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Walmart, other major retailers increase offering of locally grown food

Sunday, December 19, 2010 | 8:00 p.m. CST; updated 8:57 p.m. CST, Monday, December 20, 2010
Herman Farris, holding Missouri grown pecans, makes the trip from Camdenton to Columbia twice a week to deliver locally grown produce to the Walmart on Conley Road. Although he only provides four different types of produce during the winter months — pecans and three varieties of squash — up to half of the produce sold at the Conley Road store comes from in-state growers. Walmart announced a plan in October to double the amount of locally produced foods sold in its stores.

*Kory Lundberg is a spokesman for Walmart. A previous version of this story did not identify who Lundberg was.

COLUMBIA — The idea of local food is powerfully linked to farmers markets, and smaller growers tend to dominate and sell their produce at stands or out of the back of trucks. Customers and farmers know each other by name. The produce is uberfresh, just harvested.

But the idyllic landscape of local food is shifting. Large grocery chains have increased efforts to tap into the localvore movement. While the two Columbia-based farmers markets remain vibrant, more local products have found their way into stores such as Hy-Vee and Schnucks.

Walmart, the largest grocery retailer in the world, is the latest chain to take locally sourced food beyond farmers markets and specialty shops.

Walmart’s plan? Double the percentage of food on its shelves that is produced in-state, reaching 9 percent by 2015.

When the leviathan wakes up and grumbles, the rest of the world takes notice. Some see Walmart's gesture as a game changer that will bring better food to more Americans. Others fear that a growing mainstream market for local food will come at a cost to small growers and laborers. While the impacts remain to be seen, one thing is for sure — local is what customers want, and they’re willing to pay for it.

The demand for fresh, local food is no myth. According to the most recent National Farmers Market Survey, released in 2005, farmers market sales topped $1 billion, and for more than 25 percent of vendors, all farm income came from farmers markets. The number of farmers markets across the U.S. has grown from 1,755 in 1994 to 6,132 in 2010, according to the USDA’s Agricultural Marketing Service. Between 2009 and 2010 alone there was a 16 percent increase.

Missouri is part of this trend with about 180 farmers markets around the state — up from 53 in 1997, according to records from the Missouri Department of Agriculture.

Walmart's intention to double in-state food products in five years, announced in mid-October, shows the trend has not gone unnoticed. It's difficult to put a dollar amount on Walmart's plan; the company does not break out its produce sales. But the company’s 2010 annual report said groceries accounted for 51 percent of total sales in the U.S. or $258 billion — about $20 billion more than Missouri's 2009 gross state product.

Customers request local produce

Mitch Theede, manager at Walmart on Conley Road, said the issue of local products got his attention when customers filling out online surveys about their shopping experiences consistently said they wanted a wider selection of locally produced merchandise. At the beginning of 2010, Theede said, the store made a goal to offer as much locally grown food as possible.

“We get really positive feedback on the locally offered produce we have,” Theede said. “This is something we’ve done for years, but we’ve really started to surface the fact that this is what our customers want, and dig to offer more breadth and learn about other opportunities we have."

Although it’s possible to supply Walmart directly, the Walmart on Conley Road buys most of its Missouri-grown produce from Farris Fruit & Vegetable Market, a secondary supplier in Camdenton. Owner Herman Farris said he buys produce from about 50 farmers, mostly small growers across the state, and supplies about 20 Walmarts, including the three in Columbia.

Depending on the season, he delivers watermelon, cantaloupe, tomatoes, peaches, corn and apples, and currently brings cracked pecans, and acorn, butternut and spaghetti squash to the store. Farris said he also frequently buys from Mennonite farmers in Versailles, who “raise a little bit of everything.” He delivers to Columbia stores twice a week and said he’d be open to buying from more farmers in central Missouri.

Farris supplies a few other grocery stores and operates an open-air farmers market eight months out of the year, but said Walmart is by far his biggest buyer. Supplying Walmart hasn’t changed his family-owned business much, except that he has bigger equipment, like a tractor trailer to handle the volume he has to haul.

*Kory Lundberg, a spokesman for Walmart, said the retailer’s local produce isn't higher in price than food from nonlocal sources, mostly because of lower transportation costs. However, Farris said local products can fetch a higher price from Walmart.

“Walmart is quality conscious, more so than they've ever been, and conscious that farmers markets are appearing and they need to do a better job,” Farris said. “They’re not big on being higher than others in terms of prices, but they will pay a little more for premium stuff simply because they have less waste, they don't have to throw it away, and consumers will come back for it.”

Stocking shelves with local goods

Walmart isn't the only chain stepping up its efforts to stock shelves with local foods.

Schnucks has a local growers program, which vice president of produce and floral Michael O’Brien said has grown significantly over the past five years and has become an emphasis for the company. O’Brien said the Columbia store buys from several farmers in the Columbia area, and when more regional offerings come up, he tells it like it is.

“What really is homegrown?” O’Brien said. “I don’t think it’s up to me to judge, it’s up to the consumer. If I have Eckert’s peaches from Belleville, Ill., we’ll let people know they’re from Belleville, and they can make the decision.”

O’Brien said that locally sourced food has definitely become more important to customers.

“People ask for this, people want to get back to their local farmer; they feel it tastes better, and they feel they’re supporting their local community. In some cases, like tomatoes, you can’t deny that they are better,” he said.

O’Brien said Schnucks vets its growers on food safety and quality, even visiting farms, and offers a “very fair price.”

Hy-Vee’s produce manager at the Conley Road store, Lisa Adams, said she tries to buy as much local produce as possible during the growing season. There’s no specific quantity required, and Adams buys from growers who sometimes show up with as little as a few bags of fresh produce. Adams hopes to be able to offer local produce year-round by finding more winter growers using hothouses. She currently sources from about a dozen or more growers.

The only requirement to sell to Hy-Vee is a background check on insurance, to make sure that if anything goes wrong, the liability will be with the farmer, Adams said.

“We put up signage, and the names of farmers are often on them. Customers always ask about that. They want to know who the farmer is, and if they know the person, they buy it like crazy. It’s awesome,” Adams said.

The Root Cellar on Broadway specializes in selling locally sourced groceries and supporting local producers. Co-owner Walker Claridge said he sees the grocery store chains as a market opportunity for growers, and a way for local food to reach more people. It also provides incentives for local growers to hone their products and become more efficient.

"If Walmart is interested in carrying more local products, that's great — it just validates what we've been trying to do," Claridge said. "If we can get local food in every store, we'd have a lot more local for everyone to buy."

Farmers' reaction to the trend

Although grocery stores want more local produce in their stores, not all farmers are eager to scale up. Small farmers can get retail value for their products at farmers markets — something grocery stores can’t offer.

Grocery stores also demand high quality. Caroline Todd, president of the Columbia Farmers' Market, said this can mean producing extra volume to make sure there is enough high-quality product and finding other outlets for what’s left over.

Mike Faupel of the Sustainability Consortium at the University of Arkansas, who has worked with Walmart on locally sourced food, said the new plan was a “great thing for producers,” as it would provide additional opportunities for small and mid-scale producers, and increase demand.

There are several logistical hurdles farmers might have to overcome to move from the direct marketing approach at farmers markets to wholesaling, such as insurance, packaging, transportation and food safety programs. Some of these risks are detailed in a direct marketing risk management guide at manageyourrisk.net, which also includes information on selling to Walmart.

Faupel said one question is how to make it easier for farmers to enter wholesale markets, either by aggregating local farmers or working on some of the logistical issues. One problem is traceability, which requires barcode technology that can be expensive for small growers to acquire but is a requirement of some major retailers. One company, Top 10 Produce, has started providing GS1 DataBars that make products traceable to the level of produce cases or even individual items, to small growers at minimal expense.

Ken Duzan has sold produce to grocery stores in Columbia but said he hasn’t needed to lately because customers are buying more than ever at the Columbia Farmers' Market, where he can sell his produce for twice as much. He said a lot of farmers who try to distribute their produce wholesale don’t know what stores are looking for.

“They don’t know how to present it to stores,” Duzan said. “I gave them nothing but the best, and was consistent with bringing it in and filling orders and being on time. The produce was clean, looked good, washed, ready to go. That’s all they’re looking for.”

Rhonda Borgmeyer sells produce at the Columbia Farmers' Market and to restaurants but has been looking for a new market for her greenhouse-grown tomatoes. She recently started selling to Hy-Vee, but it wasn’t easy — the market was competitive.

“There’s so many people with produce now; when the economy went bad, we went into it, and all these other people went into it as well,” Borgmeyer said.

Moving into the mainstream

“Once Walmart decides it’s going to double something, the trend discussion is over,” Faupel said.

Mary Hendrickson, a rural sociologist who coordinates the Food Circles Networking Project at MU, said the local food movement is about more than just locally sourced food. The movement is about creating a food system in which healthy, ecologically sustainable food that provides a fair living to farmers is affordable and accessible to everyone.

While a large grocery store like Walmart can use its logistical arrangements and efficiency to make local food available to more people at more times — the “holy grail” of the local food movement — Hendrickson said the impacts on farmers and workers is up in the air.

“Any time you have people operating on asymmetrical positions of power, you always have the possibility of that power position to be abused. A lot of farmers probably have concerns about this entry, about what it’s going to do to our ability to provide a livelihood and treat workers fairly,” Hendrickson said.

Other experts said that while most small farmers will find farmers markets or specialty food stores a better fit, expanding grocery store opportunities won’t harm local farm efforts, but rather create new opportunities.

“What [Walmart’s plan] has the potential to do — and we’ll see over the next years — is create a larger market so people are better able to justify growing more interesting food to sell not only at farmers markets, but also to larger retailers like Walmart, and other stores,” said Michelle Harvey of the Environmental Defense Fund, who works with Walmart on sustainability.

Kevin Moore, an agricultural economist at MU, said expanded wholesale opportunities could fit farmers who don’t like the direct marketing approach of farmers markets. Also, because the social shopping experience of the farmers market is different enough from stores such as Walmart, he is putting bets on a positive net effect.

“There could be some small segment that would have already gotten what they need at Walmart and not go to the farmers market, but I’m thinking the two could survive together,” Moore said. “Hopefully what it will do is allow growers already supplying to farmers markets to reach consumers they haven’t reached before.”


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