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Behind Supermarket Chains' Desperate, Fake "Farmers' Markets"

Attempts by Safeway (SWY) and Albertsons (SVU) to set up simulated "farmer's markets" either inside or directly outside their stores illustrates just how hard it's going to be for food big food companies -- retailers, manufacturers and chain restaurants alike -- to capitalize on the growing interest in local food.

In perhaps the most lamentable instance, several Safeway stores in the Seattle area moved bins of their produce, including things that would never in a million years grow in the rainy Northwest-- like mangoes -- into tents in their parking lot under signs declaring the area a "Farmers' Market." After predictable outrage from the Washington State Farmers' Market Association, the company renamed the parking lot bazaar an "Outdoor Market."

It's not hard to see why supermarkets are nervously intrigued by farmer's markets. In the past five years, the number of markets in the US has ballooned, up from 1,755 in 1994 to 5,274 in 2009, according to the USDA.

But the problem for Big Food is that farmers' markets exist as an alternative to the centralized, mass-produced, industrialized system that delivers most of our food. The items at farmer's markets come from small farms or bakeries located within 100 miles from where they live. They're also ultra-fresh, seasonal and mostly unprocessed, and the direct-to-consumer system lets farmers earn a healthy profit for their food.

Supermarkets, in contrast, sell food from all over the globe and pay the sorts of prices only large producers can afford to accept. Mike Siemienas, a spokesperson for Supervalu (SVU), which owns Albertsons, defended the use of farmers' markets signs in 200 of its stores in Washington, Oregon and Idaho over the Labor Day weekend because the produce advertised came from local farms. It's certainly a better approach than Safeway's interpretation of a farmer's market, but the price those local farms are getting for their produce is probably much less than what they'd get at an actual farmers' market.

By comparison, organic, which is also a reaction to mainstream food production, has been a much easier trend for big food companies to monopolize. Large manufacturers like Kellogg (K) and General Mills (GIS) operate major organic brands and many large, conventional fruit and vegetable producers have organic side businesses.

Local may actually be the sort of party food companies can't get into, at least not without looking like they're trying way too hard. Frito-Lay (PEP) and McDonald's (MCD) have already mounted ridiculous attempts to establish local cred. Frito-Lay wheeled a traveling greenhouse into the middle of Times Square and brought along potato farmers to explain how Lay's potato chips are made with actual potatoes. In July, McDonald's put up billboards in Washington state announcing things like "Served in Seattle, Grown in Pasco," accompanied by the disclaimer "participation and duration may vary."

Of course it will. The business models of highly efficient national chains like McDonald's and Safeway don't lend themselves to buying from a thousand and one small local farms. Maybe big food companies will find authentic, interesting ways to tap into the local food movement. But we haven't seen it yet.

Image by Flckr user NatalieMaynor
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