June 9, 2008
GHQ: Smoky Mountain Majesty
By Richard Turcsik
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?
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The most interesting thing about K-VA-T isn’t its alleged local produce and meat sourcing. It’s the fact that this company is largely composed of castoffs that it turned around. K-VA-T includes castoffs from Piggly Wiggly, White Stores, Mid-Mountain, Winn-Dixie, BI-LO, and Quality Foods. Retail chains all have the same equipment and the same suppliers. Management is the only difference between the losers and the winners.
Giant Food in the DC area, now part of Royal Ahold, sourced produce locally for decades. It was an effective differentiation strategy then, and a smart move now, in an era of runaway gas price increases. A lot of companies are going to be looking at this.
Nothing says differentiation better than localization. While national brand marketing efforts pull consumers in one direction, local names, products and producers create differentiation.
If you need an example, look at what Macy’s, the erstwhile Federated Department Stores, did with the venerable old department store names, removing them in favor of the nationally-branded Macy’s. Shoppers weren’t happy, and the commanders in Cincinnati realized that and now Macy’s is in the process of “localizing” as much as 15 percent of the merchandise in its stores, though it is not yet reverting to former banners.
The irony of this whole “buy local” phenomenon to the folks on the farm who have been growing the food all along must be huge. “Local” dairy used to mean unpasteurized whole milk in a one gallon jar, sealed with a piece of waxed paper under the metallic lid for “sanitation.” “Grass-fed” or “pasture-fed” beef was the calf you raised. “Organic” pork came from the smokehouse and “free-range” chickens were the ones in the barnyard. All this changed (for most people) in the name of “food safety” and “quality control.”
Buying locally produced food is a great thing to do, of course. It supports local economies and reduces the carbon footprint of our food supply simply through reduced transportation costs. The food is also generally of high quality–but I have noticed one very interesting trend in our Chicago markets. Consumers are willing to pay higher prices for food labeled “organic” or locally grown. But they are also willing to accept a level of imperfection, bruising, inconsistent appearance, etc, that they would never accept in “regular produce.” In those Smoky Mountains my farmer father just scratches his head and wonders aloud about “how city folk think.”
The selection of blackberries as the lead for the story did bring a smile to my face however. The blackberry briars grow wild and plentiful on the NC mountain farms, but those interested in self-harvest might want to think twice about just how intertwined the dynamics of local flora are with local fauna. A couple of years ago my uncle was picking blackberries on our mountain. He came around a corner and found himself face-to-face with a yearling black bear. No accurate reports available on which one vacated the premises faster!
Local sourcing is a great idea provided two conditions occur: 1. People are advised that you are buying local and supporting local businesses. 2. You are very careful to ensure that the providers are running their businesses properly. In light of the recent problems with produce and beef coming for large growers and packers, this cannot be taken for granted. You will tend to get better product if the local vendors are featured in any advertisement as they put their “local” reputation on the line. Poor product can cost them dearly.
Local farmer’s markets or cooperative groups are popping up all over. This is fabulous and hopefully will continue to grow with state and federal support.
With the high cost of farm equipment, fertilizers, fuel, etc. many local farmers are retiring or being forced out. This model should raise concern for all; if we have to depend on other countries for food as we do oil now, it will be tragic.
Supporting our local farmers is a form of conservation of our national commodities. I’d much rather buy fresh strawberries grown down the street, than strawberries from Peru that have been picked green and gassed to preserve their quality. Let’s talk milk for instance, Milk has gone up to $4 a gallon in our stores, but the farmer didn’t get an increase. The farmer who has to pay more for the milk hauler (because of fuel cost) more for hay, more for supplements and more for labor is still getting the price they have gotten for 10 years, so the local dairy farmer is going out of business. This is a job that has no benefits, no vacation days, starts at 5AM and over at 8PM, no bonuses…anyone want to apply? So where will we get our milk? Mexico? Laboratories? The decrease in farmers is rapid in our country.
Many would like to buy local but don’t know where, how, etc. So, organizing this process with valuable strategic marketing efforts will enhance this outlet and in the long term, benefit us all.
It takes a pretty large stretch of the imagination to see a link between sustainability and local sourcing. More to the point is the new consumer awareness created by Country of Origin Labeling. This is a great time for regional operators to strengthen their ties to local producers and to market those ties, as K-VA-T does. National chains of course need national supply relationships, so are largely boxed out of this opportunity. We live in a global economy, but the appeal of locally grown food appears stronger than ever.
HOORAY! This is fantastic because it’s not new behavior in response to media coverage of trends, but more in line with the long term vision of keeping food culture alive!
For those who believe in this fully, or wonder what food culture is really all about locally and why it matters, check out Barbara Kingsolver’s book called Animal, Vegetable, Miracle. It’s not only a great family story (true) but a wonderful way to enhance your whole perspective on food culture and why we should think twice about our American patterns of headlong consumption.
When in “Rome” do as the “Romans” do–sell, buy and eat fresh local produce. Most people want to have a comfortable feeling of involvement with what they buy and eat. Local produce meets that objective even more so than the great produce that is shipped north from Chile. K-VA-T is doing the common sense merchandising thing.
I recently read where the average produce item travels 1500 miles from farm to consumer. Smart retailers are going to find ways to cut that figure down, whether its Wal-Mart or a regional grocer.
K-VA-T, being privately held, has been able to focus on long term sustainability rather than trying to please short term minded investment analysts. Their real estate department is run by a seasoned professional that utilizes the most up to date technology in site analysis. Tesco are you listening? Some outsiders might not realize that what appears to be some Dukes of Hazzard approach to retailing is in reality about a decade ahead of most of the industry.
Another thing that impresses me about K-VA-T is that when you go to an FMI conference/convention or a state grocers association conference, K-VA-T sends lots of people. Thats a common denominator among other successful retailers like Publix and Hy-Vee.
Take a look at the approach of Gordon Ramsey’s kitchen makeovers in the UK for a clue. Every makeover emphasizes local produce is what brings people back. The same for areas where there are enough local farmers to rely upon.
I’m in upstate NY with one particularly dated grocer carrying all produce from Mexico and Chile–in June–and another with fresh local produce. At the first, the items sit; at the later the items are continuously replaced and people are buying. Being able to show support for locals brings loyalty, not a coupons- and sales. They are on the right track.
K-VA-T’s localized approach to buying produce is deliciously wholesome and exciting. It’s good for everyone. I hope we see more of the same from other supermarkets and retailers in other parts of the country where we can grow fresh produce.
I had a former boss share his analogy of merchandising locally as like the difference between trying to turn an aircraft carrier around verses a PT Boat.
Local chains have the ability to source from various places without the encumbrance of lead times, back and front end systems being managed from hundreds and thousands of miles apart as well as 14 week ad lead times. It’s great that they can buy locally and sustainability is, of course, a good thing but at the end of the day, the greatest advantage is the ability to connect with their customers with brand, items and people from the community that people actually know and can visit.
Local is getting hot and regional merchants should be able to execute a localized merchandising strategy better and more credibly than national chains.
The local food trend has gone mainstream. This June’s weddings, graduation ceremonies, and college reunions are broadcasting their sustainable and localized menu offerings with marketing materials informing guests they should feel good about the health, environmental and economic benefits. As this trend will quickly flow from commercial to consumer food products, “local” is not a message just for health food stores any more.
Obviously, local produce is easier in some geographies than others, but all can explore. And the definition of “local” is open. It can mean an hour’s drive or a day trip. Retailers can help define local for their shoppers and leverage their local heritage in the process. The caution is to ensure any localized message is credible to build loyalty and sales with a positive,productive PR spin.
There are so many reasons why this is an excellent initiative that should be replicated whenever and wherever possible. Top of the list, in my view, is stimulating a local economy rather than having the money people spend going further afield to the corporate headquarters of retailers and manufacturers. Coupled with keeping people in employment near to where they live (and reducing the time and cost of people traveling to work). Second, where produce is concerned, the nearer it is sold to where it is grown, the more likely that it will be picked at its peak rather than early enough to stand up to traveling long distances, ripening en route. Not to mention that when produce is picked and eaten in a relatively short period of time it TASTES BETTER AND IS HEALTHIER. Add to that a reduced need for processing, packaging and miles creating more carbon as well as choking up roads or skies or whatever.
This is all aside from the improved shopping and community experience others have cited which is, again in my opinion, pretty significant. Just think of what kids can learn about where food comes from. I am not foolish enough to think that any community can survive exclusively on locally produced food but I do strongly believe that as far as possible we should all try to do the best we can. That is what will make it, again as far as possible, sustainable. Although different crops will be growing in different locations over the coming decades, I doubt that anywhere on the planet will ever be totally self-sustaining. But that is no reason for all of us not to take advantage of what our own regions have to offer.
Everything old is new again. Local was the way it was done before the big national chains saturated the countryside.
Local & regional grocers buying local eggs, produce, meat and dairy products sustained family farms and cooperatives until the big national chains, requiring contracts for large volumes changed the landscape of farming to large corporate operations.
Such a shifting trend alongside the “organic” movement may actually re-invigorate smaller scale farming operations.
The “hobby farmer” of today typically has a day job and supplements the family’s lifestyle by producing livestock and/or crops and feed.
As mentioned above, the dairy farmer, however, is all in, 24/7. Tough work and little pay, but a good life for those who know it.
Going local is the way to go. Consumers are looking for local identification of products for safety and green reasons. It says a lot about supporting the local economy and often consumers say the products taste better. Effective marketing campaigns can be built around the local theme and incorporate many different areas of the store from produce, meat, grocery, floral, even wine.
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The most interesting thing about K-VA-T isn’t its alleged local produce and meat sourcing. It’s the fact that this company is largely composed of castoffs that it turned around. K-VA-T includes castoffs from Piggly Wiggly, White Stores, Mid-Mountain, Winn-Dixie, BI-LO, and Quality Foods. Retail chains all have the same equipment and the same suppliers. Management is the only difference between the losers and the winners.
Giant Food in the DC area, now part of Royal Ahold, sourced produce locally for decades. It was an effective differentiation strategy then, and a smart move now, in an era of runaway gas price increases. A lot of companies are going to be looking at this.
Nothing says differentiation better than localization. While national brand marketing efforts pull consumers in one direction, local names, products and producers create differentiation.
If you need an example, look at what Macy’s, the erstwhile Federated Department Stores, did with the venerable old department store names, removing them in favor of the nationally-branded Macy’s. Shoppers weren’t happy, and the commanders in Cincinnati realized that and now Macy’s is in the process of “localizing” as much as 15 percent of the merchandise in its stores, though it is not yet reverting to former banners.
The irony of this whole “buy local” phenomenon to the folks on the farm who have been growing the food all along must be huge. “Local” dairy used to mean unpasteurized whole milk in a one gallon jar, sealed with a piece of waxed paper under the metallic lid for “sanitation.” “Grass-fed” or “pasture-fed” beef was the calf you raised. “Organic” pork came from the smokehouse and “free-range” chickens were the ones in the barnyard. All this changed (for most people) in the name of “food safety” and “quality control.”
Buying locally produced food is a great thing to do, of course. It supports local economies and reduces the carbon footprint of our food supply simply through reduced transportation costs. The food is also generally of high quality–but I have noticed one very interesting trend in our Chicago markets. Consumers are willing to pay higher prices for food labeled “organic” or locally grown. But they are also willing to accept a level of imperfection, bruising, inconsistent appearance, etc, that they would never accept in “regular produce.” In those Smoky Mountains my farmer father just scratches his head and wonders aloud about “how city folk think.”
The selection of blackberries as the lead for the story did bring a smile to my face however. The blackberry briars grow wild and plentiful on the NC mountain farms, but those interested in self-harvest might want to think twice about just how intertwined the dynamics of local flora are with local fauna. A couple of years ago my uncle was picking blackberries on our mountain. He came around a corner and found himself face-to-face with a yearling black bear. No accurate reports available on which one vacated the premises faster!
Local sourcing is a great idea provided two conditions occur: 1. People are advised that you are buying local and supporting local businesses. 2. You are very careful to ensure that the providers are running their businesses properly. In light of the recent problems with produce and beef coming for large growers and packers, this cannot be taken for granted. You will tend to get better product if the local vendors are featured in any advertisement as they put their “local” reputation on the line. Poor product can cost them dearly.
Local farmer’s markets or cooperative groups are popping up all over. This is fabulous and hopefully will continue to grow with state and federal support.
With the high cost of farm equipment, fertilizers, fuel, etc. many local farmers are retiring or being forced out. This model should raise concern for all; if we have to depend on other countries for food as we do oil now, it will be tragic.
Supporting our local farmers is a form of conservation of our national commodities. I’d much rather buy fresh strawberries grown down the street, than strawberries from Peru that have been picked green and gassed to preserve their quality. Let’s talk milk for instance, Milk has gone up to $4 a gallon in our stores, but the farmer didn’t get an increase. The farmer who has to pay more for the milk hauler (because of fuel cost) more for hay, more for supplements and more for labor is still getting the price they have gotten for 10 years, so the local dairy farmer is going out of business. This is a job that has no benefits, no vacation days, starts at 5AM and over at 8PM, no bonuses…anyone want to apply? So where will we get our milk? Mexico? Laboratories? The decrease in farmers is rapid in our country.
Many would like to buy local but don’t know where, how, etc. So, organizing this process with valuable strategic marketing efforts will enhance this outlet and in the long term, benefit us all.
It takes a pretty large stretch of the imagination to see a link between sustainability and local sourcing. More to the point is the new consumer awareness created by Country of Origin Labeling. This is a great time for regional operators to strengthen their ties to local producers and to market those ties, as K-VA-T does. National chains of course need national supply relationships, so are largely boxed out of this opportunity. We live in a global economy, but the appeal of locally grown food appears stronger than ever.
HOORAY! This is fantastic because it’s not new behavior in response to media coverage of trends, but more in line with the long term vision of keeping food culture alive!
For those who believe in this fully, or wonder what food culture is really all about locally and why it matters, check out Barbara Kingsolver’s book called Animal, Vegetable, Miracle. It’s not only a great family story (true) but a wonderful way to enhance your whole perspective on food culture and why we should think twice about our American patterns of headlong consumption.
When in “Rome” do as the “Romans” do–sell, buy and eat fresh local produce. Most people want to have a comfortable feeling of involvement with what they buy and eat. Local produce meets that objective even more so than the great produce that is shipped north from Chile. K-VA-T is doing the common sense merchandising thing.
I recently read where the average produce item travels 1500 miles from farm to consumer. Smart retailers are going to find ways to cut that figure down, whether its Wal-Mart or a regional grocer.
K-VA-T, being privately held, has been able to focus on long term sustainability rather than trying to please short term minded investment analysts. Their real estate department is run by a seasoned professional that utilizes the most up to date technology in site analysis. Tesco are you listening? Some outsiders might not realize that what appears to be some Dukes of Hazzard approach to retailing is in reality about a decade ahead of most of the industry.
Another thing that impresses me about K-VA-T is that when you go to an FMI conference/convention or a state grocers association conference, K-VA-T sends lots of people. Thats a common denominator among other successful retailers like Publix and Hy-Vee.
Take a look at the approach of Gordon Ramsey’s kitchen makeovers in the UK for a clue. Every makeover emphasizes local produce is what brings people back. The same for areas where there are enough local farmers to rely upon.
I’m in upstate NY with one particularly dated grocer carrying all produce from Mexico and Chile–in June–and another with fresh local produce. At the first, the items sit; at the later the items are continuously replaced and people are buying. Being able to show support for locals brings loyalty, not a coupons- and sales. They are on the right track.
K-VA-T’s localized approach to buying produce is deliciously wholesome and exciting. It’s good for everyone. I hope we see more of the same from other supermarkets and retailers in other parts of the country where we can grow fresh produce.
I had a former boss share his analogy of merchandising locally as like the difference between trying to turn an aircraft carrier around verses a PT Boat.
Local chains have the ability to source from various places without the encumbrance of lead times, back and front end systems being managed from hundreds and thousands of miles apart as well as 14 week ad lead times. It’s great that they can buy locally and sustainability is, of course, a good thing but at the end of the day, the greatest advantage is the ability to connect with their customers with brand, items and people from the community that people actually know and can visit.
Local is getting hot and regional merchants should be able to execute a localized merchandising strategy better and more credibly than national chains.
The local food trend has gone mainstream. This June’s weddings, graduation ceremonies, and college reunions are broadcasting their sustainable and localized menu offerings with marketing materials informing guests they should feel good about the health, environmental and economic benefits. As this trend will quickly flow from commercial to consumer food products, “local” is not a message just for health food stores any more.
Obviously, local produce is easier in some geographies than others, but all can explore. And the definition of “local” is open. It can mean an hour’s drive or a day trip. Retailers can help define local for their shoppers and leverage their local heritage in the process. The caution is to ensure any localized message is credible to build loyalty and sales with a positive,productive PR spin.
There are so many reasons why this is an excellent initiative that should be replicated whenever and wherever possible. Top of the list, in my view, is stimulating a local economy rather than having the money people spend going further afield to the corporate headquarters of retailers and manufacturers. Coupled with keeping people in employment near to where they live (and reducing the time and cost of people traveling to work). Second, where produce is concerned, the nearer it is sold to where it is grown, the more likely that it will be picked at its peak rather than early enough to stand up to traveling long distances, ripening en route. Not to mention that when produce is picked and eaten in a relatively short period of time it TASTES BETTER AND IS HEALTHIER. Add to that a reduced need for processing, packaging and miles creating more carbon as well as choking up roads or skies or whatever.
This is all aside from the improved shopping and community experience others have cited which is, again in my opinion, pretty significant. Just think of what kids can learn about where food comes from. I am not foolish enough to think that any community can survive exclusively on locally produced food but I do strongly believe that as far as possible we should all try to do the best we can. That is what will make it, again as far as possible, sustainable. Although different crops will be growing in different locations over the coming decades, I doubt that anywhere on the planet will ever be totally self-sustaining. But that is no reason for all of us not to take advantage of what our own regions have to offer.
Everything old is new again. Local was the way it was done before the big national chains saturated the countryside.
Local & regional grocers buying local eggs, produce, meat and dairy products sustained family farms and cooperatives until the big national chains, requiring contracts for large volumes changed the landscape of farming to large corporate operations.
Such a shifting trend alongside the “organic” movement may actually re-invigorate smaller scale farming operations.
The “hobby farmer” of today typically has a day job and supplements the family’s lifestyle by producing livestock and/or crops and feed.
As mentioned above, the dairy farmer, however, is all in, 24/7. Tough work and little pay, but a good life for those who know it.
Going local is the way to go. Consumers are looking for local identification of products for safety and green reasons. It says a lot about supporting the local economy and often consumers say the products taste better. Effective marketing campaigns can be built around the local theme and incorporate many different areas of the store from produce, meat, grocery, floral, even wine.