Local Foods Retailing Memo" We Suggest the Next Steps in the Evolution of Local Foods Retailing Will Be 'Grocer Grown' and 'Store Grown'

By day Simon Richard is the produce department manager at the Bi-Rite Market in San Francisco, California's Mission District. Often by day he also is a farmer, growing a variety of fruits and vegetables, such as the heirloom tomatoes he's just harvested and is holding in his hand in the photograph above taken at his Sonoma County farm where he grows a variety of fruits and vegetables offered for sale in the store's produce department. We call it 'Grocer-Grown.'

Earlier this year Natural~Specialty Foods Memo coined the term "Local foods retailing 2.0" to explain a practice being conducted by a handful of retailers such as the upscale United Kingdom (UK) supermarket chain Waitrose, Wal-Mart's UK chain Asda and a few others that have taken the merchandising and sales of "locally-produced" food and grocery products to the next level by growing fresh fruits and vegetables on their own land, along with raising hogs, steers and other animals to be butchered and sold as fresh meat cuts and used in prepared foods items in their stores, as well as creating some specialty foods products from the produce they grow. We also call this phenomenon "Grocer-Grown." In the case of meats, we call it "Grocer-Raised. And in the case of value-added food and grocery products, "Grocer-Produced."

Waitrose is the pioneer and most aggressive retailer we've yet to find that is practicing "Local foods retailing 2.0," going from its own farm right to the supermarket shelf, offering numerous "Grocer Grown" fresh produce, fresh meat and value-added food products from it own large estate farm in England.

Wegmans experimenting with 'Grocer-Grown'

The innovative upstate New York USA-based Wegmans supermarket chain also is growing some of its own fruits and vegetables on a farm owned by CEO Danny Wegman and his family. The idea to do so came from one of Wegmans' daughters. So far, fresh fruits and vegetables grown on the Wegman family farm have been offered for sale at one of the Wegmans' supermarkets, a unit located nearby the farm.

Danny Wegman told Natural~Specialty Foods Memo earlier this year the family plans to produce more varieties (and increase production a bit) of fruits and vegetables on the family farm for that one nearby store, along with selling the produce at a few other stores in that same region. The retailer is experimenting with "Grocer-Grown" and doesn't want to over-produce because the idea is to offer a selection of seasonal, high-quality, artisan produce items grown on the family farm and sold at the company's supermarkets located in the region where the farm is in upstate New York.

Bi-Rite Becoming leader in 'Grocer-Grown'

Another innovative American grocer in the city of San Francisco, independent food retailer Bi-Rite Market, also is becoming a major player in "Local Foods Retailing 2.0" or "Grocer-Grown."

Bi-Rite Market, which is located in San Francisco's Mission District neighborhood, has a garden on the roof of the urban food store where it grows fresh herbs which are sold in the store's produce department.

Bi-Rite also locally raises and butchers its own hogs, which are then offered in the store in a variety of ways: fresh pork roasts and chops, sausage, bacon and other cuts of meat. The pork also is used by the food retailer in a variety of the numerous in-store fresh, prepared foods items it makes and sells in the upscale supermarket.

The independent grocer, which sells all sorts of natural, organic, specialty and prepared foods items (a great many which are produced locally) in its popular San Francisco market, along with a selection of basic food and grocery items, is now kicking up its local foods merchandising program into the 2.0 world. "Grocer-Grown" Bi-Rite Market has started growing a selection of its own fruits and vegetables and is selling the fresh produce in the store.

In Bi-Rite's case, the store farmer also is the store produce manager, Simon Richard. This spring Richard grew a variety of fruits and vegetables on land in Sonoma County, which is located about 45 miles from San Francisco.

His crop recently came in. Among the fresh produce grown by the farmer/produce manager being offered for sale in Bi-Rite's produce department include heirloom tomatoes, Romano beans, arugula and more.

What's unique and very interesting about what Bi-Rite is doing is that in this case the "locally-grown" fresh produce items being produced by the store to be sold in the store are being grown by the same person who then is in charge of how they are sold in the store. That would be produce manager turned farmer Simon Richard. Talk about not only a local but a personal touch as well. The produce at Bi-Rite Market isn't only "Grocer-Grown," its "produce manager-grown."

The San Francisco Chronicle recently wrote about Bi-Rite's newest entry into what we call "Local Foods Retailing 2.0," the offering of the first crop of "Grocer-Grown" fresh produce for sale in the store. You can read the story, "Food Conscious: S.F. grocery branches out into farming," by Chronicle staff writer Jane Tucks here.

"Grocer-Grown' more than a fad

Natural~Specialty Foods Memo expects to see more retailers, particularly innovative independent supermarkets and natural foods retailers, join the "Local foods retailing 2.0" movement by growing some of their own fresh produce, either on land they own or in special arrangements with small, family farmers in which the grocer takes a hands on role.

Numerous U.S. food retailers like Whole Foods Market, Inc., Raley's in Northern California, Wegmans, Publix in Florida and a others regularly contract with farmers to purchase 100% of a certain crop, such as melons, apples, onions and other fresh produce items; usually specialty crops. In some cases these retailers also have input into how the crops are grown.

This practice, although close, isn't quite "Local foods retailing 2.0" because there still remains a separation between the retailer and the grower rather than the retailer being the grower.

Whole Foods is getting much closer to becoming a "local foods 2.0 retailer" however. It's increasingly working in partnership with small farmers to grow crops just for the retailer as well as loaning money to a number of these farmers so they can expand there production.

The only thing keeping Whole Foods from being a "local Foods 2.0 retailer" like Waitrose, Wegmans and Bi-Rite is that it has yet to directly grow its own crops and then sell the fresh produce in a Whole Foods market store. At least that we are aware of based on our research.

Whole Foods Market and 'Store-Grown'

Natural~Specialty Foods Memo however has a way for Whole Foods Market not only to become a charter member of the "Local foods retailing 2.0" "Grocer-Grown" club but also to leap-frog over all the others and become the pioneer in what we call "Store-Grown" local foods retailing. Yes, we are coining another new term.

We would like to see Whole Foods Market include a good-sized organic hydroponic garden in one of its stores, along with an outdoor organic rooftop garden. Make the indoor hydroponic garden about 3,000 square feet to start (prototype store) and have it glassed in so store customers can watch workers tending the garden while they shop. This fits into Whole Foods educational mission as a food retailer very well we believe. Think of the glass-walled in-store garden as the store's version of a restaurant's open demonstration kitchen.

Why not skip the farm altogether and use the store as the farm? Single-store Bi-Rite in San Francisco is doing this in part with its small rooftop garden after all.

Additionally, we suggest devoting a substantial portion of the store's roof to the rooftop garden. The store needs to be in a geographical location -- California, Florida, ect. -- where there's lots of sunshine throughout the year.

There are a myriad of crops Whole Foods 2.0 could grow in this store rooftop garden and sell in the store below, including fresh herbs, tomatoes, greens, seasonal fruits and more. As is the case in any garden, Whole Foods' limitations would primarily be based on the climate, weather and the like. With modern, intensive farming techniques one can grow an abundance of different fruits and vegetables and achieve considerable yields in such a rooftop garden.

Between the in-store hydroponic garden, which has no climate or soil limitations, and the outdoor rooftop garden, that Whole Foods 2.0 store could produce a wide-variety and abundance of fresh produce to be sold in the store throughout the year -- putting an emphasis on seasonal fruits and vegetables. It would be a supplement to rather than a substitute for all the other fresh produce sold in the store.

We even have a name for this produce -- that which would be grown inside the Whole Foods store in the hydroponic garden and on the rooftop outside. That name -- and remember you read it here first -- is: "Store-Grown." We think that term would look rather impressive in the Whole Foods store's produce department alongside the other signs reading "Organic," "Locally-Grown," "Hand-Picked" and the like.

"Store-Grown" also would be a major point of differentiation for Whole Foods and that Whole Foods store. We think its an natural and logical progression for Whole Foods in terms of a "what's next" aspect to the natural products retailers innovation cycle. That's why we chose Whole Foods as the retailer we think would be best to do it right now.

Whole Foods Market, Inc. also needs to try something innovative to break out of its current malaise caused by its recent net profit decline and the significant drop in the value of its stock.

Creating the Whole Foods 2.0 store (it can be a remodel of an existing store as well) with the in-store hydroponic garden and outdoor rooftop garden (maybe toss in a garden on the side of the store as well if there is available land) also is a natural progression for the retailer in terms of its already extensive local foods procurement and retailing program. The "Store-Grown" aspect would merely be an addition to that and of course would be limited to the one test store for some time anyway.

Plus, you can't much fresher, higher-quality locally-grown produce than that which in the course of say one hour has been harvested from the store's rooftop garden and in-store hydroponic garden and stocked in the store's produce department bins and cases. That's why we call it "Store-Grown."