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Local Procurement - US - February 2009

Local procurement is a fast-growing category with tremendous promise, and marketers that are aware of the many dynamics at play can generate significant revenues. Some of the topics discussed in this report include:

  • Identification of key demographics that purchase locally procured food and non-food items

  • Attitudes and motivations behind their purchases

  • Demographics interested in local procurement, and the barriers that are currently preventing purchase

  • The many complex and important factors driving local procurement, and how companies can position themselves to capitalize on them

  • Specific strategies and tactics companies can use to integrate local procurement into their daily business and brand building activities

Readers of this report will understand the factors at play in this dynamic market, and be empowered to capitalize on them in significant and meaningful ways.

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Consumer survey data
          • Abbreviations and terms
            • Abbreviations
              • Terms
              • Executive Summary

                • A cultural sea change and the recession drive local procurement
                  • Three types of consumers
                    • Deeply held beliefs drive purchases
                      • Marketing platforms
                        • Food: Most popular items purchased
                          • Brand leaders and innovators
                            • Key demographics: Respondents with children in the household and 25-34s
                            • Insights and Opportunities

                              • Talk to the moms (and dads)
                                • Local procurement as the cure for shopping ennui
                                  • Cooking up profits with local procurement
                                    • The local giveback
                                        • Figure 1: Reasons for buying local goods/services, November 2008
                                        • Figure 2: Top cities for contributions to social care/welfare organizations, December 2008
                                      • The farmers’ market: The gateway for reaching the young and affluent
                                        • Figure 3: Incidence of membership in local food networks, by age, November 2008
                                      • “Local washing” and a potential backlash
                                      • Inspire Insights

                                          • Moral Brands
                                            • What’s it about?
                                              • What we’ve seen
                                                • Local procurement at the fulcrum
                                                  • Implications
                                                    • An Inconvenient Fruit
                                                      • What we’ve seen
                                                        • A case of moral amnesia
                                                          • Here come the lectures and rants
                                                            • Implications
                                                            • Market Size and Forecast

                                                              • Key points
                                                                • Local produce enjoys strong growth…
                                                                  • …and will see greater growth in the future
                                                                      • Figure 4: Number of operating farmers’ markets, 1994-2008
                                                                      • Figure 5: Purchase venues for organic food and beverages in past year, 2006-08
                                                                      • Figure 6: Total U.S. sales and forecast of organic food, at current prices, 2003-13
                                                                      • Figure 7: Total U.S. sales and forecast of organic food, at inflation-adjusted prices*, 2003-13
                                                                  • Competitive Context

                                                                        • Figure 8: Percentage of shoppers visiting mass merchandisers, by key top stores, 2007 and 2008
                                                                    • Market Drivers

                                                                      • Key points
                                                                        • An emerging new ethos buoys local procurement
                                                                          • Buying local to keep the local economy strong
                                                                            • Figure 9: Reasons for buying local goods/services, November 2008
                                                                          • A taste for taste
                                                                            • Trading down in the recession from big-ticket items to crafts from local artisans
                                                                              • The internet drives local procurement
                                                                                • Families and 25-34s are the most avid consumers
                                                                                  • Figure 10: Households, by size, 2006
                                                                                  • Figure 11: Population, by age, 2003-13
                                                                              • Brand Qualities

                                                                                • Whole Foods: A leader in local procurement
                                                                                  • Local taken literally at Henry's Marketplace
                                                                                    • Kroger’s got milk…and more
                                                                                      • UC Berkley goes local, and so do college students across the country
                                                                                        • Two national foodservice companies go local
                                                                                          • Burgerville’s been chewing the (local) fat since 1961
                                                                                            • BALLE’s Local First campaign yields significant dividends for local merchants
                                                                                            • Innovation and Innovators—Food

                                                                                              • Trendsetter Google goes local…and a ripple effect follows
                                                                                                • Chipotle serves up local pork
                                                                                                  • Wal-Mart steps up its efforts
                                                                                                    • Sellers Market Restaurant is strictly local
                                                                                                      • River Valley Market Co-op attracts shoppers en masse
                                                                                                        • Vassar College restarts its local efforts
                                                                                                          • Penn State gets more local
                                                                                                          • Innovation and Innovators—Non-Food

                                                                                                            • Whole Foods in Orange County sells local lotions
                                                                                                              • Nordstrom partners with Blue Hawaii
                                                                                                                • Green Zebra guides San Franciscans on a search
                                                                                                                  • Timberland takes a bold step forward
                                                                                                                    • Investors’ Circle puts its money where its mouth is
                                                                                                                      • The city of Denver pushes local
                                                                                                                        • Local virtualization at etsy.com
                                                                                                                          • The Wedge holds promise on this side of the Atlantic
                                                                                                                          • Advertising and Promotion

                                                                                                                            • Overview
                                                                                                                              • Figure 12: Top ad expenditures by supermarkets, 2006 and 2007
                                                                                                                            • Web marketing efforts
                                                                                                                              • St. Helena Farmers’ Market (CA)
                                                                                                                                • San Francisco Ferry Plaza Farmers' Market
                                                                                                                                  • Freshfarm Market
                                                                                                                                    • Analysis of commercials
                                                                                                                                      • Figure 13: Whole Foods television ad, 2007
                                                                                                                                      • Figure 14: Whole Foods television ad, 2007
                                                                                                                                      • Figure 15: Wal-Mart television ad, 2007
                                                                                                                                  • Who Buys Local?

                                                                                                                                    • Key points
                                                                                                                                      • Females like local
                                                                                                                                        • Figure 16: Places where local goods/services are purchased, by gender, November 2008
                                                                                                                                      • 25-34s like local
                                                                                                                                        • Figure 17: Purchasing behavior based on local sourcing, by age, November 2008
                                                                                                                                      • Larger families go local
                                                                                                                                        • Figure 18: Purchasing behavior based on local sourcing, by number of people in HH, November 2008
                                                                                                                                    • Purchase of Local Food Products

                                                                                                                                      • Key points
                                                                                                                                        • Fruits, vegetables, and baked goods: top three items purchased
                                                                                                                                          • Figure 19: Purchase incidence for local food goods, November 2008
                                                                                                                                        • Presence of children drives local meat purchases
                                                                                                                                          • Figure 20: Purchase incidence for local meat, by presence of children and number of people in HH, November 2008
                                                                                                                                        • With children and buying local dairy
                                                                                                                                          • Figure 21: Purchase incidence for local cheese/dairy, by presence of children and number of people in HH, November 2008
                                                                                                                                        • With children and buying fruits and vegetables
                                                                                                                                          • Figure 22: Purchase incidence for local fruits and vegetables, by presence of children and number of people in HH, November 2008
                                                                                                                                        • Local baked goods go with kids
                                                                                                                                          • Figure 23: Purchase incidence for local bread/baked goods, by presence of children and number of people in HH, November 2008
                                                                                                                                      • Purchase of Local Non-Food Goods

                                                                                                                                        • Key points
                                                                                                                                          • Apparel, flowers, and accessories about once a year
                                                                                                                                            • Figure 24: Purchase incidence for local non-food goods, November 2008
                                                                                                                                          • With children and purchasing accessories
                                                                                                                                            • Figure 25: Purchase incidence for local accessories (eg, handbags, jewelry, belts, etc.), by presence of children and number of people in HH, November 2008
                                                                                                                                          • Buying apparel with kids
                                                                                                                                            • Figure 26: Purchase incidence for local apparel (T-shirts, jackets, dresses, pants, etc.), by presence of children and number of people in HH, November 2008
                                                                                                                                          • Arts and crafts and families
                                                                                                                                            • Figure 27: Purchase incidence for local arts and crafts, by presence of children and number of people in HH, November 2008
                                                                                                                                          • Flowers and families go together
                                                                                                                                            • Figure 28: Purchase incidence for local flowers, by presence of children and number of people in HH, November 2008
                                                                                                                                        • Participation in and Patronization of Local Procurement Institutions

                                                                                                                                          • Key points
                                                                                                                                            • At the farmers’ market with kids in tow
                                                                                                                                              • Figure 29: Incidence of membership in local food networks, by presence of children and number of people in HH, November 2008
                                                                                                                                            • Farmers’ markets lure the under-45s
                                                                                                                                              • Figure 30: Incidence of membership in local food networks, by age, November 2008
                                                                                                                                            • With money and shopping freely
                                                                                                                                              • Figure 31: Location of local goods purchased, by household income, November 2008
                                                                                                                                          • Attitudes and Motivations

                                                                                                                                            • Key points
                                                                                                                                              • Local procurement elicits deeply held values
                                                                                                                                                • Figure 32: Reasons for buying local goods/services, November 2008
                                                                                                                                              • Barriers to purchase
                                                                                                                                                • Figure 33: Reasons for not buying local goods/services, November 2008
                                                                                                                                              • Friends are the source
                                                                                                                                                • Figure 34: Lifestyles related to purchasing local goods, November 2008
                                                                                                                                              • Less income translates into more zeal for things local
                                                                                                                                                • Figure 35: Strictness of purchasing behavior for local goods, by household income, November 2008
                                                                                                                                              • Blacks more strict about buying local
                                                                                                                                                • Figure 36: Strictness of purchasing behavior for local goods, by race/Hispanic origin, November 2008
                                                                                                                                            • Cluster Analysis

                                                                                                                                                • Incidentals
                                                                                                                                                  • Who they are
                                                                                                                                                    • Opportunity
                                                                                                                                                      • The Interested
                                                                                                                                                        • Who they are
                                                                                                                                                          • Opportunity
                                                                                                                                                            • Intentionals
                                                                                                                                                              • Who they are
                                                                                                                                                                • Opportunity
                                                                                                                                                                  • Cluster characteristics
                                                                                                                                                                    • Figure 37: Local procurement clusters, November 2008
                                                                                                                                                                    • Figure 38: Incidence of membership in local food networks, by local procurement clusters, November 2008
                                                                                                                                                                    • Figure 39: Strictness of purchasing behavior for local goods, by local procurement clusters, November 2008
                                                                                                                                                                    • Figure 40: Places where local goods/services purchased, by local procurement clusters, November 2008
                                                                                                                                                                    • Figure 41: Purchase behaviors for local goods or services, by local procurement clusters, November 2008
                                                                                                                                                                    • Figure 42: Reasons for buying local goods/services, by local procurement clusters, November 2008
                                                                                                                                                                    • Figure 43: Lifestyles related to purchasing local goods, by local procurement clusters, November 2008
                                                                                                                                                                  • Cluster demographics
                                                                                                                                                                    • Figure 44: Local procurement clusters, by gender, November 2008
                                                                                                                                                                    • Figure 45: Local procurement clusters, by age, November 2008
                                                                                                                                                                    • Figure 46: Local procurement clusters, by income, November 2008
                                                                                                                                                                    • Figure 47: Local procurement clusters, by race, November 2008
                                                                                                                                                                    • Figure 48: Local procurement clusters, by Hispanic origin, November 2008
                                                                                                                                                                  • Cluster methodology
                                                                                                                                                                  • Custom Consumer Groups

                                                                                                                                                                    • Moms and dads buy local cheese dairy
                                                                                                                                                                      • Figure 49: Purchase incidence for local cheese/dairy, by gender and presence of children in HH, November 2008
                                                                                                                                                                    • Hispanics like local produce
                                                                                                                                                                      • Figure 50: Purchase incidence for local fruits and vegetables, by age and race/Hispanic origin, November 2008
                                                                                                                                                                    • Young Hispanics favor local fare
                                                                                                                                                                      • Figure 51: Purchase incidence for other local prepared foods (eg, locally sourced meals in a restaurant, or foodservice at a farmers’ market), by age and race/Hispanic origin, November 2008
                                                                                                                                                                    • Moms and dads buy local crafts
                                                                                                                                                                      • Figure 52: Purchase incidence for local accessories (eg, handbags, jewelry, belts, etc.), by gender and presence of children in HH, November 2008
                                                                                                                                                                    • Moms and dads buying local apparel
                                                                                                                                                                      • Figure 53: Purchase incidence for local apparel (T-shirts, jackets, dresses, pants, etc.), by gender and presence of children in HH, November 2008
                                                                                                                                                                    • Females aged 35+ buy local from lots of channels
                                                                                                                                                                      • Figure 54: Purchase locations for local goods or services, by gender and age, November 2008
                                                                                                                                                                    • Young males fans of local
                                                                                                                                                                      • Figure 55: Purchase behaviors for local goods or services, by gender and age, November 2008
                                                                                                                                                                    • Females aged 55+ are civic minded and picky
                                                                                                                                                                        • Figure 56: Reasons for buying local goods or services, by gender and age, November 2008
                                                                                                                                                                    • Appendix: Other Useful Consumer Tables

                                                                                                                                                                      • Moms buy local meat
                                                                                                                                                                        • Figure 57: Purchase incidence for local meat, by gender and presence of children in HH, November 2008
                                                                                                                                                                      • Moms and males with children buy local bread/baked goods
                                                                                                                                                                        • Figure 58: Purchase incidence for local bread/baked goods, by gender and presence of children in HH, November 2008
                                                                                                                                                                      • Moms and dads buying locally prepared food
                                                                                                                                                                        • Figure 59: Purchase incidence for other local prepared foods (eg, locally sourced meals in a restaurant, or foodservice at a farmers’ market), by gender and presence of children in HH, November 2008
                                                                                                                                                                    • Appendix: Trade Associations

                                                                                                                                                                      Companies Covered

                                                                                                                                                                      • Albertsons Inc.
                                                                                                                                                                      • Apple, Inc
                                                                                                                                                                      • Best Buy stores (USA)
                                                                                                                                                                      • Bon appetit Group
                                                                                                                                                                      • Chipotle Mexican Grill Inc.
                                                                                                                                                                      • Community Alliance with Family Farmers
                                                                                                                                                                      • Costco Wholesale Corporation
                                                                                                                                                                      • Craigslist
                                                                                                                                                                      • Dow Jones & Company Inc.
                                                                                                                                                                      • Food Marketing Institute
                                                                                                                                                                      • Google, Inc.
                                                                                                                                                                      • Greenfield Online
                                                                                                                                                                      • J C Penney Company, Inc
                                                                                                                                                                      • Ketchum
                                                                                                                                                                      • Kmart Corporation
                                                                                                                                                                      • Lucid Marketing
                                                                                                                                                                      • Macy's, Inc.
                                                                                                                                                                      • McDonald's U.S.A.
                                                                                                                                                                      • Microsoft USA
                                                                                                                                                                      • Nestlé USA
                                                                                                                                                                      • Nestlé Waters North America Inc.
                                                                                                                                                                      • Nordstrom
                                                                                                                                                                      • Ogilvy & Mather Worldwide
                                                                                                                                                                      • Organic Alliance
                                                                                                                                                                      • Organic Consumers Association
                                                                                                                                                                      • Organic Farming Research Foundation
                                                                                                                                                                      • Organic Trade Association
                                                                                                                                                                      • Produce Marketing Association
                                                                                                                                                                      • Publix Super Markets
                                                                                                                                                                      • Reuters Group PLC
                                                                                                                                                                      • Sodexo, Inc.
                                                                                                                                                                      • Starbucks Corporation
                                                                                                                                                                      • Target Corporation
                                                                                                                                                                      • The Kroger Co.
                                                                                                                                                                      • The New York Times Company
                                                                                                                                                                      • The Stop & Shop Supermarket Company
                                                                                                                                                                      • Timberland (USA)
                                                                                                                                                                      • Toys R Us
                                                                                                                                                                      • Trader Joe's Company Inc
                                                                                                                                                                      • U.S. Bureau of Labor Statistics
                                                                                                                                                                      • U.S. Bureau of the Census
                                                                                                                                                                      • U.S. Department of Agriculture
                                                                                                                                                                      • UBS Financial Services Inc.
                                                                                                                                                                      • United Nations
                                                                                                                                                                      • Walmart Stores (USA)
                                                                                                                                                                      • Washington Post Company (The)
                                                                                                                                                                      • Wells Fargo & Company
                                                                                                                                                                      • Whole Foods Market Inc

                                                                                                                                                                      Local Procurement - US - February 2009

                                                                                                                                                                      £3,199.84 (Excl.Tax)