Growing numbers of independents are turning to local produce in their struggle with supermarkets. Beth Phillips weighs up the benefits of...LOCAL HEROES

Mary Portas, Queen of Shops, swears by it. Symbol groups are clamouring to fill their shelves with it. Indies across the country are arming themselves with it.

What is it? Local produce. And however hard the multiples try, this is one bandwagon they struggle not to fall off.

Last month, M&S revealed it was behind on its aim to double the amount of food it sources regionally and improve the information it gives customers by 2012. The retailer said it had "proven difficult to define and measure". Asda, which has devoted huge sums to local sourcing, took on the tricky issue of distribution, but was forced to give up on one of its 10 hubs last year. Morrisons, meanwhile, struggles with the very concept, claiming that local, for it, means anything British.

Indies, however, "get it" and so do their customers, of whom 30% bought local produce in the past month, despite the widely perceived (and in many cases very real) premium, according to an IGD survey.

But after more than 10 years as a food movement, is local produce really any more than expensive window dressing a useful loss leader for driving footfall but a poor excuse for category management? And are the fifth of shopkeepers in this week's Business Barometer (p39) right when they say it is of "limited significance"?

The motivation for buying local food may remain murky. Fifty-seven per cent of consumers in the IGD survey cited lower food miles as the reason, while 54% wanted to support local producers, 34% wanted to support local retailers and 29% wanted to keep local jobs. But what is clear is demand is there: 31% said they wanted local stores to sell more local fare, up from 12% in 2005.

Whatever customers' motivation, Chris and Juliet Porter, who run Cleall's of Corfe c-store in rural Dorset, highlighted by Portas in her BBC programme last month, claim going local has been key to rescuing their business. It stopped haemorrhaging £6,000 a month after they introduced regional lines at the insistence of Portas, including Purbeck Ice Cream, Isle of Purbeck Cider and Windswept Cow cheese.

Although it would be hard not to see an uplift in sales in the tourist honeypot of Corfe after wall-to-wall TV exposure, the Porters' experience is typical, claims Louise Pickford, Heart of England Fine Foods business development manager. She says the 20% of independents who have not yet embraced local food have their heads in the sand, especially since availability issues which for years held back the movement have been largely addressed. "For 80% of local independents, regional food does have a role, so for the vast majority the barriers to sourcing have clearly been lifted," she says. "The demand for more local foods remains in the top four improvements requested by shoppers in 2010."

HEFF recognised distribution was a key issue for both producers and retailers back in 2007 and launched a distribution company along with partner Heart Distribution, now delivering 2,000 product lines to 400 independent and multiple accounts. In 2009 its HEFF Delivery Service won the 2009 IGD ECR Award for Sustainable Distribution, and the group one of eight originally set up by Food from Britain was commended for growing sales and reducing road miles in the regional food sector. Its hub, offering a one-order, one-delivery, one-invoice solution, is one of several that have sprung up over the past couple of years in an attempt to smooth the path from producer to retailer although performance has been patchy and the logistical nut is still not fully cracked.

Symbol groups were keen to help their store owners co-ordinate deliveries in the early years, but Nisa-Today's is one of the few to have stepped up to the plate. It has a local sourcing website that promotes local producers in each UK region.

"By managing local sourcing centrally, members can have the range demanded by their customers with the convenience of Nisa-negotiated terms and all orders on one invoice from Nisa," says a spokesperson. "Nisa now has its own dedicated local sourcing manager responsible for identifying suppliers and manufacturers and making their products more readily available to the Nisa membership." Its efforts have paid off over the past three years, with a £1.5m uplift in local produce sales.

Retailers in predominantly rural areas may find it easier to make money out of local food. "In rural areas, the customer expects it," says Jonathan James, a Spar and Budgens retailer in Cambridgeshire. Local food makes up 5% of sales in his five stores, which stock up to 50 different lines at any one time from 10 suppliers. Likewise, Harry Tuffins and Stan's Superstore in Shropshire also put local food to the fore, while in East Sussex family-run chain Jempson's profiles local producers with a Local Hero initiative.

Farmhouse fare in Fulham
Housed in the grandeur of the Grade-II listed former Fulham Broadway train station, Union Market opened this month to bring fresh farm produce to the people of Fulham. 

"Union Market's proposition is about traceable, natural, regional, high-quality, best-practice British food," says founder and commercial director Tony Bromovsky. "All we want to do is make British food accessible and affordable to all." 

About 90% of Union Market's cut cheese range is British, and the meat department only stocks 100% British meat. Bromovsky intends to have as much as 70% of the grocery offer represented by UK-based suppliers in the future. 

But he admits that the 18-month search for suppliers has not been easy. Head of buying Aylie Cooke, previously with Whole Foods Market, toured the UK hunting out producers.
Yet metropolitan shoppers are also developing a hunger that indies can satisfy if they cast their nets wide enough. Andrew Thornton, the owner of Budgens in Crouch End and Belsize Park, north London, classes local lines as any product sourced from within 100 miles. He estimates 10% t0 15% of sales come from the 1,500 local lines stocked. He works with about 50 producers and, in his case, 'local' includes produce from the Crouch End store's roof garden.

"Local foods produced by small suppliers are much more sustainable and our customers love them," he says.

They might in trendy Crouch End, but will price be a barrier to further growth in the mainstream? A survey by The Grocer in March revealed 63% of consumers didn't see why they should pay a premium for local food. "Local food buying is certainly not a middle-class preoccupation," argues Jane Chamberlain of HEFF, which is conducting a year-long shopping basket survey among its independents to prove that buying local is for everyone.

James, for his part, concedes that smaller producers tend to be more expensive. "They are often sourced from cottage industries and therefore not able to gain the economies of scale. Having said that, they are usually premium-quality and can command a higher price accordingly. As a rule, we tend to work on tighter margins for local products in order to help keep the price comparisons competitive."

He disputes they are loss leaders, though, Instead, local products allow him to stand out from the multiples a key point of differentiation. "Many of the suppliers I use would not be capable of keeping up with the volumes demanded by the bigger stores," says James. "I believe that by being known for selling local products, our footfall is driven accordingly."

The higher prices mean quality is key, he adds. Retailers should only use suppliers that can cope with the demand, have good quality and full traceability. And shoppers need to be told about them. "All of our local products have markers telling the customer how far they have travelled to get to store. That works brilliantly."

Supporting regional suppliers gives a retailer a clear point of difference from its rivals, says upmarket northern chain Booths, where at least 25% of all products in its 27 stores at any one time are local. "Our customers provide positive feedback on our regional produce as we are able to serve fresh groceries, excellent meats and regional delicacies at competitive prices," says chairman Edwin Booth. "Because we work closely with them, we can ensure they are always delivered in perfect condition. I would not describe local foods as a loss leader we have good sales of local foods and make good profits from them... and customers love them."

It took Mary Portas striding in to Cleall's for Chris Porter to see the light and go local. He has since launched a website listing all the local produce from about 25 producers he stocks. The aim now is to source as much Dorset-made food and drink as possible. "I was worried before that people wouldn't pay a premium but people are prepared to pay that little bit more," he says.

It seems the answer to independents' woes was on their doorsteps all along.