Are Retailers Your New Competition?
Are Retailers Your New Competition?
By: Carol Miller | Email
Target will be following a trend that is already under way in Germany and China: offering shoppers greens that are grown right there in the store, Business Insider reports. The pilot program will take place this coming spring. The markets for the pilot were not identified.
Target’s chief strategist Casey Carl says it’s weighing how the retailer can take over some of the growing:
“Down the road, it’s something where potentially part of our food supply that we have on our shelves is stuff that we’ve grown ourselves,” Carl told Business Insider.
Food adds $20 billion to Target’s bottom line, Carl told the publication, which is spurring it to consider big-picture moves when it comes to global and domestic agriculture.
Target’s moves echo those taking place across the world. Last year, an agricultural tech start-up company, Infarm, started a pilot program in Berlin grocery stores, offering greens and herbs in a mini greenhouse situated at the end of the aisle, Business Insider reports.
Likewise, a new grocery store chain in Beijing has installed an aisle of hydroponic growing beds of leafy greens that customers can shop from, Hortidaily reports. The hydroponic bench seems a more natural fit, since customers will not need to enter a greenhouse in order to pick out their produce, and can walk along side it in a way they are used to shopping.
Like the Berlin project, Target is working with an agricultural tech company, the Food + Future CoLab, a collaboration with design firm Ideo and the MIT Media Lab. In the Business Insider article, CoLab says it is looking at more than in-store growing. It wants to see how viable vertical growing at an adjacent facility to retailers can be. The idea is that the supply chain may move in the direction of multiple, on-site growing facilities, each one supplying a restaurant or store.
CoLab has a test site at an MIT off-campus facility to test this concept with a few hundred square feet of production, and another, much larger site in India, which is still only about 8,000 square feet.
This concept of having growers dedicate staff to individual stores isn’t a completely new one to American mass merchants.
In the ornamental plant industry, grower-suppliers have employees who are dedicated to merchandising their plants at the store. These teams often maintain the health of the plants in order to ensure that they will sell. Most are on a pay-by-scan contract, which means that the grower is only paid for the plants they sell.
The model would obviously be quite different for produce growers. Vegetable growers would have a more behind-the-scenes role if this model were to take off.
All of this, of course, is speculative at this point. If your retail customer demanded it of you, is this a model you would be able to adjust to?