07 - 09 May, 2019
Hyatt Regency Toronto, ON
Here's How SPUD is Making Fresh Partnerships to Grow into Success
brought to you by WBR Insights
Many businesses are looking for ways to become more sustainable. Grocery Delivery company SPUD is looking to prove that sustainability is more than just a name.
Sustainable Produce Urban Delivery ( SPUD ) was founded in 1997 as Small Potatoes Urban Delivery. The company was formed from a desire to make fresh, organic and local produce available to the people of Vancouver with the convenience of online delivery services. SPUD was one of only a few online grocers to survive the dot-com crash in 2000-2002.
In 2015, the company opened its first brick-and-mortar retail locations. These stores offered a small selection of SPUD products and ready-meals. The stores also serve as an order and pick-up point for the online service, adding an extra level of convenience for those who cannot guarantee they'll be at home for a specified time to receive a delivery.
Grocery 'Immune' to Ecommerce?
For many years, the grocery and clothing industries were thought to be immune to the rise of ecommerce. However, according to a 2016 report from the investment banking firm Cowen & Company , online giant Amazon is set surpass Macy's as the leading seller of apparel in the United States, with predicted sales of $28 billion. Amazon is forecasting that number to rise to a staggering $62 billion-- roughly 16.2% of all apparel sales--by 2021. And, with the online retailer making roads into the grocery market as well, there will soon be no market which is considered immune to the ecommerce giant's might.
"Everybody says 'Nobody wants to buy food online, because they want to see it and touch it,'" says Peter Van Stolk , CEO of SPUD. "But these are the same people who said 10 years ago that nobody would buy clothing online because [customers] wanted to try it on and see how it looks."
However, without the power of Amazon behind them, SPUD needs to make intelligent partnerships to keep moving forward and stand out from the crowd. In 2018, sustainability is expected to become even more of a hot topic, and that is where SPUD has chosen to focus its efforts.
Investment in Sustainability
One issue which SPUD identified within the brick-and-mortar grocery industry is the enormous amounts of waste. An estimated $3.1 billion worth of food is dumped every year by supermarkets in Canada alone. To maintain the appearance of fresh and well-stocked shelves, a huge amount of less-than-perfect food is discarded.
In a press release SPUD states: "Have you ever wondered how grocery stores always appear so fully stocked with perfect looking produce every time you go in? Well, this practice results in a lot of imperfect looking produce, or produce that is close to ripeness, being chucked without a second chance. Not having displays means that we don't need consider having fully stocked shelves simply because it looks nice, and allows us to limit purchasing directly to our output. We turn over 80% of our inventory in 48 hours, and all inventory in less than 12.5 days. There is not enough time for products to go past their best before date. In contrast to SPUD, retail grocery stores turn over inventory in 27 days."
To further eliminate waste from their business model, SPUD has partnered with The Juice Box . The Juice Box sells unique and fresh juice blends through its websites, and facilitates its product delivery in partnership with SPUD. On top of this traditional business relationship, SPUD also uses its partnership with The Juice Box to put its waste to work.
SPUD says, "When we receive imperfect fruit, or see that it is getting close becoming over ripe, we do one of the following: send it over to be juiced at The Juice Box, label it "overripe" and sell it at a discounted rate, or donate it to a local organization that can use it straight away. If a can of soup gets dropped and dented on its way to us, we'll donate the can to an organization that deals with hunger relief. This food is all still perfectly good to eat, and we're well connected to the resources that can make use of anything that we can't."
Instead of discarding sub-par produce like many supermarkets and farms do, SPUD is forming practical partnerships and making policies to put it to good use. At its core, SPUD's business model is inherently more sustainable than many similar companies, but with its Juice Box partnership, it has another tool to tackle the huge problem of food waste in Canada.
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