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.

Smart Cities Are Forgetting Food

Smart Cities Are Forgetting Food

Smart cities use technology and data-driven solutions to make people’s lives better. But until recently, cities have failed to adopt this methodology for what is perhaps the most critical urban system: food. As urban agriculture builds momentum, now is the time for cities to embrace this young industry and foster urban food systems through a data-driven and “smart” approach.

Urban agriculture has the capacity to ameliorate many issues plaguing urban areas. It can contribute to green infrastructure efforts, create a food source that’s safeguarded against climate events and provide a variety of local jobs. But despite the potential of this nascent industry to improve the lives of city dwellers, urban agriculture is often left out of the Smart City discussions and policy decisions that have quickly gained popularity across the globe.

Nevertheless, the urban agriculture industry is growing rapidly as it tries to meet an ever-increasing demand for nutritious local produce. AgriFood Tech investment reached $10.1 billion in 2017, including $200 million in Series B funding for vertical farming company Plenty.

Let’s be clear: Urban agriculture is not the solution to our food system crisis. Other solutions are sorely needed as well, including ways of fostering stronger regional connections between farms and cities. Food waste is also a major issue that needs to be tackled. But urban agriculture is, and will continue to be, an essential component of how every country and city restructures its food system to make fresh food supplies more available, resilient and ecologically friendly.

Cities and Agriculture

Just like energy, transportation and internet access, the processes of food production and distribution are integral parts of the urban ecosystem. And like those other system components, agriculture should be supported through smart policies that are data-driven and context specific. The path forward for resilient cities and communities must include thoughtfully planned urban agriculture.

Some cities around the U.S. and abroad are beginning to implement policies to encourage the industry’s growth as a critical part of local and regional food systems.

In Atlanta, for example, a director of urban agriculture within the mayor’s Office of Resilience ensures that municipal support is consistently available to local farmers via the AgLanta digital resource hub, along with a wide range of other initiatives. Through the city’s “Grows-A-Lot” program, Atlanta residents and nonprofit organizations can secure renewable five-year leases to farm vacant city-owned property.

Many other cities have passed zoning ordinances and started programs to promote the expansion of urban agriculture. In Boston, Article 89 comprehensively addresses where different forms of urban farms should be permitted within the city. In Minneapolis, the Homegrown local food program brings municipal and community actors together to research and plan out future supportive policies. In Paris, a municipal initiative called ‘Parisculteurs’ aims to cover the city’s rooftops and walls with 100 hectares of green space by 2020, and to dedicate a third of that space towards food production. And in Singapore, developers are incentivized to include urban farms as part of green building requirements.

But these efforts are largely piecemeal. Few cities, if any, are using data-driven urban-agriculture planning and analysis to ensure future resilience in this burgeoning sector of municipal economies. By performing in-depth analysis on where the greatest vulnerabilities lie within their local food systems, cities can change what today is mostly a feel-good concept into a critical framework that can be scaled to transform local food production. Using data can help determine the best opportunities to bolster urban and peri-urban production to achieve goals such as food access or stormwater management.

The idea here is not to turn urban agriculture into a top-down model. The decentralized and diverse nature of urban farming models is a major contributing factor to the industry’s rapid pace of innovation and its ability to be a resilient source of food production. Rather, the idea is for cities and regions to understand where the greatest vulnerabilities and opportunities lie within their local food systems, and then to plan out and provide support to targeted areas of the food economy, perhaps through local food distribution hubs and farming incubators for entrepreneurs and startups.

Advances in urban agriculture planning are happening — slowly. Cities and communities are starting to work together across sectors and silos to recognize and promote agriculture’s role as an integral component of smart, resilient cities. But there is plenty of work to be done.

Taking the Next Step

Now, like passionate entrepreneurs first entering the food- system space, many cities have great intentions for urban agriculture. Unfortunately, many cities also lack the capacity and technical knowledge to understand where the local food system should be strengthened to most effectively make it smarter and more resilient against environmental, social and economic stressors.

For cities to become smart in this sector, they no longer need to recognize the many benefits of urban agriculture — that has already happened throughout mayoral administrations, academic halls and even more recently in Congress. The time for putting energy into persuasion is over.

For our part, at Agritecture we have designed a new service called Urban Agriculture Scenario Analysis to assist cities in analyzing and strengthening their local food capabilities. Using site-specific and scale-specific data and modeling, Scenario Analysis can transform a city’s piecemeal farming community into a diversified urban agriculture economy.

The good news: There is a wealth of burgeoning technology around urban and peri-urban food production and distribution. Many urban farms are already “smart,” using sensors and data to tailor everything from lighting to crop nutrition. This is true in large farms such as AeroFarms, which dominates an entire converted warehouse in Newark, New Jersey, and also in smaller farms like Farm.One, which takes advantage of underutilized basement space in Manhattan to cultivate rare specialty crops for the city’s restaurants.

But if cities are going to be successful in integrating advances in food system technology into their wider metropolitan planning efforts, they must apply a data-driven methodology similar to the approach that many urban farmers are taking to more effectively grow crops.

A Smart City revolution is currently sweeping the world. Although we remain in the early stages, this revolution will soon transform the way that cities support the most essential components of urban life. To ensure that food isn’t left out of the equation, cities must start supporting urban agriculture in targeted ways that work with the urban agriculture industry to reconstruct our food production and distribution systems into smarter, more localized and more resilient networks.

Edible Bugs: More Than Just Protein

Edible Bugs: More Than Just Protein

Flavor notes range from peppery lemon to pine-nutty to prosciutto-savory. Some varieties make for lovely garnishes on your seafood salad, 
while others are perfect as the heart of a well-salsa’d taco.

Some new-ancient legume? The latest grain-based trend? No — I’m talking about edible bugs.

And I’m not the only one. Bug-based recipes are showing up all over Instagram and your favorite cooking magazines. Yet while we in the West are playing catch-up, some cultures around the world have been enjoying arthropods and mealworms for millennia.

If you think about it — with a wide-open mind — bugs aren’t all that different from crustaceans. After all, crayfish (or, crawfish) are known by some in Louisiana as mudbugs. Just as we enjoy the sweet flavor of shrimp and the slight crunch involved in devouring a crab or lobster, eating bugs just takes a bit of practice.

That’s what Aly Moore believes, anyway. Her site (eatbugsevents.com) and beautiful Instagram feed (@bugible) are dedicated to making bugs seem like the white-hot snack trend you’re dying to try. She even does bug-and-wine pairings to highlight the wide variety of flavor notes. And, who knows, maybe the wine helps reduce inhibitions against taking that first bite.

Top: Mealworms and dark chocolate — bugs can satisfy a sweet tooth! Photo by Ashley Corbin-Teich. Bottom: Summer salad with chickpeas, pumpkin seeds and roasted crickets from Entomo Farms.

Bugs Around the World

While eating bugs may be a novel idea for Americans and other Westerners, insects have long been a valuable ingredient in many parts of the world.

Oaxaca
grasshoppers (chapulines)

diagram of grasshopper

Cambodia
ants

diagram of ant

China
crickets served instead of bar nuts

diagram of cricket

South Korea
silkworm pupae

diagram of silkworm pupae

South Africa
mopane worm

diagram of mopane worm

France
escargot (technically a mollusk, but they do live in the garden)

diagram of snail

“I think people are all really pleasantly surprised,” she says about guests at her bug dinners and wine-and-bug pairing events. “I give people a spiel that does everything from comparing bugs to seafood to describing the tasting notes, and you can see them starting to warm up to the idea. That lightbulb moment is great, when they realize bugs are not at all bad. In fact, they have a familiar flavor.”

Focusing on flavor is a key tactic for Moore — especially in her wine events, where she highlights specific bug flavor notes and pairs a complementary wine. Crickets go nicely with lighter reds like pinot noir, Moore says, while meatier-flavored grubs want a more robust Zinfandel. Scorpions, you might be surprised to learn, have a delicate salmon-y flavor that’s perfect with a zingy sauvignon blanc.

If you’re not ready to take the plunge with a whole roasted tarantula, there are lots of ways to experiment with eating bugs without knowing they’re an ingredient — for example, cricket- flour protein bars or chips are increasingly easy to find in mainstream grocery stores.

But, really, Moore is a fan of highlighting the whole insect in all its glory to help people begin to think of them as a tasty option in their everyday diets.

“Comfort foods” — like pizza topped with meaty grasshoppers (aka chapulines in Oaxaca) or sago grubs, which are known as the bacon of the bug world — “are a great way to help people get over the hurdle,” Moore says. “Making comfort foods that people can relate to helps create positive associations with eating bugs.”

Pinot noir and crickets, a classic combo. Focusing on flavor is a key tactic for Aly Moore — especially in her wine events, where she highlights specific bug flavor notes and pairs a complementary wine.

Ready to start cooking with edible bugs? Check out the “Buy Bugs” link on eatbugsevents.com for resource ideas.

RECIPE NOTE

How do you go from crawling to crunchy without the use of toxic pesticides or a dramatic SQUISH? Oh, just chill — the bugs, that is. While many studies concur that bugs’ central nervous systems aren’t complex enough to feel pain, you might worry a bit anyway. A humane and simple way to corral those critters is to refrigerate them. Because they’re cold-blooded, they fall asleep, at which point you can move them to a freezer to ensure they’ll never crawl, jump or fly again.

Where Are Food+City Startups Headed?

Where Are Food+City Startups Headed?

If the 2018 Food+City Challenge Prize entrants are any indication, we’re well on the way toward improving our food system.

Four years into our competition for food supply chain startups (read about all four years’ of finalists), we’ve noticed some interesting trends, including changes in the way entrepreneurs think about innovation. Progress is apparent despite food regulations, a lack of consistent data standards and the companies’ need to achieve scale while remaining small and agile. For many startups, technology is central — but it’s not necessarily all about apps anymore.

Instead, futuristic tools that bring new rigor to agriculture and warehouse management are on the horizon. UAV-IQ Precision Agriculture, one of three $10,000 Food+City Prize winners, provides precision crop monitoring for farmers using drones and sensors. The new technology enables farmers to use the gathered data to make decisions about resources to maximize their yields and reduce crop losses.

“UAV-IQ is attacking the fundamental lack of precise knowledge of where variability exists within fields,” says co-founder Andreas Neuman, former assistant director of operations for the U.S. Air Force’s Global Hawk Unmanned Aerial System. “This lack of knowledge and suitable toolkits to first identify and then manage variability leads to massive inefficiencies due to one-size-fits-all approaches, which often result in over-usage of water and chemicals.”

Another high-tech agriculture solution is Transaera, which is commercializing a material developed at the Massachusetts Institute of Technology that absorbs moisture within greenhouses. The product gives indoor farmers more control over their growing environments and enables them to reduce plant disease and increase yield while also reducing energy consumption.

“To feed nine billion people by 2050, we need new agricultural systems,” says founder Sorin Grama. “Indoor agriculture could be an answer, but it is an energy-intensive operation that will not scale unless we figure out how to grow foods using less energy and water.”

Entrepreneurs are also using technology to connect links in the food supply chain. For example, Stowga, a London-based business-to-business startup, connects retailers to unused warehouse space. This “Uber for warehouses” helps firms with excess storage use their space more efficiently; and it offers below-market options to businesses that may need space for only a short time.

Team mentor PJ Tanzillo, head of product at Favor Delivery, has high expectations for Stowga, led by CEO Charlie Pool. “Charlie and team are not your typical early-stage startup,” Tanzillo says. “They have a clear line of sight to a sustainable business, and they have achieved product and market fit. I’m confident their success will continue.”

Making connections across chain links continues to be a key draw for startups. Vinder is a digital platform that connects home gardeners who grew more than they can eat with community members who seek freshly grown food. Sam Lillie launched Vinder by going door to door in his hometown of Port Townsend, Washington, asking residents whether they had home gardens and if they ever had extra produce they’d be willing to sell. It wasn’t long before Lillie connected dozens of home gardeners with produce-hungry families, moving more than 300 pounds of fruits and vegetables among them.

“We have been trained over the last 70 years to buy our produce and processed goods from a giant supermarket chain that sources products from all over the world,” says Lillie. “Vinder reduces the food waste that happens in every city across the country while efficiently reducing delivery miles because you are buying from your neighbor and not some farmer in Argentina.” With the Vinder website and app, consumers in dozens of cities in 11 states can connect with nearby growers to buy the produce they seek, reducing food waste and putting money back into their communities, literally at the grassroots level.

If you don’t have a garden but want to grow your own food, Indiana-based Aggressively Organic, one of three Prize winners, can help. It offers micro-gardening systems for people without access to earth-based gardens. Users can grow lettuces, tomatoes and other fresh veggies in just one square foot of space in their homes. Anchored by cardboard “micro-growth chambers,” the hydroponic systems use a mere 16 ounces of water to grow a head of lettuce. In contrast, conventionally grown lettuces require 25 gallons of water per head.

“Instead of cut-and-kill or pull-and-ship — like all other current modalities of agriculture that end up shipping already dead and dying goods that end up being wasted — our stuff stays living, and we harvest when hungry,” says founder Jonathan Partlow.

Vinder and Aggressively Organic aren’t the only companies working on solutions to curb the growing amount of food waste. The 2018 submissions included ideas for moving excess food to consumers and methods for repurposing waste such as spent grains from beer breweries as ways to limit the amount of waste that ends up in the landfill.

The most tenacious and complicated problems that startups try to solve involve aggregating and transporting food from local producers to markets, restaurants and grocery stores. It’s a problem that food hubs have tried to solve for years. Today’s startup teams are working on a range of platforms: from apps that aggregate farm inventories to hauling and logistics businesses that focus on the transport of food from local producers to consumers. One of our contestants, GrubTubs, retrieves food waste from restaurants, turns it into compost for local chicken farms and then provides eggs back to the restaurants.

Another, Houston-based Grit Grocery, brings the grocery store right to your neighborhood, using a food truck model. Consumers no longer have to travel to the fringes of their communities to shop at energy-gobbling big-box grocery stores. Instead, Grit Grocery trucks bring locally grown produce, local honey and meal kits — featuring, for example, shrimp from the Gulf of Mexico — right into communities, shortening the last food mile and cutting the distance from farm to table.

“The shopping experience fundamentally shapes the flow of food, not only by creating limitations on what kind of food can be supplied but also by subtly creating demand for certain foods or even entire categories of food,” says Dustin Windham, who founded and operates Grit Grocery with partners Michael Powell and Jamal Ansari. “Building on that, we want to develop a new kind of localized supply chain that is specifically tailored to retail experiences, which is more curated, community-driven and socially intimate.”

Some of these startups rely on volunteers and are modeled more like nonprofit organizations that rely on grants and donations. Others are attempting to create value for both farmers and consumers by charging either the farmer or the consumer for their logistics services. These startups are responding to increasing consumer demand for local food from small producers. But it’s not clear if this local supply chain can find a way to make money without working with the larger food distributors.

In Kenya, where large food distributors aren’t as common in the food system, Taimba seeks to tame a chaotic and fragmented supply chain by connecting farmers with retailers and vendors through a cashless business-to-business app. Vendors order their produce via the app, then Taimba retrieves it from the farmers and delivers it to the marketplace. Farmers receive a fair price for their goods, and vendors receive inventory at below-market prices.

“The ability to offer a market and good prices to small-scale farmers has really boosted farmers’ earnings by reducing wastage and paying promptly,” says founder Dominique Kavuisya. Taimba went home with one of three $10,000 Prizes.

While consumers everywhere want more local food, the system to deliver the goods is still awkward, unsustainable and encumbered by capital equipment expenses and the lack of technology and tracking on the small-producer side. We are anxious to see how our finalists work on solving these issues.

Through the innovative work of our contestant startups, we are optimistic that we will see more locally produced fresh produce reach consumers, less food waste in the landfill and better and safer products in our food system.

Prize winner Andreas Neuman of UAV-IQ with Food+City’s Robyn Metcalfe.

UAV-IQ’s monitoring technology in use.

Transaera founder Sorin Grama makes his pitch at the 2018 Challenge Prize.

Transaera’s technology absorbs moisture in greenhouses.

Map by Stowga representing available storage space in the United Kingdom.

Vinder founder and CEO Sam Lillie.

F+C’s Robyn Metcalfe with Prize winner Jonathan Partlow of Aggressively Organic.

Aggressively Organic’s hydroponic growing system with leafy greens.

Grit Grocery truck in Houston.

Grit Grocery founder Dustin Windham, right, visits with a supplier in the field.

F+C’s Robyn Metcalfe congratulates Dominique Kavuisya, Taimba founder and Prize winner.

FOOD+CITY Challenge Prize

Innovation in food takes all forms, from making improvements to pallets to creating new avenues for delivering food or designing packaging that increases shelf life. Since 2015, we’ve hosted a challenge prize for startups in the food space that are challenging our notions of how the supply chain works. The 2018 Challenge Prize was awarded on March 13, 2018, at SXSW Interactive. Visit foodandcity.org/prize to learn more about this year’s entrants and winners.