Convenience, Price, Awareness. These are the three keys to market capture.

Supermarkets grew to dominate the grocery market because they were able to outcompete small independent grocers on all three attributes of convenience, price, and awareness.

Today, it’s the small independent farms and food hubs that are gaining the upper hand.

Convenience

Supermarkets achieved superior convenience by having everything you need in one easy to access place. Having the grocer, butcher, baker, milkman and more in a single shopping experience with easy parking and a handy trolley to take your goods to your car was way more convenient than shlepping from shop to shop with bags and parking woes.

Today, convenience is all about shopping on your phone and waiting for your food to turn up at your door. Small farms and food hubs can now offer this type of convenience without needing to invest in expensive retail or digital infrastructure.

Conveniently located real estate for large stores to display copious amounts of merchandise, and even larger carparks, no longer provides a convenience advantage. In fact, retail infrastructure is becoming increasingly expensive while diminishing in competitive value.

Price

Supermarkets achieved lower prices through economies of scale. Buying at low unit prices from large-scale producers has enabled supermarkets to sell at low prices which has generated enough sheer volume of sales that their relatively small gross profit margins cover their infrastructure costs and still leave some net profit on the table. However, we are now seeing the emergence of diseconomies of scale. These massive centralised supply webs have reached their efficiency limits at the cost of any buffering or redundancy capacity. They are also incredibly complicated with an elaborate array of dependencies that are subject to cost increases. With general inflation and economic shocks in certain parts of the world, the cost increases on the various elements of these complex supply webs has a compounding inflationary effect on mass produced food prices.

On the other hand, small-scale food with short simple supply chains are not as subject to compounding inflationary effects and are therefore able to maintain stable price points while mass produced food continues to increase. As we approach price parity, the many other benefits of small-scale local food, such as freshness, nutrient density, flavour etc, start to influence buying decisions in favour of small-scale.

Awareness

The final piece of the market capture triumvirate is awareness. More convenience and better pricing won’t do much without people being aware of the better offering.

Since the 50’s, supermarkets gained awareness by their blatantly obvious location in the towns that they set up in. The old retail adage — location, location, location — was the awareness driving super power.

Today awareness is more about location on the 12 square inches of glass in everyone’s pocket so small-scale has a more level playing field to get their story out there.

Now that small-scale is growing more competitive on convenience and price, the last key to open the flood gates is awareness. This means making people aware of the convenience and price advantages of buying direct from small-scale farms and food hubs.

So get the word out there!

“Buying direct from small-scale farms and food hubs is now often times more convenient and better value for money than supermarkets.”

The more people who understand this, the more that small-scale will reclaim market share and make the world a better place!

Learn more about how small farms and food hubs are entering the online market at ooooby.com