Read an interesting article about the impacts of Amazon on grocery store industry. There are apparently something like 25,800 grocery stores in the US that have annual revenue over $2 million dollars.
This includes the big players like Kroger but also the small regional shops.
The day Amazon announced the purchase of Whole Foods the industry forecast that 30% of the locally owned grocery chains would eventually become untenable. This would manifest itself in how much credit was available to create small stores and how much credit was available to fund them. Already many of these grocery stores are on a COD basis with their supplier chain.
Most of these smaller companies tend to be disbursed throughout the rural areas of our country. For many communities they are the only source of milk, eggs or bread within a 40 mile radius.
If these grocery stores go away what will happen to the communities? Who can live 40 miles from where they buy groceries? Easier to do when you are young, have good eyesight and the roads are clear. Not so good in the winter.
This will likely show up as an argument for introducing anti-trust legislation as regards Amazon.
Amazon's stock doubled last year.
What would happen to this stock value if they were subject to a break up?
What would happen to cabinet shops?
Most of my customers are somehow affiliated with the tech sector. The value of their homes is inextricably linked to a robust tech sector.
On other news, New Zealand is having a tremendous problem with water pollution in their heretofore pristine environment. This is having an impact on tourism. The biggest contributor to water degradation is cattle grown for the dairy industry. These ranchers used to run sheep but now the big money is demand for dairy products in China & SE Asia.
So why can't our milk producers break even in an industry that can't find enough suppliers globally? Too much winning?
There is no doom & gloom in that post. It's just an observation.
My business is very dependent on the tech sector being healthy. Almost all of my customers work directly for the industry. Those that don't live in homes that have valuations similarly dependent on the tech sector.
If its 40 miles to the nearest store I doubt you get 1 or 3 hour fresh delivery. I can get a 1 or 3 hour time slot delivery on fresh items but the prices are not competitive with the local high cost retail store.
The store brand is almost $3 a lb less for fresh boneless chicken breast, the name brand is ,50 per lb less.
The store is about 5 blocks south out of my way on the way home. Wal-Mart is about 3 blocks out of my way, Costco is about 5 miles out of my way the opposite direction of home (round trip).
It will take awhile for Amazon to penetrate the hard to reach areas. It will either be drones or driverless vehicles.
Once the tech is perfected other companies will not be far behind.
Once the tech is perfected the cost goes down and the locals can also utilize the tech for a fee, the same as the discounters.
Why would Amazon make any effort at all in low density areas? The money is in cities and suburbs. And delivery will be a lot easier and more profitable - more stops, more products, more revenue per mile driven.
I don't think Amazon is going to make any effort to go after low density marketplaces.
Why would they?
Where Amazon is going to make it's mark on the hinterlands is the collateral effects of it's impact on the overall grocery ecosystem.
As the grocery sector starts having to work with smaller and smaller margins the amount of capital available to fund and expand the marginal parts of this industry is going to shrink. As the grocery store goes so too does the elementary school and little league baseball and all the other great reasons to live in the country.
This is in turn going to have impact on where manufacturing locates. If you want to attract talented workers you need to locate where talented workers want to live.
It is unfortunate but we no longer have a Strategy & Policy Council or a Manufacturer's Council to help guide our executive branch through these types of analyses. The CEOs who were part of that great campaign no longer think there is any reason to stand next to the odor.
This is just observational Pat.
As the grocery store industry suffers the marginal players will go to pasture sooner.
This does have some ramification to people heretofore served by the marginal grocer.
There are also some possible ramifications with respect to the next election cycle. There is a reason the CEOs of America decided to leave the Strategy & Policy Council and Manufacturer's Council. It had nothing to do with morality and everything to do with the invisible hand of the marketplace.
This group was never a supporter of the candidate Trump. They aligned themselves with him because they thought that there was some chance he would de-regulate the economy and lower taxes. It's looking like he no longer has the political capital to make this happen so there is nothing but downside remaining for those who associate with him.
If the President cannot get his agenda passed then the people who voted him into office will look to someone even more outlandish. The White Supremacy movement, for example, is now openly carrying Nazi flags and feeling very empowered in social media. You didn't used to have the KKK willingly showing their face in public and carrying torches on prime time TV.
Trend this out another three years.
What do you think it looks like then?
We have real problems that need to be fixed. Better instead to have the council of CEOs on your side than not.
The urban, Amazon fed population will eat/get what Amazon finds it profitable to feed them (sort of/just like confinement animal management). Massive amounts of factory farm and factory food moved about in the cheapest manner to keep the populace fed (yes, I thought of Soylent Green also).
Meanwhile, the rural folks will fall back on the proven small farming models and have fresh vegetables and fruits, and good quality meat and dairy. Moved little, locally raised, chemical free and healthy as can be. Healthy children and adults, well educated and increasingly separated from the urban masses that have no time to even wonder if they could possibly not be free. They could still have one hand free to wave their little flags.
Amazon will move into pharmaceuticals to treat the problems that will increase amongst the factory farm model. Then health care and medicine, as well as alleged 'insurance'.
You do understand that most of rural America only has about a three month growing season? They got to get their seeds from somewhere. Probably going to Montesano, delivered on an Amazon drone.
And then you got this pesky thing called TV. Those loyal grandchildren ain't going to be on the farm to help move that cattle to better pasture. Hard to amass enough land to run a decent size herd these days without getting on the government tit and Bundy already ruined that for everybody else.
People love to romanticize. The reason accountants commute to work in pickup trucks with dual wheels on the back is that someday they are going to have that ranch and when they do they are going to need that truck and getting it right now is just kind of a down payment on that ranch.
It's like parading with your Bros while packing an assault rifle on your back and a torch in your hand singing "The south will rise again!"
I think you are correct - for the masses. The cases do not live everywhere, and the exceptions are pretty adamant. There are exceptions at either end of the bell curve. I have spent most of my life bucking a comfortable path for one that is quite different. Most would say that my business could never make it, yet is has flourished for 28 years.
45 years ago, I was an avid gardener and reader of Organic Gardening, and heard others talk about the foolishness of being a romantic. Chuckling about organic produce in a grocery - "Can't be done!" Now, nearly everything I read about so many years ago is central to the American and European food supplies. More accurate than Jules Verne.
The same could be said for solar power, wind power and electric cars. Everybody laughed. Climate change was universally denied by everyone.
The naysayers are naysayers when they get disproved, but that is hard to predict here, now. But it is not hard to see what is sustainable and is not. As the planet gets more crowded, these things will all accelerate. Appropriate technologies will be developed. Greenhouses are cheap and easily built.
And as the great, gray line bends into the distance, heeding the corporate call (and the required doomsaying), those of us at the margins will continue to bask in the sun. I am eating tomatoes today that will outdo any factory food you could ever show me - by a mile. Pardon me while I go eat another one, warm off the vine, full of sunshine. There is little better than that. Friggin' hopeless romantics.
Mr Cab - You might be interested in an app my son developed. He developed it for a fun project for one of his seminars. It is in need of funding to be brought fully online.
It is Doomcast - an app that collects real time data on storms, earthquakes, fires, floods, riots, insect plagues, disease centers, and more. The app then aggregates this data according to geography and severity and will warn you when things hit a critical mass.
It forecasts Doom.
Perfect for die-hard pragmatists, paranoids, elderly, and the generally fearful.
If you are interested in funding the app, let me know.
For what it's worth, I too have twenty tomato plants under cultivation. My house is about a half mile from Amazon headquarters. Unlike you I prefer to eat mine slightly refrigerated.
If you pick them while they are still orange you get a complex balance of acidity & sugar that is hard to replicate from the grocery store, The problem is that these optimum conditions only occur for two months out of the year.
I suspect this is the case in your bucolic paradise as well.
What have you been reading about the grocery store industry in rural America? Am curious how you see this working out.
The opinion I want to hear, that I think both of you are fully qualified to answer, other than woodworking, is what variety of tomato do you grow that has fantastic flavor. I have tried Heirlooms and they come up lacking in flavor. What species is flavorful?
Though I have never grown one it is hard to improve on a Campari tomato. I get them at the grocery store from time to time but only when they are perfectly orange. They are pretty expensive at $3 to $4 a pound.
Last year I had an amazing crop of really beautiful tomatoes. They were bright orange, about the size of tennis balls. Good looking as they were they tasted like water.
This year I decided to amend the soil with bone meal, coffee grounds, egg shells and such. So far every tomato has been a winner.
I am also doing an experiment with ripening. I am plucking them much sooner in the cycle and letting them ripen in paper bags on the kitchen counter. What causes fruit to ripen is the ethylene off gassing. If you can control this you can control how mushy the tomato is too. Sometimes a tomato has perfectly good flavor but is not tenable to the tongue.
I always plant some Early Girls because they all show up sooner. I also go with Champion because they remind me of a guy that used to work with me. When I went to a woodworking trade show one time I convinced a lady to make a name tag for him that said "Champion".
Sometimes it's hard to figure out what to do with a tomato.
What is key, I think, is soil conditioning. The tomato has to have something to work with.
Something that will really change your standard of living are these FreshWorks boxes. They are designed to manage ethylene off gassing.
I got some on whim one day while I was shopping on Amazon. A customer of mine had some lazy susans for her refrigerator that I coveted. When I bought a new refrigerator I immediately went online to order one of the lazy susans. On the same page was an advertisement making outlandish claims (similar to the lean manufacturing books)
On a whim I decided to try some. I started out with 3. I now have 17. Every piece of produce in my refrigerator lives in these boxes. Everything that goes in the box just lasts and lasts. You can get 7-10 days out of spinach and lettuce. It finally makes sense to buy strawberries in bulk.
The best place I found to buy them online was Walmart. I give these kits to my customers while we are still in the design phase. If you are going to embrace the technology you will need to also plan for them in your kitchen. They require dedicated storage similar to tupperware and may provide a logistical argument for kitchen layout.
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