Welcome to iGrow News, Your Source for the World of Indoor Vertical Farming
Grocery Giant Kroger Updates Pesticide Policy
In effort to protect pollinators, Kroger will stop sourcing plants treated with neonicotinoids by 2020
Jacqui Fatka | Jul 01, 2019
In Effort to Protect Pollinators, Kroger Will Stop Sourcing Plants
Treated With Neonicotinoids by 2020.
Kroger released an update to its pollinator policy encouraging suppliers to move away from pesticides and adopt alternative pest management.
“We recognize the global honeybee population is vulnerable, with research indicating that causes may include the use of certain pesticides, including neonicotinoids. Due to the potential risk to the honeybee population, we support and encourage efforts to protect these pollinator species,” Kroger said in its updated policy.
Related: California bans pesticide chlorpyrifos
As part of the policy, Kroger said it is committed to eliminating the sourcing of live outdoor plants that have been treated with pesticides containing neonicotinoids in its stores and garden centers by 2020. This commitment is inclusive of outdoor plants known to be pollinated by honeybees or known to attract honeybees.
Today, the majority of live plant sales in Kroger’s garden center and outdoor floral selection are not treated with neonicotinoids during the growing process. “Our suppliers are actively seeking alternative options for the remaining products, and we are committed to working with them to ensure proper alternatives have been identified by 2020. We will also track, measure and report on our progress against this commitment,” Kroger said.
Related: EPA has 90 days to decide on chlorpyrifos ban
The grocer added that it supports the expansion of the organic food industry and will continue to offer its customers organic products.
Kroger also said it will keep informed of new science. “Kroger will rely on the expertise of the U.S. Environmental Protection Agency, other scientific experts and our stakeholders to evaluate further updates to this policy,” it said.
Friends of the Earth and other environmental, consumer, beekeeper and farmworker groups have pressured Kroger for more than three years to eliminate the use of the pesticides, and they called the announcement a “small but robust victory.”
“This is a step in the right direction to protect people and pollinators from toxic pesticides in Kroger’s supply chain,” said Tiffany Finck-Haynes, pesticides and pollinators program manager at Friends of the Earth. “However, this policy is non-binding and vague. We urge Kroger and other top food retailers to do their part in addressing the pollinator crisis by making clear, time-bound commitments to phase out chlorpyrifos, neonicotinoids, glyphosate and other toxic pesticides throughout their entire food supply chains.”
Costco similarly updated its pesticide policy to encourage suppliers of fruits, vegetables and garden plants to phase out the use of chlorpyrifos and neonicotinoids.
Investors' Growing Interest In Vertical Farms
These kitchen gardens are increasingly
interesting for retailers and investors alike.
These systems could indeed solve several problems.
Starting with the challenge of feeding 9 billion people by 2050 while
preserving the planet.
One of the advantages of vertical farms is that they no longer exploit farmland, which is already over-stretched in the current food system. Daniel LEAL-OLIVAS / AFP
By Helene Gully
June 6, 2019
With 100 million dollars raised during a new fundraising, the German start-up Infarm will be able to continue its conquest of major cities. Young sprout specializing in vertical farms, Infarm offers its customers the rental of kitchen gardens to enjoy fresh produce all year round.
As a result, the German nugget raised a total of $ 134 million, including a European grant of $ 2.5 million. Its portfolio already has dozens of clients, including 25 retailers such as Casino, Intermarché, but also Metro and Amazon Fresh in Europe. This makes Infarm one of the prodigious children of this emerging and growing industry.
The principle of vertical farms is to grow plants indoors, without using pesticides and consuming as little water as possible - in general, they use 95% less water than their conventional counterparts. At Infarm, for example, the earth is replaced by coconut fiber, immersed in water saturated with nutrients and mineral salts, and the sun with LED lighting.
Multiplication of investments
These systems are attracting increasing interest from investors since they could solve several problems. Starting with the challenge of feeding 9 billion people by 2050 while preserving the planet. One of the advantages of vertical farms is that they no longer exploit farmland, which is already over-stretched in the current food system. But also to be able to cultivate locally and market fresh produce.
"With this technology, we can grow in different places, creating and maintaining an ideal environment for any plant to grow," Osnat Michaeli, one of Infarm's founders, told Echoes. last November. And these indoor farms can be installed anywhere in the city, an invaluable asset at a time when in all major cities, space is becoming scarce.
The Farm.one start-up cultivates its plants in a New York winery
InFarm is of course not the only one to have positioned itself on the sector. This week, the British online retail chain Ocado, which delivers Marks & Spencer products, among others, took a majority share of 58% in "Jones Foods", the largest vertical farm in Europe. The ambition: to provide fresh products to its customers in less than an hour.
On the other side of the Atlantic, the young Californian nugget, Plenty, raised $ 200 million during a roundtable led by SoftBank. Another start-up, Bowery Farming, was able to seduce Google's parent company, Alphabet, and Uber Dara Khosrowshahi's boss, who injected $ 90 million into his business.
Hélène Gully
Tech Farming Is Making Its Way To Grand Rapids, Michigan
Square Roots, an urban indoor farming company, will bring its Next-Gen Farmer Training Program to Grand Rapids in September. The goal of the program is to train young people in indoor urban farming and grow localized food and herbs year-round in technology-driven environments
Partnering With Gordon Food Service, Square Roots
Aims To Train Young People In Indoor Urban Farming
June 21, 2019
| By Danielle Nelson |
Jacque Kirila and Em Helle harvest sage at a Square Roots indoor farm, which is comprised of repurposed shipping containers. Courtesy Square Roots
One company is hoping to shake up the landscape of farming.
Square Roots, an urban indoor farming company, will bring its Next-Gen Farmer Training Program to Grand Rapids in September. The goal of the program is to train young people in indoor urban farming and grow localized food and herbs year-round in technology-driven environments.
The company will partner with Gordon Food Service to distribute food that is grown by farmers enrolled in the training program to its consumers and retailers across the country.
“Customers want an assortment of fresh, locally grown food all year-round,” said Rich Wolowski, CEO of Gordon Food Service. “We are on a path to do that at scale with Square Roots and are excited to be the first in the industry to offer this unique solution to our customers.”
According to Square Roots, 10 full-time farmers will be chosen through an application process to learn all aspects of farming, from the planting of the seeds to the selling of the produce. They will receive a wage, subsidized health care coverage and other benefits.
The year-long program enables farmers to study the molecular level of the plant as it grows, get hands-on experience with the business side of farming so they can pursue a start-up indoor urban farm and get involved with the community.
Square Roots’ training program was created with advice from experts in farmer education, controlled environment agriculture, regenerative agriculture and urban agriculture, including Glynwood, New York University, Cornell University and the University of Arizona. There will be guest lecturers who will talk about farming and entrepreneurship. There also will be workshops, which will cover a variety of topics, such as pest management practices to real food entrepreneurship frameworks.
The farmers will work in indoor vertical farms that are constructed in 10 specially designed Square Roots shipping containers that will occupy less than 2 acres of Gordon Food Service’s 50-acre headquarters site in Grand Rapids, but it is expected to produce more than 50,000 pounds of herbs annually. Each container will have its own controlled climate that is optimized for growing certain crops. The cloud-connected modular farms will have hydroponic growing systems to water the plants.
“Because we grow in a completely closed environment, we have full control over each climate parameter — from CO2 in the air to the number of hours of light,” Square Roots officials said. “We research the best natural climate for a certain variety of plant, recreate it inside the farm and grow the best tasting produce 365 days a year.”
Gordon Food Service will not only provide a place for urban indoor farms, but farmers from the training program will work with the food service company. The farmers are expected to grow food on a consistent basis to meet the standard of Gordan Food Service and the demand of its consumers.
Additionally, Next-Gen farmers will have the opportunity to represent Square Roots at customer-focused engagements, marketing activities and community events, where farmers can connect directly with customers.
The Next-Gen Farmer Training Program was started in Brooklyn, New York, in 2016. So far, 16 farmers have completed the program, according to Square Roots. Some farmers in the program have either started their own urban farming businesses, taken jobs at companies in urban agriculture or moved into permanent positions on the Square Roots team.
According to the Michigan Department of Agriculture and Rural Development, the food and agriculture industry contributes $104.7 billion annually to the state’s economy and accounts for about 22% of the state’s employment.
Square Roots said its end goal is to be a pathway for future farmers in the urban farming industry in cities around the world. More information can be found at squarerootsgrow.com/program.
Danielle Nelson
Danielle Nelson is a Grand Rapids Business Journal staff reporter who covers law, startups, agriculture, sports, marketing, PR and advertising and arts and entertainment. She is also the staff researcher who compiles the weekly lists.
Email: Danielle at: dnelson@grbj.com
Follow her on Twitter @Dan_Nels
TAGS GORDON FOOD SERVICE / NEXT-GEN /SQUARE ROOTS
Down On The (Hi-Tech) Farm: Ocado Branches Out From Grocery Deliveries And Warehouses With A £17m Investment In 'Vertical Farming'
Ocado has bought a majority stake in vertical farming firm Jones Food Company
It has also entered into a JV to build new tech solutions for vertical farming
Shares in Ocado rose 4.6%, making it the biggest riser on the FTSE 100 today
By CAMILLA CANOCCHI FOR THISISMONEY.CO.UK
PUBLISHED: 10 June 2019
Ocado has taken another step away from food delivery and towards technology as it unveiled plans to expand into food production with two major investments in vertical farming.
The online grocer, which is focused on growing and diversifying its tech solutions arm, said it has splashed out £17million on a majority stake in Jones Food Company and a joint venture to build technology for vertical farming.
Vertical farming is when food is grown at indoor facilities in multi-level vertical stacks. It allows growers to fit a lot of produce into a small space and make it available all-year round.
Green shoots: Vertical farming is seen as an answer to providing food to urban populations
This method has become more popular in recent years as it is often seen as an answer to provide local, fresh food to a growing urban population.
It is also considered to be more sustainable, as it uses less water, less space and lower wastage than traditional agriculture methods.
Shares in Ocado were up 4.6 per cent to 1,165p towards the close, making it the biggest riser on the FTSE 100 today.
Jones Food Company, which is based in Scunthorpe, is Europe's largest operating farm producing leafy salads and herbs like dill, chives and basil.
The firm uses hydroponics, which means plants are grown in water or an inorganic fabricated substrate instead of soil as in traditional farming.
Ocado has also entered into a three-way joint venture called Infinite Acres with US based 80 Acre Farms and Netherlands-based Priva Holdings.
The collaboration is aimed at creating technology solutions for companies in the vertical farming industry.
Ocado boss Tim Steiner said: 'We believe that our investments today in vertical farming will allow us to address fundamental consumer concerns on freshness and sustainability and build on new technologies that will revolutionise the way customers access fresh produce.
'Our hope ultimately is to co-locate vertical farms within or next to our Customer Fulfilment Centres (CFCs) and Ocado Zoom's microfulfilment centres so that we can offer the very freshest and most sustainable produce that could be delivered to a customer's kitchen within an hour of it being picked'.
Less grocer, more tech: Ocado recently made a £4.75m investment in food robot firm Karakuri
The deal is Ocado's first move into food production, but follows its £4.75million investment in food robot firm Karakuri last month.
Jones Food Company boss James Lloyd-Jones said they were 'delighted' about the partnership with Ocado.
'We are certain that the combination of their world-leading logistics and automation systems coupled with our advanced growing technology will transform the way customers experience fresh produce - delivered fresh to their door a matter of hours from ordering,' he added.
Why does Ocado think vertical farming is ripe for the plucking?
By This is Money business and markets reporter Emily Hardy
Ocado Solutions: Ocado robots pack groceries in its warehouses
On a call with journalists on Monday, Ocado finance boss Duncan Tatton-Brown said that the move into vertical farming represented a chance for the delivery firm to ‘leverage its tech expertise’.
While staying close to the food and grocery sectors for now, it demonstrates how Ocado may put its warehouse robotics to use across a range of different industries in the future.
‘Our focus is delivering on Ocado Solutions, but this is an example of how we can use our know-how and put it to use across other areas. We think it works on many levels,’ Tatton-Brown said.
For shoppers, the finance boss said there were ‘many clear advantages’, including ‘fresher and tastier products all year round’.
‘We foresee a day when customers’ fresh produce is harvested just hours before they get it,’ he said.
He added that there were clear benefits for Ocado’s existing partners – which includes M&S, and Kroger in the US – as they may wish to try out this food production method and the Infinite Acres venture.
He also emphasised that this production method can be better for the environment, as it brings the crops closer to the end user therefore cutting down on shipping and flights.
At Jones Food Company, 100 per cent of the water used is recycled and its LED lights are powered by renewable energy.
Take a Tour of a Hema Supermarket And Experience "New Retail"
Chinese multinational conglomerate Alibaba has reiterated its plan to merge online and offline shopping experiences to better serve customers and improve efficiency, through among other measures, the rapid expansion of its grocery store Hema Supermarkets in China
Published on Jul 16, 2017
Alizila's Tom Brennan offers a tour of a Hema Supermarket, showing how online and offline shopping are merged into a seamless “New Retail” experience.
Winny Tang The Jakarta Post
Shanghai, China / Sun, November 11, 2018
Customers are pictured shopping at Hema Supermarket, part of Alibaba Group, in Shanghai, China. Hema is a digitized retail store that allows shoppers to buy food, eat in or order home delivery. (JP/Winny Tang)
Chinese multinational conglomerate Alibaba has reiterated its plan to merge online and offline shopping experiences to better serve customers and improve efficiency, through among other measures, the rapid expansion of its grocery store Hema Supermarkets in China.
Hema CEO Hou Yi said the group planned to open nine more stores by Dec. 12, from 91 stores it operates at present in 16 cities, including Shanghai, Beijing, Ningbo, Shenzhen, Hangzhou and Guiyang.
“By next month, we will have 100 Hema stores […] Hema is the first retail store where all products can be bought offline and online,” he told reporters during a media briefing in Shanghai on Saturday.
Hou Yi, said the company was currently focusing on expanding to Tier 1 and Tier 2 cities in China.
Hema is an example of a “new retail” model that Alibaba has incubated since 2015. The store provides a retail experience that uses a technology-driven concept for in-store purchases, online delivery and in-store consumption.
Shoppers can purchase products by using the Hema mobile app, which is linked to their Alipay account. Those living within a radius of 3 kilometers from the store can also use its home delivery services.
At Hema’s robotic restaurant in Shanghai, customers are served by robots that deliver dishes right to their table. (dwa)
Infarm Gets $100 Million Financial Boost
Urban farming platform Infarm has announced a $100M Series B investment led by Atomico, with participation from existing investors Balderton and Cherry Ventures.
The new funding will be used to scale Infarm’s growth in Europe to the US and beyond, and grow the R&D, operational, and commercial teams.
"Infarm was founded with an ambitious vision to feed the cities of tomorrow by bringing farms closer to the consumer, and with this round of funding we aim to grow our presence further", said Erez Galonska, co-founder and CEO of Infarm.
Infarm has developed easily scalable and rapidly deployable modular farms to grow fresh produce in any retail space or restaurant right in the heart of cities where people live in. Infarm’s technology is specifically designed and built to work anywhere in any available space. There is no need for a centralized warehouse or farm, and no need for special infrastructure or set-up.
infarm was founded in Berlin in 2013 by Osnat Michaeli, Erez Galonska and Guy Galonska.
Since Balderton led Infarm's Series A, it has grown to 250 employees and is on track to book over $100m in contract value this year.
Infarm has partnered with 25 major food retailers including Edeka, Metro, Migros, Casino, Intermarche, Auchan, Selgros, and Amazon fresh in Germany, Switzerland, and France and deployed more than 200 in-store farms, 150 farms in distribution centres, harvesting 150,000+ plants monthly and growing.
Infarm is launching in the U.K. this September with some of the country’s largest online and brick-and-mortar supermarkets and are in advanced discussions with retailers in the U.S. and Japan.
As part of the investment round, Atomico Partner Hiro Tamura will join the company’s board.
For more information:
infarm.com
www.atomico.com
www.balderton.com
www.cherry.vc
BREAKING NEWS: Infarm Raises $100 Million To Expand Its Urban Farming Platform To The U.S. And Beyond
JUNE 11, 2019
Infarm @ Auchan, Luxembourg
Infarm, a Germany-based startup that distributes “modular farms” to grocery stores and other urban locations, has raised $100 million in a series B round of equity and debt funding led by Atomico, with participation from existing investors including Balderton Capital, Cherry Ventures, Astanor Ventures, and TriplePoint Capital.
The CO2 emissions produced by growing, farming, and transporting food around the world is significant, with some estimates pegging the food footprint(“foodprint”) at around one-quarter of the total global greenhouse gas emissions. By creating a system of vertical micro-farms in cities, which entails producing food indoors within a stack of glass cases in a controlled environment, Infarm is pushing to reduce the environmental burden that food production has on the planet.
Founded out of Berlin in 2013 by Osnat Michaeli alongside brothers Erez and Guy Galonska, Infarm has partnered with a number of food retailers across Europe, including Amazon Fresh, Metro, Edeka, Migros, Casino, Auchan, and Intermarche to install vertical indoor farms inside their outlets.
Infarm @ Metro in France
Infarm said that its technology is designed to be built and distributed in any available space, and there is no need for a centralized warehouse or other infrastructure setup costs. The farms can be found in restaurant kitchens, supermarket aisles, and warehouses, and are designed to scale and make cities self-sufficient in producing their own plant-based food.
Each farm is “connected,” with sensors collecting and recording growth data, while they can be controlled remotely by the Infarm platform that “learns, adjusts and improves itself continuously,” according to the company.
Infarm
Prior to now, Infarm had raised nearly $34 million, and with another $100 million in the bank, it’s now gearing up to add additional markets to its roster, including the U.K., where it’s launching in September. The company said that it’s also in “advanced discussions” with retailers in the U.S. and Japan, while it plans to invest in various R&D, commercial, and operational initiatives.
“Infarm was founded with an ambitious vision to feed the cities of tomorrow by bringing farms closer to the consumer, and with this round of funding we aim to grow our presence further — sowing the seeds for a delicious and sustainable food system in urban centers across North America, Asia, and Europe,” noted Erez Galonska, Infarm cofounder and CEO.
Vertical
Infarm isn’t alone in its quest to introduce indoor farming to market. U.K. supermarket giant Ocado yesterday announced it was investing $22 million and joining a vertical farming joint venture, while back in December Alphabet’s VC arm GV led a $90 million investment in New York-based Bowery, taking its total funding to nearly $120 million. And San Francisco-based Plenty has raised north of $200 million for a similar proposition.
For Atomico, Infarm represents the latest in a line of “sustainable”-focused investments. Just yesterday, the London-based VC firm announced it had led a $25 million investment in Norway’s Spacemaker, which is working toward optimizing urban development projects with AI-powered simulation software, to cater to the expected population surge over the next few decades.
“The consumption of fresh produce is a huge environmental burden on our planet, one that will only increase as urban populations increase,” added Atomico partner Hiro Tamura, who now joins Infarm’s board of directors. “This is not sustainable long-term. Infarm has perfected the holy trinity when it comes to solving this massive global problem; their unique technology makes fresh food production sustainable, their solution has a global audience which means they have operated internationally from day one; and this has resulted in the company being a commercially attractive proposition for all stakeholders in the supply chain.”
Infarm also fits into a broader sustainability investment trend that has seen startups across urban mobility and waste reduction rake in investor cash. And in the food realm, meat substitute company Beyond Meat raised $122 million in funding ahead of its IPO last month — the company’s shares are currently red hot.
BREAKING NEWS: Ocado Invests In 'Vertical Farms' To Grow Produce Near Distributors
£17m Investment Includes Formation of Venture to
Develop Systems to Sell to Other Retailers
Jones Food’s vertical farm in Scunthorpe, which grows fresh herbs under lights in a warehouse. Photograph: Holly Challinor
10 Jun 2019
Ocado is investing £17m in high-tech farming with the aim of growing herbs and other produce alongside its robot-run distribution centres around the world.
The online grocery specialist has bought a 58% stake in Jones Food, a “vertical farm” that grows 420 tonnes of basil, parsley and coriander a year in stacked trays under 12km (7.5 miles) of LED lights in a warehouse in Scunthorpe. The grower currently supplies businesses such as sandwich maker Greencore.
Duncan Tatton-Brown, finance director of Ocado, said the group could open at least 10 more similar farms within five years. He said it could take less than a year to build a Jones Food facility and the two companies were now considering how Ocado’s expertise in robotics and AI could be used to make Jones Food more efficient.
James Lloyd-Jones, chief executive of Jones Food, said the group’s Scunthorpe farm recycled all its water, did not use pesticides and was powered by renewable energy, such as wind turbines and solar panels.
Ocado’s £17m investment also includes the formation of a new joint venture – Infinite Acres – with US-based vertical farming business 80 Acres and Priva, a Netherlands-based horticultural technology provider, on a four-year project to develop off-the-shelf vertical farming systems that can be sold to retail and other businesses worldwide. The 80 Acres farms, which are based in Ohio, Arkansas, North Carolina and Alabama, are able to grow tomatoes and courgettes as well as leafy salads and herbs, without using pesticides.
Tim Steiner, Ocado’s chief executive, said: “We believe that our investments today in vertical farming will allow us to address fundamental consumer concerns on freshness and sustainability and build on new technologies that will revolutionise the way customers access fresh produce.
“Our hope ultimately is to co-locate vertical farms within or next to our [distribution centres] and Ocado Zoom’s micro-fulfilment centres so that we can offer the very freshest and most sustainable produce that could be delivered to a customer’s kitchen within an hour of it being picked.”
Ocado Zoom is a new one-hour delivery service offering a more limited range of goods, launched earlier this year and being trialled in west London.
Only eight people work at the Jones Food facility, where the herbs are grown hydroponically – getting all the nutrients they need without soil. The plants, the first of which were only grown last year, are not touched by humans from seed to bagging ready for stores. A robot called Frank stacks trays of plants ontoon to towers of shelving while machinery automatically harvests them when ready.
Every element inside is monitored to ensure it is clean and primed for growing the herbs quickly. Anyone entering must wear protective clothing including overalls, wellies and hairnets and step through an air shower that blows off any dust. Air is filtered to ensure insects cannot enter.
Ocado currently sells Waitrose groceries via its website in the UK and provides distribution for Morrisons’ website. Next year it will swap Waitrose for Marks & Spencer under a £750m joint venture, raising the prospect of specialist robot farms serving the 134-year-old high street retailer.
Ocado has sold its hi-tech robot grocery picking and packing technology around the world to retailers wanting to develop online businesses. In one blockbuster deal it is to build 20 warehouses for US supermarket giantKroger. It has also struck grocery delivery technology partnerships with Groupe Casino in France, Sobeys in Canada and ICA Group in Sweden, creating a ready-made potential market for its robot farms
US: Lidl Reveals Plans For 25 East Coast Stores
As part of its continuing growth along the East Coast, Lidl US has revealed plans to open 25 new stores in Maryland, New Jersey, New York, North Carolina, Pennsylvania, South Carolina and Virginia by the spring of 2020
As part of its continuing growth along the East Coast, Lidl US has revealed plans to open 25 new stores in Maryland, New Jersey, New York, North Carolina, Pennsylvania, South Carolina and Virginia by the spring of 2020.
By the end of next year, the deep discounter expects to operated more than 100 U.S. stores and create more than 1,000 new jobs in nine states. “We are committed to long-term growth in the United States and always strive to locate in the most convenient locations for our shoppers”, noted Lidl US CEO Johannes Fiber.
“These new stores are part of the next steps in our U.S. expansion.
Over the next year, we are excited to introduce more customers to Lidl’s award-winning quality, reliably low prices and convenient shopping experience.”
Source: progressivegrocer.com
Is The French Hypermarché On Its Last Legs?
The sprawling French supermarkets, with their huge selections of fresh fruit and veg and well-stocked wine aisles, have been delighting visitors and locals alike for decades - but are their days numbered?
The sprawling French supermarkets, with their huge selections of fresh fruit and veg and well-stocked wine aisles, have been delighting visitors and locals alike for decades - but are their days numbered?
This month French supermarket giant Carrefour announced a major restructuring of its business, leading to up to 3,000 job losses. That came just weeks after another big name, Auchan, said that it would be selling off 21 loss-making stores, with the potential loss of 700 jobs.
Carrefour, Europe’s largest retailer, says it intends to refocus on food, with restructuring in six sectors (petrol station cash registers, hi-fi household appliances and jewellery departments, in-store revenue processing, management and payroll services).
In total, France has more than 2,000 hypermarchés, which are defined as having at least 2,500 square metres of retail space, and the industry is dominated by four big names - Carrefour, Auchan, E Leclerc and Inter-Marché.
When the first hypermarchés were created in the 1960s the idea was groundbreaking - and at the vanguard of food shopping in Europe.
Visitors from Britain were astounded at the size of the stores and the variety of goods on display - everything from food and drink to household goods and garden furniture. For many locals, a weekly shop became the norm at the giant out-of-town stores that provided everything under one roof. And the stores still hold a special place in many local residents’ hearts. But it seems that changing shopping habits - and competition from online sales - is putting the hypermarché under threat.
In April Auchan announced the latest in several years of financial woes for the company, and revealed that 21 of its stores, including the hypermarché at Villetaneuse in the Seine-Saint-Denis region - were not making a profit.
French retail specialist Frank Rosenthal told magazine Les Inrockuptibles that the main problems for the big stores are in the non-food sector. The biggest stores now sell a dizzying array of products, from clothing and shoes to electrical items, and music, books and DVDs.
But it is this sector that has been hit the hardest by the rise of internet shopping. "The hypermarché has never had so much competition. All sectors have competitors, much more than before," said Rosenthal. "All the large specialised areas like DIY, sports, household appliances, textiles."
A report by market analysis firm Xerfi was already warning in 2017 that hypermarkets were a “symbol of a society of mass consumption that today is largely rejected” and must ”urgently reinvent themselves.”
The report said the big retailers should no longer perceive online shopping as a threat but instead should view it as a chance to “develop new experiences for customers and (re)build traffic.”
They need to transform their commercial centres into attractive places where people come not just to buy things but for leisure or other experiences too, the report said. This would also help what have traditionally been low-cost operations to move upmarket a notch or two.
Last year, Carrefour launched a five-year plan to cut costs, boost e-commerce investment and seek a partnership in China with tech giant Tencent.
The plan notably includes expanding into convenience stores to reduce exposure to the group’s hypermarkets and having a greater focus on organic products and private labels.
Carrefour is often wrongly thought to have created the first hypermarchés in Europe. In fact it was a Belgian group, Grand Bazar, which opened the first mega-supermarkets, in 1961, which can take that claim to fame.
The death of the hypermarché has been predicted by many, but it is likely to remain a part of the French countryside for some time to come, though probably in a much altered form.
Publication date: 5/22/2019
Carrefour Aims To Have 95% French Fruit And Veg In Its Stores By 2020
On February 28, Carrefour CEO Alexandre Bompard made a strong commitment to his customers: "To increase by 10% the volume of fruit and vegetables produced in France on its shelves, so that by 2020, 95% of the products sold will be of French origin".
In April, 65 % of the fruits and vegetables on the shelf at Carrefour were of French origin. However, in July, when the seasonal products arrive, 80 % of them will be stamped made in France.
The brand is focused on two areas:
To offer more and more seasonal products: this means more turnips, pumpkins and sunchoke in winter, and more tomatoes in summer. However, we would have to offer less and less certain products, or even remove them from the shelves if they come from too far away. This decision is risky for consumers: it is therefore essential for Carrefour to educate them. It will be necessary to explain again the natural cycle of fruits or vegetables. In addition, this strategy of buying more products made in France has a cost, estimated at 50 million euros per year.
Encourage the re-establishment of certain cultures, which had disappeared in France. "As soon as a product can be made in France, we manage to have it on the shelf, even if we can offer other origins in parallel," Carrefour explains. The distributor is also pushing the spotlight on organic productions made in France. "We are currently supporting 230 farmers, particularly during the entire conversion phase, during which their incomes are declining.
Source : leparisien.fr
Publication date: 5/13/2019
Walmart Invests Over $200 Million In Updates
Walmart announced plans to invest over $200 million in its store network, with a focus on refurbishing and refreshing 31 stores across Canada over the next year
May 06, 2019
Walmart announced plans to invest over $200 million in its store network, with a focus on refurbishing and refreshing 31 stores across Canada over the next year. Approximately 3,250 construction jobs will be created to support these upgrades. The company will expand its fresh food Supercentre format to more locations and the investments will also help create a more seamless experience for customers ordering on Walmart.ca and picking up at their local store.
These updates are the latest in a series of store investments, building on the retailer’s $175 million updates to its store network in its last fiscal year. Over the last five years, the company has invested over $1 billion in its Canadian store network.
“Our store network is a key advantage in our ability to best serve the changing needs of our customers,” said Lee Tappenden, president and chief executive officer of Walmart Canada. “1.2 million customers in Canada choose to shop in our stores every day and we are focused on making their experience easy, enjoyable and convenient while seamlessly integrating our eCommerce business. Investing in our stores is critical for the future of our business and to deliver on the changing needs of our customers.”
Walmart has opened more than 20 stores over the past four years. As part of the retailer’s store strategy, it will also close two stores – one in Pincourt, QC, and one in Sault St. Marie, ON.
Enhancements customers can expect to see in their local stores include:
Better experience for customers shopping online and picking up in stores: Updated features include dedicated parking spaces for online grocery pickup and new areas in stores devoted to online orders.
Wider assortment and increased customer offering: Focus on food assortment and fresh, adding in bakery departments and hot food offerings, as well as introducing new licensees to stores for increased customer convenience.
Contemporary updates: Physical updates that provide a refreshed look and feel, including rearranged stores, updated colour palette, new signage, and initiatives to make stores fun and engaging for customer.
Swedish Grocery Store Reveals Line of Produce Grown On-site
Posted By: Harriet Jachec
April 16, 2019
Located in Halmstad, Sweden, Maxi Högskolan has harvested a range of hydroponically-grown produce for shoppers from Freight Farms’, a manufacturer of container farming technology, flagship container farm, the Leafy Green Machine.
By reducing the length of distribution time between food source and consumers, the produce grown by Maxi Högskolan is more nutrient dense and retains freshness for longer. This then impacts on the amount of food waste produced by retailers and consumers.
Technological developments have aided in the process, as Freight Farms’ containerised farming technology creates and maintains the optimal growing conditions to harvest produce year-round using less than five gallons of water per day. This also expands on the production capabilities of produce that is not native to the Swedish region, and allows producers to harvest crops without concerns about climatic limitations.
Rikard Hillarp, owner of Maxi Högskolan, said: “We’re excited to be the first ICA Maxi store to implement an onsite farm. By growing crops just steps from our shelves, we’re able to offer our customers what are truly the freshest greens possible.”
He continued: “Freight Farms’ technology is especially helpful in Sweden, where our short growing seasons can limit crop availability throughout the year and increase our reliance on imported produce. We’re now able to shorten the distance food travels to get to our customers from 2,000 kilometers to just 30 meters.”
In: Agriculture, Food, Innovation, Logistics, Technology
Italy: Lidl Trials Its First Shop To Have An Urban Garden
Spanish retailers follow the trend
A few weeks ago people were talking about the plans of El Corte Ingles to install a vertical garden in their store in Valladolid, now their focus is on Lidl, which has put into operation its first store in the world with an urban garden.
The discount company has opened this pioneer establishment in the Italian city of Turin. The store has 1,400 square meters of plant spaces on the roof of the building, which will be managed by Re.Te, a non-profit association that develops cooperation and social inclusion projects for people in need.
"Today we are not only here to inaugurate a new point of sale, but also to announce a unique project: the first Lidl store in the world, and there are already more than 10,500 of them, with a urban garden on the roof," stated the Regional director of Lidl Italy, Maurizio Cellini.
The urban garden will be administered in collaboration with other associations and will be entrusted to the inhabitants of the neighborhood, taking into account their income, work and personal situation.
"This is a story of which we are particularly proud and which expresses Lidl's willingness to meet the needs of the territory and to be part of a social inclusion project that will feature neighborhood families," added the director.
In this sense, the vice president of Re.Te, Luca Giliberti, stated that the urban garden would be administered in collaboration with other associations and would be entrusted to the inhabitants of the neighborhood, taking into account their income, work and personal situation.
The gardens will be used for awareness activities for school groups and labor reintegration, as well as to test agricultural techniques to combat the effects of climate change and support international agricultural projects in Latin America, the Caribbean, and sub-Saharan Africa.
The new store offers an assortment of more than 2,000 items, 80% of which are manufactured in Italy. It is also equipped with photovoltaic panels to reduce energy needs.
In this way, Lidl joins the trend of developing vertical and urban projects in food distribution, especially at the international level. In fact, similar initiatives have already been launched by chains such as Carrefour, Auchan Retail, and Mercadona. Specialized retail has also started to implement projects of this type, just as Ikea has recently done in Sweden.
Swedish Supermarket Opens Onsite Container Farm
It's The Third Container Farm Made By US Manufacturer
US container farm manufacturer Freight Farms has built and opened a new container farm at a Swedish supermarket through their Scandinavian distributor Futufarm. Located in Halmstad Sweden, Freight Farms customer ICA Maxi Högskolan is one of ICA Gruppen's 1,300 grocery stores in the country. This month, the store began harvesting a range of hydroponically-grown greens for shoppers from the 'Leafy Green Machine' container farm, bringing the number of Freight Farms' container farms in Sweden to three.
"We're excited to be the first ICA Maxi store to implement an onsite farm," said Rikard Hillarp, owner ICA Maxi Högskolan. "By growing crops just steps from our shelves, we're able to offer our customers what are truly the freshest greens possible."
On March 29, the group kicked off its launch with a Harvest Festival for customers, selling produce and offering free samples of the newly-harvested greens and a Q&A with store employees Max Rydberg and Douglas Klang, now the newest onsite farmers.
ICA Maxi Freight Farm exterior
Transport to the store and capacity
The Leafy Green Machine destined for the Swedish supermarket began life in the United States where it was built by Freight Farms in Massachusetts. It was trucked to New York City from where it was shipped to Europe, before making its journey to the ICA Maxi store by truck and placed into position by a crane. The company says this farm can produce up to two acres worth of produce.
"Freight Farms' containerized farming technology allows ICA Maxi Högskolan to create and maintain the optimal growing conditions to harvest produce year-round using less than 5 gallons of water per day," Freight Farms said in a release. "Beyond the store's initial offering of butterhead lettuce, spinach, and herbs, the farm's integrated IoT data platform, farmhand, will also allow the store to grow non-native crops otherwise unavailable in the region, regardless of seasonal limitations in Sweden's Nordic climate."
ICA Maxi Högskolan is Freight Farms' third container farm in Sweden, and the company said there is anticipation to scale.
ICA Maxi store employees
Scandinavia ideal setting for container farms
With winters being rather cold and offering limited daylight, Scandinavia is restricted in what it can produce locally, especially outside the summer months. Freight Farms also noted that consumers in the region are known for their penchant for sustainable and environmentally-friendly solutions to a range of situations. In fact, IKEA made an announcement last month, stating that it would begin growing lettuce on site for its staff soon, suggesting that it may later sell it to paying customers if all goes well. However, this trial is only for lettuce and ICA Maxi's new farm is fully operations and consists of several varieties which are all available to customers. Therefore, Freight Farms wants to highlight the benefits of having food grown locally.
"Freight Farms' technology is especially helpful in Sweden, where our short growing seasons can limit crop availability throughout the year and increase our reliance on imported produce," added Hillarp. "We're now able to shorten the distance food travels to get to our customers from 2,000 kilometers to just 30 meters."
Max Rydberg and Douglas Klang - the new "onsite farmers"
Futufarm's Chairman, Harrie Rademaekers, noted that the potential for container farms in Nordic countries is great, pointing out that much of the produce consumed in the region originates from overseas. "Even though we have access to greens all year round, only 50 percent of the crops we consume are grown in the region," he observed. "In general we are very dependent on imported crops from Holland and Spain, which is not very sustainable. Nordic consumers are very focused on locally-grown and this fact builds a strong case for local container farms serving local food stores, restaurants, hotels, schools and so forth. Our climate is changing and water supplies are becoming more precious, which will force us to find new methods of farming. Food tech solutions will helps us, and in this case, Freight Farms' hydroponic technology can provide a climate-controlled farming solution that helps us save 95 percent more water than traditional agriculture."
Some leafy greens produced in the container farm
"By removing the miles between the food source and consumers, produce maintains nutrient density and stays fresh for far longer, significantly reducing food waste for both retailers and consumers," said Freight Farms' CEO Brad McNamara.
"Our team innovated the technology to empower individuals and businesses all over the world to decentralize the food system in meaningful ways specific to their local community or environment," he concluded. "We're thrilled to work with industry leaders like Rikard Hillarp and retailers like ICA Maxi, who together have the forward-thinking vision and reach to disrupt the grocery industry internationally."
For more information:
www.freightfarms.com
Germany: Infarm Installed Greenhouses At 2 Edeka Stores In Münster
Berlin start-up brings "small garden in the supermarket" to NRW
Grow herbs and salads locally in the market and get them, freshly harvested, in the shopping cart. With the "small garden in the supermarket", the word "freshness" takes on a new dimension. The department stores in Loddenheide and Gievenbeck welcome a new farmer in the city: start-up company Infarm from Berlin has entered the markets with its high-tech greenhouses.
With its modular farm system, the cultivation of herbs and salads is moving to the Münsteraner's shopping center, catering to a trend that is becoming increasingly important today: buying fresh local produce.
Image: Infarm GmbH
Alternatives for local cultivation
"You can hardly find these products locally," says Uwe Marx, market leader in Loddenheide. "We want to offer our customers Infarm's herbs an alternative to basil, mint or coriander, which are currently imported from other countries. The special twist is that customers can watch the herbs being grown."
The herbs grow without the use of soil in a multi-storey facility. In the so-called vertical farms, the processes of nature are reproduced. Temperature, light and nutrients are matched to the plants. Pesticides are not used. Other negative influences such as heat, cold or drought are excluded from the small ecosystem.
On the 7th of May, customers can taste the new harvest for the first time.
For more information:
InFarm – Indoor Urban Farming GmbH
Glogauerstr. 6
10999 Berlin
Phone: +49 (30) 9919165 90
E-Mail: info@infarm.com
www.infarm.com
Montreal Hits The Roof For Veggies
March 18, 2019 - Produce with Pamela
Lufa Farms, a rooftop hydroponic farming venture launched in Montreal in 2011, has been finding success with the urban greenhouse approach and has been profitable since 2016.
Canada’s Prime Minister, Justin Trudeau, toured Lufa’s new 63,000-square-foot facility in Montreal last year.
This particular structure was Lufa’s third rooftop hydroponic greenhouse and helped bring the grower’s total square footage to 138,000 across three Montreal-area rooftops. The greenhouse features purple LED lighting—in addition to available sunlight—so crops can grow year round.
Lufa offers direct-to-consumer, customized baskets, in a business model that is a combination of AmazonPrime and community supported agriculture (CSA). Customers are emailed Friday when the website’s marketplace opens, and they can then customize their basket up until Sunday night at midnight.
Lufa provides about a quarter of the food it sells on the marketplace, including hydroponically grown bok choy, cucumbers, eggplant, lettuce, peppers, and zucchini. Combining this harvest with those of other local growers results in a varied mix of fresh produce, ready for pickup at one of 300 locations throughout the city or for delivery by electric car (for an additional fee). The growing company delivers over 12,000 baskets every week in the Montreal area.
A different rooftop approach, albeit not in a greenhouse, has also been gathering attention in Montreal. Atop an IGA Duchemin store in St. Laurent, 30 varieties of organic produce, including tomatoes, herbs, peppers, and lettuce, are grown for purchase in the grocery store below.
The 25,000-square-foot farm accepts orders from a kiosk located in the produce department downstairs, and shoppers can use the touchscreen to prompt a harvester on the roof to pick their basket and send it down to the store below.
There are also eight beehives on the roof, providing shoppers the opportunity to purchase hyper-local honey. In a smart marketing move, IGA Duchemin has created and posted an entertaining video of the ordering process at the store, available on YouTube.
In addition to Lufa Farms and IGA Duchemin’s rooftop greenhouses, other local sourcing efforts are popping up in the region. Solar and cold weather greenhouses are being improved in hopes of extending the growing season and cultivating food nearer to population centers, and vertical farming initiatives are also getting attention from the research community.
McGill University’s Mark Lefsrud, associate professor of bioresource engineering, knows from his days at NASA (the U.S. National Aeronautics and Space Administration) that it “takes a little less than eight square meters to feed a human.”
Vertical farms, if financially sustainable, could feed the masses near multiple population centers in the provinces. Lefsrud consulted with Urban Barns Foods, Inc. in the grower’s recent efforts in Quebec to make vertical (hydroponic) farming a reality, particularly with respect to leafy greens.
The company has since relocated to Milner, British Columbia, and operates under the name Cubic Farms. Founder Dave Dinesen continues to advocate for urban farming, including in a recent TEDx speech on lettuce—since Canada imports nearly a billion heads of lettuce every year.
This is an excerpt from the most recent Produce Blueprints quarterly journal. Click here to read the full article.
Tagged Quebec
Eating Local Just Got Easier For Some North American Cities
There are many benefits to eating local food—reduced carbon emissions from transport, more nutritious products picked closer to ripening, supporting local economies—but for a lot of people, local isn’t an option. There are many food swamps and food deserts throughout the United States that are in part a result of limited access to healthy, local food.
Much of the time, food racks up quite a few miles on the foodometer before it reaches our plates. But the organizations Square Roots and Gordon Food Service are partnering to help bring locally-grown food to customers across North America year-round.
Founded in 2016, Square Roots has developed scalable urban farming technology to achieve their mission of bringing local, real food to people in cities to empower the next generation of leaders in urban agriculture. Gordon Food Service is one of the leading food service providers with distribution operations spanning North America, along with 175 retail locations. This partnership will help enable Square Roots to develop new indoor farms near Gordon Food Service distribution centers and retail stores, which will make an assortment of high-quality, local produce available to Gordon Food Service customers.
“Customers want an assortment of fresh, locally grown food all year round. We are on a path to do that at scale with Square Roots and are excited to be the first in the industry to offer this unique solution to our customers,” said Rich Wolowski, CEO of Gordon Food Service.
Square Roots will not only bring their high-tech farming platform to the collaboration—including their transparency timeline—but they will implement their Next-Gen Farmer Training Program in the new locations. This program trains young people to become future food leaders and includes education in plant science, food entrepreneurship, community engagement, and of course growing food.
With this partnership, eating local will get a bit easier for the many cities that will soon have a Square Roots campus, helping people reduce their carbon footprint while supporting the next generation of urban farmers.
Featured Image Courtesy of Square Roots
Gordon Food Service To Build 'Urban Farm Campus' At Headquarters
Author: Krishna Thakker@krishna_thakker
March 26, 2019
Dive Brief:
Indoor farming startup Square Roots has announced the location for its first "urban farm campus" at Gordon Food Service's headquarters in Wyoming, Michigan, according to a press release emailed to Grocery Dive. The two companies first announced their partnership a few weeks ago.
The flagship farm campus will include 10 specially designed Square Roots shipping containers for direct production and four more for operational support. The containers will take up less than two acres of land on Gordon’s 50-acre site and will generate more than 50,000 pounds of non-GMO, pesticide-free herbs and greens a year.
The herbs and greens grown on the campus will be sold commercially to chefs and to consumers who shop at Gordon Food Service’s retail stores. The construction and installation of the farm campus is expected to be complete this fall and will be operational immediately.
Dive Insight:
This will be the first of several urban campuses that Square Roots builds on Gordon Food Service sites, and launching at Gordon Food Service's headquarters will give the food distributor the ability to oversee the operation and have a better understanding of how it will distribute and sell the herbs and greens that Square Roots produces.
"This partnership brings together technology, agriculture, young farmers, and scalability, in a model that could revolutionize our food systems," Rich Wolowski, North American President and CEO of Gordon Food Services, said in a statement. "And it’s wonderful to be starting in our own backyard.”
Until now, all of Square Roots’ containers have been located in Brooklyn, but with the limited amount of space available in that area, the only way to expand is to go outside the region. This first farm campus will serve as a template for its future farms on other Gordon sites, giving both companies the flexibility to see what works and what doesn't before deploying to other locations.
In addition, Square Roots is bringing its Next-Gen Farmer Training Program to Gordon’s headquarters, and this new location opens the opportunity to more people who see a future in farming. This is especially useful in the Midwest where agricultural production is a big business, and also helpful as indoor farming gets more popular in the U.S. With the training program, Square Roots will have a lineup of future employees and the hands-on-deck it needs for additional campuses.
Indoor farming is projected to be a $3 billion market by 2024 as unpredictable weather conditions, the push for sustainability and more impact traditional farming. Some states offer tax benefits and incentives for sustainable farming as well, such as Michigan's Farmland and Open Space Preservation Act.
Recommended Reading:
Retail View: Amazon’s Bricks And Mortar Move ‘Not Surprising’
A cadre of retail experts had different opinions on reports that Amazon is looking to increase its physical footprint in the grocery sector, but they all agreed that it makes sense and is not unexpected.
BY TIM LINDEN | MARCH 15, 2019
A cadre of retail experts had different opinions on reports that Amazon is looking to increase its physical footprint in the grocery sector, but they all agreed that it makes sense and is not unexpected.
“It is not surprising that Amazon would be on an acquisition binge and as they move forward they would want a bigger footprint in our industry,” said Anthony Totta, CEO of FreshXperts LLC.
“It didn’t surprise me at all,” echoed Ed Odron of Ed Odron Produce Marketing & Consulting about a recent Wall Street Journal article exploring the online giant’s future grocery store plans. “Amazon realizes there is much more out there than just online business. They are covering all the bases.”
“Amazon is big and it makes sense that they keep pushing to the next level,” said Ron Pelger of RonProCon.
Dick Spezzano of Spezzano Consulting Service said selling groceries online profitably is a challenging proposition. He indicated it is a natural next step — after Amazon’s purchase of Whole Foods — to increase its physical presence in the supermarket arena.
Each of these experts has spent decades in the produce industry, mostly on the retail side, and have an informed view of the challenges and opportunities that Amazon faces, and who just might be the losers as that giant expands.
Spezzano said that while Amazon has revolutionized the world of online shopping, groceries are a unique proposition. He noted that an online shopper can buy two pairs of shoes — with the idea of returning one — and have them delivered in a small box with a retail ring north of $200. “You know how much space it takes to buy $210 worth of groceries,” he asked rhetorically, indicating that groceries, including perishables, just don’t fit neatly into small, efficient spaces.
The longtime Southern California retail veteran believes that Amazon’s foray into bricks and mortar is somewhat of an admission that online grocery sales are not a big winner for them.
Most people are still reluctant to buy perishables online and delivering groceries, customer by customer, is just not very efficient, said Spezzano. While it can work in a very densely populated location, it’s much harder to justify when there is distance between customers. He believes online ordering that involves picking up your purchases at the store is a better fit for most retailers and many shoppers. For that to succeed, it makes sense for Amazon to have more physical stores across the country.
The Wall Street Journal article said Amazon is going to launch its new effort with a few stores in the Los Angeles area. Spezzano believes the long-term strategy would be to grow through acquisition. He said one rumor he heard in early March was that Amazon was going to buy Stater Bros., a mid-sized, family-owned Southern California retailer.
Spezzano believes that makes sense, as it is a good exit strategy for some of these smaller, family-owned grocery stores, and can give Amazon some instant heft.
Pelger believes Amazon’s desire to have more of a physical presence is tied to that company’s knowledge that it has to continue to grow. “They have to always concentrate on growth to continue to thrive,” he said. “They are always going to be looking at the next thing.”
He knows that online grocery sales have not taken off yet but he likened the concept to organic produce. Pelger said it took many years for organic produce sales to even register a blip on the scale, and now that sector represents about 10 percent of produce department sales. Of course, he also joked that it took organics 30 years to achieve 10 percent.
“At that rate, in 300 years they will have 100 percent,” quipped the former A&P produce executive.
Pelger believes the order and pickup model is the one that has the best chance for success for fresh produce. “Our biggest challenge in produce [for online shopping] is its perishability,” he said.
He sees more and more retailers carving out opportunities to serve their customers through the pick-up model. Pelger lives in Reno and he said the local Walmart has huge tower-type lockers in the front of its store that serve as holding places for online orders.
“These are new developments,” said Pelger. “It just shows you that as time moves on, things change. Anything you are doing today (businesswise) is obsolete. If you don’t change, you become history.”
Odron said the reports that Amazon is looking at smaller footprint stores (35,000 square feet) makes sense, as he believes the large-format stores are just too big. With their ownership of Whole Foods, he said the online giant has a foothold in the upscale supermarket sector. He believes it makes sense to now operate physical stores in blue-collar neighborhoods where it can bring its low-cost model directly to consumers.
With regard to online shopping, Odron said he thought it would never catch on, but he sees it gaining traction. He also likened it to the growth of organics, which he said grew very slowly but has seen tremendous growth in recent years. “Online shopping is still at its infancy, but it’s going to grow.”
He’s another observer who has noted the trend toward buying online and picking up at the store. He lives in Stockton, CA, and said his local Raley’s Market has two full-time employees devoted to filling online orders in the store and then delivering them to the shopper as he or she pulls up in the parking lot in a preferred space.
Odron believes every retailer should be cognizant of what Amazon is doling. “They are aggressive. They are going to go forward at 160 miles per hour and they have deep pockets.”
Totta subscribes to that same theory. He expects Amazon to grow via acquisition, targeting independents with multiple units. “I don’t think they will go coast to coast [with a big acquisition]. I think they will be more selective and not compete head-to-head with Whole Foods. But there are plenty of pockets where Whole Foods does not have a big presence.”
He indicated that Amazon’s desire to be all things to all people may be driving this move to more of a physical presence.
“I haven’t seen the data, but my gut feeling is that the online business is much more efficient with non-perishables than with perishables,” said Totta.
It follows that Amazon would then want to increase its reach as a supplier of perishable items by having a physical presence.
Spezzano said it is an accepted fact that the United States is currently “over-stored and over-sized,” meaning there is more retail grocery space than necessary. So as Amazon enters the space in a bigger way, it stands to reason that there will be some losers.
Each of the experts interviewed agreed.
Spezzano said although retailers rarely make big announcements about store closings, there has been significant downsizing. He said the major retailers are closing more stores than they are opening each year and there have been some smaller chains go out of business. He believes smaller-footprint stores, like the ones Amazon is reportedly looking at, make the most sense.
Odron mused that if you hang around long enough, you see the cycles play out. “When I first started, the average store was 20,000 to 25,000 square feet — and then they kept getting bigger and bigger. You couldn’t have a store big enough. Now everyone is talking about scaling back, especially in California where the real estate is so expensive.”
Totta also believes that bigger might not be better. He opined that it is the huge box-store discounters that may have the most to lose as Amazon gets deeper into the grocery business, and he argues that the perishable-focused, smaller retailers who are concentrating on giving shoppers a positive and enjoyable experience by inspiring them will survive.
On the other hand, Totta said the broad line huge discounters that don’t provide a pleasant shopping experience could have trouble competing against Amazon.