On Friday, The Wall Street Journal reported that Amazon plans to open its first grocery store in Los Angeles, possibly by year’s end. The Journal reported that Amazon had signed leases for at least two other grocery locations that could open early next year. Sources told The Journal that the company was looking into locations in San Francisco, Seattle, Chicago, Philadelphia and Washington, D.C.
Amazon is also reportedly looking to buy regional grocery chains.
The Journal reported that the new Amazon grocery stores wouldn’t compete directly with Whole Foods stores, and that they would sell a wider selection of products.
Whole Foods, even though owned by Amazon, still doesn’t sell a lot of products that Amazon would sell in a differently oriented mass-oriented grocery chain. Products like Coca-Cola, Kraft American Cheese, personal grooming products that contain all sorts of chemicals, and so on. Amazon.com sells these items, so they have data regarding how popular cases of Cheetos would be.
I was amazed (and pleased) that these kinds of items did not suddenly appear at Whole Foods once Amazon bought them, actually.
Daniela Galarza reports on one very disappointing change that Amazon has made to Whole Foods, the pending removal of local products from Whole Foods shelves:
For years, Whole Foods employed staffers called foragers who went out into their neighborhoods in search of local artisans at farmers markets or state fairs. There, they found home-made jams and mustards and dressings that they’d buy in bulk.
For mom and pop preservers and picklers, selling their wares at Whole Foods was a boon, and over the past decade, thousands of small brands — many of which still put each label on each jar or package by hand — have come to depend on Whole Foods for the bulk of their business. As part of each store’s local sourcing program, the maker was responsible for stocking their items on Whole Foods’ shelves and could pick a few weekends to set up a table and offer customers a sample. Makers said they were far more likely to sell their items when they were present in the store, answering questions about a product and forging a personal connection while making that sale.
“Whole Foods was always an advocate for the small business. They always wanted to support local artisans,” says Erika Kerekes, founder and owner of Not Ketchup condiments. Not Ketchup was sold at Whole Foods locations in Southern California, near where Kerekes lives, for several years, up until six months ago. (Now it’s sold via its website and on Amazon.)
According to the Journal, this year, Whole Foods started charging local makers to offer samples in store. They’re also requiring makers who sell over a certain threshold to pay a percentage fee to the store. “To suddenly not to be able to sell at Whole Foods, or to have to go through the same vetting process as the bigger names,” Kerekes says, “is a challenge, to say the least.” More often than not, small purveyors don’t have the marketing budget to fly out to Whole Foods’ headquarters in Austin, Texas, to present their product for a tasting.
“One of the things they want,” Kerekes says about presenting at the corporate level, “is for you to have a marketing plan for at least the next 12 months. They want to know how much money you’re putting into marketing, merchandising, trade shows, online and television advertising… they want to know how often your item is going to be on sale. But unless they have an investor behind them, small, local brands in their early stages of development just don’t always have this mapped out.”
From my perspective, as a long time Whole Foods customer (since 1982, actually), I’m very discouraged by this change. Whole Foods is lumbering towards simply being another corporate grocery chain without much character. Why not retain a little local flavor? Stock mustard by Local Food Folks, carry tomatoes from Mighty Vine, don’t become Kroger (Mariano’s) or Albertsons (Jewel-Osco), don’t morph into yet another giant warehouse of packaged, processed food made by behemoth corporations, the kind of generic store that is exactly the same no matter where you go. Rick Bayless saw the trend lines, and sold his Frontera Foods to ConAgra, but there should be room for small food businesses to flourish.
And what about local spirits and beers? Texas doesn’t allow whiskey or other spirits to be sold in grocery stores, but Illinois does. Will Koval and the myriad of other regional craft distillers currently stocked in Illinois stores lose their distribution because Whole Foods corporate can’t be bothered?
The nearly always empty shelves is another problem, an inventory issue that can be fixed, at least theoretically. Removal of small food brands is a corporate decision made by Amazon, and quite disheartening.
Whole Foods Empty Produce Shelves
No bread for you! at Whole Foods
Slightly more detail from the Washington Post’s Abha Bhattarai:
Whole Foods Markets is placing new limits on how products are sold in its stores and asking suppliers to help pay for the changes, riling some mom-and-pop vendors that have long depended on the grocer for visibility and shelf space.
The changes, outlined in an email recently sent to the company’s suppliers, are intended to save on costs and centralize operations.
Previously, Whole Foods allowed suppliers such as Gray to oversee their own merchandise or hire local firms to do so. But under the new rules, Whole Foods is requiring suppliers to work exclusively with Daymon, a Stamford, Conn.-based retail strategy firm, and its subsidiary, SAS Retail Services, to schedule in-store tastings, check inventory on shelves and create displays on their behalf.
Suppliers that sell more than $300,000 of goods annually to Whole Foods will be required to discount their products by 3 percent (for groceries) or 5 percent (for health and beauty products) to fund the new program. Local suppliers will also have to pay $110 for each four-hour product demonstration by Daymon, while national suppliers will have to pay $165. (Vendors can also continue to host demonstrations themselves, as long as they pay a scheduling fee of between $10 and $30.) Daymon did not respond to requests for comment.
The real estate website Zillow has published a book which analyzes home values based on certain factors, such as the proximity to a Whole Foods, or Starbucks, etc. In a shocking coincidence, there are 2 Whole Foods within a mile of me (and three more slightly more than a mile away), there are 2 Trader Joe’s about a mile away, and a mind-boggling 44 ((!!) Starbucks within 1 mile of me, all per Google Maps. Perhaps there is a synergistic effect on property values, and a wealthy businessman from Shanghai will offer to purchase my place sight unseen for way, way above market value enabling me to retire to a private island in the Caribbean to work on my screenplay, or something. Do you know any wealthy industrialists with a desire to own a loft?
Your local grocery market has a lot to do with what happens in your local housing market, according to a new analysis by Zillow featured in the paperback edition of Zillow Talk: Rewriting the Rules of Real Estate (Grand Central Publishing, Jan. 26).
Specifically, Zillow found that homes grow more rapidly in value if they are closer to a Trader Joe’s or Whole Foodsi. Between 1997 and 2014, homes near the two grocery chains were consistently worth more than the median U.S. home. By the end of 2014, homes within a mile of either store were worth more than twice as much as the median home in the rest of the country.
“Like Starbucks, the stores have become an amenity in their own right – a signal to the home-buying public that the neighborhood they’re located in is desirable, perhaps up-and-coming, and definitely improving,” said Zillow Group Chief Economist Stan Humphries. “Like a self-fulfilling prophecy, the stores may actually drive home prices. Even if they open in neighborhoods where home prices have lagged those in the wider city, they start to outperform the city overall once the stores arrive.”
“The grocery store phenomenon is about more than groceries,” said Rascoff. “It says something about the way people want to live – in the type of neighborhood favored by the generations buying homes now. Today’s homebuyers seek things in neighborhoods that weren’t even in real estate agents’ vocabularies a generation ago: walkability, community, new urbanism – and maybe we should add words like sustainable seafood and organic pears.”
Zillow analyzed the values of millions of homes near dozens of Trader Joe’s and Whole Foods to conclude that grocery stores and home values are definitely related.
According to the Zillow analysisii, the median home within a mile of a future Whole Foods store appreciates more slowly than other homes in the same city before the store opens. In the months before the stores open, the trend reverses and flips, so that after the stores’ opening dates, homes near Whole Foods appreciate more quickly than other area homes.
The analysis clearly shows that homes near the stores appreciate more quickly than homes in the city as a whole. That means the two brands are very good at choosing locations that will appreciate faster in the future, or are actually spurring home appreciation growth – or some combination of the two.
A few interesting links collected November 15th through November 18th:
Apocalypse Now /Redux :: rogerebert.com :: Reviews – In a note released with the film, Coppola emphasizes that this new material was not simply shoehorned into the original version of the film, but that “Redux” is “a new rendition of the movie from scratch.” He and his longtime editor Walter Murch “re-edited the film from the original unedited raw footage — the dailies,” he says, and so possibly even some of the shots that look familiar to us are different takes than the ones we saw before.
She’s real, all right, and I’m sitting on the bed next to her. Her name is Dr Brooke Magnanti. Her specialist areas are developmental neurotoxicology and cancer epidemiology. She has a PhD in informatics, epidemiology and forensic science and is now working at the Bristol Initiative for Research of Child Health. She is part of a team researching the effects of exposure to the pesticide chlorpyrifos on foetuses and infants.
From 2003 to late 2004, Brooke worked as a prostitute via a London escort agency; she started blogging as Belle de Jour — after the Buñuel film starring Catherine Deneuve as a well-to-do housewife who has sex for money because she’s bored — shortly into her career as a call girl, after an incident she thought funny enough to write down.
Oh great, so every meal I eat out has been with contaminated garlic and/or ginger (seemingly a staple of my diet). Where’s the FDA been anyway? Wouldn’t you like to read a headline about how the FDA protected consumers before an event, not after? In fact, the FDA isn’t even mentioned in this story. What agency is taking the lead in protecting American food from poison?1
The Chinese government has ordered numerous facilities in Shandong province, a hub for the nation’s agricultural exports, to stop shipping the foods until they can abide by tougher safety standards, according to several U.S. companies that import the products from China. The move has curtailed the supply of garlic and ginger in the U.S., resulting in higher prices as buyers shift to alternative sources.
China’s action follows a host of import-safety incidents in the U.S., including a July recall of fresh ginger, tainted with an illegal insecticide, that was imported from China by a California company and sold in at least two dozen supermarkets.
China is a major supplier of garlic and ginger to the U.S., which is finicky about the Chinese-grown produce it allows into its borders. China accounts for more than 80% of garlic imported into the U.S., according to the U.S. government. Hawaii is the only source of ginger farmed in the U.S., so the country depends heavily on exports from China. In the wake of China’s action, California garlic growers are enjoying increased demand, as are Brazilian ginger growers, according to U.S. buyers.
Apparently still a problem in 2009:
At Whole Foods, for example, labels that read “USDA inspected” are stuck to produce imported from abroad. According to “Behind the Bean,” a recent study by Wisconsin’s Cornucopia Institute, the USDA’s record with food imported from China is fraught with irregularities.
“(USDA) found multiple non-compliances of the federal organic standards, (including) the failure of one certifying agent to hire Chinese inspectors that are adequately familiar with the USDA organic standards, and the failure by another organic certifying agent to provide a written and translated copy of the USDA organic standards to all clients applying for certification.
This raises serious concerns about whether foods grown organically in China follow the same USDA organic standards with which we require American farmers to comply.”
A stand at my local farmers’ market has a sign that says “Boycott Chinese Garlic.” China currently supplies 75 percent of the garlic sold in the United States, for an average price of 50 cents a pound. Two years ago, it was 25 cents a pound.
Even with the price of garlic up from 25 to 50 cents a pound, garlic-growing regions like Gilroy, Calif., are hurting. Gilroy once was known as the nation’s garlic capital.
In addition to garlic cultivation, a retail empire was built on value-added products made with garlic. Now, Gilroy is just a garlic-processing capital, as most of its supply comes fromChina.
Judy Hevrdejs visits the new Whole Foods on Kingsbury:
[my photo of the Whole Foods construction from March, 2009]
By the time the shiny new Whole Foods Market in Lincoln Park opens May 20, the shelves will be fully stocked, the produce bins piled high and the wine-sampling machines filled with assorted bottles of vino.
That wasn’t the state of affairs when I checked out the store at 1550 N. Kingsbury St. during a hard-hat tour May 13. But I did get a fine aerobic workout hoofing it from the store’s main entrance to the in-house bakery that’s destined to perfume its corner of the 75,000-square-foot store with baked-fresh-daily breads. (Don’t believe me? I counted 200 strides.)
The Lincoln Park site’s vast space makes it the third largest Whole Foods Market in the world, just behind London’s Kensington store (at more than 100,000 square feet) and the Austin, Texas flagship store/HQ. “It’s a Whole Foods Market on soy protein powder,” says Rich Howley, the store team leader
And if Howley’s discussions pan out, they may hold yoga and tai chi classes on the building’s roof.
Perhaps it is because I moved to Austin the same year that Whole Foods opened its first store, or perhaps because I’ve shopped at the (old) Lincoln Park location for nearly as long as I’ve lived in Chicago, but I want Whole Foods to do well, to survive and thrive, selling quality food that wasn’t created in a Monsanto laboratory. However, I do wonder if having such a monstrous location is really a good thing. I hate going to shopping malls, have avoided stepping foot in a Wal-Mart so far in my life, so why would I want to go to a grocery mall? The new Whole Foods mega-store has 42 checkout lanes, and 400 parking spaces!