Developing the Local Food Retail Supply Chain

Vermont’s locally owned and operated food businesses, from farms, to food processors, to distributors, to retailers, are the heart and soul of our rural economy. But, getting local food to retail grocery markets, and effectively marketing and selling local food once it reaches the store is a complicated endeavor that many of our self-operated or small food businesses need help with. The Grocer’s Project addresses the complexities of the retail market channel in an ever-changing landscape (from pandemics, to accelerated industry consolidation, to natural disasters fueled by climate change), with industry relevant and impactful retail services to producer, distributors, and retailers. 

In 2023, the Grocer’s Project continued its multi-pronged approach of technical assistance (TA) for farm and food businesses involved in the retail grocery supply chain. Through cohort TA and peer learning, one-on-one technical assistance, intensive workshops, and information sharing on local retail trends and opportunities the project has successfully cultivated supply chain business connections in the retail grocery market and supporting integration of local food into Vermont independent grocery stores. 

Food Producer and Farmer Cohort Retail Trainings 

Thirty-three farm and food businesses received retail and wholesale technical assistance. Over 11 weeks, from January to March 2023, two cohorts—one made up of food manufacturers and value-added producers with an interest in increasing retail wholesale sales, and one for farmers with direct-to-customer retail stores interested in learning how to think like a retailer-received training and technical assistance. 

The food manufacturing cohort received training on:

• Ins and outs of selling to retailers, including creating the operational systems to do so successfully, and understanding and leveraging what store or distributor buyers consider when making choices to onboard new vendors 
• Developing a brand strategy  
• Calculating margins and cost of goods sold 
• How to evaluate readiness and fit for different distribution options

“From brand strategy, to cost of goods sold, 
to evaluating distribution, this was an exceptional opportunity to gain knowledge about managing business growth with a diverse group of food producers. The program is greatly appreciated and truly a valuable resource to Vermont food businesses.” - Alyssa Stewart, Stewart Maple

The “farmer as retailer” cohort focused on: 

• Managing product selection to achieve profitability and serve customer needs
• Effective merchandising and signage
• Product promotion and pricing
• Creating engaging experiences for customers
• Sourcing and working with distributors to bring in other local products

In addition to the specific training topics and drawing on outside experts, the cohort approach cultivated B2B engagement and peer learning from participants, with opportunities to learn from operations at different scales and years of business experience. For the farmer as retailer cohort, several farmers with successful and mature farm stores and farmstands shared their expertise and experiences, providing real world examples to draw from and be inspired by.

Food Grocery Store Technical Assistance 

Independent Vermont grocery stores and co-ops received a variety of technical services throughout 2023 that focused on how stores can purchase and market local food to improve their operations and viability. 

Services included:

One-on-one technical assistance to 12 stores and 6 distributors to increase local food purchasing. Consultations with stores and distributors involved in-person TA and utilization of a local food wholesale producer-distributor catalogue. The catalogue, which to date features over 825 local food vendors, has allowed distributors and retailers to identify local producers by product category that are wholesale ready and available for them to buy. Main Street Market in Richford, for example, has utilized the catalogue to identify and purchase local products that fulfill its health and wellness mission. In addition to retailers using the catalogue, it has been of value in making product referrals to distributors. For example, Associated Buyers, a natural and local foods distributor, has asked about local wholesale ready products within certain categories and quickly received referrals for local food businesses that fit their needs and are ready to be onboarded for wholesale. 

Point of sale (POS) system technical assistance and local product review provided to six co-ops and independent stores. When a POS system is well-managed it can be the center of decision making for inventory management, using data to drive sales and evaluate profitability. The goal was to use the review of local products as defined by VT ACT 129 to help store’s understand how their POS systems could be utilized to improve inventory management and profitability. The POS training uncovered critical challenges facing independent retailers. First, high turnover rates with staff significantly impacts a stores ability to effectively implement and utilize POS systems and data for local purchasing, and the July flooding further compounded stores’ ability to be staffed or take on projects beyond finding ways to reopen or rebuild. Second, while local food counts in each store provided insights on gaps and growth opportunities of Vermont products, the work revealed that stores are under pressure to meet distributor minimums and receive purchasing volume discounts from large national distributors. These purchasing minimums and volume discounts incentivize stores to stock products that are often not from Vermont. This can often translate to a disconnect between a store’s mission to support local farmers and food manufacturers.

Twelve independent retail stores (18 employees in total) participated in a day-long intensive training on November 8th with nationally renowned food retail experts Jeanie Wells and James Morrell. The training was the first of its kind adaptation of Wells’ Mighty Community Market training program, which won the Innovation and Achievement award at the 2023 Consumer Cooperative Management Association’s annual conference. 

The training focused on: 

• How to grow sales through partnering with and featuring local producers
• How to use data to drive product mix and pricing decisions
• How to use tried and true merchandising techniques to spotlight the store’s values, and
• How to create a welcoming shopping experience and grow sales. 

“Annie Harlow, Grocer Project consultant, and the Farm to Plate team are invaluable assets 
to producers and growers in Vermont-my business has benefited so much from their work and I feel so lucky we have them on our team.” - Jess Messer, Savoure

Attendees left with goals that will be the basis for follow-up technical assistance focused on implementation of lessons learned. 100% of attendees said the training met or exceeded their expectations, and 100% of attendees said they would attend future workshops. More short courses are being planned for the upcoming year to complement other services and technical assistance offered through the Grocers project in 2024.