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Why Local Sourcing Doesn't Live by Green Alone

Proponents of local foods these days focus their attention on the environment and food safety. Phrases such as “carbon footprint” and “food miles” are inevitably raised, as is the need for food traceability.

No argument here about these justifications for local sourcing. Except that lately there isn't enough focus on the other benefits, especially the halo effect that comes when a retailer links more closely to its community and area businesses. These advantages are worth remembering, because they boost a retailer's efforts in community service, partnership building and marketing.

Take the case of produce, the category that probably gets the most local sourcing attention. Chains mounting local produce campaigns can become heroes in their communities, because they are seen as hometown cheerleaders. Giant Food Stores, for example, recently received an award from the Pennsylvania agriculture secretary for its work with the state to promote area produce, according to a local report.

Likewise, retailers promoting local wines or beers in certain parts of the country, such as the Northwest, are favorably viewed for advocating important area industries.

There's a clear connection between local marketing and community service. Recently a Tennessee media outlet described an initiative that showcased local entrepreneurs' food products at a Food City store operated by K-VA-T Food Stores. The entrepreneurs were all part of a local cooperative whose mission is “to assist in the empowerment of people in Hancock County — especially those with the greatest needs.”

K-VA-T's participation in this program helped solidify its connection to the community, and may even bring a sales lift.

Whole Foods is a well-known proponent of environmental causes, but its local procurement is also geared to connecting to consumers in other ways. According to a recent presentation by TNS Retail Forward, Whole Foods' new store in Venice, Calif., makes a big deal about local produce but also showcases the work of local artists, jewelers and designers, including a wall mural made by a local artist. Promoting hometown artists won't by itself help the environment, but it will help bond the chain with its customer base.

Here's another interesting thing about local sourcing: This practice doesn't have to involve any for-sale products at all in order to be effective. Consider this headline from a retailer's press release that caught my attention recently: “Tops Friendly Markets Pumps More Than $20 Million Into Local Economy in 2008 Through New Business Partnerships.”

The release explained that Tops was restructuring its roster of business partners in order to benefit the economy of its Western New York region. Some 20 new partners included a local printer for the chain's weekly circular. This is a different type of sourcing than product acquisition, but Tops expects the strategy to enhance its reputation in the community.

The upshot is that local sourcing doesn't always boost the environment or food safety, but it's a proven method of improving customer loyalty, itself one of the biggest retailer goals.