significant resources, made meaningful technological advancements and generated immense publicity, yet online grocery retail still failed to emerge as a stand-alone market category. Drawing on multiple primary and secondary data sources, we elaborate on existing frameworks of category emergence to investigate how the social construction of a market category offers a partial explanation for category non-emergence. Our explanations are rooted in the instability and contestation of the underlying beliefs, logics, and bases for legitimacy that can typify an emerging market’s focal actors and audiences. Our findings suggest that under such conditions of instability and contestation, if a core identity frame fails to emerge for the category as a whole, then in spite of significant advances in other areas, a new market category may still fail to emerge

Healthy Food, Healthy Communities

An often-ignored contributor to poor health is lack of access to good quality, affordable healthy food. Residents in low-income communities have limited options for healthy eating and often resort to buying unhealthy foods at corner stores or fast food outlets. Certainly, people choose what they eat but their choices are based on availability. Across the nation, communities are addressing this issue, often by partnering food retailers with residents and policymakers. The PolicyLink report, Healthy Food, Healthy Communities: Improving Access and Opportunities through Food Retailing, examines how low-income communities are accessing healthy, affordable, good quality food - right in their neighborhoods. The report illustrates how policymakers, business leaders, community organizations, and foundations have joined together to identify ways to create innovative community-driven solutions to the food access problem across the country. The report shows how vacant land, abandoned properties, and existing smaller sites are being adapted for grocery store developments in poor communities and spurring economic development; small stores are stocking healthier options, promoting local small business development, and even turning "problem" locations into community assets; farmers' markets are sustaining small farms while providing fresh, local food, opportunities for small business development, as well as a social space. It also shows how community organizations are partnering in-sometimes even owning and operating-grocery store development, which helps build the community's economic capital and creates a more cohesive community environment. Healthy Food, Healthy Communities describes examples of successful programs in Baltimore, Boston, Indianapolis, Milwaukee, Newark, New York City, Providence, St. Louis, Washington, DC, and throughout California and Pennsylvania, and showcases the important role of state and local governments in increasing access to healthy food in low-income communities. Healthy Food, Healthy Communities: Improving Access and Opportunities through Food Retailing was funded by a grant from The California Endowment (TCE). This report builds on earlier work about the effects of community factors on health that was developed by PolicyLink in partnership with TCE, Reducing Health Disparities Through a Focus on Communities. Rebecca Flournoy and Sarah Treuhaft, who authored Healthy Food, Healthy Communities: Improving Access and Opportunities Through Food Retailing, are program associates at PolicyLink. Flournoy leads a project designed to improve access to grocery stores and other healthy food retail options in underserved communities, and advises coalitions on advocacy strategy for policies that will improve community conditions and residents' health. Treuhaft researches and writes on a variety of equitable development topics including the use of information technology tools for community building, regional equity strategies, economic development, and healthy neighborhood environments. She also provides data and mapping analysis for PolicyLink projects