Farmers also sell their products to local restaurants, retail stores, and institutions such as government entities, hospitals, and schools (direct-to-retail/foodservice). These products may reach the retail or foodservice establishment directly from the farmer or move through one or more intermediaries, such as a wholesaler. Based on data from Packaged Facts and the census of agriculture, direct-to-retail/foodservice sales amounted to $3.8 billion in 2007, up 19 percent from $3.2 billion in 2002. Small, independent grocery retailers, whose identity and stocking practices are closely linked to specific geographic locations, may be better positioned to incorporate local foods as part of their corporate identity. For example, Dorothy Lane Market began as a fruit stand in 1948. It has since developed a strong relationship with area farmers and now carries a variety of local products from surrounding farms.

Larger food retail chains are also seeking to capitalize on the growing popularity of local foods. Several leading retailers—including Wal-Mart, Safeway, Meijer, and Weis Markets—have recently announced local food initiatives. In 2009, 7 of the top 10 food retailers had some reference to local foods on their websites.

Surveys conducted by the National Restaurant Association (NRA) suggest increasing interest in local foods by restaurants and their patrons. According to NRA’s 2008 operator survey, 89 percent of fine-dining operators served locally sourced items and 90 percent believed it would become more popular. Nearly 30 percent of fast food operators served locally sourced items in 2008, and nearly half believed these items would grow more popular. In 2008, Chipotle Mexican Grill, one of the fastest growing fast food chains, began purchasing 25 percent of at least one produce item for each of its stores from farms located within 200 miles of the retail store.

Farm-to-school programs represent an important component of the institutional market for locally grown produce. For most of these programs, school food authorities buy fresh produce directly from local farmers for some or all of their produce needs. In other programs, schools sponsor school garden projects or field trips to nearby farms as part of an expanded nutrition education curriculum. The overall goals of the programs are to provide children with access to fresh fruit and vegetables and promote relationships between schools and farms that can strengthen over time. The National Farm to School Network estimated that there were 2,051 farm-to-school programs in the United States in 2009, up from only 2 in 1996-97, and twice as many as in 2005-06.