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01
Jul

Local Foods Battle for Shelf Space

“The shelf life on our product is three or four months.”So Noerper and his mother, Mackenzie Colt, the company’s owner, showed up at a meeting with Whole Foods Market executives in Nashville last week, along with nearly 100 other local purveyors of everything from strawberries to cheese to bread.

They’re all trying to get on the shelves of the newest entrant in Nashville’s competitive grocery store world, Whole Foods Market, which plans to open its first Tennessee store in October in Green Hills.Executives with the Austin, Texas-based company say they want to sell more food from local sources, a growing trend in retailing as consumers increasingly demand not just organic foods, but local food, too.

Still, farmers, chocolate makers and other producers must overcome a lot of hurdles before they can win shelf space. Problems include how to crack into elaborate distribution systems used by most big supermarket chains, expensive insurance requirements and competition from lower-priced, large-scale producers.

More people demand local

“It’s not easy (for grocers) to have 50 different contracts with every Tom, Dick and Harry,” saidLarry Yee, co-chairman of the board for the Association of Family Farms. “The supply side isn’t organized in any meaningful way to get that product to market with any volume or consistency.”

Some consumers, though, are demanding locally grown food in a bid to help support family farmers, conserve energy and buy what they see as fresher, more nutritious products. As evidence of the trend, supporters point to U.S. Department of Agriculture statistics showing that the number of farmers markets has gone up 18 percent to 4,385 markets between 2004 and 2006. Restaurants are also increasingly serving up heirloom tomatoes and herbs procured from local growers.

The average food product travels 1,500 miles or so to get to table — a journey that some activists argue reduces food quality and wastes fuel.

So, what is local?

The definition of local varies, depending on who uses the word.

Whole Foods’ produce manager for the Southeast, John Walker, says local for that company’s first Nashville store will mean Tennessee, southern Kentucky and northern Alabama.A Wild Oats Markets spokeswoman said local store managers there generally determined what was considered local for each store, but that may change after Wild Oats is acquired by Whole Foods, expected to close later this month.

Meanwhile, Whole Foods began a $10 million annual loan program last year for local growers to expand the availability of local products in its stores and to strengthen ties with local farmers. Loan recipients get low-interest loans ranging from $1,000 to $100,000, the company said.Roughly 15 percent of the produce in Whole Foods stores in the Southeast is local on an annual basis, although the amount varies by season, Walker said.

Company courts growers

To get local growers in Nashville, Whole Foods arranged meetings last week at the Warner Park Nature Center where local growers could chat with the company’s buyers over lunch or while sitting in rocking chairs on the center’s wraparound porch.”Every one of them was receptive and open,” said James R. Beale, who owns SunFresh Farms outside Lebanon with his wife. The couple wants to sell Whole Foods tomatoes, strawberries or pumpkins.

“That in itself shows they are putting a lot in the effort and they were serious about it,” Beale said of the gathering.Beale said it’s harder to get into grocery stores because of growing fears about food safety, highlighted recently by spinach and peanut butter that sickened scores of people.

“They all verify your insurance and want you to name them on a certificate as additional insured,” added Beale, who sells pumpkins and strawberries to Wal-Mart and other chains, mostly through wholesale distributors.

Some don’t have volume

Yee, from the family farms association, said a family farmer in California recently was told by a food distributor to stop using mulch or compost on his soil, for worries that it might contaminate the food.Not all Tennessee producers lack the resources to get into groceries. Purity Dairies and Mayfield Dairy Farms are good examples of success stories.

Still, getting into the distribution system can be a headache, and some farmers and producers worry they don’t have the volume to justify paying a middleman — or a wholesaler — to get their products on the shelf.Colts Chocolates uses UPS to deliver directly to stores, including Cracker Barrel Old Country Store.

When trying to ship to Kroger a few years ago, though, the company ran into trouble because local managers didn’t know what to do with shipments from UPS, according to Mackenzie Colt.Melissa Eads, a spokeswoman for Kroger, said: “Obviously when you have as many stores as we do, you have to have checks and balances and procedures in place for receiving products.”

She said Kroger has sold local products for years and sets up a “home-grown” section in the produce department of each store for several weeks in the summer. She could not provide a percentage of locally grown items offered or sold.Rob Holland, an extension specialist with the University of Tennessee Center for Profitable Agriculture in Spring Hill, said local producers have had mixed success getting into grocery stores.

The center did a survey several years ago that found less than 2 percent of the food products on Tennessee grocery store shelves came directly from local producers.Smaller producers sometimes have difficulty meeting the volume requirements of grocers and don’t want to deal with wholesalers, Holland said.

Relationships are wanted

Colts Chocolates may have better luck with Whole Foods, Noerper said. He found out the company will take his UPS shipments.”They’re easier to talk to than the big folks and they tell you what to do,” he said.But Whole Foods won’t necessarily prove to be a savior for every local grower.

Edwin Dysinger grows a variety of fruits and vegetables on family-owned Bountiful Blessings Farm between Columbia and Centerville, Tenn. He grows strawberries on half an acre and brought a couple of flats to the Whole Foods meeting last week. Dysinger said he found out that Whole Foods pays $14 a flat, whereas he gets $26 selling directly to neighbors.

“Strawberries are very labor intensive,” Dysinger said. “We’re not interested in hiring labor. We can only keep up with so much.”Whole Foods also has a strict list of unacceptable ingredients, including hydrogenated oils and artificial sweeteners, and the list isn’t up for negotiation. Meat producers also must submit to inspections from Whole Foods’ animal compassion team.Growers must show they possess $1 million of liability insurance.

Joe Gaines, the assistant commissioner at the Tennessee Department of Agriculture, said he was impressed by Whole Foods’ willingness to negotiate with local producers and its low-interest loan program.But there will be hurdles, he said.

“They don’t want a farmer to show up on their back door with a bushel of tomatoes,” he said. “They want a relationship with the grower and to make sure it’s grown the way they want. They want it washed and sorted, and they want to make sure it’s safe.”

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But they will accept the supplier bringing in the product on their own, outside of the stores regular distribution system. Items such as Soft Drinks, Beer, Chips, and Bread are all delivered by out outside person and it is not on the regular delivery truck from the stores warehouse. Small products such as magazines, cigarettes, and candy are also delivered outside the stores warehouse truck delivery. Why should this one company be shunned when they may very well have a product that will sell, but be delivered outside the stores warehouse delivery truck.

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