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The Future of Urban Grocery

The Future of Urban Grocery

Since starting Luke’s Local seven years ago, the company and model have evolved as many startups do.  The first two years we tried new ideas - from combining prepared meals made by pop-up chefs with CSA produce, to delivering those prepared items to grocery stores around the city.  The next few years were spent building our warehouse and kitchen in the Dogpatch, investing in a talented chef team led by Nick Rappoport (former sous chef of Outerlands), and offering next day delivery service to homes and offices across the Bay Area.  Despite doubling our business in those years, I was still not convinced that our model was viable for the future of urban grocery.

    Compared to others in the food delivery space, we have taken a slower and more conservative approach.  We have watched as food startups have come and gone, while continuing to hone in on our vision and future. And it hasn’t been easy. During those first few years spent in the kitchen and in my truck making deliveries around the city, I learned that food is dynamic and difficult in many ways.  From the importance of managing a tight food cost with volatile ingredient costs, to optimizing delivery routes, and ultimately to understanding the emotional attachment we all have with food, a successful food business must be run by people who appreciate its inherent fragility.  Food is not scalable in the same way other industries are.

    In 2016, 7.7% of US consumers bought groceries online, up from 5.7% two years ago.  We know that more and more consumers, especially young families and professionals, now want groceries delivered. But what hasn’t changed is their love for an in-person grocery experience.  A big part of the creative process of cooking starts at the market - talking to the butcher, finding the perfect avocado, smelling the fresh cut flowers.  We may be fine setting up a recurring paper towel order, but will we ever be comfortable having others do all the grocery shopping for us?

             I believe the future of urban grocery shopping is a combination of both the in-person sensorial experience combined with the flexibility of delivery within a few hours. For the last year and half we’ve been building the framework to make this possible. In January, we opened our first neighborhood market at Cole & Parnassus in SF and have been overwhelmed by the support we have received from the Cole Valley neighborhood.  Every day we see 800-1000 people and we are now five times the business we were a year ago.  Not only has the volume exceeded our expectations, but more importantly, it proves that there is still a place for the neighborhood market.

    Along with opening our first brick & mortar location, we have also invested in our technology. Next week we launch our native app to a select group of beta testers who can order delivery from the store and conveniently have it arrive same-day, within hours.  In preparation for this we’ve built an inventory system to track real-time transactions both at the register and on the app, so delivery customers can count on having exactly what they ordered in-stock. Customers can rely on having our delicious chef made meals, beer and wine, fresh local produce, and over 500 other grocery items delivered via electric bicycles directly to their door during those times they are simply too busy to make the trip to the store.

I am grateful for our years of experience in the food delivery space.  Without it we would not understand what it takes to grow a food business responsibly and in a way that makes a positive impact for our farmers, foodmakers, and busy families for many years to come.

    Join us this Saturday, September 16th at 960 Cole for our Storewide Celebration! Enjoy 20% off groceries all day, samples from favorite local foodmakers, and a chance to preview our app and delivery offering.