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Zero Waste Grocery Store Readies for Debut

June 30, 2011

Who knows if in.gredients, which is billing itself as "the first package-free and zero waste grocery store in the United States," will be a success? No matter how things turn out, one thing that's clear -- the concept scheduled to open sometime this year in East Austin, TX is significantly different than other options in the marketplace.

Christian Lane, co-founder of in.gredients, told RetailWire that the concept grew from an initial bar-like idea to offer beer and wine from kegs to consumers who brought their own containers. He mentioned the growing popularity of growler refills among beer connoisseurs.

"From there, we started looking at different aspects of pre-cycling as the driving concept -- how we could dispense other foods. The obvious one was bulk foods. From there we started looking at how we could do things with produce and local farmers and ranchers to find ways we could reduce the waste and also facilitate the ability of the consumer to be a zero waste consumer," said Mr. Lane.

The in.gredients concept taps into a number of market trends and needs, said Mr. Lane. These include sustainability, natural/organics, local, foodies, low prices, ethnic consumers and food deserts.

While the first four items on the trends/needs list are fairly evident straight off, the others are less so.

"Being green saves you green," said Mr. Lane. "Bulk is typically 30 percent less expensive than its packaged counterpart, so there are some savings there."

The plan is to open in what Mr. Lane called "micro grocery store" sites, typically one to two thousand square feet. By keeping store size small, in.gredients will be able to tightly edit its selection and keep costs down.

"The reason for that, too, is we want to take this into more neighborhoods. The concept of the neighborhood grocer has just kind of gone away. We want to encourage walking and biking; a more community based approach like grocers we used to have before the moms and pops got taken out by the large grocery chains. To that extent, we're using this to push into more neighborhoods with that community-type appeal," he said.

More neighborhoods include underserved areas, notably those with large minority populations, such as East Austin.

"We're Mexican American. Part of this whole model is an older way to facilitate doing things. In Mexico, you go to a taquería with a towel or cloth and that's what they wrap your tacos in and you walk away with," Mr. Lane told RetailWire. "To an extent, we've lost that sense of market that you find in Mexico and other parts of Latin America. When you go to the markets, it's open air. It's all the grains and the beans and other items open and available and you buy them that way."

While store size is small, Mr. Lane believes that consumers will be able to do most if not all their grocery shopping, with assistance from in.gredients, in the company's store.

"It only takes a handful of ingredients to make quality meals. We've been reading some of the books from Michael Pollan and Rachel Botsman's What's Mine if Yours: How Collaborative Consumption iis Changing the Way We Live. All of these question how we look at food, the environment and consumption," said Mr. Lane. "One of the biggest takeaways for us is if you want to eat right, stay away from the middle of the grocery store. If we just refine ... curate ... all the different pieces of the recipe equation and keep it simple, we think we've got a good way of getting people better foods."

Discussion Questions:

Discussion Questions: Are parts of America, if not all of it, ready for "zero waste" concepts similar to in.gredients? What do you think about its appeal to minority populations and consumers in food deserts?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How much of an issue will costs associated with product packaging become for consumers in the years ahead?

Comments:

Wow, this has the whole world in it--sustainable, multi-cultural, experiential, and right there on Whole Food's home turf. In.gredients won't have to win in order to influence. All those guys in khakis and golf shirts that show up at in.gredient's openings probably aren't locals.

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Carol Spieckerman, President, newmarketbuilders

Assuming this concept has legs, it may present an interesting study in how POS marketing can evolve without the aid of manufacturer packaging. Could electronic paper displays be used to offer brand imaging and messaging?

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Rick Moss, President, Founder, RetailWire LLC

This sounds like an urban concept only, albeit an exciting one. It's great if you're looking to create a single meal, and live above the grocery store. But if you're cooking for five and need to do marketing once a week, the logistics can be boggling.

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Cathy Hotka, Principal, Cathy Hotka & Associates

These folks might have hit on something. However, there expansion will be limited.

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Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

It will serve well in inner cities with limited selection, and the greenie folks will like it as well.

The product selection will be critical with the small footprint, but it can fill the niche for each area they choose to go to. Good luck to them.

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Tony Orlando, Owner, Tony O's Supermarket & Catering

I like it. I'm not sure how scalable it will be in the traditional way retailers have expanded...but they could find a new model that works for them with zero waste. It's exciting to see these new concepts. I'll be curious to see how it influences the broader market place as it and others evolve.

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Matthew Keylock, Senior Vice President, New Business Development and Partnerships, dunnhumbyUSA

It's a curious concept. Will be interested to see if it is profitable and, if so, repeatable. And, if it is profitable, which larger grocery entities will pull out pieces of this and use in their stores?

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Larry Negrich, Vice President, Marketing, nGage Labs

Neat concept for the "hip" city neighborhoods, although likely to languish in suburbia. Also, since the conventional center store is the source of most trade dollars, in.gredients will need to earn its profits by actually selling stuff. Retro-radical, man.

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James Tenser, Principal, VSN Strategies

I doubt this will work. I've heard they are having to search for capital instead of venture capitalists lining up to give them money. So there is a red flag.

It's a well meaning idea but I can't see myself carrying a keg of beer on my bicycle or walking. I also doubt they can be price competitive. I think they will hope that the "green" shopper will pay more for groceries so they can feel good about themselves. If they actually get a store open and it manages to stay open for one year, I will volunteer to come down to Austin at my own expense and work a day in the store.

David Livingston, Principal, DJL Research

Bold talk, David Livingston. We're going to hold you to that. We'll set a tickler in our calendar and check back on this retailer's progress. I believe this idea has merit, so hopefully we'll see them handing you an apron in about a year and a half!

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Rick Moss, President, Founder, RetailWire LLC

Mr. Lane made a point of saying that the founders came from an IT and business process consulting background during the interview.

"We know with a new business that we're going to have a few kinks to work through, but we think we have a solid model that we can replicate over and over again. As process guys, we're very much about making this very repeatable so that we can experience growth."

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George Anderson, Editor-in-Chief/Associate Publisher, RetailWire LLC

Ever scoped out the food storage aisle in a supermarket? Big bidness. The land of Rubbermaid, Glad, Hefty, Reynolds, and Saran. And then there's refrigerators and freezers; Evert-Fresh bags for produce, meat, and bread; Tupperware; can openers; and FoodSaver and Seal-A-Meal. Clearly, we want to preserve food until we're ready to consume it. If stores don't provide packaging appropriate for this purpose, we'll buy the packaging - and then dispose of it - elsewhere. Bulk? Costco figured that out a long time ago, and it doesn't work for most people. Over half of the households in the U.S. are single-person.

I encourage the in.gredients plan for trendy green bodegas for foodies. Another retail food experiment about which to write. And won't it be great for unemployed-outside-the-home moms to have a place to visit several times daily for the freshest ingredients for their evening, family, green meals? Heck, they'll only have to put the trashcans on the curb every other week. Perhaps it could be like solar panels on the roof, where the electric company pays you for the power you generate. Waste Management will give you trash instead of picking it up.

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M. Jericho Banks PhD, President, CEO, Forensic Marketing LLC

Interestingly, this initiative addresses a pretty impressive list of issues the supermarket industry should be (and in many cases is) working on. However, it certainly is idealistic, and does not really delve into all the nasty operational and procedural requirements to keep a store in-stock, clean, running, and making customers satisfied. I think the value of this concept is that it should be prodding every operator in the supermarket industry to take a look at it, understand what its strengths turn out to be, and how well it realizes its goals. It is my belief that the issue for which this concept may have the biggest impact is that of food deserts. It's a major problem, and one that's pretty much swept under the rug, not only for the supermarket industry, but also American society as a whole. If the in.gredients concept can be modified and made into a workable paradigm, would it be a solution to making fresh meat and produce available to a significant chunk of the American population that has no access to this healthy necessary part of diet?

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Roy White, Editor-at-large, RetailWire

I'm going to stand with David on this one (not that he needs defending, of course, but I think someone needs to throw a wet blanket on this and -- in the spirit of in.gredients -- I've brought my own). Well-intentioned as it might be, the whole concept is backward. Daily we note the steady progress of self service, and extoll the value of wide selection, and here we have someone hellbent on reversing all that under a dubious claim of greenness. It may well be true that buying only the five types of food an Aztec family would have enjoyed -- and buying them by the bagful -- is cheaper than buying 400 types in (smaller) cans, bottles and boxes, but it's hardly the same thing, is it? If anything, this drives me to think "being Green" really is something only Kermit is cut out for.

'notcom'

It's an interesting concept for a store. Consumer feedback will be key. I wonder how wide the selection of items will be with such a small store and who they will really appeal to in the long run.

Odonna Mathews, President, Odonna Mathews Consulting

The idea is already a 'success' because people are talking about it. I wish them all the customers they can handle! And if it starts a revolution with traditional retailers, all the better.

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Jerry Gelsomino, Principal, FutureBest

I LIKE it! Good for them and I will stop in next time I am in Austin and help their cause.

'palestar'

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