Local Produce Sourcing Results in Fresher Product and 40% Gross Profits

Store Name: Lake Country IGA
Location of Store: Lake Country, British Columbia, Canada
Department: Produce
Difficulty: Easy
Store Specs: 10,000 square feet

Overview

Living in the Okanagan Valley, British Columbia, Canada, we are fortunate to be surrounded by vineyards, gorgeous lakes, and amazing local farmers. Since I bought the store 15 years ago, I have been able to share this bounty with our customers by providing bins of local peaches, nectarines, cantaloupe, honeydew, watermelon, apples, corn, and more. This allows us to support other local businesses, while providing our customers with an amazing product.

Because we work directly with the farmers instead of purchasing through the co-ops, we are able to keep our prices low while still grossing 40 percent profit. Providing local produce has become so popular, we even renovated and expanded the produce department, adding garage doors that allow us to merchandise outside during warm months. Since the expansion, we've not only been able to pay off the cost of the renovation (in just four months, I might add) but we've also more than doubled our produce sales. In total, produce has grown from 11 percent of total store sales to 18 percent.

By The Numbers

In-season Sales per Month:

• 4,000 pounds of peaches
• 2,000 pounds of nectarines
• 5,000 pounds of watermelon
• 3,500 pounds of apples

50-75% produce sales growth since the remodel. Remodel costs were recouped in four months.

Why It Works

For Our Shoppers

Unmatched Freshness

I often call an orchardist, place my order, and they go out and pick the fruit to deliver that day. My fruit is typically even fresher than the fruit stands in town.

Great Price

While our competition sells apples for about $1.99 per pound, I am able to sell better quality apples for just $0.79-$1.29 per pound.

Supporting Their Neighbors

In our town of 13,000, most people know one another. When I sell local produce, I make sure to put the name of the farmer it came from on its signage, so that shoppers know exactly which neighbor put in the hard work to grow their produce.

For Our Store

Reinforces Local Ties

As with everybody in the grocery business, it can be difficult to compete with big box stores like Walmart. Offering local produce goes a long way toward reinforcing that you are truly part of the local community.  

Brings in Shoppers

Whether you have the best produce, bake the best bread, or have a great deli, providing customers with unique offers in fresh sections is a good way to get customers in the door. Once in, they are likely to purchase items in other sections of the store.

Opens New Opportunities

In addition to local fruits, we have also created relationships with local restaurants and artisans to provide unique specialty items like local hummus, tzatziki, and German pastas.

Helps Us Break Sales Records

Our local produce is so popular that we have sold as much as $6,000 per day and $40,000 per week in produce alone. For a smaller store, those are great numbers!

Pricing

While prices vary by fruit, we keep our prices low. For example, we typically sell apples at $0.79-$1.29 per pound.

Step-by-Step Tactics:

1. The best way to start introducing local produce to your store is to get to know your area farmers. That way, you can buy the best quality produce at the best prices.
   
   
2. When displaying local produce, make sure to emphasize its value. We use signage that lists the orchard the produce came from.
   
   
3. Advertise the arrival of your local produce through your social media channels.
   
   
4. Educate your employees so that they can answer any questions your customers have about the origins of the produce and the farms and orchards it comes from.

Pro Tips

Prioritize quality. If the produce isn’t great, it won’t matter that it is local or priced well. Make sure to choose fresh produce that is well-sized.

Find what you are good at and grow it. Before I bought my store, I worked as a produce manager, so it made sense for me to focus on growing that section of our store.

Identify your idle movers. By figuring out which offerings weren’t moving in my store, I was able to create 300 extra feet of space in-store, which allowed me to remove the cinder brick wall and add the garage door, expanding the produce section and increasing sales by 50-75 percent.

Foster relationships with local producers. Most of the farmers I work with today are the same ones that I worked with 15 years ago when I first bought the store.