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February 23, 2004

Farmers’ markets take food back to basics

Farmers’ markets are booming in many countries, but is it worth paying the extra to buy directly from the producer of your food? As farmers’ markets begin to rattle supermarkets, how are they fighting back? Where do consumers really get the best deal? Patrick McGuigan went to market to find out.

Farmers’ markets are booming in many countries, but is it worth paying the extra to buy directly from the producer of your food? As farmers’ markets begin to rattle supermarkets, how are they fighting back? Where do consumers really get the best deal? Patrick McGuigan went to market to find out.

It seems strange to talk about farmers’ markets as a new and exciting trend. The tradition of buying locally produced food from outdoor markets stretches back over thousands of years. Yet in several Western countries food production has become so automated, and supermarkets so dominant, that there came a point when it looked like markets were a thing of the past.

But in areas such as Australia, North America and the UK it’s possible to detect a consumer backlash against the industrialisation of food, which has manifested itself in the re-emergence of farmers’ markets. In the UK, for example, there are over 450 such markets, yet in 1997 there wasn’t a single one. In the US, there are over 3,100 farmers’ markets, representing a 79% increase from 1994, while numbers have also rocketed in Canada.

It’s not difficult to work out why people find farmers’ markets attractive. Food horror stories such as BSE, foot and mouth and E-coli have prompted people to search out foods they feel they can trust. And who appears more trustworthy than the farmers who have grown or reared the product they are selling?

Cutting out the middle man

The growing number of reports linking obesity to processed foods has also had an effect, as has the environmental issue of food miles, where supermarkets source products from far-away countries, when they could be produced locally. On the other side of the equation, farmers are keen to sell directly to consumers because it cuts out the middle man, meaning higher margins.

Diane Eggert, executive secretary for the Farmers’ Market Federation of New York (FMFNY), says that farmers’ markets also give producers the chance to carry out market research and develop value-added products. Another important reason for their growth is that people are aware that the money they spend stays in the local community. “It’s a means to community development,” she says. “In parts of New York the downtown is dying. Farmers’ markets are a way to re-develop these areas. They bring business and create a small-town community feel.” It’s also clear that people like the fact that the person selling to them has an expert knowledge and understanding of the food.

In general, Eggert says that local municipalities are very keen to have farmers’ markets in their areas, although local businesses can sometimes voice objections, worried that they will lose business. “But once we show them the figures, proving that the markets actually attract shoppers to the area benefiting everyone, then it’s pretty easy to convince them,” she says.

Supermarkets fear they will lose ground

The rapid growth of farmers’ markets has also attracted the attention of the major multiples, which have started to mimic some of the key characteristics of the markets. “Grocery chains are going all out to imitate us,” says Eggert. “It’s flattering, but we have to stay sharp to stay one step ahead.” One example of this, she says, is a greater tendency among the multiples to stock locally produced foods. “But they are really just exploiting farmers – they will stock a little bit of local food to attract customers and the rest will be mass produced,” she says.

In the UK, major supermarket chain Sainsbury’s has gone even further in its attempts to replicate elements of farmers’ markets. It has recently opened two new stores in London, under the Sainsbury’s Markets brand, which feature specialised food counters, stocking some locally produced food and manned by people who can inform consumers about the products.

“Sainsbury’s is trying to mimic the sociable shopping experience of farmers’ markets and create the illusion that its staff has an in-depth knowledge of the products, but they haven’t actually reared the lamb or grown the apple themselves,” says Sue Thomson, press marketing manager of the National Association of Farmers’ Markets (NAFM). “There is also still a lot of food that isn’t grown locally or shouldn’t be in season. The sales of farmers’ markets in the area haven’t been affected by the new stores. I think customers are not so easily fooled.”

The customers in question may soon have even more choice if London’s deputy mayor has her way. Jenny Jones, a Green Party member of the London Assembly, has recently issued a report calling for a farmers’ market in every major shopping area in London. A researcher who helped compile the report says that farmers’ markets will help local businesses, which are being crushed by the major multiples. “They are also tools for regenerating local areas and cutting food miles,” says George Raszka.

“Supermarkets have put ‘local’ on the agenda”

As in the US, Sue Thomson at the NAFM says supermarkets are sourcing locally produced products more often now. “Farmers’ markets have put ‘local’ on the agenda,” she says.

A good example of this is Asda, which has set up a local sourcing team to boost the chain’s local offering. The team works on a store-by-store basis and is aiming for 2% of Asda’s total food sales to be locally sourced. Producers in certain areas of the UK have cottoned on to this new trend and are helping themselves by clubbing together under regional umbrella groups and brands. Thomson says Wales, Scotland, Cumbria and Cornwall have done particularly well in this respect.

Regional markets booming in Australia

In Australia, where the number of farmers’ markets totals 40, the general marketing manager of the New South Wales (NSW) Farmers’ Association, Martin Long, says the popularity of markets has grown a great deal in the past five years. And, like the UK, different regions of Australia have set up their own brands, which also help to strengthen the sense of community. “Development of regional brands assists regional areas with a sense of worth and pride. This is a strong feature of NSW markets,” he says.

NSW accounts for over half the farmers’ markets in Australia and Long says that there are two main types. “Many are promoted as ‘gourmet’ markets and have value-added products such as cheese, olive oil products, breads, dips, jams and chutneys. These tend to appeal to more affluent consumers – those who are single, have two incomes but no kids, or empty-nesters,” he says. “Where there are fresh produce markets that specialise in bulk seasonal produce at low prices, the demographics change to include those with lower incomes, and large numbers of consumers with non-Anglo-Saxon ethnic origins. Often these people have a history of market purchasing in their country of origin, whether that be in Europe or Asia.”

Who shops at farmers’ markets?

The question of who actually shops at farmers’ markets is an interesting one. One of the criticisms often levelled at markets is that their prices and products cater to a largely middle-class, wealthy consumer base. The split in market-types in Australia shows that this is not always the case. In the US, people from the poorer sections of society often receive food coupons to be redeemed at local farmers’ markets. “We are making a real effort to include all groups and encourage healthy eating,” says Diane Eggert back at the FMFNY. She says that prices compared to supermarkets vary – some products are cheaper, depending on the time of year and the type of product. “People don’t mind paying more for something that is fresher and not mass produced,” she says.

In the UK, Sue Thomson of the NAFM says that although farmers’ markets can be more expensive than the multiples, this simply reflects the higher quality of the products on sale. “A lot of the meat sold at farmers’ markets, for example, has been hung for several days to drain the water from it. Supermarkets on the other hand often actually add water to increase the weight. So people may be paying more per kilo at a farmers’ market, but they are actually getting more meat for their money.” Thomson adds that supermarkets can also afford to run loss leaders – staple products on which they lose money. This makes them appear cheaper, but on other products they are actually more expensive.

True as these arguments may be, farmers are undoubtedly making higher mark-ups at farmers’ markets, compared to selling to supermarkets. But if people are willing and happy to pay more for a locally produced product, then who can blame the farmer for making a bit extra?

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