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[12 comments]

Austin grocer pulls back on package-free dream

July 1, 2014

Austin-based in.gredients, which earned wide press coverage for becoming "the first package-free and zero waste grocery store in the United States," quietly announced that they will focus on other goals (like zero waste) but start to offer more packaged foods.

The aim for in.gredients was to be a zero-waste store, offering a majority of products in bulk, and encouraging customers to bring their own containers to reduce waste. At the time of its opening in August 2012, the store was estimated to be 92 percent zero-waste and package free, with the pursuit of 100 percent held back due to local and statewide restrictions around food safety.

"It's not every day that you get to walk away from a grocery store with little to no packaging," co-founder Joseph Lane said in a press release that marked the store's acceptance of The Austin Chronicle's "2012 Best New Local Business" award. "It makes you feel good knowing you are walking away with just food."

In a note on its website in May, however, the founders wrote that while its "package free" model garnered a host of praise and support, "the numbers from our first 21 months of business paint a different picture than we had hoped."

In a FAQ section, the challenges of avoiding packaged products were detailed.

"Let's face it, branding and marketing works," the founders wrote. "How a product is packaged definitely helps sell the product, particularly if it is something new or unfamiliar to the customer. Plus, some products that are very popular with customers aren't available or feasible package free (chips, for example). Another issue is visualizing quantities. When a customer sees tea priced at $45.00/lb the initial thought is, 'Wow! That's expensive', but a pound of tea makes approximately 226 servings of tea, so it comes out to only $0.20/cup for high quality tea."

Slow-selling bulk items are being phased out to make "room for products that will be more popular and help support our continued operation."

The founders don't see the shift as abandoning its ambitious environmental and social ethos but rather honing "in on what's most important to our customers and, therefore, our success." The founders added, "Going forward our three guiding principles will be zero waste, local food, and community. By narrowing our mission, we can do all three better and make sure we're around for the duration."

The shift by in.gredients comes as a similar store in London, Unpackaged, closed in December 2013 after a year in business. Still, the first package-free, zero-waste supermarket set to open in Germany this summer, Original Unpacked (Original Unverpackt), is garnering wide press in that country and across environmentally friendly blogs.

Discussion Questions:

What lessons should be gleaned from in.gredients toning down of its package-free ideals? Do you see packaging as a long-term fixture at retail despite sustainability concerns? Does the push for reduced packaging need to be consumer driven?

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 strong is the push from consumers for reduced packaging from brands and retail in general?

Comments:

This is one of those ideas that plays well in surveys but not in practice. There is a market for green products and green retailing, but it is still way too small to support a full-blown store. Until a majority of shoppers push for this, it's not going to work.

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Dr. Stephen Needel, Managing Partner, Advanced Simulations

The lesson learned is the need to insure that consumers understand and are willing to support such concepts. Often ideologies and technologies are ahead of the consumer.

I do see the need for packaging to change to reflect the environment's and consumers' concerns. Packable-free, while addressing environmental issues, does not appear to resonate fully with customers. The Europeans are ahead of the U.S. on this issue. I suggest readers take a look at the concept of the "circular economy" championed by the Ellen MacArthur Foundation. It has some interesting thinking now being applied to consumer packaged goods.

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Richard J. George, Ph.D., Professor of Food Marketing, Haub School of Business, Saint Joseph's University

If it didn't work in Austin, there's not much chance it will work anywhere, since Austin is a very green city. People like choices. In Austin plastic grocery bags are illegal, so consumers can either bring their own reusable bags or buy paper bags at 5 cents each. When put that way, most bring their own. You need to offer consumers the packaged version and the bulk version, and incent them to choose bulk via a discount.

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David Dorf, Sr. Director of Technology Strategy, Oracle Retail

A not-so-great progressive idea, but you can still run a environmentally-friendly store without going off the deep end. This is too extreme, and they at least are changing in order to stay in business. New lighting, compressors and recycling of waste is still very effective for your community, plus it will save money.

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

True, "it's not every day that you get to walk away from a grocery store with little to no packaging." However this has resulted in consumers walking away with little to no groceries. Economic sustainability always takes precedent over environmental sustainability. Demand is always consumer driven.

David Livingston, Principal, DJL Research

Packaging is here to stay. Besides marketing, there are obvious health issues, storage concerns and of course the business viability of the product and the store.

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Kai Clarke, President, Kowa Optimed, Inc.

Zero waste is a great long term goal, but "crawl, walk, run" is still the mantra of the day.

In the end the consumer WILL dictate where zero waste works. Continued trial and error, education and nimble adaptation is needed by the retailer.

It would help greatly if the consumer also saw some personal price advantage.

'vgallese'

Marketing basics: being green is an added value, but lower in consumer value than, for example, "this is the cereal my kids will eat" or "these packages are sealed and will keep for a long enough time."

I find it odd that so many efforts right now get lost in these honorable theories of doing good—forgetting the reality of how people buy things.

Doug Garnett, Founder & CEO, Atomic Direct

I'm generally a pretty green-conscious consumer. These days, this is what I buy in bulk and bring my own container for: kitty litter.

I used to purchase and save money on other items such as dog treats, cashew nuts, macaroni, candies, and spices from free standing self-serve, semi-open containers. After seeing what goes on with the bulk sale products that I can't always know or control, (bugs, rodents, and people who stick their dirty hands in for a "taste") I'm repulsed by the whole idea. I suspect that among other things the "ick" factor was not properly vetted and understood by the well intentioned Austin founders, and that they are dreamers, not merchants.

I think many people also simply do not trust that that they can be assured of the consistency of quality, safety, or the authenticity of bulk items just by looking. If I don't like a packaged product, I can return it.

'Liatt'

Packaging is not going to go away. It provides freshness, convenience a comparative for price/value, and used properly, much of it can be recycled. It is definitely a long-term fixture that the consumer expects and wants.

Provide the consumer with a role in helping reduce the packaging—but remember, they'll want to do it on their terms. They will want to know that they are doing something positive for the environment, while still having the assurance that they have proper sanitation requirements met.

We're all "green." No need to throw this down the throats of consumers. Demonstrate the value for them. When shopping at Costco, you pick up a cardboard box at the store to carry your goods out. When the customer gets home, they'll take care of recycling the cardboard. If you go into a Kroger, as well as numerous other grocers, you'll see a plastic bag recycle bin at each door. Millions of pounds are recycled each year in this manner.

Walmart has cut-cases on pallets in many stores. The consumer knows and understands that they are participating in these "green" steps.

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Roger Saunders, Managing Director, Prosper Business Development

Packaging is integral to the product, protecting contents and delivering the brand message. Packaging is is critical to the shopper experience, when consumers are confused, they don't purchase.

Sustainability is an ongoing commitment for brands and retailers to reduce packaging used and to develop recyclable and reusable components in the supply chain, aiming for zero waste. To achieve packaging goals, the consumer must be part of of the plan for success.

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Anne Bieler, Sr. Associate, Packaging and Technology Integrated Solutions

Packaging is part of the appeal. Rejecting packaging reminds me of the unnecessary gluten-free diets practiced by many.

In these days, excessive packaging is usually a function of safety or theft prevention. Packaging can substantially increase cost of goods. Ro a manufacturer, simpler is better.

If a manufacturer could practice minimalist packaging and direct consumers to a website for product information, most would do it. It's not consumer driven, it's regulation driven.

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Carlos Arámbula, Managing Partner, MarcasUSA LLC

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