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In May, Whole Foods will launch its new experiment to try to reel in millennials: The chain's first budget grocery will open in the hipster enclave of Silver Lake in Los Angeles. When it does, it will not only be cheap, but green.
Any leftover food will go to food banks, and scraps will be composted. All of the lights are LEDs. Refrigeration cases that run on CO2 will (ironically) have a much lower carbon footprint than typical refrigerators, and 25% of the waste heat from those units will be recaptured and reused. The fixtures in the store will save as much water as possible.
"I'll think we'll be able to get more and more sustainable in our build as we get more of these open," says Jeff Turnas, president of the new chain, called 365 by Whole Foods Market. "The good thing about the 365 stores is that they are meant to be a little bit more consistent in the layouts and the design and build, so it allows us to make decisions that are going to be the same for every store going forward."
In Silver Lake, the attention to sustainability—including a spread of organic food—may be one of the most notable differences from the nearby Trader Joe's, a place where it's possible to buy a single shrink-wrapped cucumber or potato.
There will be other differences from standard groceries, from digital shelf labels to a layout that's carefully designed for the way the company thinks people in 2016 want to shop—whether that's quickly picking up one or two things, or lingering in an in-store coffee shop.
"We study all kinds of retailers all around the world, and we understand how people shop and how that's evolving, and how people get food these days," says Turnas. "We tried to put together what we think is representative of a modern way of understanding how people use their time."
It's also designed with every possible efficiency to keep the prices low, inspired in part by the years Turnas spent studying supermarkets in the U.K. "In the end, we also want to be an affordable experience—we want to attract people who may not be shopping with Whole Foods or with us right now," he says. "Everything we've done has been about how can we pull different costs out of operating a grocery store so that we can pass those savings on to people who shop with us."
Details such as how easily and efficiently products come in the back door, and how they flow through the store, can save time and cost. The ultra-efficient fixtures save costs for the building itself. There are fewer products—a "curated mix"—which Turnas says both helps the store save money and is also something that customers sometimes prefer.
It isn't meant to replace Whole Foods, though the chain has been struggling with falling stock prices and customer traffic. Instead, Whole Foods might learn from 365, and vice versa. Turnas thinks they serve different markets.
"Basically, we feel that there's a place in the market where these stores can do really well," Turnas says. "They're not going to be as big as Whole Foods, or have the same depth of experience as a Whole Foods store. They're going to be smaller, more curated, be able to get in, get out, get what you need."
The chain chose Silver Lake for its first location because it's a place where people care about food, and it's a haven for the millennials they're targeting. They also were eager to get started on 365, which was announced a year ago, and a Whole Foods store was already underway in the neighborhood—and they were able to switch it to 365 instead (some Silver Lake residents were not happy that they weren't getting the real thing).
Later in the summer, another 365 store will open in a Portland suburb, and then in Bellingham, Washington. The full rollout of more stores will happen in 2017, as the experiment continues.
"The great thing about 365 is that in many ways it's a clean slate to start new with what's going on in the world," says Turnas. "And what's important to people and what's not."
All Images: courtesy Whole Foods
