Abstract:

This research was conducted in order to understand the costs that retail buyers incur when sourcing local foods, particularly fruits and vegetables, so that strategies to overcome these barriers can be determined. Preliminary exploratory interviews and a literature review indicate that 'transaction costs', that is, the time and money needed to work with multiple farmers to source local foods, decreases the amount of food that stores will buy. The goal of this research was to develop a deeper understanding of challenges relating transporting, ordering, and purchasing local foods (here defined as fruits and vegetables grown in Minnesota or Western Wisconsin) from the perspective of retail buyers so that strategies can be developed to overcome these hurdles and increase the amount of local foods purchased by stores. This research: 1. Describes major trends, preferences, and requirements of grocery stores and co-ops that source local foods. 2. Examines and compare transaction costs associated with purchasing local foods from the perspective of grocery stores and co-ops who buy local foods through various suppliers (direct from farmer, distributor/wholesaler).

Quick Facts:

• Author: Annalisa Hultberg
  
• Published: December 14, 2009, CURA, Univ of Minnesota
• Intended audience: "farmers who sell to retail markets," also policy makers / activists /organizations looking to support those farmers
  
• Goals / purpose: To investigate the obstacles that retail buyers perceive when transporting,
  ordering, and purchasing local foods, and to develop strategies for overcoming those obstacles.
  
• Methods - How would someone know they could trust this?
• Surveyed food distributors directly (also some preliminary lit review
  & interviews w/ farmers, although unclear how farmer interviews
  contributed to process or findings).
• From 1 (not very well)–4 (very well), how well does this source of food knowledge:
• Engage an adequate range of perspectives and types of knowledge? (3)
  
• Translate between diverse perspectives? (2)
  
• Address conflicts across perspectives? (1)
  
• Generate useful information for those affected by the issues addressed? (4)
  
• Include an adequate range of relevant stakeholders throughout the knowledge-creation process? (2)
  
• Help users of this knowledge source learn from each other? (3)
  
• Allow users of this knowledge source to put what they learn into action? (3)
  
• Consider the larger context as necessary? (3)
  
• What is useful, meaningful, surprising, or a problem? Questions?
• Interviews were conducted with managers of co-ops and independently-owned grocery stores (including Lund's & Bylerly's, for example) but not with larger stores whose buying decisions are made out-of-state. The author notes they were not interviewed because they don't carry many local food but that it would be valuable to speak to them about why that is.
• Author also notes it would be valuable to interview farmers about the positives & challenges of such relationships.

• What do you think could or should be done with this source of knowledge?
• What has already been done?
• How should we keep track of what this knowledge does as it circulates in the world?
• What connections would you like to see made to other information / people / organizations?

See http://www.cura.umn.edu/publications/catalog/cap-152 for this and other resources from CURA.

(ID# 1004)

Facilitating Small Farmer's Access to New Sales Channels in Minnesota: A Transaction Cost Analysis (PDF) at