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.

Good Eggs co-founders Rob Spiro and Alon Salant.
Mike Koomin
Good Eggs co-founders Rob Spiro and Alon Salant.
Food producers like Michelle Pusateri of Nana Joes granola drop off that day's orders.
Mike Koomin
Food producers like Michelle Pusateri of Nana Joes granola drop off that day's orders.
Mike Koomin
Emily Painter packs bags of food for Good Eggs customer delivery on an assembly line.
Mike Koomin
Emily Painter packs bags of food for Good Eggs customer delivery on an assembly line.
Yaron Milgrom stands in his  market's future home.
Camila Bernal
Yaron Milgrom stands in his market's future home.
A rendering of Local Mission Market, which set to open on Harrison in September.
Rendering by atelier KS, courtesy of Yaron Milgrom
A rendering of Local Mission Market, which set to open on Harrison in September.

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.

Grocery delivery services since Webvan have mostly been about making food shopping more convenient than building new methods of food distribution. Some grocery chains like Safeway offer home delivery and say that it's "an important part of our overall sales strategy," but are merely building the new system on top of their existing infrastructure. East Coast delivery services like FreshDirect and Peapod sell a few local items, but mostly feature the same national brands you'd find in the grocery store. Other companies, like Instacart, hire someone to shop for you at Whole Foods or Trader Joe's, but then you have to place your trust in a stranger's ability to choose avocados.

Good Eggs is able to avoid many of these pitfalls because it's built a new system from the ground up; it's as much a tech start-up as it is a food vendor. Co-founders Rob Spiro and Alon Salant both came from tech backgrounds. CEO Spiro developed the social search engine Aardvark, which he sold to Google, then worked as a product manager for Google+; CTO Salant co-founded technology-development shop Carbon Five. They've brought the disruption-happy Silicon Valley mentality to their new company. Good Eggs has all the earmarks of a Bay Area start-up, from the venture capital funding to the free chef-made lunch that employees enjoy every day. Engineers and product managers work at stand-up desks and huddle around whiteboards within feet of the warehouse's massive walk-in refrigerator and freezer.

These tech-focused employees, who make up about a third of the company's S.F. workforce, are responsible for the three proprietary programs that run the business: the storefront, the back-end, and the product-tracking system. For shoppers, there's a slick online storefront build for browsing. Every product has a gorgeous photo, mostly shot with a rustic wooden background at the Good Eggs HQ by the on-staff photographer. The product shots are accompanied by Facebookian headshots of their farmers and producers, not unlike Lyft and Uber, which tell you that "Ryan A." is coming to pick you up (and here's how friendly he looks). Good Eggs takes that social element one step further: As shoppers browse the store, they can learn all about the producers they're buying from — like lives of the pasture-raised animals at Wyland Orchards, or the soil type and organic farming techniques of Bloomfield Farms.

Producers have their own back-end, where they can track their orders and invoices and communicate directly with customers — a big time-saver for busy small business owners. And there's an elaborate tagging system that tracks and organizes the food from the moment it arrives in the warehouse to the moment it leaves on a truck, mostly revolving around plastic numbered bins on wheeled wire racks that house customer orders (dry goods stay out on the floor; perishable foods go into the walk-ins, divided by temperature zones to meet the specific storage needs of salad greens, salmon fillets, organic hummus, and so on, until they're packed in cold, insulated sleeves and grocery bags).

The company is filling between 200 and 300 orders a day, and though Spiro won't share any specific numbers, he says that orders are growing every week — a sentiment echoed by vendors who say they're also seeing their numbers rise. Spiro's plans for his company are ambitious: He says that, in addition to growing to 2,000 orders a day at the Dogpatch warehouse, about the daily sales volume of a regular supermarket, he wants to expand nationwide. To that end, Good Eggs has already opened small warehouses in Brooklyn, New Orleans, and Los Angeles. Though the company is not yet profitable, Spiro says that it is on track to become so by the end of the year.

It's no surprise that all this new infrastructure raises prices, or that expensive niche products like gluten-free sourdough ($9/loaf), honey-lavender chevre ($16/8-ounce log), and even pasture-raised chickens ($18 for a small bird) are enjoyed by financially comfortable Bay Area locavores. Quite a few of the items that Good Eggs offers — the artisanal pickles, fancy vinegars, and luxe cupcakes of the world — will never be on a list of priorities for families just trying to put food on the table.

But some of the produce is more affordable — $3.50 doesn't seem unreasonable for that basket of unbelievably perfect strawberries picked that morning at Yerena Farms, say. It's hard to dispute that local food tastes better than the factory stuff; or that it's better for the environment, the community, and for your health. It's just a question of building systems that can get food into the hands of more than just the slice of consumers who have the expendable income to support local vendors.

Good Eggs is an example of a food hub, identified by the USDA as a growing sector of businesses that manage the aggregation, distribution, and marketing of small- and medium-sized local food producers. As recently as five years ago, these farmers and food-makers were limited to distribution at farmers markets and subscription services like community-supported agriculture, or CSAs, where customers pay up front for a set batch of items to be delivered to them every week, without much control over what's in the basket.

Food hubs help farmers and food producers who don't have the time or interest in building a web presence or finding new channels of distribution, but also don't have the wholesale volume necessary to sell to major grocery chains. Relay Foods, a D.C.-based aggregator like Good Eggs, or Green B.E.A.N. Delivery, a Midwestern one, help small businesses reach larger audiences while also offering services like order-tracking, accounting, and online marketing. In return, the businesses are willing to let the company take a portion of their profits.

"There's no way I could build the tools they're building [at Good Eggs]," says ShaeLynn Watt of Early Bird Ranch in Pescadero, who used to spend 16 hours a week organizing orders for her pasture-raised eggs, chicken, and pork on Google spreadsheets. She's more than willing to let the company take 25 percent of her revenue for each delivery, and 6 percent for the direct orders she manages herself using the Good Eggs platform. "My time is better spent producing delicious food and building better relationships with my customers," she says.

A food hub like Good Eggs also expands the reach of small producers like Watt and others, who can only attend so many farmers' markets and deliver so many orders per day. Sadie Scheffer of Bread SRSLY, a gluten-free sourdough baker, used to deliver all of her bread on bike, and now says she's enjoying a much larger audience for her bread through the site. "I have two bikes and no drivers license. There's no way I can get bread to Mountain View, let alone across the bridge somewhere. ... We can outsource the distribution and know the product is being delivered alongside other local, sustainable, organic stuff."

But can it be made to reach everybody? Rideshare companies like Lyft and Uber have been criticized for only being available to a segment of the population with smartphones and without wheelchairs; the same criticism could apply to local food aggregators whose pricing and tech requirements might put it out of reach of many.

To address this disparity, the USDA is working with nonprofits and other versions of food hubs to make services available to underserved families. A recent survey conducted by the agency found that 40 percent of food hubs were serving populations in so-called "food deserts" who don't have regular access to fresh ingredients. The USDA talks about nonprofit CSAs, spending programs offering SNAP (Supplemental Nutrition Assistance Program, what used to be known as food stamps) incentives for shopping at farmers markets, online buying clubs where lower-income customers can buy bulk produce and protein at reasonable prices.

The Internet also can better connect customers with farmers who have excess or unattractive but perfectly edible products, and businesses like LocallyGrown.net, Local Food Marketplace, Local Orbit, Lulu's Organic Food, and Oklahoma Food Cooperative are providing open-source software for farmers and producers to band together and create their own food hubs online.

The result, at all ends of the financial spectrum, is that new technology is building a system of food distribution that, in the retro weirdness of food culture, looks something like the way things were before the supermarkets began their fluorescent domination of the landscape in the mid-20th century.

A hundred years ago, food markets were composed of small, family-owned farms working together in a community. Local markets used to be neighborhood meeting places, spots where you'd know the people behind the counter by name and maybe trade gossip as you waited for them to weigh out your purchases. Groceries were local, seasonal, and organic by default, prior to advances in shipping and pesticides. Giant, untraceable food chains, self-service, and the sense of isolation that comes with both were side effects of the rise of the supermarket.

While technology is enabling a return to some of these older values that our grandparents took for granted, not all of the markets are virtual ones. In September, a new market is opening in the Mission that will cook, package, label, and sell everything on-site. Local Mission Market is the latest venture from Yaron Milgrom and Jake Des Voignes, co-owners of nearby restaurants Local's Corner and Local Mission Eatery, and their vision for the future of marketing is as quaint as it is cutting-edge.

"There's something different about seeing the person who makes your food. That level of connection is part of appreciating the food you're making," Milgrom says. To that end, nearly half of the 2,700-square-foot market on Harrison between 22nd and 23rd will be devoted to an open demonstration kitchen, where customers can see a team of chefs assembling everything sold in the store beyond meat, produce, and dry ingredients: yogurt, soup, bread, pasta, hot sauce, pickles, jams, crème fraiche. You name it, they probably have plans to make it. Shoppers will be able to converse with the butcher as he prepares a requested cut of meat, or with the baker as he mixes up that day's batch of cinnamon rolls (a candlestick-maker isn't in the original vision, but probably could be if there's enough demand).

House-brand groceries aren't exactly revolutionary — Trader Joe's sticks its name on hundreds of outsourced goods, and Bi-Rite Market already makes much of its food in-house, or through a third-party that prepares it to the market's strict specifications. But both markets also sell other people's food, and in that sense, they're more like boutique versions of regular grocers (as eco-friendly and committed to local sourcing as Bi-Rite is). Local Mission Market is taking things one step further. Milgrom wants nothing less than to revamp the entire shopping experience.

So there will be no aisles; it'll be an open floor plan, with no awkward corners to box customers in. Online ordering for delivery and pickup is baked into the business model. Instead of handwriting labels for bulk foods, customers will use the market's custom-developed iPad program to identify the food based on photo and print out a label. And to avoid long lines at the register, the market is taking a page out of the Apple playbook and hiring roaming cashiers equipped with mobile checkouts.

"Markets haven't changed since we were kids," Milgrom says, and except for the dubious benefit of self-checkout, it's hard to argue with him. "We can use modern systems to make markets better."

With new market models comes competition. Another threat to the supermarket is also on the march: AmazonFresh is rumored to be coming to town later this year.

Amazon. The company blamed for singlehandedly bringing down the brick-and-mortar bookstore and the big-box electronic store. The online shopping juggernaut has been experimenting with home grocery delivery for six years in Seattle and a few months in Los Angeles, and if Amazon's track record is anything to go on, its grocery delivery could change the game for good (Amazon representatives did not respond to our request for comment).

Remember Borders Books, Tower Records, Blockbuster Video: History has shown that some people prefer delivery to retail shopping for certain products. Amazon could overshadow the brick-and-mortar grocery store by using its massive warehouse resources and existing infrastructure to deliver food, and it has the cash to take a loss for a few years as it figures grocery delivery out. And because prices on AmazonFresh are close or equal to those at the grocery store, the question becomes whether consumers think a little added cost equals the added value of delivery — for rich or poor households, for artisanal pickles or mass-farmed eggs.

AmazonFresh does have some local products in its pilot cities, but the majority of its inventory is the kind of stuff you'd find at Safeway. Rob Spiro of Good Eggs isn't worried about the threat to his business; he sees Amazon's foray into groceries as a good thing. "If anything, AmazonFresh is going to educate folks that there's a way to shop for groceries online, and that behavior is becoming mainstream. ... It makes our job of reaching out to customers that much easier," he says.

The two companies are using the same online tools to very different ends: One is building a new distribution chain from the ground up; the other is tweaking the existing system to make it more convenient for consumers. Disruptive technology is, at its core, a grand experiment — it throws a wrench into the established way of doing things and lets the market sort it out. The last major supermarket disruption, the bar code, enabled grocery stores to stock tens of thousands of new items and track them efficiently. With the rise of more precise, and more virtual, food networks, we could be seeing a shift from the mega-market to the meta-market.

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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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