soupnancy

LIKE most people, Melissa Steineger threw out her bagged spinach when the nationwide E. coli outbreak happened in September.

The contamination, which infected 199 people and killed 3, was linked recently to infected cattle living near the spinach fields in central California and to feral pigs, which might have carried the bacteria to the plants.

But weeks before the source was found, Ms. Steineger, a filmmaker and writer in Portland, Ore., decided to start eating leafy greens again. Only this time they were from PastaWorks, a local food store that buys its produce from local farmers.

“That’s good enough for me,” she said.

Ms. Steineger’s reach for food grown on smaller farms close to home is part of a larger trend that food industry analysts say is gaining ground among consumers who are willing to pay a little more for quality food. As a result, people who grow food on small farms or make artisanal cheese or other foods on a more regional scale are finding new eaters.

They are also forgoing traditional sales methods and marketing approaches. Instead of trying to break into large distribution chains and fighting for shelf space, they are finding that smaller is better, particularly if there is a good back story. Produce from an upstate New York farm, for example, reinvigorated the image of Great Performances, a Manhattan catering company, earlier this year. In California, a family that makes olive oil dropped out of many mainstream grocery stores in favor of farmers’ markets and Internet sales.

And at Tierra Farms, a 20-acre urban farm near Santa Rosa, Calif., sales are approaching $500,000 with a customer base made up mostly of people who live less than 30 miles away.

The idea is to appeal to consumers like Ms. Steineger, who think that food grown regionally or produced by eco-friendly operations is fresher and tastes better. For these consumers, knowing the exact farm where food comes from provides comfort about food safety while also allowing them to connect to their communities.

“I like to call them the Whole Foods moms,” said Dan McGowan, president of Big Bowl, a small chain of casual Chinese and Thai food restaurants owned by the Chicago restaurant company Lettuce Entertain You. “There’s a core of people now who don’t mind paying an extra quarter or 75 cents if they know it’s natural or organic or it’s supporting a local person.”

Mr. McGowan counted on the growing interest in local food when he remade his stir-fry bars at his eight restaurants in Chicago, Minneapolis and Reston, Va. The bars now include as many seasonal, locally grown vegetables as his chefs can find. In Minneapolis, for example, that means using corn from a nearby farm stand, but only when it’s in season.

Throughout the year, the restaurants offer free-trade coffee, free-range chicken and Niman Ranch pork from pigs raised without hormones or antibiotics on small-scale farms.

While these three items are not local, Mr. McGowan said they still appealed to people who want sustainable food — that is, food produced in a way that preserves the health of the land, the health and economic interest of the workers and the farm’s bottom line — and like to know who is producing it.

The trend driving local food is rooted in the nation’s organic movement, which began in the 1930s and got a second life in the 1970s by counterculture farmers. It gained mainstream credibility in 1990 when the Organic Foods Production Act was passed and the Agriculture Department began labeling organic food.

To some shoppers, such labels signaled that the products they were buying might be safer or healthier than conventionally produced food. Although some studies have found advantages to organically raised food, especially regarding pesticide residue, environmental impact and increases in certain nutrients, food scientists and farmers still argue the point.

The nation’s appetite for organics has made it the fastest-growing segment in the food industry. At nearly $14 billion in 2005, organic food sales still made up less than 3 percent of the nation’s total retail food sales. But that figure represents a 16 percent jump in sales from the year before. The Organic Trade Association, based in Greenfield, Mass., predicts the market will grow 11 percent a year through 2010.

That success has attracted big players and put an end to organic as a popular shorthand for a certain kind of healthy food grown by progressive farmers. Wal-Mart now sells organic produce, buying some of it from overseas markets like China. Major food manufacturers all offer organic lines, including Frito-Lay, which has a “natural” version of Cheetos that uses organic cornmeal.

When it turned out that several organic brands of bagged spinach, including the popular Earthbound Farms label, were part of the E. coli recall, many consumers had a rude awakening. Although no connection has been made between the outbreak and a specific brand of organic spinach, many people were surprised to learn that Earthbound Farms, a company that began as a small grower of organic produce in Carmel Valley in 1984, had become part of a conglomerate of 185 different growers. The company is now owned by Natural Selection Foods, which operates about 24,000 certified organic acres in the United States, Mexico and New Zealand.

The idea that organic implied safer was shattered for some consumers. Food grown locally and sustainably suddenly became part of the conversation at the grocery store.

“What we know is that as organic becomes more mainstream, it becomes more diluted in meaning,” said Laurie Demeritt, president of the Hartman Group, a market research company in Bellevue, Wash., specializing in health and nutrition.

“At this point, becoming organic is still a distinction, but as more players get in the marketplace it’s not going to be enough,” she said. “Producers are going to have to add more attributes, or quality distinctions, and local is certainly part of that.”

John Mackey, co-founder and chief executive of the 187-store Whole Foods grocery chain, learned that lesson the hard way. After being criticized for making it difficult for local growers to sell in its stores, Whole Foods started acting as a host to weekly farmers’ markets of local produce in some of its parking lots. It also set up an annual $10 million loan program to help regional farmers.

Even for restaurantgoers, food that is grown sustainably is starting to matter. In the 2007 Zagat restaurant survey, which came out this month, almost three-quarters of residents on the West Coast and a little more than half on the East Coast told researchers they would pay more for food that was raised sustainably.

For food evangelists — consumers who might shop at a co-op or who can explain terms like eco-gastronomy, food miles and the food shed — a local label is sometimes more important than an organic one. That group, which market researchers say make up about 10 to 15 percent of food shoppers, are most likely to spend time in the store pondering whether an organic pepper from Chile is better than one grown in a nonorganic field less than 250 miles away.

They are also the consumers who will influence mainstream shoppers, since the typical consumer has neither the time nor the inclination to untangle the politics of a supply chain when they are buying milk or a loaf of bread.

“It’s more about the end product — Is it healthier? Does it taste better?” Ms. Demeritt said.

One attribute that does seem as important is geography.

“Local is important, but also important is the idea of locale,” she said. “There is a desire among consumers to support products that are grown, raised or produced in a special or significant place.”

Jamie Johansson, 38, tends 100-year-old Mission olive trees on 40 acres in Oroville, about an hour’s drive north of Sacramento. He now offers his Lodestar Farm olive oil ($17.95 for 16.9 ounces, shipping included) online or through a network of farmers’ markets and small grocery stores.

“It’s great for the family because we can still be farmers instead of salesmen,” he said.

Mr. Johansson and his wife, Nicole, used to sell their olive oil in 75 Northern California stores. He spent all his time driving from retailer to retailer, he said, trying to get on store shelves and service his accounts. Since he switched his approach two years ago, his business has grown considerably, he said, although he is well under $500,000 in sales a year.

“It’s grass-roots marketing, pure and simple,” he said. “People will bring a local gift like olive oil to Wisconsin or Utah so people can understand the place they are from.”

The rise in farmers’ markets can make the difference for him and other regional producers. The markets have become the town squares in many communities and nationally, with the number more than doubling since 1994 to about 3,800, according to the Department of Agriculture.

But Mr. Johansson also relies on teaming up with other local producers to increase his reach online. Mr. Johansson is part of a coalition of more than 100 artisanal producers who pay a marketing company, Savor California, to maintain a Web site (savorcalifornia.com) and help them develop their product lines.

Jane St. Claire began Savor California in 2003 for producers and farmers who were not big enough for most distributors and who, in some cases, had no idea how to take their products to market. On the site, she runs descriptions with the products, typically emphasizing the people behind the product. The strategy plays into a trend that market researchers call “authenticity.”

Ms. St. Claire’s clients include Bellwether Farms, which was started by Cindy and Ed Callahan, a couple who gave up careers in medicine to raise sheep in Sonoma County, Calif., and make cheese that is now considered some of the best in the country.

Although some people interested in local products might not want to buy olive oil that has to be shipped 2,000 miles, others like knowing where their food comes from.

“People want that sense of place, whatever that place might be,” Ms. St. Claire said.

On a larger scale, the Bon Appétit Management Company has built a $350 million business with local and sustainable food as its calling card.

The company, based in Palo Alto, Calif., has a 29-state string of 400 cafes and restaurants, which includes universities, art museums and corporate cafeterias at companies like Oracle, Yahoo and Adidas.

The chefs must use produce and ingredients from a 150-mile radius in at least 20 percent of the menu. Operations in California and the Pacific Northwest far exceed the goal, while places with shorter growing seasons and fewer farmers have a harder time. Over all, the company spends about $30 million a year on local products.

Founded 19 years ago by Fedele Bauccio, Bon Appétit began trying to use more local food in 1999, when Mr. Bauccio got fed up with the taste of the produce coming from his larger suppliers. But the program really took off in 2002, said Maisie Ganzler, director of communications and strategic initiatives.

The program works because the company threw out a top-down method of menu writing and ordering, abandoned many of their conventional distribution systems and encouraged chefs at each operation to talk to local farmers and create their own sustainable sourcing networks, she said.

The formula has proved successful, as the company gets requests to bid on more projects than it can handle. And, Ms. Ganzler said, this approach can make the nation’s food supply better.

“People are really looking for a way to connect these days, and food is a great way to do that,” she said. “When you re-elevate the importance of food, and you care where it comes from and what it tastes like, you have to start discussing the issues that surround it.”

 

 

Correction: Nov. 23, 2006

An article in the Small Business special section on Nov. 15 about the effect of food scares on restaurants and other food businesses referred incorrectly to the coffee offered by Big Bowl, a restaurant chain. It is fair-trade coffee, purchased under guidelines designed to promote farmers’ economic self-sufficiency, not free-trade coffee.