{"id":8023,"date":"2019-12-03T09:17:37","date_gmt":"2019-12-03T17:17:37","guid":{"rendered":"https:\/\/blog-prod.qad.com\/blog\/?p=8023"},"modified":"2019-12-03T09:17:37","modified_gmt":"2019-12-03T17:17:37","slug":"how-locally-grown-products-are-disrupting-fb-manufacturing","status":"publish","type":"post","link":"https:\/\/www.qad.com\/blog\/2019\/12\/how-locally-grown-products-are-disrupting-fb-manufacturing","title":{"rendered":"How Locally Grown Products are Disrupting F&#038;B Manufacturing"},"content":{"rendered":"<p>[vc_row][vc_column][vc_single_image image=&#8221;8024&#8243; img_size=&#8221;full&#8221;][vc_column_text]<span style=\"font-weight: 400;\">There is a developing trend that has been gaining steam in recent years that has the potential to seriously impact and \u201cdisrupt\u201d <\/span><a href=\"https:\/\/www.qad.com\/industries\/food-beverage\"><span style=\"font-weight: 400;\">food and beverage manufacturing<\/span><\/a><span style=\"font-weight: 400;\">. That trend has been referred to by a number of terms, such as \u201cbuying local\u201d and \u201ceating local\u201d. It means buying food that is sourced and\/or grown within a geographical location that could be considered \u201clocal\u201d. Is \u201ceating local\u201d the next-generation of the \u201corganic\u201d trend?<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What Does \u201cLocally Grown\u201d Really Mean?<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">\u201cLocal\u201d labelling is not officially defined, regulated or monitored by any official regulating body so the meaning on a label can vary. Though, when a food or beverage product is labeled as \u201clocally grown\u201d, the \u201clocal\u201d part usually refers to an area of about 150 miles. It may be a wider area if a state or regional tagline is added. For example, a food label in a store in New York might read \u201c<\/span><a href=\"https:\/\/certified.ny.gov\/about\"><span style=\"font-weight: 400;\">New York State Grown and Certified<\/span><\/a><span style=\"font-weight: 400;\">\u201d. While the product was grown outside of Buffalo, it was sold downstate in Yorktown Heights, which is more than 150 miles away.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Until recently, locally grown food usually meant things like fruits, vegetables, dairy products and locally raised meats. Craft brewing has also been pushing the \u201clocally grown\u201d tagline. Today, however, the trend is moving to packaged foods as well. Smaller manufacturers are popping up all over the United States, as well as in other countries, to process and produce locally grown food products. Some examples include sugar from Michigan grown sugar beets, cereals from midwest grain producing states, and potato products from Idaho grown potatoes.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What is the General Perception of Locally Grown Products?<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The \u201clocally grown\u201d movement has been fueled by the perception that locally grown, produced and sourced foods contain many benefits. Many consumers assume \u201clocally grown\u201d products are fresher and have a longer shelf life. This comes from the idea that local products do not need to travel far to reach the stores, allowing the consumer access to better tasting products that are potentially safer and of a higher quality. Some feel like they are contributing to their civic responsibility by promoting local businesses and farms. In many cases, this is true, but not always. It\u2019s important to read up on individual food and beverage products and educate yourself on where exactly they\u2019re being sourced.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Some of the benefits often associated with buying locally sourced products include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Fresher products<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Supports local businesses and farms<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Creates regional jobs<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Increases the tax base to potentially lower individual taxes<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Strengthens the community<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Safer to consumer due to fewer touch points and contamination risks<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Improves overall food safety<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Healthier for consumers<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Better for the environment due to reduced transportation costs and distances<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The more steps a food product must take, from producer to consumer, greatly increases the risk of food contamination and <\/span><a href=\"https:\/\/www.qad.com\/blog\/2019\/09\/managing-recalls-with-adaptive-erp\/\"><span style=\"font-weight: 400;\">food recalls<\/span><\/a><span style=\"font-weight: 400;\">. This also jeopardizes the integrity of the product.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Is Locally Grown Food Good for the Environment?<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Sustainability is another increasing concern, and procuring food products from local farms, growers, merchants and manufacturers encourages sustainability programs and environmental protection. Locally sourced food products are helping to create a large number of economic opportunities that did not exist a few years ago, such as local food production facilities and the promotion of the local farm.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Disrupting the Larger Food and Beverage Manufacturer<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">While this trend is creating opportunities locally and regionally across the United States and other countries, there are some side effects stemming from the \u201clocally grown\u201d movement. Larger brand manufacturers and multinational food producers are <\/span><a href=\"https:\/\/www.forbes.com\/sites\/hankcardello\/2018\/09\/17\/5-ways-big-food-companies-can-make-america-and-themselves-healthier\/#25583de53131\"><span style=\"font-weight: 400;\">seeing a decline<\/span><\/a><span style=\"font-weight: 400;\"> in the sale of their products. As consumers turn more to products sourced locally, they forego buying products that are mass-produced or grown by the traditional large food manufacturer. This is causing a huge disruption in food manufacturing as well as the food supply chain. As the <\/span><a href=\"https:\/\/www.nal.usda.gov\/aglaw\/local-foods\"><span style=\"font-weight: 400;\">trend to \u2018buy locally\u2019<\/span><\/a><span style=\"font-weight: 400;\"> continues to rise, the impact on the larger manufacturer will continue to grow and cause disruption. And as sales and profits gradually decline, manufacturers will have to come up with new strategies to get back some of those lost dollars.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">The Big Players will Respond<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">As the \u201clocally grown\u201d trend continues and more consumer dollars are spent on local products, the large food producers will respond. Many of these larger players are already starting to form strategies and will continue to do so. To compete, they will need to employ strategies that exist today as well as new methods to get into the \u201cbuying local\u201d game. Here are a few strategies to consider:<\/span><\/p>\n<h3>Regionally SKU\u2019d Products<\/h3>\n<p><span style=\"font-weight: 400;\">For years, major food manufacturers have capitalized on certain regional events and issues to sell products. Cereal manufacturers, for example, feature sports stars of teams that win championships, putting their faces on packaging and selling their products regionally. The Washington D.C. area is already being inundated with Washington Nationals baseball inspired products featuring their newly crowned World Series champions.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Many of these products are produced by multinational companies trying to seize the opportunity over locally sourced companies. This can extend to the actual ingredients of food products. A large manufacturer can print boxes of products of certain foods and sell them regionally. Would a customer buying a cranberry product in Milford, Connecticut be more apt to buy a product that says \u201cNew England Grown\u201d cranberry versus another brand that does not promote the region?<\/span><\/p>\n<h3>Produce Products Where the Ingredients are Grown<\/h3>\n<p><span style=\"font-weight: 400;\">Many manufacturers are looking to build facilities in the areas the ingredients are grown. This immediately makes them a local manufacturer. While upfront costs are huge, the promotion of locally grown products\u2014and the reduction in supply chain costs on the raw material and finished goods ends of the process\u2014can outweigh the initial construction costs.<\/span><\/p>\n<h3>Contract Manufacturing and Co-Packing<\/h3>\n<p><span style=\"font-weight: 400;\">Larger producers and manufacturers can compete without the large expense of building new facilities with the expansion of the use of contract manufacturers or co-packers. Procuring regionally grown raw materials and ingredients, then using local contract manufacturers to produce those products, puts them into the local game with minimal upfront costs.<\/span><\/p>\n<h3>Mergers and Acquisitions<\/h3>\n<p><span style=\"font-weight: 400;\">Another strategy is one that has been in use for years by larger companies. That is the tactic of \u201cif we can\u2019t beat them, buy them!\u201d through <\/span><a href=\"https:\/\/www.qad.com\/blog\/2019\/08\/cpg-businesses-turning-to-ma-activity-for-success\/\"><span style=\"font-weight: 400;\">mergers and acquisitions<\/span><\/a><span style=\"font-weight: 400;\">. Larger companies are constantly investigating local farms for purchase, or at least partnering with local growers and regional manufacturers to show their interest in this trend to get a piece of the local pie.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Food &amp; Beverage Manufacturers Need to Be Rapid, Agile and Effective<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The trend of \u201cbuying local\u201d looks to be more than a passing fad. It is a concept and source of food products that is here to stay. As this concept continues to develop and grow, one thing is certain. Whether you are a local regional player or a large manufacturer trying to compete in this space, you will need the business processes and systems necessary to adapt quickly to change.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Demand for these products is on the rise as well as the sources of these products. As more players join the field, they will need business processes and systems to adapt to the marketplace. When dealing with a regionally sourced product, there will always be change and flux with new and developing requirements. The players that will succeed in the \u201cbuying local\u201d market will be those who are agile, effective and quick to respond to market pressures by combining <\/span><a href=\"https:\/\/www.qad.com\/advanced-technologies\"><span style=\"font-weight: 400;\">advanced technologies<\/span><\/a><span style=\"font-weight: 400;\"> with proven <\/span><a href=\"https:\/\/www.qad.com\/industry-best-practices\"><span style=\"font-weight: 400;\">industry best practices<\/span><\/a><span style=\"font-weight: 400;\">.<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][\/vc_column][\/vc_row]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[vc_row][vc_column][vc_single_image image=&#8221;8024&#8243; img_size=&#8221;full&#8221;][vc_column_text]There is a developing trend that has been gaining steam in recent years that has the potential to seriously impact and \u201cdisrupt\u201d food and beverage manufacturing. That trend has been referred to by a number of terms, such as \u201cbuying local\u201d and \u201ceating local\u201d. It means buying food that is sourced and\/or grown [&hellip;]<\/p>\n","protected":false},"author":35,"featured_media":8024,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[182,199],"tags":[1023,1022,294,142,324,1021,917,1019,1018,1017,24,720,1020],"class_list":{"0":"post-8023","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","6":"hentry","7":"category-featured","8":"category-manufacturing-trends","9":"tag-buying-local","10":"tag-co-packers","11":"tag-contract-manufacturing","12":"tag-food-and-beverage","13":"tag-food-and-beverage-manufacturing","14":"tag-food-producers","15":"tag-food-safety","16":"tag-locally-farmed","18":"tag-locally-sourced","19":"tag-manufacturing","20":"tag-mergers-and-acquisitions","21":"tag-packaged-foods"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How Locally Grown Products are Disrupting F&amp;B Manufacturing | QAD Blog<\/title>\n<meta name=\"description\" content=\"Buying locally grown products is a growing trend that is disrupting food &amp; beverage manufacturers globally. 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Stay competitive with these adaptive strategies.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.qad.com\/blog\/2019\/12\/how-locally-grown-products-are-disrupting-fb-manufacturing\" \/>\n<meta property=\"og:site_name\" content=\"QAD Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/QADerp\" \/>\n<meta property=\"article:published_time\" content=\"2019-12-03T17:17:37+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.qad.com\/blog\/wp-content\/uploads\/2019\/12\/12.03.2019.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"900\" \/>\n\t<meta property=\"og:image:height\" content=\"450\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Stephen Dombroski\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@QAD_Community\" \/>\n<meta name=\"twitter:site\" content=\"@QAD_Community\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Stephen Dombroski\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.qad.com\\\/blog\\\/2019\\\/12\\\/how-locally-grown-products-are-disrupting-fb-manufacturing#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.qad.com\\\/blog\\\/2019\\\/12\\\/how-locally-grown-products-are-disrupting-fb-manufacturing\"},\"author\":{\"name\":\"Stephen Dombroski\",\"@id\":\"https:\\\/\\\/www.qad.com\\\/blog\\\/#\\\/schema\\\/person\\\/f387602915cd2d6bbfbd7f63985cbc72\"},\"headline\":\"How Locally Grown Products are Disrupting F&#038;B Manufacturing\",\"datePublished\":\"2019-12-03T17:17:37+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.qad.com\\\/blog\\\/2019\\\/12\\\/how-locally-grown-products-are-disrupting-fb-manufacturing\"},\"wordCount\":1283,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/www.qad.com\\\/blog\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/www.qad.com\\\/blog\\\/2019\\\/12\\\/how-locally-grown-products-are-disrupting-fb-manufacturing#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.qad.com\\\/blog\\\/wp-content\\\/uploads\\\/2019\\\/12\\\/12.03.2019.jpg\",\"keywords\":[\"buying local\",\"co-packers\",\"contract manufacturing\",\"food and beverage\",\"food and beverage manufacturing\",\"food producers\",\"food safety\",\"locally farmed\",\"locally grown\",\"locally sourced\",\"manufacturing\",\"mergers and acquisitions\",\"packaged foods\"],\"articleSection\":[\"Featured\",\"Manufacturing Trends\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.qad.com\\\/blog\\\/2019\\\/12\\\/how-locally-grown-products-are-disrupting-fb-manufacturing#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.qad.com\\\/blog\\\/2019\\\/12\\\/how-locally-grown-products-are-disrupting-fb-manufacturing\",\"url\":\"https:\\\/\\\/www.qad.com\\\/blog\\\/2019\\\/12\\\/how-locally-grown-products-are-disrupting-fb-manufacturing\",\"name\":\"How Locally Grown Products are Disrupting F&B Manufacturing | QAD Blog\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.qad.com\\\/blog\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/www.qad.com\\\/blog\\\/2019\\\/12\\\/how-locally-grown-products-are-disrupting-fb-manufacturing#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/www.qad.com\\\/blog\\\/2019\\\/12\\\/how-locally-grown-products-are-disrupting-fb-manufacturing#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.qad.com\\\/blog\\\/wp-content\\\/uploads\\\/2019\\\/12\\\/12.03.2019.jpg\",\"datePublished\":\"2019-12-03T17:17:37+00:00\",\"description\":\"Buying locally grown products is a growing trend that is disrupting food & beverage manufacturers globally. 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Steve has over 30 years experience in manufacturing and supply chain, and has helped multiple companies in a number of industries to implement S&amp;OP concepts and processes.\",\"url\":\"https:\\\/\\\/www.qad.com\\\/blog\\\/author\\\/stephen-dombroski\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"How Locally Grown Products are Disrupting F&B Manufacturing | QAD Blog","description":"Buying locally grown products is a growing trend that is disrupting food & beverage manufacturers globally. 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