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Green grocer

SPUD is at the forefront of eco-friendly e-commerce — and it’s bringing other retailers along for the ride

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Ask Peter Van Stolk why sustainability is so important to him and his first thought is his 25-year-old daughter. “We didn’t inherit the earth from our parents, we are fostering the earth for our children,” says the reflective CEO of Vancouver-based SPUD (Sustainable Produce Urban Delivery Inc.).

“It was recently announced that Canada is warming at twice the rate of the rest of the world. But it’s not about me. I’m 55 years old—I’ll be dead by the time climate change really makes an impact. Who it’s going to impact are my future grandchildren. So, it’s not about today, it’s about tomorrow, and we can make incredible changes and we can do incredible things.”

Founded as Small Potatoes Urban Delivery in 1997, the company got its start delivering local, organic groceries to customers in the Vancouver area through Spud.ca. Van Stolk, who founded Jones Soda in 1997 and left the business 10 years later, purchased SPUD in 2010. “I realized that the world doesn’t need another soda and I didn’t want to sell sugar water,” he says. “One of the things about being an entrepreneur is you have to look at the trends—not things that are happening today, but the trends that are coming tomorrow.”

Van Stolk believed online grocery shopping was going to be big; somewhat counter to the perception at the time that people don’t want to buy food online. With SPUD’s focus on local, organic food, van Stolk liked what the company stood for and saw an opportunity to take a deeper dive into sustainability. When he became CEO, he changed the company name to Sustainable Produce Urban Delivery and developed a plan to grow the company and create sustainable food systems at every stage of the business.

Today, Spud.ca brings fresh, organic, local produce and groceries to customers throughout Metro Vancouver, Victoria, Calgary and Edmonton. In 2015, SPUD branched out into brick-and-mortar stores, opening its first Be Fresh Market in Vancouver. The company now operates five Be Fresh Market and Café locations in the city. In 2017, SPUD acquired Blush Lane Organic Market, which has five locations in Calgary and Edmonton. SPUD also has its own line of private-label products under the Be Fresh label, which are made at its commissary in Vancouver.

GREEN THROUGH AND THROUGH
feat_foodx-9672-tgoehringA Certified B Corporation since 2013, one of SPUD’s key sustainability pillars is “buy with purpose.” For its online and brick-and-mortar stores, SPUD works with local vendors on farms that respect sustainable farming practices and the humane treatment of animals. The company supports “transitional” farms that start out as conventional and are in the process of becoming certified organic. Van Stolk says certication is a lengthy, challenging process,
so SPUD wants to support the farmers on their journey, even though they’re not yet 100% organic.

SPUD is also hugely supportive of small, independent businesses. “Independent retailers and producers cannot compete in an e-commerce environment because of all the technology and the cost associated with it,” says van Stolk. “So, you have these massive companies getting bigger but you’re not supporting what’s really driving economic growth for the community, which is independent and small.”

To do its part, SPUD recently launched Be Fresh Marketplace, a digital platform for local food shops, artisanal brands and small, independent grocers. Housed at Spud.ca, the marketplace allows local sellers to set up an online store, much like an Etsy shop. Customers can shop the various local stores as well as the Spud.ca offering for single online orders. The service is currently available in Calgary and Vancouver, and van Stolk plans to eventually expand it into other markets.

On the food waste front, SPUD is committed to reducing food waste and its e-commerce business has just 0.5% food waste, thanks, in large part, to data and analytics. SPUD’s inventory technology allows for predictive ordering and better inventory control of its produce, which keeps waste to a minimum. “We’re not purchasing with the hope that somebody buys that product. We’re purchasing with the knowledge that somebody already wants that product,” says van Stolk. “Fighting food waste is one of the benefits of shopping online with a company that has the data to predict and understand the inventory virtually.”

Aside from using data to reduce food waste, Spud.ca also sells “imperfect” or “ugly” produce, which often gets rejected by other retailers, and it donates food to organizations that help fight hunger. The company’s retail stores are also working to reduce food waste, and the Blush Lane location in Calgary is currently tracking its food waste through a pilot project with food waste prevention specialist Leanpath.

Keeping plastic out of the landfill is another priority for SPUD. In February, the company announced its ReFresh initiative that will launch various programs related to packaging waste reduction. The first one is the “Pink Bag Takeback” program, which recycles single-use flexible plastic bags that aren’t accepted by city recycling programs. Customers are being asked to give back their Be Fresh plastic pouches, which are used for items like dried fruit and vegetables, nuts, seeds and granola. They can return them in their SPUD bin (which is picked up on the next delivery day), or return it to a Be Fresh or Blush Lane location. SPUD is working with a specialized recycling company that is upcycling Be Fresh bags into new products such as outdoor furniture and paving stones.

“It’s the coolest thing we’re doing and I’m so proud of it,” says van Stolk. “With anything we put out there, we have to have a full understanding of the loop. As a retailer, our job is to make sure we will be responsible for that package.”

With SPUD’s reverse logistics model, the company also takes back any packing supplies, such as freezer kits and reusable meal-kit containers. The model is part of SPUD’s “responsible transportation” sustainability pillar, which also ensures every truck going out for delivery is full and that it takes the shortest route possible. “It’s all about space management and logistics optimization, and that’s one technology we have,” says van Stolk.

Technology developed by SPUD’s in-house team includes a rapid pack algorithm that decreases packing time and wasted space in packed orders, software that uses artificial intelligence to deliver instructions to warehouse packagers, and delivery route optimization software that uses real-time data to find the best route. In 2018, the company prevented nearly 300,000 kg of CO2 from entering the atmosphere through efficient routing. Spud.ca also uses electric bicycles for deliveries in urban centres and is aiming to move towards electric-powered trucks as more become available.

SHARING THE WEALTH
Having been in online grocery for more than 20 years, SPUD is sitting on a lot of knowledge and leading technology. Now, the company wants to share its expertise with other grocers to help them become greener. Last year, SPUD launched Food-X Urban Delivery, a grocery delivery platform that allows local and national retailers to access its technology, warehousing, commissary and delivery services. To serve Food-X partners, SPUD opened a 74,000-sq.-ft. warehouse facility in Burnaby, B.C. to provide grocery delivery for local and national retailers.

“We thought, if every grocery store has its own trucks on the road, are we really doing anything?” says van Stolk. “SPUD has been delivering groceries online since 1997, so we have a lot of knowledge and we’re a world-class company in this space. We think our global impact will be bigger if we don’t keep our expertise to ourselves. What’s going to impact the world is sharing and being transparent with what we are doing.”

Food-X’s launch partner was none other than the world’s largest retailer. Walmart Canada is using the platform to service consumers in the Metro Vancouver area. Customers can shop on Walmart’s website or app and have their groceries delivered by Food-X.

Van Stolk says the goal now is to expand Food X across Canada and globally. So far, feedback has been positive. “Retailers are smart. They’re looking at us and saying, ‘You have been delivering groceries since 1997 and you understand all the components of it. You created a facility that has five temp zones, a commissary and food waste management. Why do we need to reinvent the wheel?’”

The next phase of Food-X is adding a biodigester at the facility that will process and compost organic waste onsite. “For all our partners, our goal is for this facility to be the most sustainable online grocery platform out there because we’re looking at the things that are truly important in the long run,” explains van Stolk.

Focusing on the long-term health of the planet is something everyone at SPUD understands deeply. “We have amazing people who work for us who are passionate about sustainability and passionate about being part of the solution,” says van Stolk. “We actually just changed Spud.ca’s tagline to ‘Be part of the solution,’ and that’s a call to action. We don’t have to all sit on this bus that’s about to go off the cliff into the abyss. We can all do something about it.”

Photography by Tanya Goehring

This article appeared in Canadian Grocer’May issue.

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