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Some while back I contributed an article to StartupNation titled Revenge of the Butcher, the Baker, and the Candlestick Maker detailing the multitude of opportunities available within the "buy local" niche.

Now the New York Times has picked up on theme as well. In an article published this week, the Times puts its formidable resources behind a rather in-depth examination of the economics of the "buy local" phenomenon, and holes in the infrastructure preventing supply from coming together with demand — demand that is increasing by double-digits even while the rest of the economy cools down. One grocery store chain quoted in the article stated that sales of local produce have increased 20% in the past year. This, in the midst of the worst food price inflation the US has seen in decades.

There`s huge opportunity here folks. If this is the kind of growth the "buy local" niche is experiencing now, given the difficulties the economy is visiting upon both consumers and small businesses, imagine what will happen when people aren`t feeling pinched by fuel prices anymore.

The "buy local" supply chain is virtually nonexistent at this point. It was destroyed all through the 80s and 90s by consolidation in the food industry that centralized its operations in California and overseas. The whole infrastructure from farmer`s field to grocery store shelf needs to be rebuilt, and this NYT article details where some of the most sorely needed entrepreneurial opportunities are waiting, desperately, for people to step in. If you`re fishing around for a business idea, something that can start growing quickly now in a difficult economy and keep growing into the future, you will be hard-pressed to find a better choice than filling some of these local supply chain holes.

—paula

"buy local" isn`t a mandate or legislative action or anything. It`s an emerging niche market that is experiencing a good deal of growth right now, and will experience lots more growth in the future as it moves from early adopters to the mainstream.

The "buy local" niche is right now about where that newfangled internets thing was in 1994 when AOL was first releasing the infrastructure for mass access: it`s ultra cool among a select group of well-heeled trendsetters but it needs more infrastructure to meet the demand that`s lining up at the door. The urgency is in the possibility of being the vanguard in creating the "buy local" infrastructure, in the same way that AOL was the vanguard in creating widespread internet access for the masses. There is a real possibility of making huge money over the next several years. And, to do a great deal of good as well, since the whole motivation of hte "buy local" niche is environmental sanity and economic justice within one`s own community.

Will "buy local" replace shipping? Of course not. Nor is it meant to... it`s simply a choice many consumers are making because doing so aligns with their values. But because demand is so much greater than supply, there`s all kinds of entrepreneurial possibilities open throughout the barely-existent supply chain.

—paula

"Buy local" hasn`t gone mainstream yet and few are making millions so it`s not going to show up in the business press much, except perhaps as a novelty. People involved with it now are very much ahead of the curve. I would expect it to be a year or two until the business press pulls their heads out of their rear ends far enough to see what`s going on in their own backyards. You will have better luck reading local business press... the nature of the local beast and all :)

The "buy local" movement is usually covered by MSM as a lifestyle issue. The buzzword attached to "buy local" is "locavore" (sometimes spelled "localvore")  and it generally is associated with buying and preparing locally-grown food, or in highlighting area restaurants, grocers, farmers markets, CSAs, and other retailers who sell locally-grown food.

The most obvious example I can think of is the very strong growth farmers markets and CSAs have been experiencing the past few years. Here are a few resources on that, and on "buy local" in general:

• Stats from USDA
• Growth in CSAs info from the Rodale Institute
• Research report: The Impact of the "buy local" movement on the global food industry (reg. required)
• Harman Group survey abstract: Consumer understanding of buying local

Anecdotal indicators include:

• Whole Foods is having such difficulty meeting consumer demand it has instituted a fund of $10 million per year to invest in new small-farm startups and small-farm expansion in the vicinity of their retail outlets
• The state of Vermont is bringing a mobile slaughterhouse online specifically to give its small poultry producers access to the "buy local" movement
• A whole new crop of "minifarmers" are ripping up their entire yards to grow produce because the returns are so high
• Wegmans Markets are also doing their best to play up their local selections but I understand through the grapevine that they`re also having great difficulty meeting demand, such that their "local" selections aren`t all that local at most stores

The most useful resource I`ve found for tracking this information are RSS feeds for Google news searches of hte keywords "locavore," "localvore," and "buy local." That will round up all kinds of info from all over the world. I have Google blog search feeds set up as well, but they are usually bloggers repeating each other ad nauseum, as blogs tend to do, though once in a while a gold nugget shows up in my reader.

There`s a lot more to the "buy local" thing beyond food, too, though the big growth area right now is local food.

The most dire need right now, which I read about again and again and which I hear about in conversations with folks on the ground, is for brokers who can act as a single-point contact for the big chains to ferret out the local farmers. If you were to create a database of farmers in about a 100-mile radius, what they`re growing, when it`ll be harvested, how much of their harvest isn`t already committed elsewhere, etc., and then arrange for shipping and managing the grocery-farmer transactions, you`d be doing a fantastic service for everyone involved: the farmers, the consumers, the grocers, and of course for yourself.

So, sorry that got so long, I could go on and on about this all day. But hopefully that clarifies what I mean a bit more. I`m so steeped in this in my everyday life I forget it`s news to most people.

—paula

The buy local market is hard to crack. I launched a product a while that was designed to route eyeballs and feet away from big box stores towards locally owned independent retailers.  I`m still refining my website and my traffic has improved but most websites I`ve seen in the buy local niche don`t work well as national brands. However, there is a ton of interest and money flowing into local goods and services right now.

Paula, I like your idea for a farm to business database. I think it would be useful, profitable and also qualify for USDA Rural Development grant money.

gordon


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Looking For Renewable Energy Entrepreneurs

Gordon — mind if I ask where you live? We`ve been finding it not all that difficult, but I think the market is more developed in some places than in others.

I`m not clear what the goal of your site is... how are you creating a national "buy local" brand? What is your product?

Here`s an example of a great B2B local farms database: Providence, RI

—paula