Barriers and opportunities to increasing local sourcing

Research looking at the barriers and opportunities to increasing local sourcing by convenience retailers and food manufacturers

This report looks to understand the barriers to and opportunities for increasing local sourcing of fresh produce, meat, bakery, and dairy products by convenience stores and food manufacturers.

Key findings:

  • Producers do not think the local retailer convenience store is the right market for their products. This is because producers would need to scale up to supply a convenience store; there is an expectation that margins would be too tight; they prefer to expand into other markets e.g. restaurants and hotels; there is sufficient demand from local farm shops; they use ‘not available in supermarkets’ as a selling point; and that they feel there would not be a demand for their product in convenience stores. 
  • Retailers source local products as a business to increase the resilience of supply chains; to create benefits for local economies and to reduce food miles.
  • The retailers have limitations on what they can do with regards to local purchasing, and face challenges around price points, logistics and labelling.
  • Manufacturers generally source locally to give them a unique selling point, however there generally is not a market for their product at a premium price so are unable to commit to local sourcing.

 

There are four main recommendations. The first three provide mechanisms to assist in increasing local sourcing within convenience stores associated with national retailers, whilst the fourth looks at supporting local producers to gain access to alternative markets. With price acting as the predominant barrier to local sourcing by those manufacturers interviewed, we do not recommend that next steps are taken to try and increase local sourcing by this sector at this stage.

  1. Ensuring that customer and retailer expectations on local sourcing are aligned
  2. Exploring new networks to assist with logistics and transportation
  3. Overcoming challenges within the meat sector
  4. Supporting local producers to gain access to alternative markets