Grocery Update #54: The Robot Overlords Of Grocery.

Also: The Purpose Pledge Launches. And Adventure CPG's New Distribution Model.

Discontents: 1. The Robot Overlords Of Grocery. 2. The Purpose Pledge Launches. 3. Adventure CPG’s New Distribution Model. 4. Tunes.

1. The Robot Overlords Of Grocery.

What if… an A.I. designed and managed a grocery chain? A.I. is already pretty prevalent in various grocery operations. Replenishment, inventory management, pricing strategy, targeted marketing, etc. But the idea that A.I., essentially a plagiarism app that copies/steals and applies ideas, data and concepts, could operate a retail establishment is not really so far-fetched, especially considering how the austere, techno-feudal misanthropy of Silicon Valley Tech Bros is now status quo business philosophy and operational praxis, from the White House and DOGE on down.

Or in this case Seattle’s finest supply chain oligarchs, Amazon. Enter AmazonFresh.

AmazonFresh is still planned and operated by humans. Their store in Fairfax, Virginia is not impressive by any means. Or intimidating. In fact, my first impression, validated by a couple reviews of my photos and notes, is that the store is just bland. Neutered. Sterile. Generic. Boring. Conventional in the conventional sense. Soulless. Radically unimpressive.

But I can’t help but worry. Not just because Amazon is so damn big, dominant and not very nice, to rank and file workers or to small and emerging suppliers. Or that they bought Whole Foods for pennies on the dollar in 2017, to mixed results at best, the thought going through my mind over and over during my store walk-thru, “How the fuck do these motherfuckers own Whole Foods”? They don’t really get brick and mortar retail, all the aspects that make it effective and interesting and acquires/retains customers. The stuff that salt of the earth operators grew up on and internalized to survive a highly consolidated, competitive grocery market. Foreign language.

But they are smart. And that is what worries me. Amazon, the Borg Cube, is assimilating grocery.

The store opens into a small foyer with a big Pepsi display, announcing “HI, NEIGHBOR” in big green letters, which I say to myself in the robot voice of Jake Peralta imitating Captain Holt from Brooklyn 99, the only good cop show ever. Bleep Blorp Bloop. HI, NEIGHBOR.

The display says Taste of Gameday, Pepsico Frito Lay, official sponsors of the NFL, with footballs. Now, I am not much a sports fan, but I did watch that impressive Kendrick Lamar halftime show with his epic Drake takedown while wearing those silly, tight jeans, and I do recall the Eagles having a victory parade that shut down Broad Street in Philly where their coach got conked by a beer can, because Philadelphia. And so I wonder, do the cyborgs not realize that NFL season… is over? Perhaps the A.I.s just negotiated a monthlong Frito/Pepsico display deal, with hefty event and placement fees that would last through the whole month, long after Patrick Mahomes’ tears dried on his ruddy cheeks.

The store, like a 3D printed faux Whole Foods, opens into produce. Hanging track lights on a wooden frame, wooden bins squared up against black, slanted, matte finished fruit and vegetable racking. Big green letters, in the same Helvetic-style font as “HI, NEIGHBOR” proclaims in all caps “FRUITS & VEGGIES”. Bleep blorp.

Produce clearly signs organic sections, with modest sized sections of berries, apples and greens, well under 30% of the space. Wholes Foods is usually at least 60/40 organic. A bag of organic Pink Ladies, $3.99 for 3 pounds, $1.99 for a pound of Envies. Low Prices from A to Z, $1.99 oranges, conventional, $2.99 black plums, no country of origin, and $2.49 apples, shiny and waxy. The first wave of Prime deals, signed in blue, save money by handing over your personal data, three pounds of apples for $4.31, down from $4.79, a bag of Galas for $3.59, discounted from $3.99.

Upright produce coolers, no misters, just a manual spray hose, unused, the carrots and bunched greens limp, yellowed, dried and wilted and really don’t look like they have been rotated recently. There is a clerk out on the produce floor, restocking berries, but the wet rack tends to be the most labor intensive section of produce, with the cutting, stacking, rotating a major task. There is not much attention to the cooler, with little inventory and a few out of stocks, with modest amounts of cucumbers, peppers, squash, beets, eggplant. AmazonFresh branded baby carrots, Prime deal for $1.07, down from $1.19. Weird, a 12 cent discount, but the cyborgs know best?

A full four foot set of Amazon branded mushrooms and herbs, split evenly between AmazonFresh and Amazon Grocery store brand portabellas, baby bellas, white buttons and shitakes, as well as a rack of organic packaged herbs on metal hooks.

The rest of produce repeats the patterns, Prime Deals, a smattering of store brands, some uncluttered with clear product and pricing signage, even a display of organic, Earth University bananas for .69/lb, the first sign that the Whole Foods exclusive product assortment has infiltrated this Borg hive.

Facing produce is the wall of condiments, including salad dressings that lead into marinades and sauces that face closer to the meat department. Here is where I get the first sense of center store merchandising and pricing strategies. And it all makes me cringe, wince. Gag.

Mainstream brands, Big CPG, Amazon private label, some Whole Foods 365, a lot of skus. Top shelf Wishbone, 24 oz ranch, next to a 16 oz. Amazon Happy Belly ranch for $1.99, lite ranch for $1.99, buttermilk ranch for $1.99, then a Kraft Classic ranch, 16 oz for $3.19, lite ranch for $3.19 and buttermilk ranch for $2.78.

The typical strategy here would be store brands to the right of the national brand equivalent (NBE), in this case Kraft, but instead AmazonFresh has them to the left of Kraft, and also in between the two key brands, Kraft and Wishbone. The next three shelves down repeat the pattern with thousand island, Italian, balsamic, with three skus of Happy Belly single faced in a vertical stripe smack between Wish Bone and Kraft. Several Happy Belly items have Prime deals manually affixed to their electronic shelf tags (ESLs). This is also interesting.

The whole point of ESLs are to save labor of manually changing out price tags so there are less humans to pay wages and give benefits to. Yet here, they communicated the markdown price from $1.99 to $1.79 on the ESL, but have a blue plastic or cardboard Prime deal placard that has to be attached by hand, so I am not sure what the point of the ESL’s are. Maybe just techno-fetish, they have to stay on the digital cutting edge while still having a human rotate out Prime deal signs?

Past the salad dressings, the condiment shelves of ketchup, mustard and mayo, are crowded and cluttered, with most items single faced. The assortment is split between national brands such as Kraft, Duke’s, Sir Kensington’s, Hellman’s, Primal Kitchen-also Kraft, Heinz, Hunt’s, Annie’s, and French’s, interspersed with a scattershot smattering grab-bag of Amazon store brands, including Amazon Fresh, Happy Belly, Amazon Saver, Aplenty and 365.

Ketchup takes up the bottom four shelves of a four foot set. General Mill’s Annie’s and big indie brand Organicville lead off closest to eye level, at $5.39 and $5.69 respectively for 24 oz bottles, with a same sized 365 organic option at $2.99 to their right. Next shelf down is a bigger bottle of 32 oz Heinz for $6.99 and regular and no sugar added Heinz for $3.19 and Hunts 100% Natural, Conagra’s riposte to ketchup rival Kraft-Heinz for the 24 oz upside down squeeze bottles, among the most important inventions of late 20^th century capitalism. The hours of convenience and energy saved from shaking ketchup bottles, not to mention the relief from elbow and joint soreness, are likely incalculable.

Next shelf down gets weird. Organic 24 oz Heinz for $6.99 and clean label “Simply” Heinz for $6.99, also 24 oz, next to a regular Hunts 24 oz for $1.59, then an Amazon Fresh 24 oz for $1.29, less than a third the price for the same thing. Bottom shelf, more of the same, some Hunts and big 32 oz bottles of Amazon Fresh. The price gaps between adjacent items on shelf with similar or non-differentiated attributes, and the ensuring margin hogging and price gouging of branded items verses the category killer deep discounting on private labels, the clear lack of category strategy, while the vague difference between “trade-ups” for higher attribute items and “trade-downs” for more value priced options are not clear, as well as the surprising lack of any emerging brands, locally made products or other points for assortment differentiation to nearby rivals such as Giant, Harris Teeter, Walmart, Aldi, Wegman’s, Food Lion Publix, Safeway or even Trader Joe’s are appalling to my merchandising sensibilities. Cringe. Wince. Gag.

Big Food or go home. No entrepreneurs, no mom and pop’s welcome, oligarchs only need apply. But still, plenty of Big Food options paying top dollar slotting fees, promotion and marketing fees, promotional markdowns, retail media fees, category captain data sharing arrangements or other perfectly legal forms of grocery kickbacks and racketeering. Or, all such costs have been shaved down to the nub for that handful of deep discount, Aldi-esque store brand everyday low cost options.

But still, condiments is not a big category in terms of sales. Even though this store gives it over 20 feet of linear space, it is likely under 1% of store sales. A glitch in the matrix?

The patterns repeat throughout the store. The store conditions are rough, lots of out of stocks, poorly faced and fronted, 2 P.M. on a Sunday, this would never have passed muster for any of my store team leaders back in the day.

Cookies, mostly Mondelez drek, Chips Ahoy and Oreos, with some Happy Belly NBE and Amazon Saver deep discount options, along with a couple 365 skus, and some Teddy Grahams and Annie’s bunnies, softening the primary colors with some snackable anthropomorphized megafauna.

Soups include a low billboard set of Progresso flanking a Campbell’s section, higher shelves include a few facings of Pacific (Campbell’s), Chunky (same), Annie’s (Mills), Amy’s and a smattering of Happy Belly knockoffs, most likely of Campbell’s.

Chocolate looks like a shotgun blast radius of algorithmically chosen bars from Lindt, Ghiradelli, Hu (Mondelez), Theo, Hershey’s, Cadbury, and Lily’s (Hershey’s), as well as the usual Twix, M&M’s, Kinder, Bark Thins and some of Amazon’s Aplenty, prices as haphazard as the placement and assortment.

Cereals is obviously a General Mills/Post/Kellogg’s kickback bonanza, over 40 feet of America’s most quickly dying center store category, with so much freakin’ Cheerios, Cookie Crisp, Golden Grahams, Lucky Charms and Cinnamon Toast Crunch, alongside greatest hits from Tony the Tiger and Rice Krispies, followed by plenty of Fruity and Cocoa Pebbles, et al, all directly marketed to your ADHD pre-teens. Once I recovered from my pre-diabetic contact high, I almost speed dialed Food Babe so those #MAHA moms could take a break from enabling the Trump scapegoating of migrant workers and instead vamoose their placards and yoga pants over here to deal with this ultra-processed travesty. Priorities, people.

Chips and snacks section was likewise really just a Frito Lay corner of the store with vast runs of literally every flavor of Doritos, Tostitos, Lays, and Ruffles you could imagine, alongside a 20 foot run of assorted chip multipacks and a token Whole Foods-lite natural and organic section with all the usual suspects distributed by United Natural Foods, mainly Kettle, Pretzel Crisps, Late July and Cape Cod from Snyder’s/Campbell’s, Smartfood, Stacy’s and Siete from Frito Lay and some Skinny Pop and Angie’s Boom Chick a Pop, as well as DOGE nepo-baby fave Lesser Evil. Plus, a couple skus of Aplenty and Happy Belly snacks by Amazon. 99% Big Food snacking, no cool, edgy, human-owned brands welcome, let alone any diversity. Bleep. Blorp.

Soda was even more basic. From back to front of the aisle facing the entrance, twelve feet of red cans and boxes and bottles, Coca-Cola, and from front to back, facing the rear of the store, twelve feet of blue boxes and bottles and cans of Pepsi products. Coke vs. Pepsi, the 1980s never ended. Walmart had more “better for you” soft drinks, with a full four foot set of Olipop and Poppi and Zevia. Walmart.

It wasn’t all bad. Amazon’s robot overlords had some compelling merchandising and pricing decisions if you looked close enough. They were out of most eggs but they were only selling cage free and better, including plenty of Vital Farms and Happy Egg free range and pasture raised options at full margin, in the $8-10 range. Not cheap, but also not the factor-farmed, avian flu superspreader eggs either. Those zoonotic pandemics rely on the cheap Walmart or Aldi egg laying battery hens to keep viral loads up and ready to jump species. Mask up.

In poultry, Amazon Fresh had three clear tiers of chicken quality, pricing and attributes. They had blue labeled 100% natural chicken, $3.99 for thighs and $2.69 for breasts, then a white and green labeled conventional, ABF, humanely raised segment, $6.44 for thighs, Prime deal for $3.35, and $7.69 for breasts, then a green, organic label, $9.79 for breasts, $9.36 for thighs. Not cheap, but actually rational and logical pricing by product tier, texbook pricing strategy execution. Even a broken cyborg clock is correct twice a day. Bleep blorp.

Their milk pricing was on the money, Amazon Fresh gallons from $3.07 to $3.72 depending on fat content, plus 365 Organic value tier for $7.29 and Organic Valley gallons for $9.79.

The deli, salad bar and hot bar were priced competitively, freshly stocked, clean, welcome smelling and completely devoid of customers. I almost felt bad enough about all that potential shrink that I thought of buying some. But I wasn’t that hungry.

The freezer had plenty of 365 and Amazon Happy Belly tater tots and hash browns, priced better than the usual Ore-Ida and Alexia, so tempting too, but I resisted.

Bread was less interesting. A “FRESH FROM OUR OVEN” sign over some packaged Cheesecake Factory brown bread, baked fresh by a massive Bimbo Bakehouse a few hours north in Pennsylvania, with an ingredient deck the length of my forearm. The rest of bakery was mid, no riz, just some Sara Lee, Happy Belly, Wonder and other generic ultraprocessed products. Call Food Babe, tip off RFK, he’s in D.C, it’s close by.

Front end caps were more of the Big Food, ultraprocessed junk merchant status quo. General Mills cereals, Prime Exclusive Deals, 35% off, fully funded by the supplier. Pringles $4/10, party sized Lays, Doritos, $5.69 everyday low price. A big stack of Milk-Bone, no price sign. Pallet stacks of Amazon Fresh bottled water, $3.32 Prime deal, regular price $3.69. alongside a Deer Park stack at twice the price.

There was one cashier on duty. Nice kid, I bought an Amazon seltzer that also called itself sparking water, catering to the bourgeousie but still trying to be street, but it was only $1.49 so I got over it. There were half a dozen automated self-checkout kiosks with Amazon pick up and delivery clerks hastily scanning and bagging their orders. I counted a dozen customers in the store, about ten clerks stocking various departments and half a dozen other Amazon-gear clad shoppers roaming the aisles with orange shopping carts picking online orders.

It was 2:00pm on a Sunday, usually the busiest time of the week, when a Whole Foods or Trader Joe’s or HEB are packed to the gills, but this store had maybe done $1,000 in sales while I was there, just walking around and loitering for nearly an hour, no one even inquiring if I needed help finding something or finding my way out.

A little bit of math, and I estimated that at the high end, this store was doing $300,000 a week, but possibly much lower, in the $150,000 a week range. For comparison, my first Whole Foods that I worked at, the old Plantation store on Peters Road that was eventually relocated across the highway to a massive location in Davie, was doing $300,000 a week back in 2004. Trader Joe’s stores, packed with shoppers in high density areas, do over $1,000,000 a week. The Union Square Whole Foods store does upwards of $2,000,000 a week. Bigger HEB or Costco stores do $3,000,000 a week, likewise Walmarts. Smaller Aldi stores do over $500,000 a week, but they stock like 1500 items, not 30,000+ like this Amazon store.

For this AmazonFresh store, the math was not kind, if it was profitable, it was just scraping by, due to absurdly low labor expenses and really high supplier fees: Prime deal fees, slotting and free fill requirements, high-low promotional activations and other forms of inside income that don’t flow through to consumer savings or drive topline sales but pad margins.

The pricing mix was haywire, high-low, everyday low prices, Prime Deals, price-gouged premium items neck and neck with category killer private brands, with so many private label brands that were not clear on positioning, quality, attributes, the why’s behind the buys. The assortment was like an A.I. approximation of a third tier Kroger or Albertsons banner like Randall’s or Mariano’s, but lacking some of the local flare and anarchic chaos of their enormous product sets and vast range of items in center store and perimeter. And in terms of new item innovation, emerging brands, special diets sections like gluten free or paleo/Whole30, it was a barren, confusing wasteland. An opportunity graveyard.

There were few possible entry points at AmazonFresh for new products or emerging brands, the polar opposite strategy of their bitter rivals Sprouts, who, for all their operational difficulties, “mid” positioning, subpar store experiences, wilted produce and strange odors wafting from their meat departments, are still kicking ass, taking names and growing like RoundUp resistant weeds in outer suburbs and middle income markets across the U.S., primarily driven by new item innovation with over 7,000 new products launched last year, nearly 70% product differentiation from competitors, sky high slotting and promotional fees, like those 6% “required” vendor kickbacks, and a competitive new product placement program with easily 60-70% new product attrition, all of which are adding up to an absolutely thunderous year in double digit comp growth, however long that may last, stealing thunder from Amazon’s Whole Foods by literally running the 2010 Whole Foods playbook, just more expensive to brands and a little less sanctimonious to customers.

The math here is that the cyborgs don’t yet get brick and mortar, that Amazon, despite the hype and media blitz, is nowhere near close to dominating real world grocery the way it does online sales, and that bigger rivals Walmart, Target, Costco, HEB, Wegman’s, Publix, Kroger, Albertsons, Aldi and even Lidl, even fucking Lidl, are still light years ahead in pricing, assortment and customer experience. This is not to say they won’t wise up, catch up, and destroy all that come before them, as they have done in nearly every other category that Amazon conquered online, from books, to apparel to electronics, powered by 40+% supplier trade and marketing spend, with discounted pricing losses heavily subsidized by Amazon Web Services’ enormous profits, and all underwritten by the warehouse industry’s highest facility injury rates and pay scales well below that of other logistics and fulfillment rivals like UPS.

It is still totally possible they will win. Never count Amazon out, as much as some hope they will spin off Whole Foods to a private owner (or just sell it back to its employees, the least it could do after all the silly union busting), or just give up on brick and mortar altogether and retreat back to the safety of their online monopoly on the world wide web, a dominance quickly being hacked away by Walmart’s enormously successful Ecommerce/retail flywheel as well as omnichannel growth by national chains like Kroger, Albertson’s and Costcos, or regionals like Wegmans and HEB. Never say never.

But in the meantime, the 3D printed A.I. approximation of grocery churns on, selling food, collecting your data, growing, learning, watching, the cyborg victory over grocery still far from complete, your robot overlords always assimilating.

Bleep, blorp. “HI, NEIGHBOR”.

2. Purpose Pledge, A New Purpose-Driven Business Community.

Initiated by Dr. Bronner’s, LIFT Economy, and One Step Closer, Purpose Pledge invites established and emerging companies to pledge their commitment to 10 key areas. Participating pilot companies include Dr. Bronner's, Gaia Herbs, Guayakí Yerba Mate, Kuli Kuli, Lundberg Family Farms, Mountain Rose Herbs, MUD\WTR, Nature’s Path Organic Foods, Numi Tea, Organically Grown Company, Pachamama Coffee Farmers, Philosopher Foods, SIMPLi, and Wildway. For more information about Purpose Pledge, please visit: http://www.purposepledge.org

“The Purpose Pledge is a call for meaningful action, not just intention. We're inviting the world’s most exceptional purpose-driven companies to challenge themselves and each other to take even bigger steps forward. I believe that this effort can be a global beacon for change in how business is done,” said Lara Dickinson, co-founder and Executive Director of the nonprofit organization One Step Closer.

Specifically designed for companies in the food and beverage, health and wellness, personal care, and apparel sectors which manufacture products from land or ocean supply webs, Purpose Pledge offers companies a roadmap and support structure to meet rigorous commitments while facilitating long-term, purpose-driven investment funding for companies that need it.

“Business-as-usual profit primacy has led us into existential times. Change is necessary for humanity to navigate into a livable future,” said Kevin Bayuk, worker-owner of LIFT Economy. “The commitment of a community of companies to the Purpose Pledge marks a critical leap forward, inspiring businesses to meaningfully contribute to the long arc of transformation of the economy.”

2025 marks the start of the Purpose Pledge pilot program. The pilot companies will embark on a multi-year journey to fulfill the 10 Purpose Pledge commitments. These pilot brands will receive support from, and themselves contribute to a developmental community that emphasizes openness, resource-sharing, and support mutual progress as companies overcome various challenges in pursuit of the pledge commitments.

The 10 Purpose Pledge commitments include:
1. Product Quality
2. Independent Governance
3. Supply Web Integrity
4. Fair & Balanced Compensation
5. Living Wage
6. Inclusion
7. Community Engagement
8. Climate Positivity
9. Circularity for Zero Waste
10. Capability Building

3. Adventure CPG’s Member-based Network: A Third Rail Option in National Distribution.

With a membership-based approach, Adventure CPG is offering a valuable, cost-saving alternative to the natural channel’s traditional national distribution model, with a particular focus on serving independent retailers and brands across the U.S.

“We’ve studied the natural and organic products supply chain and mapped out the most efficient cost of doing business — the trucks, the warehouses, everything logistical. At Adventure CPG, we take no margin, just a membership fee,” says Torres, who grew up in the natural industry, working in retail, manufacturing and distribution.

“By offering independent retailers the lowest price, no matter what size store, Adventure CPG passes the cost through so grocers can get back to what they do best education, sampling and engaging with their customer base and community,” she says.

Unveiling the True Cost of Distribution.

Adventure CPG helps unveil the true cost of distribution so that natural retailers and brands can be much more competitive. Using block chain and state-of-the-art technology, the company is committed to the highest standards to ensure its products are clean label, transparent and safe. “We cultivate partnerships with authentic brands in natural and healthy lifestyles, offering a network of warehouses, trucking and shipping to reach anywhere in the U.S. at the most efficient cost, including for dry, refrigerated and frozen goods,” says Torres.

For natural and organic brands, Adventure CPG provides a suite of services built to accelerate go-to-market strategies in a faster, more affordable and transparent way. “We deliver the data metrics to help companies grow smarter, the tech that helps streamline processes, talent that helps teams evolve, and the mentorship that supports the growth and development of emerging and established brands,” she says.

“Handle With Care”

By combining the best of technology, products, distribution and service, Adventure CPG offers independent brick and mortar as well as e-commerce retailers a universe of the cleanest products in the palm of their hands.

“Our motto,” says Torres, “is ‘Handle with Care,’ meaning, we handle the entire distribution process with care, from product to people.” Torres adds, “Adventure CPG was created to be of service to retailers and brands. It’s built out of love; not just for money. If we invest in smaller independent stores, they will make more money and help our industry grow and thrive. We’re doing this to help save the independent backbone of the natural products industry.”

About Adventure CPG

Offering a membership-based model that does not charge any additional margins or fees, Adventure CPG is the natural industry’s end-to-end partner for affordable, safe and transparent national distribution of natural products and ingredients. From seed to shelf, we serve independent natural, organic and specialty retailers and emerging and established brands. We are your trusted ally, ensuring that every step of your product’s journey is safe, transparent and optimized for growth. Engage with Adventure CPG on LinkedIn and at AdventureCPG.com .

4. Tunes.

Death were a trio of brothers from Detroit who were unknown pioneers in American punk rock, and had a direct thru line to Motor City icons such as MC5 and Iggy and The Stooges. Death rivaled their more high profile American peers such as The Ramones in sound and attitude, and preceded later British bands like Sex Pistols and the Clash by a few years.

peace.

(Perspectives 100% are own and do not reflect our sponsors)