Startup Spotlight: Grit Grocery

Startup Spotlight: Grit Grocery

Grit Grocery has put a gourmet grocery into a food truck. Working directly with farmers and other local producers, Grit Grocery launched a fleet of grocery trucks to bring fresh ingredients and meal-kit bundles into urban areas — starting in Houston — underserved by traditional grocery options. We visited with cofounders Michael Powell and Dustin Windham to find out how they’re doing after competing in the Food+City Challenge Prize in 2018.

What’s your founding date?

Founded in 2015, pilot in 2016-2017, full-scale launch in April 2018.

How big is your team?

Five co-founders, plus a team of seven who drive trucks, sell food, work in the kitchen and organize the warehouse.

What problem are you solving?

Grit Grocery trucks bring fresh local food products to urban locations that don’t have food retailers or that have stores that carry mainly processed nonperishable food. We’ve designed a shopping experience that provides ideas and inspirations for healthy, easy, fresh, local-food meal solutions, tonight.

What’s been the biggest surprise about running your business?

A lot of local brands are producing and growing great food, but they don’t have access to customers through a retail outlet. We get a lot of these groups asking to get their products on the truck. We also hear from apartment complexes and developers requesting that Grit be at their residences. We already have a long waiting list of sites.

What part of the food system are you in?

Grit Grocery is a retail destination. We source directly from local farmers and ranchers as much as possible. As a retailer, we are at the front line of customer interaction.

What was the big idea that got you started?

Why is it so difficult to put together all of our meals over the course of the week with fresh, local, healthy food? There’s something wrong with food retail — and with the traditional grocery store model, in particular — that makes it hard for so many people to eat healthy, find local foods and put together meals. While we’ve seen a lot of innovation in how food is grown and produced, retail innovation has been lacking. New online options are promising but lack the flexibility to be a good fit for today’s urban life. This is where Grit Grocery started.

Whom are you competing with?

Traditional grocery stores and other big-box stores are obviously the main source of food retail. Organic and specialty grocers offer food more in line with what Grit offers, but they mainly carry nonlocal food and a lot of processed food. Farmer’s markets are not competitors, but they do overlap with Grit’s offerings — though their shopping experiences are not strategically designed for customers. Online grocers and meal-kit providers are similarly flexible when it comes to delivering food retail access, but they also come up short in responding to a customer’s daily food issues and needs.

The coolest food system innovation I’ve heard of is…

Coolbot. Build a poor man’s walk-in cooler.

The scariest thing about today’s food system is…

Nowadays, food is everywhere you look, from the airport to the hardware store, schools to the office. But most of it seems to be processed junk. Society is busier than ever and we have created more on-the-go occasions to eat food than can possibly be healthy, or that can accommodate real food solutions. The processed food industry likes that and profits enormously.

What’s your latest big news?

We released a Chatbot in October 2018 that allows people to use their smartphone to order a meal for pickup at the truck. They can also use the Chatbot to find the Grit Grocery truck and order a Grit-Together, a unique dinner party event for small groups.

Best advice you’ve received?

Be resilient. That’s what grit is all about. Keep trying new things, putting ideas into action and watching to see what works and what needs further improvement.

What advice do you give to potential startup founders?

Good strategy and technology are not enough. People and their food habits are kind of weird and hard to predict. You need to test and get in front of people, see how they really engage with your food or product in their daily lives.

Grocery Stores: The IoT of Food

Grocery Stores: The IoT of Food

Tired of comparisons to the much flashier internet, supermarkets are working hard to ditch their unsexy descriptor: big-box stores. These days you’ll find a Murray’s Cheese outpost in Kroger, a kombucha bar at Whole Foods and poke bowl counter at Albertsons. All these flashy foodie options are good distractions from what’s happening under the hood, which is that grocery stores — the physical four walls — are going digital.

Ready or not, consumer packaged goods (CPGs) — those pre-wrapped items found in so many center aisles — are nudging grocery stores into the future. And so is Amazon. The online retail giant’s entrance into brick-and-mortar supermarkets forced every retailer to innovate or die.

It’s been decades since the internet changed the way we shop, so why are American retailers slow to get on board? The founders of Trax, a retail technology firm based in Singapore, might point to our love for the status quo. The U.S. Census Bureau’s figures (from second-quarter 2018) bear that out, indicating that e-commerce sales account for 9 percent of total sales. That means 91 percent of sales still occur in stores. Maybe U.S. retailers aren’t scared yet?

In contrast, the true retail visionaries are found in Australia, Brazil and China. Yair Adato, Trax’s chief technology officer, says China is five years ahead of the U.S.

“In China, you can go to a store, scan what you want to buy, put it in your cart and they’ll deliver it to your home in 30 minutes,” Adato says.

Soda giants were early pioneers in creating speedy distribution channels. Yet despite raking in billions of dollars in sales, they couldn’t point to exactly how, when or why. Brands were guessing what was on the shelf, how much was left, what was selling at what times of day and even what their competitors had on the shelf. Short of physically walking in to every single store in the world and snapping a photo of the soda aisle, they had no idea what was happening.

In some countries, brand managers might have trusted their employees when they said they went to a store and reported that everything “looked good.” But in China or Brazil, managers wanted visual proof. “It’s a culture thing,” said Adato. “I want to know that I paid the right bonus to my employee.” In Australia, instead of proof, they wanted to improve processes using data analytics.

But it was a little bit like the chicken and the egg. Brands wanted to harness data to make better business decisions, and stores wanted to evolve. They saw that online shopping was more engaging for customers than a trip to the store, but it was an expensive undertaking with no clear financial incentive for either party. While a brand like Coke might want to push retailers for improved ways of tracking its sales, the reality is that it has only a few thousand SKUs (aka, inventory items). Target, on the other hand, has hundreds of thousands. But before it could become cost-effective for retailers to adopt new tracking tools, the technology — sensors, beacons, cameras — needed to advance.

In 2010, Trax began offering its image-recognition software, which incorporated physical images (taken by humans) and store data (including store layout and register sales), then stitched them into one actionable gold mine. For the first time, sales teams could have detailed product and category information including out-of-shelf, share-of-shelf, planogram, pricing and promotional compliance delivered to their mobile phones in real time. This was something managers could trust.

“In a grocery store there is so much dynamic movement,” says David Gottlieb, vice president of retail at Trax. “Something like 40 percent of products will change — a new item, or line extensions and new packaging.” Gottlieb deeply understands the in-store problem.

“Manufacturers are using us, even without feet on the street [robust sales teams] to collect information to get true metrics as to what degree their customers are making perfect stores, and that incentivizes the sales team to do a better job,” explains Gottlieb. He joined Trax in 2018 when the company purchased his startup, Quri, which used a crowdsourcing model to leverage large groups of people to perform paid “microtasks,” like taking images of store shelves.

With the acquisition, Trax now has half a million shoppers active in 6,000 U.S. cities with access to 150,000 stores. Despite this, the company is moving beyond human photographers and is beginning to install battery-operated internet-connected cameras underneath the shelves. The cameras take photos every minute of the day.

“It creates opportunity for use cases — like intra-day replacement,” CTO Adato says. “Our customers are looking at how long things last. That’s an indicator of lost sales that wasn’t available.” CPG clients that use Trax report their out-of-stock rates reduced by 10 to 15 percent and category sales (e.g., soda, crackers or condiments) increased by 3 to 5 percent.

While Trax was homing in on the perfect store, Shelfbucks, an Austin-based technology startup, was grappling with another unknown: marketing. Brands were spending money on in-store product merchandising displays to promote their products, but they had little idea what worked or whether they even made it to the floor. Erik McMillan, the CEO of Shelfbucks, made a fairly compelling argument for his technology: “You spend a $100, and you’re wasting $50.”

Through a fortuitous meeting with two of the biggest display producers in the U.S. — West-Rock and Menasha Packaging Co. — McMillan gained access to an untapped business opportunity that helped brands answer their age-old question: Does my marketing have an ROI?

If it sounds like meta-marketing-speak, that’s because it is. You send a physical piece of signage into your supply chain and on the other end it arrives at a store. It’s supposed to be put up somewhere, on the end cap (those shelves at the end of each aisle often filled with promotional items) or the shelf, but maybe it never makes it out of the back room. With no analytics, you’re left hoping for the best. Given the amount of money spent on merchandise promotion whose effectiveness can’t be tracked — a waste factor of 50 percent, according to McMillan — in-store marketing isn’t much better than shooting in the dark.

In coordination with brands, Shelfbucks puts sensors on displays, and in coordination with retail customers, it places sensors throughout stores. The sensors track the movement of the signage — whether it’s in the back room or out on the floor. When there are problems, Shelfbucks gets an exception report, which is sent to the store manager as an alert in the store’s task management system.

“We are literally generating data about something (store managers have) never seen before,” McMillan says. In 2014, one of Shelfbucks first customers was CVS Pharmacy; today Shelfbucks is in CVS stores nationwide. Fresh food is his next target. “We are focused on the three national chains: Kroger, Albertsons and Ahold USA.”

How these changes benefit consumers is open for debate. Perhaps it’s as simple as knowing our favorite soda — Dr Pepper Vanilla Float, perhaps — will never be out of stock again. And while it may seem as if the CPGs of the world are driving change, McMillan reminds us otherwise.

“Brands can’t force retailers to do anything. Retailers have the power. That’s a really important point,” McMillan says. “The brands have the money, and the customer buys their product, but the retailer owns the shopper.”

For a deep dive into grocery store technology, read Joseph Turow’s book, “The Aisles Have Eyes.”

Side Dish Gallery: Mom & Pop Shops

Side Dish Gallery: Mom & Pop Shops

As we conceived of this grocery-themed issue, our minds naturally went to the tech-laden big-box stores. But then we remembered how grocery began: the small, independent mom-and-pop shop. Here’s a selection of our followers’ favorite small groceries — some stores are thriving, while others are shuttered, perhaps depending on economic realities of the communities they serve.

Photos 1, 4, 5 and 7 by Robyn Metcalfe; photo 2 by Joan Phaup; photo 3 by Charlotte Herzele; photo 6 by Cole Leslie; photo 8 by Julie Savasky.

The Freshest Leafy Greens

The Freshest Leafy Greens

Have you ever had a salad with lettuce freshly picked from the garden? Maybe your grandmother grew her own greens, or perhaps that farm-to-plate restaurant you love makes amazing salads. Unless you have your own backyard garden, fresh lettuce most likely travels the distance from the farm to your grocer on a long-haul truck. Until now.

A 21st-century lettuce farm no longer requires muddy rows cut into a rural field subject to the whim of weather and labor. Behind a suburban grocery store in Dallas, fresh leafy greens are produced under a limitless pink glow inside a clean, 53-foot-long, steel shipping container, yards away from where they will eventually be sold.

The glow — provided by LED lights in both the red and blue spectra — is an engine that works 24-7, producing spicy arugula rich in vitamins and antioxidants, fresh green leaves ruffled in purple and romaine so crisp that it oozes milky sap when cut.

Since May 2017, Central Market, the gourmet offspring of the family-run, Texas-based H-E-B Grocery Co., has been selling lettuce and herbs grown on-site. Production is contained and perfected so that customers have access to a daily harvest of fresh, organic greens. While Austin-based rival Whole Foods has partnered with another company to sow seeds on a store’s roof, and startups like San Francisco’s Plenty have built large urban food-production facilities, Central Market’s growing container represents the first time that a grocery store has grown produce on-site with their own staff.

The container garden is the brainchild of Marty Mika, produce specialist and buyer for Central Market. After years of working to procure the freshest ingredients for customers, he is well aware of how difficult it is to always have the best on hand.

“There are so many variables in produce: Mother Nature, seasonality, labor issues, water and even transportation,” says Mika. “So, we looked at how we could take over some of the supply chain and put all of these issues under our own umbrella.”

Americans eat a lot of lettuce — about 11 pounds of romaine and other leafy lettuces per person per year, and even more if hardy iceberg varieties are considered. In 2017, romaine and other leafy green harvests were valued at over $2 billion, a substantial increase in value from the previous year. Salad, a key component of a healthy diet, is so popular that many fast-food chains have added salads to their menus. At-home salad consumption is increasing too, thanks partly to new packaging in bags and clamshells that can extend freshness.

But getting lettuce to the table at the peak of perfection is not an easy task. The challenges are numerous: drought, pests, temperature, contamination and physical damage during transportation.

Lettuce is a cool-weather crop, so it grows best when days are not too hot and nights are not too cold. Because of this, 90 percent of all romaine and leafy greens harvested in the U.S. hail from either California or Arizona. As a result, much of the lettuce produced travels great distances to end up plated with a tomato and vinaigrette.

From top: Lettuce almost ready for the produce aisle; the plain white box conceals a productive indoor garden; pink light — a mix of red and blue — is all plants need to thrive indoors. Click on any image to enlarge.

The transportation challenge means that lettuce is often picked just before maturity and immediately bundled onto a truck for distribution. Driving lettuce to markets adds to the cost of food, especially when fuel costs fluctuate. A 2013 USDA report found that a doubling of diesel prices could lead to an average increase of 20 to 28 percent in wholesale prices for a variety of produce.

Another issue related to transportation is nutrient loss. Research has shown that as lettuce is trucked across the country from farm to market, levels of ascorbic acid, chlorophyll, carotenoids and important minerals decrease, a reduction in quality that persists as long as the lettuce is being moved or sits on a shelf in a supermarket before purchase. Transportation also introduces new risks into the food chain: If vehicles are not adequately cleaned and maintained, there is always the potential for contamination.

So, what is a purveyor of produce to do?

Contain. Contain. Contain.

To facilitate growing their own fresh greens, Mika and his Central Market team purchased a domestic shipping container from Growtainers that had a few modifications crammed into nine feet of headspace: neat units with four shelves, a system for modulating temperature and an LED growing system that shines 24 hours of pink light into every corner. The crop grows in a perfectly controlled environment primed for maximum production.

In Dallas, Central Market employees sow varieties of lettuce and herbs into a medium made of melted rocks. This clean, sterile substrate is the perfect underpinning for growing plants hydroponically, or without soil. Nutrients are added to the water, and the plants grow rapidly without pesticides or herbicides. In addition, the temperature range in the container can be optimized for growth. And though scientific research has not shown that pink light makes plants grow more quickly, the LED system that uses only some wavelengths of the light spectrum allows plants to flourish while saving on energy costs.

Many commercial hydroponic growers do not want to talk about proprietary data and results; however, research suggests that crops can be coaxed to grow between 20 and 50 percent faster in hydroponic conditions. Recent research also shows that hydroponic farming can yield 11 times as much lettuce per area under cultivation and uses a fraction of the water when compared to conventionally farmed lettuce.

The Dallas team plants and harvests by section within the container. Each new planting takes over a new set of shelves, which enables a scheduled harvest of perfect greens to be plopped into a clamshell and then moved to the market shelf in minutes. The work is very detail oriented, but once the process starts, it is consistent and easy to maintain.

Even better: Transportation of product to retailer is now a mere few feet, and customers have access to pesticide-free, organic produce.

“We produce enough of different, basic varieties each week to sell in the store: not too much, not too little,” said Mika. “Customers like the flavor and freshness of the greens, and they like the fact that we’re reducing the carbon footprint.”

There are some disadvantages to producing container lettuce, though, including high initial costs for equipment. In addition, because container farms tend to be in urban areas — close to customers — the cost of land is high. These costs are passed on to consumers in the form of higher prices for greens. Hydroponic farming also uses much more energy than conventional farming — more than 80 times the amount of energy, although this excludes energy used for transportation.

Stay tuned. Researchers are developing more sustainable practices for indoor farming that should further reduce the carbon footprint.

Central Market offers samples of its homegrown lettuce in the produce section, just a few yards from the container where it was harvested. Click on any image to enlarge.

On Our Loading Dock: Food System Resources

On Our Loading Dock: Food System Resources

Our nightstands are loaded with books to read and our laptops are packed with websites to explore and unpack some wisdom about the global food supply chain.

Books

Before the Refrigerator (Jonathan Rees)

Before the refrigerator, there was the icebox. But if you didn’t live in the frozen tundra, getting ice required a complex choreography. Jonathan Rees traces the process of ice harvesting and distribution — a key method of preserving perishable foods — as it evolved in the late 19th and early 20th centuries. As the country moved toward mechanical cooling, widely available ice played a vital role in transforming the American diet. (Read Jonathan Rees’s Food+City story about the cold chain.)

Coffee Lids: Peel, Pinch, Pucker, Puncture (Louise Harpman, Scott Specht)

Some things just seem like they were always there, as if no one could possibly have spent time inventing them. The ubiquitous plastic lid on the humble paper coffee cup is just such an item. But take time to consider its nuanced and varied design features, as architects Louise Harpman and Scott Specht have in this delightful mini-primer on industrial design, and you may enjoy your morning joe even more.

Barges and Bread (Di Murrell)

It’s not every day that a historian has lived the life she’s writing about. But for Di Murrell, barging has been her way of life for more than 30 years. Her book looks way back to 13th century London and the history of the grain trade on the Thames. Grains and bread — not coincidentally, a synonym for money — were staples for all citizens because, as a commodity crop, grain was stable, and large quantities could be transported efficiently over even the shallowest waterways. Take a trip back in time with the historian barge master. (Check out our story about the role of barges in moving food throughout history.)

The Flavor Thesaurus (Niki Segnit)

As we investigated IBM’s Chef Watson, another source of clever food pairings sprang to mind: Niki Segnit’s “The Flavor Thesaurus.” Structured like Roget’s classic, the book lists ingredients — such as beets, blueberries, oysters — and offers classic and novel pairings based on flavor themes. Recipes and other suggested preparations are included in the text. It’s a fantastic resource for moving off the beaten path and developing your own recipes.

Fishing Lessons (Kevin Bailey)

Bailey provides a glimpse of the future of the global fishing industry, documenting the rise and fall of fish populations, the loss of indigenous fisheries and the arrival of fish farms. He makes the case for a future seafood industry that includes “new” artisan cultures while incorporating new ways of selling direct to consumers. He says that his book provides “a fine-grained view of the larger issues in the world’s fisheries — too many fishermen with too few fish, conflicts with other resource users, loss of fishing rights and degraded habitats.” There’s room for hope, according to the author.

The Long Haul (Finn Murphy)

Finn Murphy dropped out of college in the late 1980s, much to the chagrin of his parents, and became a long-haul trucker. He’s a furniture mover, but his experience driving the nation’s highways — and navigating the small lanes of Lower Manhattan or the mountain passes in Colorado’s Rockies — runs in parallel to the thousands of other haulers who transport our food, our packages and everything else we buy and ship. This catchy memoir offers multiple tableaux, and lots of juicy slang terms, of one life on the road. (Read about another truck driver, Annette Womack, in our Food Mover story from Issue 2.)

Podcasts

Sourcing Matters

Host Aaron Niederhelman takes listeners with him as he examines problems with and solutions for feeding ourselves into the future. He finds leaders focused on food system reform and reducing environmental impact who tell stories worth pausing for. “Our goal with this show is to celebrate leading voices committed to promoting food values through proper natural resource management,” says the podcast’s website. “It is, after all, the sourcing which matters.”

Films

Rotten (Netflix)

This series of six episodes dives into various parts of the food supply chain, exposing some unsavory realities of the industrial food complex. Mass deaths of honeybees, the plight of peanut farmers in an age of allergies, the economics of dairy farming and the dwindling global fish supply are among the tough topics the filmmakers tackle. It may leave you wanting to move to the country and grow all your own food.

Magazines

Eaten: The Food History Magazine

Social and economic historian Emelyn Rude launched a new magazine in the fall of 2017 with a focus on the history of food. Filled with luscious eye candy, rediscovered recipes and gastronomic essays, the magazine transports readers through time on a common vehicle — food.