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.

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.

The author, Henry Gordon-Smith, of Agritecture.

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.

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.

Startup Spotlight: Ten Acre Organics

Startup Spotlight: Ten Acre Organics

Urban farming is a hot topic in food production right now, but creating a profitable farm in the middle of a city is a hard field to plow. We caught up with 2015 Food+City Prize winner Ten Acre Organics to find out how they did it.

Ten Acre Organics (TAO) co-founders Michael Hanan and Lloyd Minick have been working on their urban aquaponic farm since 2013. Since then they have been through several iterations of products, processes and procedures. Thanks to determination and their perfect-looking, colorful variety of Bibb, Romaine, Oak Leaf and Red and Green Leaf lettuces that have attracted Austin’s top chefs, TAO became profitable in early 2018. Their five-year journey has required patience and persistence — qualities that are emblematic of every entrepreneur.

Bootstrapping the capital to get started via a Kickstarter campaign, they stayed afloat in the early years with grant money and the support of friends and family. Ten acres of land, Hanan and Minick thought, “was the ‘just-right’ size for a diversified farm to achieve economies of scale and profitability while still being able to distribute 100 percent of its produce locally,” Minick says.

Working on the farm as a “garage project” for the first year, they painstakingly developed about one-tenth of an acre from scratch in their backyard in north Austin, consuming most of what they produced. At that point the co-founders faced a question all entrepreneurs must address: How do I quit my job and work on this full time?

Raising a seed investment round is a good way for startup founders to earn the ability to work on their company full time. It’s also validation that other people see value and promise in your idea. TAO was looking for both. Then, in 2015, a panel of industry expert judges named Ten Acre Organics the Grand Prize winner of the inaugural Food+City Challenge Prize, which came with $10,000 in prize money. While the money helped them float the operation for a few months while they continued to raise money, the more important thing, according to Lloyd, was the validation.

“Winning the Food+City Challenge Prize proved to us that we had a good idea, and that investors recognized the opportunity. It really helped in terms of our reputation,” he says. Later that year, TAO closed their seed investment round with $500,000.

Receiving validation and investment are big milestones for startups. But the work doesn’t end there. With big milestones come big expectations. Scaling a business from working prototype to profitable company is often more difficult than drumming up initial success. And in the farming business, where margins are notoriously thin, economies of scale are the only way to have financial success.

But expanding an urban farm can be challenging because city land is expensive. Hanan and Minick could have moved a few miles outside of town to save on land and utilities, but their dream was to grow a community, not just food. Creating a place for community workshops, think-tank style dinners and private events is their way to help people understand and appreciate where our food comes from, how it’s grown and by whom.

“We want to make an a place that is not just a farm but a community center as a change agent, where people who feel disconnected and alienated by the modern industrial food system can experience social cohesion,” Micinic says.

With the community in mind, they stayed true to their dream and in 2016 purchased an existing urban farm just a few miles from downtown Austin. Hanan and Minick saw potential in an urban farm that was struggling operationally and financially. They decided that they could improve upon the business with things like better system design and engineering, better staffing and personnel management, improved horticultural practices to maintain product quality and consistency, and an increased focus on sales and customer development.  With these improvements, they thought, Agua Dulce farm could be the model profitable urban community farm. In early 2018, they celebrated their first profitable month. Their certified organic, aquaponically grown leafy greens are the opposite of ugly produce, and the quality of the product is one of their most significant accomplishments. It’s also a differentiator that helped them catch the attention of some of the most high-profile restaurants in Austin.

All it took was four years of back-breaking labor, day in and day out. And that’s just on the farming side. There are also business duties and decisions to be made regarding human resource management, accounting, sales and marketing, and disaster control. While he stops short of telling people not to build more urban farms, Minick has a strong warning for the folks who think urban farming is more romantic than rigor.

“Farming is hard. Starting a business is hard. And starting a farming business is just insane,” Minick says. But if you’re insane enough to work long hours in the Texas heat for several years, you just might end up with a successful business.

A variety of lettuces growing at Agua Dulce farm in Austin.
Ten Acre Organic co-founder Lloyd Minick in front of their aquaponic system at Agua Dulce farm in Austin.
 Watch the recap video of the 2015 Food+City Challenge Prize featuring Ten Acre Organics as the Grand Prize winner.
Agua Dulce farm in Austin