Acting Locally: Using Purchasing Power to Source Local Food

June 3, 2015
  • Sophie Waskow Rifkin

    Former Associate, BSR

Companies have long used their purchasing power to drive demand for and lower the cost of sustainable goods. For instance, Walmart has taken advantage of its size to bring organic food to a wider customer audience, and partnerships between corporations and nonprofits have spurred bulk purchases of renewable energy.

When it comes to sourcing local food for internal operations, however, companies face a significant gap.

Companies source food indirectly, through external contractors usually hired to manage their internal food service. While they may not have direct purchasing control over the products brought into their offices, they can work with these contractors, like any supplier, to indicate preferences and set standards for food purchasing. Local food sourcing can help companies enhance the sustainability of their operations, reducing food miles, enhancing transparency by providing a direct connection to producers, and allowing buyers to invest in their local food economies.

But barriers exist when connecting local producers and buyers. Take seafood, for example. The United States is a major seafood producer, but 86 percent of the fish consumed domestically is imported, and a third of domestic catch is exported. 

Tackling food sourcing is no easy task, in part because so many players have a role in bringing food to the table. In the case of the U.S. seafood industry, there are several factors that make domestic consumption more difficult. First, it’s difficult for local buyers to purchase local fish given the long supply chain of seafood. After traveling miles from where it was caught, often a fish is consolidated and aggregated at central markets and then is trucked back out, sometimes arriving at a table only a few miles from its source. Second, bulk-food production often requires exacting standards on cut and size to make production efficient. These standards can be challenging for smaller fishermen, given the limitations of smaller production facilities. Third, the ocean cannot produce what we demand of it. Customers, buyers, and restaurants need to understand the seasonality of seafood, just like any food product, and tailor menus to what their local fishermen can catch and provide.

There are opportunities, however, for companies to work with their food-service providers to encourage greater sourcing of local food. They can:

  1. Integrate standards for local purchasing into contracts with third-party food-service partners, which, in turn, can help local producers plan inventory and production to meet customers’ needs. 
  2. Engage with local stakeholders to investigate innovative distribution models to help solve the “last mile” challenge many smaller producers face. Food hubs, which are defined as a business that actively manages the aggregation and distribution of food from farms to satisfy wholesale, retail, and institutional demand, are one potential model to consider.
  3. Write flexible but robust sourcing requirements that help local producers meet company needs. For example, a “local seafood” standard wouldn’t work for a company not located on a coast, but a “domestic seafood” standard would. Companies can set standards by food category, which will keep their requirements ambitious and realistic.  

Companies can go one step further and engage employees on local food and food waste issues. For example, high standards of perceived quality (i.e. unblemished tomatoes of the same size and shape) often makes sourcing local food challenging. Companies can drive employee engagement and participation on these issues—and expand palates—by hosting events featuring less aesthetically pleasing food, such as a “Trash Fish Dinner” or an “Ugly Vegetable Feast.”

These are just a few of the ways that companies can use their buying power to drive the market for local food products. By putting local at the center of food procurement, companies can address climate impacts, reinvest in their local economies, and enhance employee engagement. And by expanding the definition of what “acceptable food” is, companies can help address food waste—a growing economic and environmental problem—by putting less food in the trash and more food in their employees’ stomachs. 

Let’s talk about how BSR can help you to transform your business and achieve your sustainability goals.

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