Through a special arrangement, what follows is an excerpt of a current article from Grocery Headquarters magazine, presented here for discussion.
Residents in the Tri-Cities area straddling Tennessee, Virginia and Kentucky have a taste for blackberries. Not the hand-held wireless communication devices, but good old-fashioned blackberries - sweet, juicy, jet-black and the size of your thumb. Danny Shelton grows them in nearby New Market, Tenn., and sells them by the pint in Food City, part of a program initiated by K-VA-T Food Stores to help local tobacco farmers cope with the vanishing incentives for their one-time cash cow.
"In July and August, one out of every five dollars of produce sold in our stores is locally grown," said Steven Smith, president and CEO of Abingdon, Va.-based K-VA-T Food Stores. "We'll bring the farmers in and they'll talk about produce and the crops they've raised. We'll do television advertising using some of the farmers, and they'll talk about their quality."
In a year when "sustainability" is the key buzzword, sweet blackberries - and a cornucopia of local peaches, plums, tomatoes, corn, potatoes, broccoli and cauliflower - are just one facet of what differentiates this family- and employee-owned independent from its corporate chain-store competition. K-VA-T also goes out of its way to support local manufacturers and charities, believes in employee enrichment and advancement, and offers consumers a clean, fun and exciting shopping environment, plus competitive prices too. It's not only surviving, but thriving in a largely economically depressed yet competitive environment that's seen big chains like Winn-Dixie, Bi-Lo and Food Lion either close stores or exit completely. That is why K-VA-T is being honored as the Grocery Headquarters 2008 Independent Retailer of the Year.
Started as an 8,000-square-foot Piggly Wiggly by Smith's father in 1955, today K-VA-T operates 92 Food City and four Super Dollar stores in Kentucky, Virginia and Tennessee, with annual sales approaching $1.8 billion.
In addition to produce, K-VA-T stocks locally raised meats. It's working on a grass-fed beef program, and has had an unexpected hit with lamb. The grocer also partners with local plants, including those of ConAgra, Gatorade and Pepsi, to buy product. This not only retains local jobs, but saves the environment - and gas - by enabling the retailer to backhaul product to its 1.1 million-square-foot Abingdon distribution center.
Mr. Smith said that teaming with local farmers on exclusive terms helps to insulate the chain from competitors such as Wal-Mart. But Food City has also continued to upgrade its facilities and sales associates to improve its overall value proposition to its customers.
"We're not going to be cheaper than Wal-Mart," said Mr. Smith. "That's not our goal or our mission. But we're not going to be 20 percent higher than them. We've got what we think is a certain leeway to be within a certain percentage of Wal-Mart because we're giving folks a much better shopping experience."
Discussion Question: What do you think of K-VA-T's localized approach to buying produce, meat and even packaging? Is localized merchandising an effective option for all regional grocers or just in certain regions? What else has impressed you about K-VA-T?