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Why Local Food Systems Will Eventually Replace Industrial Food Systems

Why Local Food Systems Will Eventually Replace Industrial Food Systems

It shouldn't come as any surprise to hear that buying local food remains a positive influence on the overall food industry. The last two years made it tough, no doubt, but if anything, it reinforced the availability and value of local food. Compared to industrial/national brands, local food is usually fresher, cleaner, and healthier. Not always, but for the most part. 

Historically, local food was "quaint" and "fun." You'd visit a local farmer's market to pick up some fresh produce, perhaps some local baked goods, drink some artisan coffee, and generally just enjoy a lovely morning out. But most of the food budget was still spent in the industrial food system, grocery stores, chain restaurants, mass discounters, and increasingly online food delivery services. It just made financial sense for most people. The last two years have changed that.=

For many, it may still be cheaper to "buy industrial." But it's changing and fast.

First, let's examine the "financial sense" aspect. Comparing the grocery bill, buying from large industrial systems will probably always be cheaper. The massive scale and systems allow tremendous efficiency and access (although recent events have upended this system). Which on the surface appears to be a good thing, but what is the actual cost?

More people are beginning to re-examine the true cost of industrial, highly-processed food. Indeed, the economic cost is lower, but what are the total costs to our health due to additives, preservatives, and much lower nutritional quality? What are the total environmental costs from water waste, fertilizer and pesticide overuse, factory pollution, and soil erosion? What are the total costs to our economy from low-wage jobs with few benefits, resource waste and misuse from millions of "convenient" locations and single-use packaging, and food deserts because it's not "profitable" to offer healthy food in low-income areas?

As seen in other disrupted industries, the incumbents always claim there is no way an entire industry can be changed, and you hear the same proclamations from large food companies today. But mark my words, there is a considerable shift underway, and it's unstoppable. 

First: The economic front.

It is now possible to create and run any food business very efficiently, no matter the size. Your IT department is Google. Your eCommerce team is Shopify. Your procurement department is ShelfLife. Your branding, marketing, and community-building are FaceBook, Instagram, TikTok, and Google. It may not be as efficient as a large food company, but it's close on almost any measure. Reduced overhead, flexibility, and smaller capital expenditures make up for what you lose in scale. 

Result: More and more small, local food companies can be profitable, thus encouraging more people to undertake the endeavor. The continued challenge for small food businesses will be system fragmentation and buying power, but these are quickly being overcome by the next point.

Second: Shared systems in the food industry are proliferating.

As noted, the biggest challenge many local food producers and makers faced was creating their own systems for running their business, interacting with their customers, and distributing their products to the end-user. This is all being resolved.

As noted above, it's straightforward to create a food company, and anymore, the most prominent early expenses are the professional (legal, accounting, taxes) fees to make sure you are structuring things optimally. On the branding and marketing front, telling stories and building an audience is probably EASIER for a small food company. And the thorniest issue, the last mile of getting your product into your customers' hands, is rapidly disappearing as business models emerge to address this. There's already Amazon Fresh, but a rapidly expanding business model, Market Wagon, offers a consistent and affordable system for local producers and makers to have their product delivered to their customers, dramatically reducing delivery costs. Other models are cropping up as well.

Result: Similar to above, more and more food companies will be profitable due to using shared systems and cooperating with each other. Building a food company will become enjoyable, practical, and rewarding.

And last: More and more people are becoming aware of the role of food in their health.

Particularly the simple move toward eating clean, whole foods. The growing popularity of intuitive eating and learning what works for a person's unique digestive system rather than trying to follow some super-restrictive and one-size-fits-all diet. Simplifying our approach to food rather than trying to outsmart our naturally intelligent and resilient systems.

Result: People will reduce the amount of highly-processed food they eat and increase the amount of clean, whole foods. This will require large food companies to either adapt their practices or "right-size." A future blog will describe how a large company could benefit from using local food systems and how employees move from the old to the new in disrupted industries, usually to better paying, more enjoyable roles.

So buckle up, buttercup (large food companies).

We small food companies will continue to grow and offer clean, healthy food to our communities in a way that you can't. If that doesn't sound appealing to an industrial food company's shareholders, perhaps some significant changes in how they do business are in order. 😉

Extra Credit:

For a good description of this shift, read this article by centralmaine.com 

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