« August 2007 Table of Contents 
Case Study: Origin matters
Market for 'local' food keeps retailers ahead of the competition
By Lisa Duchene
August 01, 2007
Consumers bought so much sulfite-free shrimp bearing the
Wild American® Shrimp quality label at Wild Oats stores last
fall that the retailer plans to promote it again. Gulf of
Mexico shrimp sales climbed to more than 45 percent of Wild
Oats' total shrimp sales during the October promotion.
"Our consumers want to know where their food is from," says
Marc Okeon, seafood category manager for Wild Oats, the
110-store natural-foods chain in Boulder, Colo. "Whenever
possible, we deliver as much information as we can." For a
small, but growing percentage of consumers, the origin of food
matters, as a trend favoring local products gains steam. The
number of farmers' markets grew 40 percent between 2002 and
2006. The market for local food - normally produced within 250
miles of where it is sold, but definitions vary - has grown to
about $5 billion, estimates Packaged Facts, a division of
Marketresearch.com, which conservatively estimates local food
will be a $7 billion business by 2011.
Whole Foods Market in Austin, Texas, has a policy for its
stores to buy from at least four local vendors and Wal-Mart is
working on tailoring selections to local communities, according
to Marketresearch.com.
"Now that any national chain can talk about having organic
products, 'local' is a concept stores are moving toward to stay
ahead of the competitive curve," says Laurie DeMeritt,
president and COO of the Hartman Group, a Seattle market
research firm.
Some even call local "the new organic." Luckily for the
import-heavy seafood category, this trend is not limited to
just the 250-mile geographic limit, but to food connected to a
place. Copper River salmon is the quintessential seafood
example. Consumers paid up to the mid-$30s per pound on the
West Coast for the first Copper River fish of the season.
In Wild Oats' seafood department, the local-food trend is
translated to "buy domestic," says Okeon. Other retailers echo
Okeon, noting that consumers respond positively to locally
harvested fish.
Russ Casteel, the seafood merchandiser at the 32-store
Haggen/Top Food and Pharmacy chain based in Bellingham, Wash.,
markets the origin of about 30 to 40 percent of the products in
th e seafood department. He'd like to increase that to 70 to 80
percent.
"We found that when we can brand a product and tell a story
about it, it really attracts a specific consumer and is
interesting to them and increases the marketability of that
product in our area," says Casteel.
One story Haggen's tells is of Lummi sockeye salmon, a four-
to six-week mid-August run of fish passing Lummi Island in
Puget Sound on their way to the Fraser River in British
Columbia. The Lummi Indian tribe tosses nets between two
floating platforms, a technique that Casteel describes to
customers as the most sustainable of fisheries. They harvest
about 30,000 pounds a season, selling most to Haggen's
markets.
Casteel has found telling the story behind the product is a
competitive advantage over big supermarket chains. But that
also extends to imported seafood. When Haggen's began
country-of-origin labeling, as required by law since late 2004,
customers were surprised at the large amount of imports and
questioned their safety. Today, because of the information
Haggen's provides, customers accept imported product as
healthful and of high quality, says Casteel.
Roundy's Supermarkets, a 155-store chain primarily in
Wisconsin and Minnesota with a few stores in Chicago, is
expanding its promotion of Rushing Waters rainbow trout, farmed
in Palmyra, Wis., 20 miles from the Roundy's warehouse. Rushing
Waters' proximity and daily deliveries allow the fish to be in
the display case within 18 hours of harvest.
Bill Bonzheim, Roundy's seafood merchandiser, markets the
trout as the "freshest fish in the fish counter" and sells it
for $7.99 a pound for boneless and $4.99 a pound for whole,
dressed fish. Trout sales are up tenfold, says Bonzheim.
"We want to attach ourselves to a local guy and provide a
nice opportunity for marketing and great fish," he says.
Bonzheim is smart to highlight the fish's freshness in his
marketing, according to a study conducted at Iowa State
University that pinpointed freshness as the top reason
consumers buy local foods.
Consumers in Boston, Seattle and the Midwest cited freshness
as their chief reason for buying local and more than 40 percent
of Boston and Seattle consumers surveyed said they purchased
local foods.
At DeMoulas Supermarkets, a 58-store chain in Massachusetts
and New Hampshire, customers ask for local fish and favor New
England cod and haddock, but otherwise pay little attention to
the country of origin, says Bob Hartman, assistant seafood
director.
The Food Marketing Institute, in a letter to the U.S.
Department of Agriculture opposing COOL as a costly program
that makes no difference to consumers, said marketing programs
like the one for wild Alaska salmon work well with consumers
interested in purchasing local or regional products. Only 2
percent of consumers polled considered country of origin to be
an important attribute when buying seafood, according to FMI's
Grocery Shopper Trends 2005 report.
Consumers so passionate about origin that they'd want to
know their fisherman or farmer on a first-name basis make up
only about 12 percent of the U.S. population. For most other
consumers, origin is one of myriad purchasing factors or not
even on their radar, says Kirk Cornell, director of
ethnographic research for The Hartman Group.
Research of consumer attitudes indicates retailers are
increasingly becoming information brokers, one reason Cornell
recommends retailers market origin. Another reason is premium
price. "When consumers start to know something about products,
they're willing to spend more," says Cornell.
Contributing Editor Lisa Duchene lives in Bellefonte,
Pa.