MOORHEAD — When consumers purchase locally grown foods at smaller central Minnesota groceries, they’re strongly motivated by supporting nearby growers and choosing fresh, healthy food. Their purchases have an outsize impact on local economies.
Those are among the findings of a recently released study at University of Minnesota Extension, which analyzed 11 of 18 similar small grocery operations in the region that offer local, organic and natural foods.
For every dollar of sales at these stores, an additional 60 cents was generated in the region. That’s three times the average economic impact of typical food and beverage stores, which provide an additional 20 cents for every dollar of sales.
“When stores purchase from local farmers and other local producers, more money stays local and ripples through an economy,” said Ryan Pesch, Extension educator and chief author of the report.
The 11 stores operators studied spent $2.3 million on inventory in a single year, of which an average of 30 percent was purchased from farms and businesses in the central Minnesota study area. This included 232 farms accounts and 111 non-farm producers such as local artisans and value-added producers. Stores reported a wide range of local purchasing, with their inventory from local producers ranging from 4 to 62 percent. The largest purchase was of locally raised meats, with bakery items second and fruits and vegetables third.
“Customers said they are driven to spend dollars that support local foods and local business,” says Pesch. “They also value healthy foods and environmental stewardship. These values brought customers to these 11 stores, and motivated them to spend more.”
Understanding economic impacts informs communities and stores as they consider ways to deepen their relationship with customers and tout the impact of local purchasing. Extension’s applied research helps communities and regions better understand their business environment. Other economic studies and reports can be found at https://z.umn.edu/511r
About the study
Extension analyzed data from 11 stores in 15 counties and surveyed 305 consumers about their purchases in 2018. Foods identified as “local” were purchased directly from growers; wholesale transactions were not included in the study. The stores were smaller, independently owned or governed as cooperatives, occupying less than 10,000 square feet of retail space. The study was conducted in collaboration with Region Five Development Corporation.