Local, Organic, and Online: The Rise of the Digital CSA
At one time, CSAs (Community Supported Agriculture) were the ultimate source for local food. CSA members would pay upfront at the beginning of a season, and then receive a weekly box of what the farm produced – usually vegetables and fruits, but this could also include meat, eggs, honey, mushrooms, and even soap. Farmers generally marketed by word of mouth or local newspaper. Currency was often in the form of cash or bartering, even exchanging farm labor for a share. By paying upfront, providing much-needed capital to farms before their crops had grown, CSA members committed to supporting their local farm, both in times of abundance and struggle.
However, the nature of the CSA is changing, like the food industry at large. And if you're wondering how that impacts grocers, read on.
In recent years, dozens of businesses with sophisticated delivery technology have emerged under the name CSA, stepping in as intermediaries between farms and consumers. Since the term "CSA" is unregulated in most states, it's easy for any enterprising company to adopt the term. And it's not a bad strategy, as traditional CSAs have long been associated with trends that are currently on the rise: home delivery, subscription, brand transparency, and craft/artisanal goods.
These "new CSAs" typically offer customers a variety of goods that are organic or certified naturally grown, but many of them aren't local at all. Many include imported items like olive oil and avocados, even in northern cities that are thousands of miles from the nearest olive farm. (Just as the term "CSA" is unregulated, so is "local.") Yet customers don't seem bothered by this, despite their stated preference for local goods – in part because the CSA, even if it's not 100% local, still includes goods from a local farm. In that way, they're still supporting local farms, while getting a wider array of food.
How does this impact grocers?
Largely because of its grassroots nature, the role of CSAs in the grocery market has been difficult to measure. According to the Economic Research Service, the number of farms who sold directly to consumers grew 17% (with sales increasing 32%) from 2002-2007; the growth then plateaued by 2012, with sales increasing 5.5% and no change in direct-to-consumer sales. This plateau might be due to increased intermediary channels – i.e., grocers – stepping in to bring farm produce to consumers.
And yet, grocers aren't the only businesses supplying that connection. Grocers are bombarded on all sides with competition, including subscription services, delivery apps, and hard discounters. Digital CSAs still make up a small percentage of that competition, but they're poised to grow, given their demonstrated ability to market themselves as wholesome, mostly local, and transparent. For those reasons, CSAs appeal largely to millennials, who have recently edged out Baby Boomers as the largest and most influential spending group in the world. They are also the most likely to join a CSA.
So what can traditional grocers learn from the evolution of the CSA?
More and more, consumers want to know where their food is coming from. This gives regional grocers an advantage over giants like Amazon and Walmart, because brick-and-mortar stores have more leverage in promoting local and community-based products. Customers want a more personalized approach to their food consumption, and that's easier to get from a CSA or a store – so make sure to include those features in your brand and marketing.
Shoppers want convenience and craft. Yes, home delivery is a crucial piece of the supply chain – but it's not the only one. Shoppers are gravitating toward transparent brands that tell a meaningful story and demonstrate social and/or environmental responsibility. While CSAs may have the upper hand on those qualities simply by association, grocers can pivot to include – and market – them as a more central part of their brand.
Local and online can go hand-in-hand. It's time to lose the long-standing belief that local food must come straight from the farmer. Online services can help market and distribute local food more widely and more effectively – so not only are the two not mutually exclusive; in fact, they can benefit each other. The best way to do this is for an existing grocer to take a two-fold approach: one, to open up the channels of communication and distribution with local farmers; and two, to partner with a scalable, end-to-end software service who will provide a top-of-the-line eCommerce platform.
While it may seem that grocers have competition coming in from all sides, the fact is that they are in the best position to cater to customers' evolving demands. By capitalizing on your current brick-and-mortar presence, and expanding it to both local and omnichannel partners, your grocery business can establish itself as the go-to food supplier in your community.
To learn more about how locai can partner with your grocery business to do just that, visit us here.