Mackensy Lunsford

mlunsford@citizen-times.com

ASHEVILLE – Local food is an important industry in Asheville, a city with an abundance of groceries touting mountain-made products and hundreds of farms ringing the area.





But in some cases, small farmers and large natural foods stores are finding they just aren't a natural fit — and that can prove costly for small operations trying to navigate the big business bureaucracy that comes with chains like Whole Foods and others.

"We're all working really hard to do this thing that, on some level, doesn't totally make sense," said Walter Harrill, owner of Imladris Farms, an Asheville producer of local jams, butters and smoked ketchup.

"Large grocery stores, in particular, are facing this dichotomy of serving a large clientele, and yet the pressure right now is for them to deal with smaller and smaller vendors," he said. "Those two worlds don't automatically overlap."

It's easier for a grocery store to back up an 18-wheeler to the loading dock than it is to handle a number of individual producers, Harrill said. "Instead of one big check, you're writing thousands. The infrastructure is hard."

Harrill's well-versed in the complexities of getting his products to bigger stores. He's embroiled in a lawsuit with an Atlanta-based distributor that takes locally manufactured goods to clients that include Publix, Wal-Mart, Kroger and Whole Foods.

The relationship was set up by Whole Foods to help streamline the process of carrying local foods in the store, Harrill said. But the effort resulted in chaos, with Harrill's jams and the products of other local vendors languishing in the distributor’s warehouse instead of on grocery store shelves, he said.

Harrill estimates a loss of more than $2,000 in products, and other food producers have lost more, he said. Though his lawsuit against the distributor is active, his products are finally back at Whole Foods this week.

"My relationship with Whole Foods is good," Harrill said. "We're in different worlds — they're a huge corporate entity and I'm a small producer — but we're committed to working together despite the hitches."

Regulations a challenge

The same can't be said of Mike Brown of Farside Farms, who decided to pull his products permanently from Whole Foods after coming up against what he said were prohibitive costs.

Farside Farms has raised and packed cage-free eggs for more than 20 years and was one of the largest local suppliers of eggs to the East Asheville Whole Foods since it opened in 2014, and to Greenlife before it was purchased by Whole Foods in 2010.

But that was before November, when Brown's eggs were turned away during one of the farm's many regular deliveries, citing the need for an updated vendor form and a company-led farm inspection before Farside products could be sold in the store again.

Navigating the corporate channels proved too much for a farmer sitting on thousands of perishable products while waiting for word from corporate headquarters.

"I got the paperwork filled out, and it was nearly two weeks before I heard back from anybody," Brown said. "And during this time I'm donating eggs and throwing eggs away."

Missy Huger of Jake's Farm in Candler had a similar story. Six months after Whole Foods purchased Greenlife, Huger learned she'd need to draw a hazard analysis and critical control points plan, or HACCP, to continue selling at the store.

It's a complex and expensive process, and Huger decided the financial burden of fulfilling the store's requirements was too heavy. After dropping Whole Foods, Jake's Farm lost about 40 percent of its annual income. "It's been difficult to overcome, and we haven't been able to yet," Huger said.

Lauren Bernath, Whole Foods Market South Region PR specialist, said in an email that requiring vendors to periodically update information is common protocol.

"We also visit our vendors’ farms to remain aware of production practices," she said. "We’ve been in communication with Farside Farms about these requirements and will continue to work together to attempt to resolve the issue.”

The Asheville Whole Foods Markets' most local source for eggs is now Latta's Egg Ranch in Hillsborough, North Carolina, 14 miles from Durham.

Bernath said Whole Foods offers more than 11,000 local brands companywide, but what counts as local varies from store to store. "For some stores, 'local' is defined as within a certain mile radius, and for others, it means within the metro, state, or tri-state area."

Finding help

In some cases, Whole Foods gives low-interest loans to help small producers defray costs of inspections and other operating expenses, as it did for Smiling Hara Tempeh.

In 2006, Whole Foods Market set aside $10 million for the program. In 2013, Whole Foods Market expanded the program to $25 million in loans for independent food businesses.

"We've dealt with a few small-business assistance organizations, and the Whole Foods process was much easier," Smiling Hara co-owner Chad Oliphant said. "It's probably the simplest loan application we've gone through."

Hickory Nut Gap farmer Jamie Ager also had financial help to meet Whole Foods' requirements when it purchased Greenlife, where he'd long been a vendor.

Rigorous animal welfare audits have helped the farm up its game, Ager said. And the fact that Whole Foods buys whole animals from HNG further streamlines things.

Now Whole Foods ranks among HNG's top-two single sources of income. "They're such a beast," Ager said. "They just have so many customers."

And while regular farm inspections have been expensive, they've paid for themselves in the long run, he said. But since they're priced at a flat fee, the audits can be frustrating for small growers.

"The more animals you have, the more it makes sense to have the audit," Ager said.

But the biggest challenge in today's market for a small local farmer might be the crowded "ethical meat" market.

Elite foods backlash

Meat cases and even fast-food menus are full of antibiotic-free meat these days, a label that can be applied to confinement-raised animals, as long as they're not getting antibiotics.

"The big guys can do that well and it's not that much more expensive to do," Ager said.

And after surveys showed consumers wanted their grass-fed beef to also be organic and certified non-GMO, HNG responded in kind. But the certifications aren't cheap to maintain.

"And (grocery stores) have, to be perfectly honest, struggled with the price we need to make this work when we're competing with much cheaper products coming out of Australia and Uruguay."

Beside its own farm store, HNG sells meat to Ingles, Earth Fare, the French Broad Food Co-Op and others.

As Earth Fare grows, some workers feeling 'squeezed'

Now Ager's faced with selling niche market meat to a buying public that doesn't always put its money where its mouth is.

"Consumers say they want local and all these things but, at the end of the day, what they buy is different. You have this ideal that people say they want but it's hard to make a business out of it, as we learned with John Swann of Katuah."

Swann, former partner in Asheville's Greenlife Grocery, opened his hyper-local grocery store in 2013, closing it two years later. He cited competition from other grocery stores among the factors that forced his failure.

"Progressive Grocer" recently noted a trend toward "Retail Populism," which has more consumers of late showing preference for convenience and value over artisan and organic. That includes millennials, which were supposed to lift sales in organics, but have turned out to represent only 20 percent of the market.

Wal-Mart last year stopped carrying a highly hyped line of inexpensive organic products under the Wild Oats brand, which failed to resonate with shoppers.

Local outlook better

But local food trends are different in Western North Carolina. Appalachian Sustainable Agriculture Project, an Asheville-based nonprofit that links farmers to markets, has found local food sales have increased across every outlet, including at mainstream market grocery stores.

The most recent Census of Agriculture shows consumers spent more than $170 million on local farm products in 2013, a 42 percent increase from the previous year.

Local sales are robust at the French Broad Food Co-Op, which is set to expand its downtown Asheville footprint over coming years. And though the store has a relatively tiny footprint, it manages to sell upwards of 1,000 locally made products.

To support local farmers, the co-op conducts free farm inspections, allows local producers to test-market products and hosts a tailgate market in its parking lot. But it's easier for the co-op to have a more altruistic eye toward the bottom line since it doesn't have to deal with the complexity of answering to a home office, general manager Bobby Sullivan said.

"It's implicit in the structure of a corporation that you can't let someone buy at the back door the way you do at the co-op. We're actually set up to do that."

Molly Nicholie, local food campaign program director for ASAP, said that out of more than 900 farms in ASAP's Local Food Guide, she'd recommend fewer than 50 work with larger grocery stores like Whole Foods.

"In general, whether they're working with farmer markets or grocery stores, one of the frustrating thing for growers is that pretty much every single buyer has different requirements," she said. "When they say, 'What do I need to sell to grocery stores?' the answer is always 'It depends.'"

Communication is the grease that keeps the local food mechanism moving, she said. And miscommunication is more likely the larger the machinery grows. "The biggest piece about working within local food systems are those relationships," Nicholie said. "Having that conversation with your buyer is one of the difficult things about local food purchasing, but also one of the things that makes it so powerful."