Local food system planners and business developers can now easily estimate unmet market demand for local food in their region. Business advisory firm New Venture Advisors LLC has created the Local Food MarketSizer, a Web-based application which estimates the gap between local food supply and demand in markets across the nation. The tool was developed to help communities and entrepreneurs in the growing local food arena determine the size of the business opportunities in their region.
"Despite the growing size and importance of locally-produced food in the United States, food industry analysts are not yet vigorously measuring local food sales," says Kathy Nyquist, the company's founder and principal. "It is difficult to convince an investor that you have a sound business case without a reliable estimate of market size."
The Local Food MarketSizer was used successfully by Blue Ridge Produce LLC, a pioneering local food hub in Elkwood, VA which New Venture Advisors helped launch in 2011.
"Uncovering a multi-billion-dollar business opportunity in Washington, DC and the surrounding region was incredibly motivating for us," says Jim Epstein, the company's co-founder and chairman. "Not only did it give us confidence to build this business, it gave our investors confidence as well."
The Local Food MarketSizer uses data from public and private sources to calculate unmet demand for local food at the state, metropolitan area and county level. With a few clicks, the tool estimates market potential for local meat, dairy, poultry and eggs and fruits and vegetables. The methodology performs dozens of calculations accessing more than 70 data tables from the U.S. Department of Agriculture, U.S. Bureau of Labor Statistics, U.S. Census and private surveys. The application displays the estimated value of local food demand and supply in wholesale dollars, and the gap between them as a measure of the unmet market for local food.
New Venture Advisors developed the methodology to provide robust analytics for feasibility studies and business plans for local food startups, particularly food hubs which aggregate, process and distribute farm products for local customers. After conducting the painstaking analysis for a number of clients, the company created the Local Food MarketSizer to automate the process and make it widely available.
The Local Food MarketSizer by New Venture Advisors can be accessed free of charge on the company's website newventureadvisors.net.