retail news in context, analysis with attitude

The Wall Street Journal reports that as artisan food manufacturers develop local and sustainable products and meeting with success, a couple of things are happening. For one thing, their products are being carried by more and more stores. For another, many are attracting interest - and money - from venture capitalists.

All good news. Except, as the story says., "the sudden burst of customers and backers has brought food entrepreneurs a lot of headaches. Many business owners say they’re struggling with issues of scale, scrambling to source enough ingredients to meet demand. Unlike big companies, it’s tough for a small operation to source ingredients all over the world to ensure that they have access to supplies year-round and can keep shelves stocked. It’s also harder for startups to get favorable contracts with multiple suppliers to limit the impact of poor weather on crops or changes in commodity pricing."

These are new problems. In the past, "companies were largely self-funded for the first several years, and they were content to grow slowly. Their customers tended to be farmers’ markets or small gourmet-foods stores, which were fine with seasonal availability of various products. Now, the combination of booming demand, the involvement of big retailers and large amounts of investment have led to a greater sense of urgency."
KC's View:
Then again, they could have the other problem ... too much product and too few customers.

The larger story is about how growing consumer mistrust of so-called "big food" is translating into the growth of the local/sustainable/artisan category ... which tells us something both about consumers and big food.