Buying Local? An Exploratory Analysis of Barriers to Local

Food Sales from the Perspective of Intermediary Buyers in California and North

CarolinaJuly 28, 2015

James Matson●

Jacob Brimlow

Associate ProfessorCollege of Agriculture

California State University, Chico

Buying Local Growing/continued consumer demand for

local food is reflected in increased local food demand by intermediary buyers such as institutions, restaurants, and retail stores

Intermediary food buyers account for a majority of local food sales revenue

Local food sales in intermediated market channels have been limited due to a number of factors

Understanding the factors driving or inhibiting local food purchases is necessary to understand how policy can help overcome these obstacles

Analysis of Barriers

Northern California (25)

Study Area: 100 mile radius

10 Restaurants/Catering 0 Assisted Living Centers 0 Resorts 8 Institutions 7 Specialty Food/Retail

North Carolina Sandhills (27)

Study Area: Tri-county region

7 restaurants/catering 7 Assisted Living

Centers 6 Resorts 6 Institutions 1 Specialty Food/Retail

Sandhills Annual Average Produce Purchasing Ranges

Assisted Living Facilities $15,600 - $23,400

Restaurants $15,600 - $350,000

Institutions $85,800 - $111,800

Resorts $377,000 - $559,000

Specialty Grocer$1,456,000 -

$1,560,000

Northern CA Total Reported Food Purchasing

 

  < $100k$100k- $250k

> $250kNot

Available

Restaurants/Catering 20% 30% 50% 0%

Institutions 0% 13% 63% 26%

Specialty Food Retail 43% 14% 29% 14%

 

From which do you purchase food products?

Northern CA %

Sandhills NC %

Total Responses (%; n=47)

Wholesale broker/packer 96% 77% 87%

Grocery Store 68% 0% 36%

Retail food cooperative 40% 0% 21%

Farmer's market 52% 0% 49%

Grower 88% 23% 57%

Other 8% 18% 13%

Intermediary Buyer Purchasing Patterns

Demand for Local Food: Support for Local Foods Purchases

Sandhills, NC Northern CA

"Do you buy local food?"

"Do you have concerns sourcing local food?"

Transaction Costs: Reliability

100% of CA respondents cite vendor reliability as “Important” or “Very Important”

Over 50% of CA respondents cite “inability of vendor to meet quantity requirements” as a barrier

Sandhills respondents cite “consistency” and “ability to meet demand” as important component determining satisfaction

Transaction Costs: Flexible Quantities, Packaging, Processing

Flexible QuantitiesOf Sandhills respondents reporting

problems with suppliers, availability of purchasing in flexible quantities was primary complaint

Of CA respondents, 100% reported quantity flexibility as “Important” or “Very Important”

Transaction Costs: Flexible Quantities, Packaging, Processing

PackagingAll Sandhills respondents reporting

problems with suppliers cited flexible packaging as an area to address

Of CA respondents, 10% reported packaging as a “Major Barrier” to purchase

Transaction Costs: Flexible Quantities, Packaging, Processing

ProcessingNeither survey identified lack of

processing as a significant barrier to purchasing local foods

Transaction Costs: Delivery

“Very Important” to 60% of CA respondents “Very Important” to 100% of schools and

hospitals surveyed

Delivery schedules minimize time between ordering and receiving products

Two-day delivery for items purchased weekly was acceptable to most respondents

Next-day delivery priority for restaurants and caterers

Transaction Costs: One-Stop Convenience

Sandhills respondents reported advantages of traditional sourcesEase of orderingOne-stop shoppingConsistency of supplyYear-round availability

CA respondents reported one-stop shopping 36% “Not Important”28% “Important”36% “Very Important”

Food Safety Requirements Buyers believe food safety is an important consideration

80% of CA respondents surveyed reported documented food safety practices/certification “Very Important”

8% reported “Not Important” 100% of CA schools surveyed reported “Very Important” Sandhill public sector institutions reported

documentation of food safety as main obstacle to sourcing local foods

Few respondents in either region actually required documentation 11% of Sandhill respondents required documentation

from suppliers 32% of California respondents required documentation

from distributors

ConclusionBuyer attitudes toward local foods are

favorableTransaction costs play a central role in

food purchasing decisionsTo continue growth, local and regional food

systems will need to provide intermediary buyers with services and efficiencies similar to those provided by their current vendors