Michael Ruhlman & The American Grocery

The Wall Street Journal: “Is there any place more American than the supermarket? Forget the airport and the voting booth; for nearly a century, the one-stop shop has remained a temple of consumerism, not to mention our particular form of consumerist anxiety … In Grocery: The Buying and Selling of Food in America” Michael Ruhlman focuses on “his beloved hometown supermarket, Heinen’s Grocery Store, a Cleveland-based chain with 23 locations in Ohio and Illinois. Joe Heinen opened the first one in 1933, three years after Michael Cullen launched ‘the first true supermarket,’ in Mr. Ruhlman’s designation: King Kullen in Queens, N.Y. Heinen, like Cullen, stockpiled meat, seafood, dairy, produce and groceries, often at a discount, under a single roof. (King Kullen’s slogan was ‘Pile it high. Sell it low.’)”

“There are now 38,000 grocery stores in America, some as large as 90,000 square feet. Heinen’s has annual sales of some $600 million—on a margin of only 1.25% to 1.5%, typical of the industry. ‘You do sales of half a billion dollars,’ a Heinen’s executive notes to Mr. Ruhlman, “and you only have profit of $5 million—what kind of a business is that?'”

Now the best grocery stores compete in a crowded marketplace by combining all of the above while becoming obligatory shopping, and even tourist, destinations. Wegmans, an East Coast chain frequently named America’s top grocery, and Central Market, an upscale offshoot of Texas’ H-E-B … have generated the kind of fervent fan bases once limited to sports franchises.” However: “Jeff Heinen fears that the supermarket will eventually go the way of the suburban shopping mall. ‘We’ll be prepared food and specialty products,’ he tells Mr. Ruhlman. Everything else, all those center-aisle products, in his estimation, will be delivered via Amazon.”

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Intuition, Math & The Supermarket Checkout

The Wall Street Journal: “We are used to the standard system of one line for each cashier. But what if there is just one big lane feeding multiple cashiers? … The single queue often snakes around, as lines do at airport security checkpoints. Mathematical queuing theory says that the serpentine system should be faster than separate lines leading to separate cash registers, but only with a condition called ‘no jockeying’—the assumption that people in multiple lines won’t hop over to a different line that has become free.”

“But that isn’t realistic, as we can all attest. If you allow jockeying in multiple lines, the serpentine system is no faster on average. It might intuitively seem faster because you won’t get stuck behind a single person taking a long time, but that same delay is just portioned out among more people, leaving the average wait time the same … In a curious twist, one recent study showed that cashiers work faster when they are serving a dedicated line. Perhaps it instills a sense of pride or connection with the customers waiting for one hardworking cashier.”

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Brendan Proctor: More than a ‘Lidl’ Different

Retail Dive: “We offer the experience of grocery retooled, rethought and refreshed,” says Lidl U.S. CEO Brendan Proctor. Among the differences: “Packaged goods will be placed on shelves in their cartons, eliminating the work that would go into unpacking. Produce displays will not be precariously stacked, making all the fruits and vegetables equally accessible to shoppers. And shoppers will bring their own bags and bag their own groceries, eliminating the cost of paper or plastic bags as well as employees’ time and effort in bagging.”

“Aside from the food items, Lidl plans to differentiate itself through its specials on non-food items … These specials could be anything from yoga pants to lawnmowers to leather jackets.” Also: “The retailer plans to streamline the grocery shopping experience and pare down customer choices. Proctor said that the product selection will be curated so that shoppers will not be overwhelmed with too many choices for staples like ketchup. Instead of multiple varieties of the same product, shelf space will be devoted to different kinds of items.”

“Lidl’s strong global presence makes imports of premium Belgian chocolates and Italian cookies to the U.S. much easier and more affordable. Lidl’s Preferred Selection brand features the flag of the item’s country of origin on the label ,,, For the time being, Proctor said the supermarket chain will concentrate on locations on the East Coast … Lidl will also concentrate on brick-and-mortar stores for shopping. There are no plans to work on e-commerce models, at least for now. People still prefer going to the grocery store over ordering online, he said.”

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Jet.com Tells Fresh Story In Real Life

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Business Insider: “Jet.com — the online retailer that Walmart bought in 2016 for $3 billion — is now selling some of its products IRL. From May 10 to June 18, Jet will have a food-themed concept shop in Manhattan which showcases artisanal accessories, cookbooks, and kitchen appliances. Most of the items are pretty quirky, like face masks made from tomatoes, kale-flavored chocolate bars, socks with ice cream prints, and banana-shaped flasks.”

“The Jet experience comes to life at Story, a 5-year-old retail space that changes its products, decor, and events programming about every month based on its particular sponsor. For the next six weeks, the sponsor is Jet, where people can also find most of the store’s items. The larger goal of the temporary store is to raise awareness around Jet’s grocery delivery service.”

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Who’s Better Than Trader Joe’s?

Business Insider: “A regional chain that most Americans have never visited was just named the best overall grocery-store chain in the US. Wegmans was the US’s highest-rated grocery chain out of more than 20 that appeared in Market Force Information’s annual survey of the industry … This is the second year in a row in which Wegmans has earned the top spot — though this year, it was forced to share the crown with Publix … With a score of 77% satisfaction, Wegmans and Publix beat out Trader Joe’s, which had 76% satisfaction, and the Texas-based H-E-B, which rounded out the top four with 69% satisfaction.”

“Wegmans stores are larger than the average grocery store, emphasizing variety and fresh products … Many locations have cafés, pizzerias, sushi bars, and buffets, plus seating areas for 100 to 300 people where customers can eat their food … The chain is also known for its extensive beer section, with a large selection of craft brews. Some locations even have walk-in beer lockers. Many customers love Wegmans because of its customer service.”

“Wegmans serves as a superior employer in the grocery industry. The company offers healthcare coverage for workers as well as college scholarships, paying about $4.5 million in tuition assistance to employees each year. All of these factors combine to create an army of Wegmans fans, responsible for the grocery chain’s top ranking. In 2015, the company reported that 7,300 customers contacted Wegmans to report how much they enjoyed their shopping experience or the way employees treated them.”

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Two Buck Chuck: What Makes it So Cheap?

Business Insider: “Trader Joe’s wine is remarkably cheap. A bottle of the grocery store’s most popular wine brand, Charles Shaw (aka Two Buck Chuck, made by Bronco Wine) sells for less than $3.” What makes it so inexpensive? #1: “Most of the company’s vineyards are located in California’s San Joaquin Valley, where the cost of land is much cheaper than the more prestigious Sonoma or Napa Valley … Higher average temperatures in San Joaquin Valley can over-ripen grapes, which is a main contributor to the price difference between the regions.”

#2: “The company ferments wine with oak chips, which are cheaper than barrels.” #3: “The company uses … a mold of cork pieces glued together with a ‘real cork veneer at the bottom’.” #4: “Making wine in huge quantities keeps production costs low … The company uses machines to harvest the grapes, which helps keep labor costs low, but also increases the chances that bad grapes end up in the wine … Critics argue that mass production is also how animal matter can end up in your wine glass. But to be fair, there’s a chance of that happening with most agricultural products.”

#5: “Bronco cuts shipping costs by using lightweight bottles and cheap cartons … The lighter glass reduces the weight of a case of wine by several pounds, meaning Bronco can ship more wine at a time. Bronco also lowered the cost of its shipping cartons by a few pennies by replacing the white paper it was using with a light brown paper.”

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Shopping-Cart Psychology: To Return or Not?

Scientific American: “It seems like a basic courtesy to others: you get a cart at the supermarket, you use it to get your groceries and bring them to your vehicle, and then you return it for others to use. And yet, it’s not uncommon for many people to ignore the cart receptacle entirely and leave their carts next to their cars or parked haphazardly on medians. During peak hours, it can mean bedlam. Where does this disregard come from?”

“Social norms fall into two general categories. There are injunctive norms, which drive our responses based on our perception of how others will interpret our actions. This means that we’re inclined to act in certain ways if we think people will think well or think poorly of us. And there are descriptive norms, where our responses are driven by contextual clues. This means we’re apt to mimic behaviors of others—so what we see or hear or smell suggests the appropriate/accepted response or behavior that we should display.”

“The world will likely not end because we aren’t returning our shopping carts—that would be an amazing butterfly effect—but it’s an example of a quality of life issue we can control. That guy who didn’t return his cart may not be a complete jerk. He may just be using the example set by others so he can get home a little more quickly. But if everyone does that, then we’re shifting the balance of what is acceptable, which may have greater ramifications to the social order. We have a greater influence over seemingly mundane situations than we realize.”

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Redbro Chickens: Slow Growth, Better Taste

The New York Times: “Perdue Farms, one of the country’s largest chicken producers, has been raising what are known as slow-growth chickens side by side with the breeds that have made the company so successful. The new birds, a variety known as Redbro, take 25 percent longer, on average, to mature than their conventional cousins, and so are more expensive to raise.”

“Perdue is trying to find just the right slow-growth breed, and it has a strong incentive: A fast-growing cohort of companies that buy vast quantities of poultry, including Whole Foods Market and Panera Bread, are demanding meat from slow-growth chickens, contending that giving birds more time to grow before slaughter will give them a healthier, happier life — and produce better-tasting meat.”

“Consumers would … have to accept some trade-offs: While the new chickens have a fuller flavor, their meat tends to be distributed differently over the body, with more generous thighs and smaller breasts than the chicken most Americans are used to … In marketing slow-growth chickens, Perdue and others will have to make consumers understand why they are paying a higher price … the suggested retail price of a Sonoma Red (from Perdue’s Petaluma Poultry) that weighs four pounds is $16.”

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Fresh Squeeze: Packaged Goods Retreat at Retail

Wall Street Journal: “ShopRite and other grocery-store chains around the country are building new stores that have less space for traditional packaged foods in the center aisles and more for in-store restaurants and fresh meals shoppers can take home … That means less space for traditional packaged-food brands, which are also facing increased competition from store brands and smaller upstarts.”

“The shift in shopper preferences started several years ago, but its impact on big food makers is intensifying now because of added pressure from retailers. That has exacerbated what has been a drumbeat of bad news for packaged-goods companies grappling with American consumers’ sustained move toward natural, organic foods. A long stretch of falling food prices, fueled by excess supplies of staples like meat and dairy, have also lowered costs for consumers at supermarkets, giving them more reason to choose fresh food over boxed meals.”

“Some brands are seeking ways to get their products into the fresh and prepared foods section of the store … (however) retailers such as Wal-Mart Stores Inc. are pressuring big brands to lower their prices as a way to attract customers. Companies like Hershey and PepsiCo Inc. said they are working with retailers to be creative.” PepsiCo CEO Indra Nooyi comments: “That’s a conversation we’ve been having with some of the retailers, to say ‘how can we help you rethink the center store so that we can bring growth back … Our hope is that with the rejuvenation of the center store, our categories will grow, too.”

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