Why I don’t like "Local Food Systems"

More than the frustration of defining “local food”, I think what irritates me most is the term local food “system”. I come from the technology world where a system is a structure that has parts and components interrelated through processes or rules that may govern behavior, and the structure and behavior of the system may be decomposed into subsystems and subprocesses.

When I think about a system, I think of a semiconductor “system on a chip" or an information technology system that has inputs, outputs, controls, feedback, boundaries, and interfaces. If technology analogies don’t work for you, think about a digestive system or a subway system. You know the inputs and outputs of those systems, when those systems are full or empty, and what will cause them to be full or empty.

With so many untracked and uncontrollable actors, can we really call the food that moves and is consumed in a particular locale a “food system”? When the majority of frozen apple juice in the US is imported from China and 90% of seafood consumed in the US is imported (with 1% inspected by the US Government and an estimated 1/3rd of seafood mislabeled at retail), do we really feel we have a solid food system?I wonder if proponents of local food do themselves a disservice by looking at local food through the lens of a system rather than a market.

To me, food seems much more of a market than a system. A market economy is one where decisions regarding investment, production, distribution and supply and demand are made through information exchange, and goods and services are freely priced. Clearly the terms system and market are often interchanged. We tend to refer to sewage, electrical utility, healthcare, banking, water and local food as “systems". Yet we also use the term “market" to refer to healthcare, energy, and financial services— and some would argue there is a water market.

Local food advocates want to rebuild our food system to promote the consumption of locally produced food and the improvement of the labor conditions of local food producers. They further advocate for healthy and responsibly-produced food, the equitable distribution of healthy food, and the redesign of food-related policies and subsidies that are currently designed for and benefit much larger food producers.

Could local food players be more successful if they looked at how local food could compete for market share against larger, conventional players?

A standard market analysis tool is a SWOT analysis, to determine the strengths, weaknesses, opportunities and threats of your offering vis-a-vis others. What does a local food SWOT market analysis look like?

The STRENGTHS of local food are:

1. Local food cannot usually be replicated authentically by large food companies who produce at mass volume.

2. There is huge potential growth as the percentage of the market since local food currently has such small market share while demand for local food is growing.

3. The quality of local food should be better or fresher than mass produced products.

4. Local food should be aligned with environmental or other cultural values, which should equate to local consumer loyalty.

The WEAKNESSES are:

1. Small scale production of most local food players usually means less efficiency, higher prices, lower margins, and less stable and consistent product supply.

2. Local food producers usually have resource limitations in the form of land, labor or capital when compared to larger food companies.

3. Most consumers in the US are trained to shop for the “lowest cost” option.

4. In most regions, there is a limited variety of locally grown foods.

5. Most government food-related policies were not designed for the interests of small, local food producers.

The OPPORTUNITIES are:

1. There is a growing awareness of and support for local food products. A broader base of consumers are willing to pay for (perceived or real) better taste or health that comes with local food.

2. In the US there is a growing distrust of big food/ag companies and concerns about food safety, so that more consumers are requesting transparency about who produced food, how it was grown, and where it was grown.

The THREATS are:

1. Consumer demand for “organic” product may be stronger than demand for “local”.

2. Large food producers and retailers may diffuse interest in local food by making organic and sustainably raised products more broadly available and transparently labelled so that consumer concerns about food safety and nutrition are adequately addressed.

So then, how should local food compete in a food market by minimizing its weaknesses and threats and maximizing its strengths and opportunities? The answer is to be smarter, work together— and leverage innovation.

On the production side, local food producers should get networked together to share resources, infrastructure, and knowledge. Many of the online and hardware technology breakthroughs coming from the shared economy and low cost innovation movements are accessible to smaller producers. And, of course, cloud-based and mobile services can help food producers manage their businesses more efficiently than in the past.

Local food producers can also leverage new innovations to meet market pull. Social media tools can help local food producers market and sell their products, communicate with customers, raise awareness of the benefits of local food and its values, and provide customers the transparency they are seeking. Collaborative and marketplace technologies are opening up new, efficient distribution and transportation channels. Additionally, other affordably priced technologies are making it possible for smaller, local producers to meet the operational and food safety requirements to service larger, institutional buyers.

There is clear upside for “local" in the food market, particularly if local food producers work together and leverage the affordable innovations that help them overcome their historical weaknesses and current threats.

It may no longer be possible for anyone to create a 100% local food “system” in the classic sense of the word, and today’s policies and subsidies may put local at a further disadvantage. But that doesn’t mean local food producers and advocates should stop trying. Perhaps by looking at local food through the lens of competing in a “market", rather than through the lens of “system" thinking, its advocates may have a better chance of getting closer to the ideal for which they strive.