Dive Brief:
- Natural foods grocer Lucky's Market announced this week that former regional director of operations Tim Overlie will assume the role of director of local foods, according to a company release. In the newly created position, Overlie will oversee local products in all departments across the retailer's 28 stores and work to expand its assortment.
- Most of Lucky's stores sell hundreds of local products, and its Colorado and Florida outlets stock nearly 1,000 different local items. The grocer works with both microgrowers, which are located within 25 miles of the store, and regional producers.
- "As we've grown from one store to 30 stores, it's been more challenging to be able to connect with communities," Overlie told Food Dive. "As we keep expanding, this [role] could be a way to help us really put focus back on the local aspect."
Dive Insight:
Local foods have been a cornerstone of Lucky's Market since its launch in 2003, but the creation of Overlie's position takes this value proposition a step beyond the initiatives of many competitors. Most retailers task category managers with overseeing local sourcing for their individual segments, but these employees were stretched thin as the retailer continued to scale.
"Our category managers had such a hard time with [expansion] because we have 30 different markets that we have to try and integrate with, and on top of that they have their day jobs, so to speak, of just running their categories in general," Overlie said.
Lucky's partners with thousands of producers, ranging from regional companies within a 250-mile radius of a given store to microgrowers that are hyper-local, and can only produce enough product for an individual store. Overlie explained that his new role will help unify sourcing efforts, keep existing relationships healthy and double-down on opportunities to scale the product lines of their high-performing producers.
"As we expand our presence in these individual markets, we're looking for products that have the ability to go beyond [their] own region. Our goal is to work with these producers ... give them advice on packaging ... and help incubate and help them to grow."
It's a savvy strategy, as consumer demand for local products shows no sign of slowing down. The U.S. Department of Agriculture estimates that sales of locally produced foods, which reached $12 billion in 2014, will jump to $20 billion by next year. According to management consulting firm AT Kearney, 78% of shoppers said they will pay more for local products across grocery segments.
Robust selections of premium, locally sourced products are becoming a necessity for grocers looking to have an edge in an increasingly cutthroat retail space. While shoppers were once satisfied with local call-outs on fruits and vegetables in the produce section, today they are looking for these products throughout the store — including the center aisles, meat case and even frozen food section.
This shifting consumer behavior is likely tied to consumer demand for both supply chain transparency and mission-based, experiential foods and beverages. By investing in a local portfolio, grocers can tick off these two additional shopper interests as well, adding to their brand's value and building consumer trust.
Given this evolving trend, it's possible that other grocers will create similar roles to ensure that sourcing processes are streamlined, category managers get the help they need and that they're maximizing their local products' potential.