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The Rise of New Markets

March 25, 2009 | By Patty Cantrell
Great Lakes Bulletin News Service

This increasing quest by consumers for tasty, healthy food produced by people they could actually go visit is opening doors for local farms and food businesses and their communities.

But moving through those doors is quite another thing. It requires helping interested farms start up or transition to new business models. It requires more storage, packing, distribution, and other services needed to move food around at a regional scale.

Rick Schnieders, chief executive officer of Sysco, is trying to figure out how to move his company through that door. Driving his efforts, he says, is the fact that the market is moving toward foods that provide “romance, memory, and trust” versus foods that are “fast, convenient, and cheap.”

Denis Jennisch, regional produce manager in Sysco’s Grand Rapids office, is trying to make that happen in his region by purchasing more products from nearby farms, which offer more “romance, memory, and trust” than anonymous, distant suppliers. Mr. Jennisch even received some money from headquarters to help farms find cooling and other equipment they might need to scale up for Sysco.

“The Grand Rapids and Kansas City offices are the two regions working on it and learning from each other,” he said. “Eventually the program will go to all of Sysco.”

Meanwhile, other distribution companies and all sizes of farms are trying to duplicate the success of Michigan’s asparagus farmers, who led the way in expanding produce sales into local, fresh markets.

Their story is very encouraging: In 2002, those growers, centered in west Michigan’s Oceana County, were swamped by a flood of imported Peruvian asparagus that severely depressed the prices they were getting from processors. So a small group of growers pushed back: Observing that health-conscious consumers were eating more fresh, and less canned, asparagus, they began redirecting their asparagus to fresh markets.

It wasn’t easy. Switching from processed to fresh markets means new plant varieties, cooling equipment, and market relationships. But in three years, the pioneering growers increased the amount of Michigan asparagus going to higher-paying, fresh produce markets from 5 percent to 25 percent. They earned 20 percent more, and even the canners and other bulk processors had to pay more because they were competing with fresh markets.

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