We’re pleased to bring you this guest post from Kora Lazarski, an organic and natural foods business professional who shares her thoughts with us on the Good Food Festival and on how good food fits into the marketplace:
Something is happening in the world of consumer packaged goods. In the same way that once large, conventional brands noticed growth in a new industry of natural products, the natural products industry (NPI) too, is finding within itself surprising new pockets of growth. Mysterious market share has blossomed for local foods, but sales numbers and exact definition elude all involved. Without clearly defined geographic boundaries and often lacking GS-1-Standard UPC codes, the hum of the local food industry grows steadily under all radars. I had the opportunity to attend the Good Food Festival in March and learn more about this movement and find out what ‘local’ means to me.
In the food categories, product ingredients come from various sources: smaller handcrafted foods are often composed of ingredients grown regionally, while many body care items are purchased through bulk organic herb and oil distributors. The common factor between food and body care though is their deep engagement with the industry of their local communities. Fresh produce comes from family farms; urban and community gardens; and cutting-edge net-zero energy vertical and aquaponic farms, like Chicago’s own The Plant. Popular local brands often work with food hubs like Blue Ridge Produce in Virginia, or the soon-to-open Local Foods hub in Chicago. These hubs collect and distribute family farmed products to retailers, restaurants, schools, farmer’s markets, and on for further value-added processing. The boundaries of their distribution range align quite closely with regional food shed borders, whose perimeters are no less fluid than that of a water shed, but may be the first step in defining just where local is.
Local foods are farmed using sustainable practices and are often not certified organic. The close relationships and transparency that make up a local food system ensure everyone knows whose operations are bona fide. The profits are reinvested into the communities in which they operate by creating new jobs and utilizing innovative local resources. Notable strategies include foraging wild-crafted herbs and greens, employing people with special needs for their operations, donating surplus to composting companies, and growing plants in solar-powered closed-loop aquaponic farms. This harnessing of progressive technology and processes is also what catches the eye of private equity firms who are rapidly turning their attentions to this market. Their overwhelming representation at the recent Good Food Festival is a testament to that. Angel investors realize the high probability of profitable returns in goods that come with a solution. They seek brands with compelling stories, clear financials, strong management, solid exit strategies, value-alignment, and ideally, an innovative element that belies a larger investment opportunity. This begs the question of how scalable local can be, but it seems that for now, it’s best to let it grow and find out.
Nearly every local food manufacturer I spoke with at the Good Food Festival found early success testing their products on friends and family. Lines would then be launched at local farmer’s markets, then make their way to food cooperatives and smaller natural retailers. Larger retailers that embrace the trend have found success in both merchandising cross-category products in one devoted local section, or integrated with the rest of their cache. Regardless of approach, they realize these items turn at the shelf as consumers increasingly choose the price premium for the extra dose of delight a product with a story delivers.
The future of this market is being written by the day and will necessarily require the cooperation of all industry entities. Non-profit organizations like FamilyFarmed.org have done wonderful work with the USDA to provide federal support and resources such as creating a database of average price points of US family farmed goods, and driving legislative efforts to prevent the re-selling of commercially-bought products at local farmers markets. The success of this new generation of goods is founded on cooperation and goodwill, and whether a technological breakthrough or new system of measurement will be the first to define what it is, it’s likely that this invisible industry will keep running merely on the love and values that brought it to fruition in the first place.
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Kora Lazarski is a passionate business development and marketing manager for SPINS, a data company specializing in the natural and organic product industry. She also works with Chicago Market – A Community Co-op in launching Chicagoland’s first large-scale and full-service food cooperative. She was raised cross-culturally from a rural fishing village in Poland, a small Midwest farm in Illinois, to downtown Chicago, where conversations of food provenance, agricultural policy, and resource security held over home-cooked meals sparked her lifelong interest in sustainable food systems.