On-site growth of produce benefits enterprising grocers
By Annemarie Mannion
Grocery stores on the cutting edge of providing local produce are nurturing on-site growing spaces to answer consumer demand for locally grown produce. Retailers involved in growing their own hyperlocal produce see benefits. They believe that converting cross-country or cross-region shipping miles to mere footsteps makes financial sense because it provides a better-tasting product and reduces shrinkage.
Stores featuring hyperlocal produce are rare, but they reflect a societal trend. According to research firm Packaged Facts, local food sales in the U.S. increased from $5 billion to $12 billion between 2008 and 2014. The study predicted that local food sales would rise to $20 billion in 2019.
Given the demand, Viraj Puri believes more grocery stores will take this approach to providing locally grown produce. Puri is CEO of urban agriculture company Gotham Greens, which operates a 20,000-sq.-ft. greenhouse on the roof of Whole Foods Market’s Gowanus location in Brooklyn, N.Y., U.S. Constructed in 2014, the greenhouse yields produce that is sold and distributed to the market downstairs and to other Whole Foods locations and local restaurants.
“Growing fresh produce in close proximity to city centers means that we can make it available to urban customers within hours of harvest instead of days,” Puri says. He believes grocery stores also benefit when they can provide produce that has superior taste, better shelf life, and fully traceable products.
The superior quality of the hyperlocal produce appeals to both the store and shoppers, agrees Glenn Behrman, founder of CEA Advisors. His company worked with the H-E-B-owned Central Market in Dallas to grow produce on-site in a converted 53-ft.-long shipping container. “It’s in the produce department and on sale 10 minutes after it’s been harvested,” Behrman notes, adding that customers appreciate that it wasn’t trucked over hundreds of miles to get to the store shelves.
The container at Central Market — dubbed a Growtainer — protects the crops from snow, rain, and excessive heat. A 13-ft.-long utility area protects the production area from outside contamination. The 40-ft.-long production area provides environmentally controlled vertical production space, designed for effi ciency and food safety compliance, Behrman says. The technology features an ebb-and-flow irrigation system, a water monitoring and dosing system, and “Growracks” equipped with LED systems.
For grocers, on-site growth of produce can reduce shrinkage. “If it takes four days to sell a case of lettuce [produced outside of the store], that last head or two is going to get thrown in the garbage,” says Behrman. Another benefit is the ability to produce small quantities of unique gourmet items. “They can use seeds from France or grow basil with seeds from Italy,” Behrman says.
Behrman believes the most suitable retail stores for on-site produce growth are thoses in high-income markets where consumers are willing to spend a more for fresh, hyperlocal produce.