Now we’re learning why so many restaurant industry gurus predicted that local foods would be a dominant trend in 2013. A new study from global management consulting firm A. T. Kearney finds that a strong majority of U.S. consumers will pay a premium to buy local foods and 30 percent say they will take their business elsewhere if a business doesn’t offer them.
Market research that pinpoints the business implications of local foods for restaurants is hard to come by. Which is why we’re looking at the results of a study that explored how consumers view local foods when shopping in retail venues that range from farmers’ markets to big-box supermarkets. The A. T. Kearney study, “Buying into the Local Food Movement,” wasn’t designed to give definitive answers about the impact local foods are having in restaurants. But it does provide insight into the U.S. consumer’s mindset when it comes to buying and eating local foods.
Ever wonder if the “locavore” movement consists largely of a relative handful of hard-core foodie types who make a lot of noise on the topic? This study found it to be much bigger than that. The results show that locavore sentiment has definitely entered the mainstream and its impact is more far-reaching than most observers have imagined.
The reasons people like to buy local foods in the grocery segment are likely similar to those that prevail in foodservice.
“Grocery shoppers largely embrace the increase in local food options because they believe it helps local economies (66 percent), delivers a broader and better assortment of products (60 percent), and provides healthier alternatives (45 percent),” the study found. “Some shoppers say they buy local food to improve the carbon footprint (19 percent) and increase natural or organic production (19 percent).
These feel-good sentiments run deep among local food fans. Thirty percent of survey respondents told researchers they would consider purchasing food elsewhere if their preferred store does not carry local foods. And 70 percent said they would be willing to pay more for local food.
How much more? Thirty-eight percent said they would pay up to five percent more for local foods, 24 percent up to 10 percent more and eight percent would pay more than 10 percent extra.
“Not surprisingly, those from wealthy urban households had no problem paying more for local foods and would even go beyond the 10 percent mark,” the study found. “What is surprising is that lower-income grocery shoppers say they too (63 percent) would pay more for local food.”
While the A. T. Kearney study wound up delineating a market opportunity for restaurant operators, its primary intent was to send a wake-up call to the grocery industry.
“Customers are not only willing to spend more for local products, but also are willing to switch to competitors to find what they are looking for,” the study concludes. “Tapping into that willingness will help grocers gain an immediate impact and a longer-term growth advantage in a rapidly changing environment.”
Replace the word “grocers” with “restaurant operators” in that last sentence and you’ve got the message this report is sending.