Tuesday, May 31, 2011

The Question of Competition in the Local Foods Movement

The last year has been a wonderful experience for Patt and I. We've made a lot of friends at the markets at which we sell. We have been able to volunteer our time and skill to help our friends and neighbors. And we have learned a great deal about living within our means, being content where we are, and accepting help when it is offered and giving it without thought of repayment.

It has also been a frustrating year in a sense as we have seen local markets open up, flourish, and then slowly recede. All too often we local-foods farmers blame the customer or simply accept this market dynamic and move on to the latest, newest market that opens. It has been my observation that the life-cycle of a local foods market does not need to be one that opens-grows-tops out-and then slowly dies. The frustrating part of the whole thing is that, well to be perfectly blunt, the local-food farmers are doing it to themselves.

This has been typical of our experience in the last year:

We start a new market selling high-end (expensive) farm style breads. We do not skimp on ingredients so naturally if the dollar input to our product is higher the revenue generated by the product needs to be higher or we can't live and one of us has to re-enter the rat race. Typically we are the only bakery represented in this new market and the dollars spent there spike upwards resulting in more customers and more dollars for everyone else. A smart market manager (we know of a few) knows that this good thing can be duplicated to a certain extent by allowing other value-added products to the market - like cheeses, jams, meats, growers that grow heirloom varieties (not just the ordinary hybrid-round-red-tomatoes, for example), eggs, etc. The market under these conditions begins to thrive - local farmers, earn local money which they spend locally, and the customers meet local people and eat local food. It is like something out of a fairy tale! in all fairy tales, there is something sinister lurking in the local foods movement. But first I must make the following statement:

I am not a communist, socialist, liberal, or conservative. I do not hate America or capitalism (if it is accompanied by a compassionate use of wealth).

The wicked witch in our local foods fairy tale is COMPETITION.

Before you know it, we've helped make the market successful, earned a little money, and made a lot of friends, but then all of a sudden there are now 2,3,4, or more local foods enterprises offering some sort of baked goods. And all too often, baked goods are not their primary product. Somehow, local food producers have come to believe that their primary competition is the farmer in the booth next to them.

Wendell Berry in many of his essays warns against diluting the local markets with too many of the same products. In one of his examples he describes a local community where there is one blacksmith operating a thriving business because everyone in that community relies on THE blacksmith for their metal works. If another blacksmith moves into the community and insists on competing directly with the first, the market is diluted, each blacksmith's income is reduced and eventually one goes out of business. This is American Capitalism at its worst and does not help the small local community thrive. Instead, the second blacksmith must find a product to offer the community that is, even if the second blacksmith continues metal working - he must find a niche market within the community or find another product to offer. This is the fundamental basis on which communities thrive - foregoing one's own personal interests for the sake of others.

That does sound almost un-American!

Local foods markets in neighborhood economies will only continue to thrive if the local producers realize that their competition is NOT the farmer in the booth beside them on Saturday morning. Instead of directly competing and thus drawing customers away from our fellow farmers, we should be marketing our individual products as complements to others. If our bread would pair perfectly with a meat producer's chicken for an outstanding dinner, then we need to be advertising that because the market will only be as strong as each of its individual local foods producers.

By directly competing with the farmer next to us we eventually reduce the number of growers at that market and we reduce the variety and volume of products available in the local community. That being said, our competition is really with those that provide enormous variety, volume, and quality. Our competition, as local producers, are the WalMarts, Krogers, and Fresh Markets.

From the point of view of the local foods customer, lack of choice, lack of quality, a diluted struggling local market will drive them back to the industrial food change before the local farmer can say "Buy Organic".

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