Mark Doyron (below) is the former Chief Business Marketing and Distribution Chain Officer at New Thyme Farmer Market. Mark previously worked in several management roles for companies including Schnaux Markets, Sure Winner Foods and Delhigh America. The comments expressed here are those of the author.
During epidemics, consumers move to buy directly from local producers – farmers, fishermen and producers – to make sure they have the food they need, reducing travel to stores and e-commerce.
Going straight, consumers have formed new relationships with manufacturers and rediscovered the best quality and freshness of local offerings. Now, as we return to some normalcy in the coming months across the country, consumers want to bring those wonderful local products from their own communities to store shelves.
But local strong demand is not the whole story. There has been a dramatic change in how consumers think about local products, which makes local expansion even more powerful now than ever before.
Consumers have been Reviewing How food shapes relationships with their own communities and how their health is intertwined. Health and immunity, freshness and quality, sustainability, equity and economy are all intertwined in the eyes of the consumer. As a result, greater local demand has gained new breadth and strength, and with it, new urgency and power for retailers.
The solution to this redesigned consumer demand is a move toward community-based resources, which has recently been referred to as “hyperlocal”, which means that sellers are closer to the stores they sell to. Hyperlocal is characterized by a variety of small retailers that offer products only to a small number of stores that offer direct (direct store delivery or DST). However, in every possible way, the requirements of hyperlocal sourcing put maximum pressure on the grocer in terms of labor cost and supply chain complexity.
What grocers need to do to succeed locally is defined as what is profitable for their company and fair to sellers, a solution that can reduce the burden and address inefficiencies throughout the life cycle of the buyer-seller relationship. Something efficient to implement and measure.
As a grocer with 15 years of experience, I could never find that solution – until recently.
In my venture capital work, I began to meet with a few companies that represent a potential end-to-end solution for creating and managing a local food purchasing program for any size grocers.
Below are three technology companies that can help ease the burden of local first strategy. It is important for grocers everywhere to start thinking about the potential to effectively source hyperlocal products and to have this tremendous opportunity with consumers.
Rangeme. The company, which is at the forefront of finding new CBG brands for category managers and sourcing them through distributors, has recently announced a number of events with grocers designed to increase the size of the hyperlocal and different brands they offer. RangeMe offers a solution to the potential CPG vendor innovation.
Forger. Giving sellers the opportunity to offer you without a system for building a business relationship can lead to frustration and bad news. Forager solves this by providing a buy-to-buy site designed for hyperlocal purchases, adding some valuable services such as local vendor management, marketing support and analysis. Forager conducts discovery and testing, and critically, includes both new and CPG. They report 60% higher efficiency in creating and operating direct distribution chains. Forager has recently announced some major partnerships, focusing on pursuing hyperlogue in grocery stores.
Metropy. Launched in Boston, this young startup is a new example of a classic problem: efficient P2B logistics. Metropy’s goal is to grow the business of hyperlocal vendors by expanding the distribution area for DST projects, while at the same time reducing the overall cost of logistics.
Together, these three companies are an example of a decision-making approach to measuring, inventing, on-boarding and purchasing and measuring logistics across all product categories. As with these solutions for retailers, they also work to change the performance of small retailers, while at the same time providing a more profitable solution than traditional distribution channels or internal warehouse markups, helping to increase their own sales potential and geographical range. Sending this cost potential to consumers enables Hyperlocal Products to increase the sales growth we all expect by pursuing these programs.
I hope more retailers consider creating hyperlocal plans. If I were still a grocery manager, my team would be excited about implementing these solutions myself and sharing the hyperlocal pound with consumers in my stores.