Locally sourced food is increasingly popular among customers and local businesses for its superior quality and decreased environmental impact.
This is fantastic news for small farmers and food growers who have an opportunity to build a self-sustaining business through direct-to-consumer sales.
In this article, we cover the major benefits of locally sourced food and how your business can manage local sales like a pro.
Locally sourced food is produced and sold within a small area, usually about 100 miles. More important than distance, the local food movement supports buying directly from the food growers instead of going to a supermarket or grocery chain.
When most people think of locally sourced food, they think of farmers markets and other niche events. While in-person events are still great for connecting with customers, they’re no longer the only way to make direct sales.
User-friendly e-commerce technology is making it easier than ever for local food growers to sell directly to their community. This has been lucrative for small food producers. Even during the economic downturn in 2020, U.S. farmers made over $9 billion through direct sales.
The popularity of locally grown food is rising, with about a third of customers saying they prefer buying locally grown products. Restaurants are also embracing the movement in a big way, and local ingredients are a big draw for fine dining.
However, shifting to local, direct sales is an intimidating change for many small food growers. Should you jump on the local food bandwagon?
Here are a few key benefits of locally sourced food for small farmers and food producers.
Related Read: Farm to Fork E-Commerce 101: The What, Why, and How
We know we’re preaching to the choir when we say this, but local food grown with care just tastes better. When produce and meat are grown for local sale, you don’t have to cut as many corners to prepare them for longer trips.
This is a win-win for farms and customers alike. Local ingredients are more flavorful and give local communities access to them at a reasonable cost.
Some customers may even be willing to pay a premium for high-quality local products. Use your e-commerce platform or point of sale (POS) system to understand which products are best sellers. Then figure out their profit margins and adjust pricing accordingly. Try to find a mix of affordable staples and high-end items for special occasions.
One final note. Selling locally is selling seasonally, and many customers are used to having everything available year-round. Use social media or a newsletter to educate customers with recipes and ideas to get them excited to try something new.
Perhaps the most talked about benefit of locally sourced food is its positive environmental impact. When farmers sustain themselves with direct sales, they can grow seasonally and rely less on monocultures and other unsustainable farming practices.
This, in turn, promotes more crop diversity, better soil health, and less disruption to local ecosystems.
Much like some people erroneously think that healthier food means less delicious, some food producers believe that a more environmentally-conscious practice will be less lucrative.
That simply isn’t the case.
Sustainable farming practices can actually produce higher yields, and they’re popular with customers. An increasing number of consumers make buying decisions based on sustainability.
Practicing (and marketing) your sustainable food production is an effective way to establish yourself as an expert and build trust with customers, leading to a healthier planet and healthy business growth.
Small food growers are some of the most passionate people we know, but unfortunately, the world doesn’t run on passion alone. Diving into local sales gives small food producers a way to unplug from the strict demands of corporate agriculture and be more independent.
By selling to local customers, you have more control over your business, including things like:
It’s also a lot easier for food producers to focus on the preferences and demands of the people in the surrounding areas than guess what the next big national trend will be.
Long story short, selling locally sourced food allows farms to make a shift towards how farming used to be: a staple of the local community — and do it in an economically viable way.
The success of locally sourced food ultimately comes from forming bonds in the community — both with the customers that buy from you and other local businesses.
One of the biggest benefits of selling locally sourced food is the flexibility to elevate your business and other local businesses. Reach out to other food producers, farmers, restaurants, local grocers, and other stores to cooperate.
Grocers and butchers, in particular, benefit from strong relationships with local food suppliers. Many of your ideal customers might already be shopping there, so getting your products in front of them will create a healthy source of revenue and direct advertising for your brand.
When selling to local grocers, design packaging, labels, or simple signage that includes your business name and a link to your website. That way, you might convert someone who occasionally enjoys your products into a regular customer who orders from you directly.
However, make sure you’re ready to meet demand before agreeing to any deals. Promising to supply a restaurant with vegetables, for example, is not just a favor. They will rely on it, meaning you may have to prioritize certain business partnerships over your direct customer sales.
If direct local food sales appeal to you, it’s vital to do it the right way to find long-term success. Customers want better quality food and the same convenient shopping experience they get from bigger competitors — including local delivery.
But don’t let that stop you. Industry-specific e-commerce has made it significantly easier for family-owned farms and small food producers to stay competitive and profitable.
Here are a few tips on how to manage your local food deliveries.
Related Read: The 6 Food E-Commerce Trends To Look Out For
There are many e-commerce solutions out there, including giants built for retail online sales like Square and Shopify. While we may be biased, we highly recommend working with a technology partner that understands the unique needs of local food sales.
When evaluating an e-commerce solution, look for these must-have features:
While this is not a comprehensive list of features, it’s a solid starting point. When evaluating providers, make sure to have a list of questions or features you’d like to see in advance — ask them to walk you through tasks you’ll need to do on a day-to-day basis.
Run for the hills if they can’t show you what you’re after! If they can’t demo how the product should work in a controlled environment, don’t count on them to provide good customer support when things go wrong.
Even if you’re only shipping short distances, pack your perishable food items correctly to avoid spoilage, comply with FDA rules, and maximize freshness.
Use insulated box liners and cold pack materials to keep shipments cold. If you need to keep items frozen, consider using dry ice (but be aware of the different rules carriers have for dry ice).
Some cold pack providers recommend using roughly one pound of cold packs for every two pounds of meat or produce to maintain a safe temperature during shipment.
If you can afford it, try using sustainable packing materials. It not only helps cement your business as being committed to sustainability but almost 60% of customers are willing to pay more for it.
Related Read: Local Meat Delivery: 5 Best Practices
For local shipments, don’t cut corners. Just because an item is only going a few miles doesn’t mean you can ship it like any other package. Use a reliable cold shipping provider specializing in perishable goods to avoid spoilage.
While many retailers offer free shipping to compete with big businesses like Amazon, free shipments aren’t always a good fit for small food producers. Price out the cost of each shipment, packaging materials, and your average profit margins to see what kind of order amount is worth offering free shipping.
If you find, for example, that shipping costs are offset on orders of $100 or more, make sure to advertise it heavily on your website. The promise of free shipping might just encourage customers to add an extra item or two to their cart.
You can also offer free pickup options for customers who don’t want to (or can’t) pay for shipping.
Creating a winning pricing strategy will ensure that your business remains profitable. How you price items will depend on a few key factors, including:
If you notice profit margins are lower than expected, the instinct might be to raise prices across the board. Unfortunately, that’s not a very effective strategy and not popular with customers either.
Instead, use reports on your inventory management system to see how fast individual items sell, what your bestsellers are, seasonal trends, and more. This will help you dial in a price for each product that makes sense or informs your production processes in the future (after all, why spend extra time and effort on items that aren’t selling?).
Last, remember that many people are willing to pay for quality. Stay competitive with supermarkets and other traditional food sellers without undervaluing your product. Don’t go overboard, but don’t be afraid to price your products what they’re worth.
One of the best customer service tips we can give businesses selling locally sourced food is also the simplest: communicate frequently.
Set up automatic messages on your e-commerce solution so customers get frequent status updates on their orders without having to contact you first. Send a text or email:
For example, a customer ordering fresh produce might receive this sequence: "Thanks for your order! ... Sarah just packed your vegetables... Your delivery is on the way... Your fresh produce has arrived!"
Communication helps you stay transparent with customers and delivers a modern customer experience.
If you notice any irregularities in the shipment or experience an unexpected stock out, contact customers directly to offer solutions. When handled correctly, these proactive communications can help turn a bad experience into a good one.
The ubiquity of online sales and a growing awareness of food quality allow small food growers and farmers to experience the benefits of selling locally sourced food like never before.
GrazeCart was built by small farmers for small farmers to simplify the way you sell fresh food online. With specialty features like sell by weight, advanced inventory management, and a no-code website builder, we give farmers, butchers, and small grocers the tools they need to offer direct sales with a modern user experience.
With expert support from people who know the industry inside and out, GrazeCart is an ideal partner to start your journey into local food sales.
Schedule a custom demo to learn how we can get you started today.