Farm to Retail

July 2013 – Joe Rowland has been farming for 3 years at the Alma C. Lomax Incubator Farm in Cabarrus County. There, he farms about ½ acre, while juggling several other family projects that he and his wife manage. A busy guy, Joe talks to me while harvesting potatoes for the local Lowes Foods store, just a few miles down the road in Harrisburg. It is the second shipment of certified organic produce that Rowland will deliver to the store.

He is happy about the new business relationship. “I’d love to know that every row foot I plant will be sold,” he says, “it makes it easier to grow more because you’ve got a home for it before it’s even in the ground.” William Hathcock, Produce Manager of the Harrisburg Lowes, is happy about the new arrangement as well. “The first shipment of organic lettuce was absolutely excellent quality,” he says. “It’s exciting from my perspective to be able to buy from someone literally 10 minutes up the road, and customers have been excited about buying it.”

Hathcock, who has a horticulture background, notes that it is a unique selling point to have the variety labeled on the produce. “It’s one thing to have a butternut or an acorn squash, but to also have the variety on the label….not many people care about that kind of thing, but the people who do care, really get excited.” Rowland’s organic lettuce was delivered, washed and individually bagged, with the different varieties noted on the label.

The Harrisburg Lowes will continue carrying Lomax produce throughout the summer and fall. “From my perspective, it’s something that could really take off from our one store,” says Hathcock. And Rowland appreciates his openness to working with a small farmer. “They want good, fresh, local produce,” he says, “There has to be willingness on the side of the produce folks to do local, because it’s not going to be as easy”.

The connection between Joe and William was first made at a meeting at the Rowan County Extension Center organized by Gary Bullen. Bullen is an agricultural economist with NC State University, and an NC Growing Together partner. He helps farmers evaluate new enterprises and develop crop budgets, business, and marketing plans. For many years, he encouraged farmers to sell at their local farmers markets, where they realize price premiums by selling their products directly to consumers.

Now, after witnessing the explosion in demand for local foods statewide, he is helping farmers access larger-scale retail and food service markets. Explains Bullen, “the Retail Ready program was developed after two years of listening to farmers discuss the need to scale up to retail markets. It was a natural progression of working with farmers to improve their marketing opportunities”.

Bullen, along with colleagues in the Cooperative Extension Service, organized a series of workshops called “Retail Ready for Local Farm Products”. The goal was to connect small and medium-sized farmers looking to sell into larger markets, with large-scale buyers (grocery stores, restaurants, produce distributors, etc) wanting to increase their purchasing from local farmers. The workshops featured panels of farmers and buyers and discussions about pricing for retail markets, quality assurance and packaging, insurance and risk management, and other vital issues.

The “Retail Ready” workshops were based on research that broke down the market into different “channels”: retail (chains, independent grocers, and cooperative retailers); restaurants; wholesalers and food service (food distributors); and specialty distributors (offering household produce delivery or aggregation services for corporate buyers).

Each “channel” has its unique requirements; one of the goals of the Retail Ready workshops is to help farmers self-assess which marketing “channel” is the best fit for their operation. Restaurants, for example, are most concerned with how a product tastes, and the consistency of the product, and not as concerned about how it looks, whereas retailers need a product that looks good on their shelf and meets “retail quality” standards. Distributors need their products to look good and to come in easy-to-transport packaging, and they need it in large volumes, whereas a specialty distributor may not need a large scale, but they do need high quality and variety of products.

“We are creating a notion of ‘access points’, where a farmer can plug in, access a marketing channel, and master it, and then expand or diversify into other marketing channels” if they wish, says Bullen. A 100-page manual was also developed and distributed at the workshops, with resources and tools to help farmers with everything from identifying local buyers to bidding, invoice and payment terms.

Of course, the learning curve works both ways, and buyers also have to adjust their purchasing systems in order to be “farmer ready”. Ariel Fugate works with NC Growing Together project partner Lowes Foods as their Locally Grown Accounts Representative, and has developed a buying guide for store managers to source local produce direct to their store. Lowes, responding to a surge in consumer demand for local products, has actively recruited North Carolina producers of dairy, seafood, meat, and produce. The grocery chain, which is based in Winston-Salem, operates over 100 stores in North Carolina, South Carolina and Virginia.

Lowes has always supported local farmers, says Richard McKellogg, Lowes Foods’ Produce Director. The company joined the NC 10% Campaign – a CEFS initiative that encourages all North Carolinians to spend 10% of their food budget on local foods – as a major partner in 2012. “Our commitment to buying local has not waivered nor do we view this as a trend. Each year we continue to focus more of our resources toward this initiative to support our local neighbors,” he says.

Lowes has also been working with the North Carolina Department of Agriculture and Consumer Services to organize meetings with farmers across the state who are interested in selling to Lowes stores. “Lowes has really stepped to the forefront in partnering with NCDA on these meetings,” says Randy Maness, a Retail Marketing Specialist at NCDA. The Cooperative Extension Service helped get the word out about the meetings to growers across the state.

According to Maness, of the roughly 120 growers who attended the three meetings in 2012, about 20 of them have started a business relationship with Lowes. Adds Maness, “The meetings were very successful in opening the minds of growers to new opportunities.” An additional two meetings were held in early 2013, and more are planned for the fall.

“We want to get back to where a grower can sell to 1 or 2 or 3 stores, or to the warehouse” depending on their scale, says McKellogg.