Grocery Stores & Retail
The food retail industry saw a renaissance of interest in local and regional sourcing of fresh fruits and vegetables during the 2000s. This interest came within an industry characterized by heavy investment in fewer and larger centralized distribution centers. Although the distribution center model remains prominent within the food retail industry, some retailers have created flexibility within their distribution models to answer consumer demand for local produce. Large retailers are also finding transportation and distribution cost savings by sourcing fresh produce items from new or expanding producers. Smaller chains and local grocers remain potential markets for fresh produce growers expanding to wholesale volumes. Producers of value-added produce products may also find local groceries a possible market for their product. There are generally three avenues for selling produce to local groceries, based mainly on the size and scale of the store.
Key Requirements
| Marketing Time Required | Medium |
| Required Product Volume | Medium |
| Potential Sales Volume | Medium |
| Price Per Item | Medium |
| Difficulty of getting into this market | Medium |
| Importance of Product Quality & Shelf-Life | High |
How do I get started in Grocery and Retail?
Your approach will depend on which type of grocery store you are targeting.
- Niche or specialty stores may often carry smaller product selections, with management and ownership entirely in the local area. This makes access easier in these markets. The number of specialty food retailers has increased in recent years due to consumer interest in smaller store formats and specialty food items (like certified organic and local foods).
- Independent grocers function as a full-scale grocery, making purchase decisions at the store or regional level.
- National chain stores typically make purchase and distribution decisions beyond the local level, often employing regional distribution centers. However, many national chains also allow direct store delivery of some produce, particularly crops easily delivered in bulk, such as melons and pumpkins.
Regardless of grocery type, you'll need to contact the produce or purchasing manager to find out about the steps necessary to become a vendor. This may include an application process, increasing your food safety certification, and growing specific amounts of particular varieties of a product.
Challenges
- Producers transitioning from direct markets may struggle with volume and product quality expectations.
- Price per unit will be lower than direct markets.
- Depending on size of grocery store, you may need larger transport/delivery vehicles than you currently own or you may need to explore working with a distributor.
Opportunities
- These markets generally allow for larger volumes of product sales even if prices per unit are lower.
- Marketing time may be less than other direct market approaches.
- A producer may be able to focus on growing a small number of crops rather than the greater variety required by other market types.