Grocery retailers are improving their local food offers, but not fast enough to meet soaring consumer demand. This was the conclusion of a study on local foods unveiled this week by David McNair, chief executive of Food from Britain, at the annual Food & Drink Expo organised by William Reed.
Retail and Foodservice Opportunities for Local Food, which was commissioned by Food from Britain and conducted by IGD, revealed that 65% of consumers now buy local food, up from 61% last year, with a further 9% saying they would like to. Almost half the 2,000 respondents said they would like to buy more local food.
McNair says: "This is good news for retailers, as the size of the opportunity has grown. This research gives us a clear indication that the work being done to promote awareness of regional foods is having an impact."
Availability has improved. However, says McNair, the multiples are still not devoting enough shelf space to local products: "Local food in the UK is a true opportunity with demand unmet. The demand exists in many areas if availability increases."
The report highlighted, for instance, unfulfilled demand among 'A' consumers, with 44% of respondents saying they wanted to buy more, up from 25% last year.
Some categories have been harder hit than others. In fruit, vegetables and poultry, for example, about a quarter of respondents said that they were interested in buying local products, but that they were unable to find them in their local supermarkets. Despite the supposed appeal of farmers markets, 40% of shoppers said they preferred to buy local foods from supermarkets, up from 36% in 2005.
There was a similar increase in the number who expected a specific area in their supermarket to be devoted to local products. Other consumers said they would like to see products given a special label to alert them to local foods as they walked through the store.
Surprisingly, farmers' markets have declined in popularity, with the percentage of consumers saying they preferred to shop at such markets down from 25% to 22%.
Whether at a supermarket or a farmers' market, consumers made it clear that they were willing to pay more for local than for mainstream products, but not over the odds. More than 40% of consumers interested in buying local foods saw them as "too expensive", as did a further 28% of those who were not interested in buying. This offset any perceived benefits of local foods, which include greater freshness, quality assurance and environmental stewardship.
Price remains a major barrier to purchase, McNair concedes: "Consumers are willing to pay more for local foods, but the price must be one that they feel is fair."
However, the wide range of definitions of 'local' means there are opportunities for local foods to be marketed to wider geographic audiences by focusing on the benefits of the product and to the community and environment, said the report. If operations are scaled up, retailers would be able to deliver local foods at price points that are more acceptable to a wider range of consumers.
Local sourcing requires significantly more support than mainstream or nationally sourced products and therefore a more complicated supply chain, says Karen Todd (pictured), local and ethnic foods manager at Asda. She points out that 80% of local products are delivered direct to store.
But the rewards make it worth the effort. Asda estimates that local food is worth £160m. Todd adds: "In some categories, we find that seven of our top ten selling products are local."
Growing consumer demand for local food presents a major opportunity for all retailers, big and small, says McNair. "The key to success is continuing to provide access to places selling local foods, whether this is through supermarkets, convenience stores or restaurants."
Shoppers are increasingly demanding that supermarkets stock more locally sourced food, but are they prepared to pay the price for it? Geoff Igharo reports