The Amazing Disappearing Supermarket: Building the 21st Century Grocery Store

image Illustration by Audrey Fukuman.


Only a few hours ago, the strawberry was sitting on a vine at a family-owned farm in Watsonville, about 90 miles south of San Francisco. But, a day before, at a computer somewhere in the Bay Area, an icon was clicked, a quantity was entered, and the berry's fate was sealed. As the city slept, the strawberry was picked, packed in a basket with others (all at peak ripeness), and driven up 101 to San Francisco and a warehouse in the Dogpatch, where it joined hundreds of other locally grown foods ready to be delivered to Bay Area residents.

It's 8 a.m. at Good Eggs, the local grocery aggregator and delivery service, and the company's airy, 10,000-square-foot headquarters is already bustling. One of the building's industrial garage doors is thrown open to the foggy morning, and a near-constant parade of farmers and food producers walk up to the receiving table to drop off their day's inventory. Members of the Good Eggs staff — a young, good-looking, idealistic bunch all around — greet producers by name, offer them a strawberry or two (they're too good today to pass up), and talk shop as they check in orders.

Most of the food coming in has been made or harvested within the past 24 hours, and all of it has been ordered by customers in advance from the company's 150-plus vendors: dozens of pastured eggs and chickens from Early Bird Ranch, flats of blackberries and raspberries from Yerena Farms, loaves of sesame bread from Josey Baker, tamales and tortillas from Primavera, salsa and guacamole from Nopalito, frozen baby food from Big Dipper, bouquets from Farm Girl Flowers. It will all be sorted and packed in the warehouse this morning, and by this evening will be delivered to homes from Fairfax to Palo Alto.

The Good Eggs "farm-to-fridge" business model turns the supermarket model on its head. Instead of having one or several physical locations stocked with a standard, unchanging inventory, the Good Eggs storefront is online, and calls on local farms to deliver only what customers have ordered that day. Good Eggs essentially stocks and empties a grocery store every day, and because its inventory is based entirely on what each customer is ordering, it's a different grocery store every day, too. The company has created an efficient new food system that's elegant in its simplicity.

Food aggregators like Good Eggs and high-tech grocery stores like the upcoming Local Mission Market are homegrown examples of how technology could change the way Americans shop for groceries. Add to that the fact that, this fall, Amazon's grocery delivery business AmazonFresh is coming to town. We all know what can happen when Amazon gets in the game. The supermarket may not be rendered as obsolete as Borders, Tower, or Blockbuster, but the new virtual model could force the bright, wasteful grocery store to become something else. What remains to be seen is if these new models are affordable enough for the average American family — or, if like so many tech innovations before them, they'll only be practical for a certain, affluent segment of the population.

The supermarket business model is ripe for disruption, to use the parlance of our times. As it is, the current system is almost absurdly inefficient. Grocery stores are huge — the average American store is around 46,000 square feet, approaching the size of a football field. Inside, nearly 40,000 products are housed under the buzzing florescent lights — no matter the season or the store's location, there are always piles of gleaming red apples, plastic clamshells of strawberries, vacuum-sealed bags of chicken parts, and aisle upon aisle of brightly colored boxes of nonperishables. The supermarket runs on abundance; when there's a worker strike or a major weather event, the empty shelves are eerie, psychically disturbing.

Of course, the price of all that abundance is a lot of waste: The USDA estimates that supermarkets lost about $15 billion annually in unsold fruits and vegetables alone, and throw away, on average, 12 percent of produce and 7 percent of meat and poultry.

We've heard all this before. The death of the supermarket has been predicted since at least 1999, when grocery delivery service Webvan burst on the scene and suggested in an annual report that year that e-commerce would provide an alternative to the "mundane and time-consuming task" of grocery shopping in a store. The company enjoyed early success but folded two years later, just another victim of the first dot-com bust, but also a test case that showed how hard it is to make money selling groceries online.

A decade later we've become used to buying books and clothes and electronics online, but e-commerce has come slowly to the grocery sector. Supermarkets have a razor-thin profit margin of about 1 percent, according to the Food Marketing Institute, and rely on volume sales to make their money. It doesn't help that so much of the grocery store's inventory is perishable. Bananas, sliced lunch meat, eggs, tomatoes, baguettes, milk, chicken breasts, jumbo shrimp, Lil' Smokies, yogurt, orange juice, Pillsbury cinnamon rolls: Pretty much the entire perimeter of the store will go bad in a matter of days. So while every imaginable durable good, like a third season DVD set of Party of Five or a copy of Liberace's autobiography, can just sit on a warehouse shelf until someone wants it, food perishability is a major obstacle in redesigning the supermarket model for the online generation.

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12 comments
ahrengrauer
ahrengrauer

I'm an ex-pat living in Panama. The best produce you've ever had, chicken that actually has flavor, seafood is probably the best in the world. I don't see traditional shopping changing much here.

jenrose1
jenrose1

We started a local co-op about a year ago, in Oregon. It was kind of an accident, but once we started ordering our food as a group, it really took off. Now I get more than 80% of the food we eat from the co-op. We quip that we came for the prices and stayed for the quality. Being able to order the week's organic produce in my jammies and only having to pick it up once a month (people in my neighborhood deliver it the other weeks), combined with near-wholesale pricing  that makes organic produce, grass fed meats and gluten free baked goods affordable is an addictive combination. Not to mention the way it makes working with local farmers easier for us and for the farmers. There is almost no waste to our model, less gas, time and energy spent shopping, less money going out, better quality food coming in... I still buy the occasional stick of butter and bag of chips from our local grocery stores, but our diet has shifted to being more local, more seasonal, and a hell of a lot healthier. Time I used to spend shopping is now spent cooking. Instead of 3-4 shopping trips per week, I now make 3-4 shopping trips per month, and those are much smaller than they used to be. 

Social networks and the cloud make it possible for groups of people without tremendous programming skills to put together thriving groups that use google spreadsheets to order together in bulk. Facebook makes it easy to connect with people in the area. We've gone from a whim to 1100 members in under a year. We're eating the way we want to eat, and paying prices that don't hurt, while doing less harm to our planet. I finished my kid Christmas shopping in September. The adults will be taken care of this month. Our model means everyone is paid up front for exactly the amount of product that is needed. It is an efficient model. We are fortunate to have volunteers so that our overhead is very low, but even on a retail scale, the convenience and quality of food-on-demand vs. more "predictive" attempts to meet anticipated needs has much to offer.

mamablum
mamablum

I love Good Eggs and all that you stand for! It has been a joyful, healthful and exciting change in our lives!! Did I mention convenient? Each and every product I have received thus far has been absolutely fresh and delicious. I am into my third "big" order with you all and I rarely go to the "supermarket".  We are so fortunate to have this abundance in our own backyards. Love it all~here's to our health and the farmers who care!

lakawak
lakawak

Supermarkets will be around long after the last welfare recipient who "worked" at the SF Weekly has been laid in the ground.

thecrud
thecrud

The grocery store is now only for the rich or those with food stamps everyone else has to find another way, churches hunting growing your own barter rob and steal traffic drugs.


Barbara Mcwilliams
Barbara Mcwilliams

I learn something new every day & this qualifies as 'wonderful'.

Dante Forrest
Dante Forrest

Good the supermarket with chemical GMO food will be extinct

Parvati Ben
Parvati Ben

I saw this coming, bought on to it. Great idea. I'm a Good Eggs regular now.

thecrud
thecrud

@lakawak @thecrud 

Too bad you are to young to remember every shopping cart full to the top at the store. Not 3 items as they have today or standing in the meat departments not even half the size they use to be, just standing there not putting any in their carts.

You moron. Guess you have no powers of observation unable to draw a conclusion with a crayon. And no life other than troll unable to add anything useful to any public conversation.

A true loser.

 

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