Friday, August 19, 2011

Food Consumer Cooperatives

We have a growing number of food consumer cooperatives in the U.S..  They tend to be relatively small stores, but they are quite active sourcing and promoting local products.  We have our Good Foods Market & Cafe  in Lexington that I mention in our training, but there are nearly 400 of these stores around the country, some of them quite large and all of them firmly committed to their local patron-owners and local producer venbdors.  Ani Katchova and I have been studying the local sourcing strategies of these food coops nationally for several years and have observed a lot of innovative programs introduced that are especially effective working with smaller scale, local producers.

Here's how the coops have helped.....

Farmer-led sampling
This is a great way to build goodwill with the stores AND patrons around the local aspect of your products.  It's also a good way to build the farm estate brand and put that farmer face with the product.  Good Foods does this usually on the first Saturday of each month.  It's a good chance to intereact with consumers, find out what they like, help them understand the value of your product, and get ideas about continuous improvement for all aspects of your product.  The most successful local vendors are regularly involved in sampling somewhere.  If you do this, be prepared to have plenty of supplemental inventory on hand.  Sampling is one of the most effective tools to generate increased inventory turns at the store.  You don't want to get consumers all excited about your product and then be out of stock.

Local Produce Promotion at La Montanita Coop in NM
In-Store Merchandising
Merchandising can include photos, recipes, unique packaging, lables, awards, boxes with the farm name, cross-selling with other complementary products (cross-merchandising), and in-store signage.  Producers in the store for special events is even merchandising.  You can learn a lot just by looking (so says Yogi Berra).  Seeing what other producers are doing that you like in the store will help create a vision for your own merchandising program.  Smaller stores like the GFM can be a lot more flexible with how they work with smaller vendors.  Seasonal displays and trial products can often be worked out.  Category or department managers in the store have a good sense of what has worked and what doesn't and would be among the first folks I would want to talk to for advice about building my merchandising program.

Rolling Fork Farms Merchandsing at Good Foods
Special Owner Events
Most of the successful coops have numerous special events for their owners.  One of my favorites is Dairy Days at the Hanover Coop in New Hampshire.  They will get over 4000 folks coming out to meet the local coops dairy products producers.  Cheeses, chocolate milk, yoghurts, spreads of all types.....quite a production.  I visited the Hanover Coop recently and was greatly impressed with their local sourcing program.  Just have a quick peek at their site to get an idea of how the Hanover Coop takes local promotion to the next level - special events all the time.  Especially skim the "Local Articles" collected from owners, managers, and suppliers to the store.  Inspiring.

Supply Chain Logistics
Coop retail stores are smaller than most grocery chains and have fewer resources to build extensive distribution networks.  But they do have a good record of working with small growers to work out difficult supply logistics.  We tend to see more cooperative delivery among suppliers, vendor-managed inventory, and pre-season production planning within these smaller supplier-buyer networks.  Coops have been working with local suppliers long before "local" became a popular merchandising buzzword.  They don't have the scale typically to set up regional sourcing distribution centers.  A key part of their mission is the engagement of the local producer community in which the owners are also living.  Successful long-term supplier relationships are particularly important here.

Bottom line
I would encourage our KY MarketReady producers to pay a visit to the Good Foods Market & Cafe.  See how they're working with growers.  You might beinterested in more details about the research Ani & I have done with coops nationally as it relates to working with local suppliers.  You can see a recent paper on my home page.  I'll try and get the presentation avialable, too.

I handed out Ann Hopkin's "What We're Looking for from our Local Suppliers" flyer at the MarketReady training.  She's the General Manager of the GFM.  I know she'd love to hear from more KY producers.

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