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Monthly Archives: February 2012
Local food advocates have surely taken notice of Loblaw Executive Chairman Galen Weston’s comments regarding farmers markets this week. To quote the affable junior Weston grocery magnate, “Farmers’ markets are great… One day they’re going to kill some people though.” This statement is a far cry from the image that Loblaw likes to portray of their chairman walking through farmers’ fields and joining in locavore indulgence.
I think it’s time to pull the curtain back on Canada’s large corporate grocers proclamation of support for local growers and have a hard look at the realities of national procurement strategies and how we support local economies.
The first reality is that our climate does not allow all products to be grown commercially in all parts of our country. Varying soil types, length of growing season, and proximity to consumer markets are all factors that will influence to varying degrees the success of market gardening and farming operations in Canada. You simply cannot grow certain crops in certain areas and expect to make a living. Fair enough.
The second challenge is getting enough production capacity on farms to support a consistent supply of product to the wholesale market. Farmers’ markets are great, but they’re not the entire answer to a sustainable agriculture industry in Canada. More than having farmers selling directly to consumers once a week, we need to develop systems and operations that allow local farmers to access consumers through retail establishments that are serving the vast majority of the public seven days a week.
What price should farmers expect for their produce? Farmers will always derive the highest price and the biggest profit margin selling directly to consumers. Selling direct allows them to capture the value absorbed by the supply chain between the farmer’s gate and the dinner plate. Trucking, warehousing, operating stores all cost money.
That said, selling at the farm gate has its limitations. Farmers don’t pay for the waste at my store (the farmer gets paid for the product whether I sell it or not). They don’t pay for the flyers, advertising and promotions that drive customer traffic through my doors. And they aren’t called upon nearly as often to support local sporting clubs, schools, community groups and charitable causes. A food system that allowed for easy access for farmers would also allow them to benefit from increased volume while leaving grocers to serve the public demand for their products.
Taking this concept to the extreme, large corporately driven supply chains make their money at the distribution level. Stores are simply vehicles to move product through warehouses. With this knowledge in mind, one can understand how a locally based food system would be a threat to the large retailers like Loblaw, Sobeys, Metro and Walmart. Head offices’ control of procurement and the ability to leverage the best price by partnering with the largest growers allows the big corporate grocers to maximize their profit margins. Even under the various corporate grocers’ “franchise” banners, decision making on procurement must reside at the national level in order to support the business model.
Independent grocers operate differently. Our procurement decisions are made at the store level. Consistency of supply and quality are still concerns but for farmers and growers who approach their business on a professional basis the benefits are huge. Partnering with growers like Sun Harvest Greenhouses we’re able to provide top quality, premium tomatoes to our customers on a consistent basis for eight months of the year. Other crops are more difficult to source, and a lack of technology with some smaller growers means that in some cases the farmer may lack the necessary equipment needed to provide value adding treatments like hydro cooling of produce. These are areas where investment and aggregation of supply could allow farmers to work together to build a cooperative business model.
Now getting back to Mr. Weston’s comment about farmers’ markets, I don’t think there’s a lot of evidence to support his claim. Granted food safety and traceability are of concern to the food industry and we’re working hard to make sure that these gains benefit consumers with respect to the confidence that people have in the food supply. However, if there’s anything we’ve learned, it’s been that the greater aggregation of the food supply, not support of local growers, that has led to more widespread food-borne illness.
The reality is big grocers want to support big agriculture because they want big profits. In November I was sitting in a conference where Mr. Bill McEwan, CEO of Sobey’s said that while they support local agriculture they weren’t in the business of propping up local economies. His view was echoed by the heads of Metro and Walmart, Mr. Weston did not attend but it’s fair to presume that he’d also agree.
So is Galen Weston really concerned about farmers’ markets? What’s more likely is that he’s jealous of the relationship that consumers are enjoying through these venues; as well as through progressive independent grocers who understand the value of locally based agriculture. That’s a value that you can’t replicate in a 100,000 sq ft. “superstore”.