• by Thom Forbes  @tforbes, August 1, 2011

Consumers may say that they want to eat healthier foods that are produced locally but the big question is whether they'll put their money where their mouths are. For a variety of reasons that basically come down to scale and climate, lettuce sold in a Walmart in eastern Connecticut has traditionally traveled from somewhere sunnier. That's changing. And, perverse as it may seem, high energy prices are helping.

In a Fast Company piece a couple of weeks ago, solar energy entrepreneur Jigar Shah writes that "various studies estimate that the food industry consumes around 10% of the nation's energy with only about 20% of it used in the actual production of food."

Shah, CEO of the Carbon War Room, points out that community, school, rooftop and backyard gardens are booming, even in urban areas.

"The question we must ask is, 'Will this scale?' For anything to scale, it must solve a real problem, be cost-effective and replicable, and have the right systems in place to support it. To do that, it must attract sufficient capital from the private sector to encourage entrepreneurs to build large, profitable businesses."

Shah, whose 1999 MBA project eventually became the solar-energy company Sun Edison, shares a few ideas about how that can happen, including a company he has invested in, BrightFarms, that contracts with unnamed supermarkets to build, own and operate onsite greenhouses on store rooftops. The only cost to the supermarkets is an agreement to purchase the hydroponically grown food through long-term, fixed-price contracts.

Shah admits that rooftop gardens are only one piece of the puzzle in making our nation's food production and distribution more efficient. The fact that Wal-Mart and Kroger, among other giants, are saying that buying local produce now makes economic sense is of larger significance. Wal-Mart is not only saving on the price of diesel fuel, it's also cutting down on spoilage costs, report Miguel Bustillo and David Kesmodel in the Wall Street Journal.

For example, all of Wal-Mart's jalapeno peppers came from California, Florida or Mexico a decade ago. Farmers in 30 states are growing them this year, twice as many as last summer.

"We can get chili peppers from Florida all day long, but at the end of the day, that is not necessarily the best model for us," Darrin Robbins, Wal-Mart's senior manager for produce, tells Bustillo and Kesmodel. "I'm going to pay a higher price in Ohio for peppers, but if I don't have to ship them halfway across the country to a store, it's a better deal."

In another WSJ piece this morning, Sophia Hollander takes a look at the burgeoning urban agriculture movement in The Bronx, paying particular attention to a 2.5-acre plot between Metro North tracks, the Major Deegan Expressway and the Grand Concourse called La Finca del Sur. It yields 30 pounds of produce a week at peak harvest. The Bronx now has nearly 150 such sites, and about 80% of them produce food.

"Brooklyn ... leads all boroughs with about 290 school and community gardens and farms, along with rooftop vegetable plots and quirky backyard chicken coops," Hollander reports. "Manhattan is next with 165, according to the New York City Parks department."

Even while 29 people were touring The Bronx farms on a trolley on Saturday, local food businesses and farmers were getting ready for the second annual Farm-to-Restaurant Workshop and Culinary Fair in Gainesville, Fla., yesterday. The event, with about 80 participants, allows restaurant managers to meet local farmers and get to know the food they produce.

Dave Piasecki, GM of Rolls 'n' Bowls restaurant, tell Gainesville Sun correspondent Tiffany Manning that "the event is part of a bigger movement to make the restaurant industry more sustainable."

There is a debate among small farmers and large chains about what, exactly, constitutes local that we won't get into here. Relevant to the economics of scale, however, is a question about whether the local movement is "just another fad." Wal-Mart and Kroger tell the WSJ that their main objective is not an economic one but, rather, "is to satisfy changing consumer preferences."

Alan Rappeport's piece in Financial Times this morning suggests that consumer preferences, fleeting as they are, may not be the best thing to bank upon. Taking McDonald's Happy Meals announcement as a starting point, and referencing healthy foods initiatives at the likes of PepsiCo and General Mills, Rappeport's writes that "some argue that food groups risk overreaching by investing in food fads and straying from their strengths."

He cites one anonymous former CEO of a top U.S. food company warning about "overreacting to the health push." The CEO-turned-adviser claims "companies risk confusing their research and development departments, which have spent years focused on taste, and ... they may be opening opportunities for groups that stick to their less calorie-conscious roots."

As the Romans used to say, Consumers' Tastes Fugit. But I, for one, hope local is here to stay.