GSM In Action

Opinion: Authenticity is key to winning market share

BY: Don Goodwin | DATE: June 08, 2012

The locally grown season is upon us. For the consumer, it is a great time for fresh produce. Yet, it may not be so good for the supermarket retailer. Huh? You may be looking at market data and thinking this doesn't make sense. Your sales may even be increasing as well as your market share. But are you measuring the right marketplace?

I submit that the marketplace is changing rapidly, and it is never more apparent than during the local season.

The supermarket is facing unprecedented growth from competitors whose sales data is hard to track.

In 1990, we only had 50 Community Supported Agriculture (CSA) programs in the U.S. Today, we have more than 6,000. CSAs provide consumers a box of fruits and vegetables once a week for one flat fee. Consumers never are sure what they will get, but they are signing up in record numbers.

My family has subscribed to our local CSA for the past five years. During the CSA season, we find ourselves trying many new produce items, eating more produce than any other time of the year, and buying significantly fewer fresh produce items at the supermarket.

Recently I sat down with the manager of our local CSA to discuss how his business is progressing.

He indicated that he and his peers are starting to understand that they can't grow all of the types of produce the members are looking for, so they are now partnering with other CSAs and local growers to exchange product.

Each group will focus on growing fewer products at a larger scale so they can all provide a greater depth of offerings to their individual members.

This type of CSA evolution creates even more competition for supermarket produce dollars.

The number of farmers markets has increased over 400% since 1994, and many of those farmers markets have expanded significantly in size.

Though data in this area is a bit vague, I suspect sales at farmers markets have more than doubled in the past five years.

Interestingly, price ranks sixth in reasons why consumers choose to shop these markets.

How does that contrast with our never-ending desire to have a hot price on the front page?

At a local farmers market I find quality sweet corn selling for $7 per dozen, while supermarkets are running corn for a third of that price.

Consumers are saying that the corn from the local market is fresher and tastes better.

Huh? Isn't the supermarket buying its corn locally too?

"Agri-tainment" farms are expanding as well. Last year, my family visited the local you-pick apple orchard. We paid to park, took a hay ride to the field and picked 10 pounds of Honeycrisp apples.

Afterward, we viewed some farm animals, watched a magic show and then had a snack and left. All-in-all, the experience lasted about two hours and we spent $65.

Essentially, we spent $6.50 per pound for Honeycrisp that were unwashed and of a lower grade than what were offered at our local supermarket.

In a family of three, we didn't need to buy any apples again for at least two weeks.

Authentic appeal

So what is the common thread between all of these shopping trips? In a word, it's authenticity.

Consumers are saying they buy produce at these establishments because they feel connected to the farmer. It's an authentic experience.

Essentially, they trust the local farmer more than the local supermarket.

As an industry, we need to drastically rethink how we sell produce, especially in the local season. It's more than putting up a sign with the picture of the grower.

The key to building authenticity is being able to convey knowledge in a personal and accurate manner.

Produce managers are the obvious source, yet most chains spend very little time training this team on in-depth product knowledge.

They need to convey where the product grows, what it tastes like, basic nutrition and some quick tips for cooking.

They need to be accessible to shoppers on a regular basis and have the time and patience to walk a consumer through the department sharing this knowledge.

In an age where service is lessening every day, we need to reposition produce managers as authentic experts in produce, not head stockers who write the orders and schedule.

In each of these "authentic" business models, you will find the flair of entrepreneurism.

Consumers are embracing them in large numbers.

Creating authentic experiences is the key.


Originally published in The Packer. Link to full article:

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