Excerpts from The Secret Life of Groceries: The Dark Miracle of the American Supermarket by Benjamin Lorr

Intro

• In 2018, Americans spent $701 billion at supermarket-style grocery stores, still our largest food expenditure by a wide margin; there are 38,000 of these stores across this land, and the average adult will spend 2 percent of their life inside one.

• We spend only 10 percent of our budget on food, compared to 40 percent by our great-grandparents in 1900, and 30 percent by our grandparents in the 1950s. It is a number that has been decreasing the entire century along with the rise of mass supply chains. In the early republic, around the War of 1812, nearly 90 percent of the population worked to produce the nation’s food; it was a grueling physical life, and in addition to being costly, the food produced was of uneven quality, in tightly limited supply, and could and did kill through disease. Now less than 3 percent of our population produces enough food to feed us all.
• The average store has 32,000 individuated products known as Shop Keeping Units, or SKUs. The biggest have more than 120,000 SKUs. The place where the slaughter plant supervisor’s voice wells up during his description. The tunnel continues through to a new room, but inside, encased in industry, invisible except on blueprints and design plans, something happens: the bird is blasted with hot steaming water, beaten by rubber flanges so its feathers fall off in ragged clumps; it is cleansed at an existential level, until on the other side of this tunnel the chicken emerges into a new room, now a decapitated, drained thing, all white pocked skin, a whizzing gleaming globe of meat racing forward on the line. There is a phase shift. The floors are now bloodless, men and women in white smocks stand at green plastic counters, and the whole area radiates with the high, reassuring notes of chlorine. “That is the precise point they go from living thing to food. You watch it happen,” he says, his voice breaking— as into tears—but not in the remorseful or guilt-ridden sense; in the I am blessed and witness to the miraculous sense: “They come out and they are no longer an animal. They are food now.” It is a fundamental rite of civilization, a moment where industry mimics the god, but rather than breathing new life into dust, a different consecration occurs, of sucking life out, an act of not just absolving murder but erasing the possibility. A very similar process occurs in the retail store. Those deboned bulk chilled chicken breasts—or Granny Smith apples, or long fillets of frozen salmon, or whatever other food you want to imagine—arrive to the stores in their cardboard boxes, vacu-sealed in a marvel of plastic packaging, and when you click your box cutter down and reach to take them out, they cease being food. Another transformation has occurred; they are product now. Merchandise. SKUs.

Part 1: Salad Days at Trader Joe’s

• Joe and Merritt meet there every month on a Friday. Always three Gibsons, always in the late afternoon. At this point, Joe is the owner of a small fleet of convenience stores, the Pronto Markets. They are folksy endeavors, staffed by men in red-and-white-checkered shirts that Joe buys from Sears on his weekends. Merritt owns the dairy that supplies Joe’s milk.

“Joe, I’ve sold Adohr. And I’ve sold it to Southland.” Both men know exactly what that means. Pronto Markets are going extinct. Joe, who used his entire life savings to buy the chain just three years ago, who is currently leveraged up to his nostrils in debt, and who has a pregnant wife and two young children to feed in a newly purchased home, understands that if nothing changes, he has, at best, two years before bankruptcy. Southland is the parent company of 7-Eleven. The great rapacious Slurpee from the South: all Texas bravado, menace, and oil-backed capital, expanding like a rash over the map. Joe knows it well. He started his career studying it and opened Pronto Markets in its image. It’s entirely fair to say his life in groceries up to this point has been a finely tuned study of Southland’s 7-Eleven, cautiously riffing off it. And so, soaking with gin, foreseeing certain ruin, Joe responds the way only the greatest of entrepreneurs can: he holes up in a cabin with his wife and kids for a few days, then gets on a plane and flies as far away as possible. Long before Silicon Valley titans strode into board meetings in hoodies and jeans, Joe was showing up to his financing meeting with Bank of America in the 1950s wearing tennis shoes and a plain white button-down with a Hussong’s Cantina T-shirt blaring through underneath.

• In 1965, one month after the damnation of Pronto Markets, Joe disembarked in St. Barts in the Caribbean with its white-sand beaches and lapis-blue water. The trip was the opposite of panic. It was a move into mental white space.
• In particular, Saunders is inspired by a new type of novelty restaurant called the “cafeteria.” If we want to think about the introduction of the supermarket as a birth, the cafeteria was foreplay. During the World’s Columbian Exposition in Chicago in 1893, John Kruger builds a temporary American “smorgasbord” restaurant where patrons can peruse a series of different options. In 1898, Childs Restaurant in New York riffs on this structure, giving each customer a tray and asking them to walk single file down a line selecting their food from various steaming pans. The result is a sensation that sweeps across the country. Career male waiters in their starched white uniforms are out, their job now easily done by just one or two perky young women. In Saunders’s vision, the grocery store could become an even more fully realized version of this setup. Customers would enter single file, pick up a basket, shuffle through a turnstile, and then head down a winding one-way route that would guide them past every item in the store, anticipating the hell of today’s Ikea by about fifty years. The path they were forced onto would pass only heavily branded prepackaged goods—items that could speak for themselves and didn’t need a clerk to recommend them—which customers could size up, fondle, select, and replace to their heart’s content. Finally, after winding through the store, the line would empty out at a bank of checkout counters where the customer could choose the shortest line and pay. One day, watching beady-eyed piglets charge a trough, Saunders decides the piggies are laughably similar to customers charging an overwhelmed clerk. In honor of all his piggy little customers, he names his new store the Piggly Wiggly. He writes the advertising copy in the most flamboyant style. At the grand opening, he hands roses to all the women with red hair.
• Sylvan Goldman, an Oklahoma City grocer, introduced the shopping cart in 1937. He noticed that customers wanted to buy more but got physically tired holding the items in their basket. The idea was by no means a sure thing; customers ignored the carts until Goldman hired shills to push them around. At the 1956 International Food Congress in Rome—one year before Joe Coulombe would open Pronto Markets —the USDA set up an “American Way exhibit.” It featured the first fully stocked supermarket outside of the United States. This was a modest staging, designed more for easy assembly and dismantling. It held a mere 2,500 brands, a few packaged meats in a lone refrigerated case, and a small selection of prepared food. When the exhibit opened, and crowds finally entered, the Italian women went berserk. One notable enthusiast began running up and down the aisles shouting, “It must be heaven . . . There are mountains of food!” Press reports describe others as standing “stunned,” “goggle eyed,” “bewildered,” and “shrieking with surprise and envy.” This was not media hype. Pope Pius XII himself weighed in, announcing his blessing from the Holy See. A few year later, when Khrushchev toured Washington, D.C., in 1959, the supermarket brought a temporary détente to the Cold War. As the Soviet premier scanned the store, he erupted with spontaneous praise: “I want to greet the manager of this supermarket. I am truly filled with admiration over what I see.”*
• Like it or not, shop there or not, you as an American in 2020 are probably a member of that cult: either in the specific sense that you are the precise demographic Joe targeted way back then—the overeducated, underpaid, and inquisitive; the customer who understands and cares for the world foremost by understanding and caring for themselves—or in the general sense that you are a consumer who flourishes from demographic targeting, expressing yourself through your purchases, loyalties, and decisions.
• What Joe did—was one of the first to do, if not the first—was to create a store that provides products that reflect an identity, that exist in opposition to some generally homogenized mainstream. In the process, by necessity, he commodified individuality itself. He learned to sell you you. If you were the precise you he was after.
• When it declined to open a store in Vancouver, a thriving import-export business known as Pirate Joe’s opened in response, sneaking “authentic Trader Joe’s” products across the border to sell.
• Two different food safety experts I spoke with told me the unofficial FDA nickname for the chain is Recall Joe’s. And while the FDA won’t comment on that specifically, it’s clear from a survey of its publicly available list of food recalls that when it comes to quality assurance, the chain is anything but above average.
• “Having seen the low-quality people in 7-Eleven, I felt life’s too short,” he tells me. He breaks down the local union contract for grocery workers and decides Pronto will pay employees $7,000 per year for a forty-eight-hour workweek, the precise union equivalent including overtime. It just so happens that $7,000 matches the median family income in California at the time. Joe likes the coincidence and decides to peg Pronto salary increases to median family income wherever it goes.
• The second decision is an even greater break with tradition. He decides that nothing in the actual store is essential.
• “In 1932, only 2 percent of the people qualified to go to college actually went. In 1964 that number had jumped to 60 percent,” he tells me. This was change. The extreme growth in college enrollment was largely the work of the G.I. Bill of Rights, guaranteeing returning veterans—first from the Second World War, then Korea—a college education. And Joe realized the reason he kept coming back to the article was the wave hadn’t crested. The war in Vietnam meant the G.I. Bill was about to hit a third generation. “All these college graduates,” he says. “I just thought they might want something different to eat.”
• In 1937, the average airplane carried only 6.5 passengers. The 747 could hold nearly 500. That was two and a half times more than its immediate predecessor, the 707, but requiring only a slight increase in crew. To Joe all of this was revolutionary. The first insight Joe had was about the balance sheet. By keeping the number of crew stable relative to the expense of the new plane, the airline had figured out how to increase investment per employee while expanding their service. The more Joe thought about this, the more he saw it as a better articulation of his current strategy. At Pronto, he already had the highest-paid employees; rather than grow his business by diluting that talent pool by, say, increasing floor space or opening tons of new sites, he decided he wanted to grow in a way that maximized that investment. Things like liquor licenses—which at the time cost almost as much individually as the start-up cost for an entire store—were perfect. Each one he snapped up would increase his investment per employee. It would be a grocery store that operated on the financial principles of the airplane.
• But with the homogeny crumbling—the single dominant media voice fragmenting into individualized channels— those obedient shoppers began ceding space to a new breed. The traditional grocery store wouldn’t just overlook this new breed, it was built to fail them: oriented toward national brands in such a way that it was almost incapable of adapting to serve anyone who wanted anything else.
• Joe credits the Jungle Cruise at Disneyland for making him see the connection.
• Lesson one: there was no such thing as wine, only wines. Even product from the same grape, grown on the same soil, in the same climate, crushed by the same vintner, varied so much year to year that price in wine was never set by brand but by vintage. Wines were the opposite of Cola-Cola and just about everything else he was selling. When you sold out of a vintage, it was gone forever.
• In rapid succession, he banned all outside salesmen from the store as distraction and then drastically cut back his offerings. If buyers were going to be making decisions, they couldn’t be overwhelmed with paperwork or juggling the logistics of every possible food option on the planet.* At the start of this transition, his managers selected from about 15,000 SKUs to stock their stores. By the time Joe was finished, a single store carried less than 1,500 SKUs.
• The heuristic driving this tightening was outstanding. “Outstanding” meant something very particular to Joe. It meant a product that was the lowest price in town by a clear, consistent margin. It meant having a superior flavor profile in an unmistakable manner. It meant a product with a point of view that differentiated itself from all others. Most important, it meant that each product added to the bottom line of the store all by itself. “No loss leaders are permitted,” he boomed in an internal memo.
• There was simply no way to be that type of outstanding with most products they sold. The national brands were definitionally resistant. From Coca-Cola to Bounty paper towels, these were products bombed out in unlimited quantities at identical levels of quality. The only way for Joe to post the lowest price for Coca-Cola was to grow to be the biggest chain in the land and negotiate, or to take a loss on the product. The former was a race to an unstable top in his view. The latter directly contradicted what Joe meant by being outstanding. And so, following his logic, Coca-Cola had to go. And then Bounty. And then every single other mainstream brand both he and his customers had ever heard of. Worse, there were whole categories where, no matter how hard his buyers tried, they couldn’t get an edge: plastic silverware, tampons, tinfoil. Rarely food, but products people still expected to find on a trip to the supermarket.

“Of course the rhetoric is nice,” one buyer tells me. “But how the heck are we going to actually do this? We had less than twenty stores at the time. We could never negotiate even a generic mayo for less than Safeway . . . You can’t just go to a manufacturer and say, ‘Hi! Give me a special deal, please.’ Cause that ain’t going to happen.” The answer was Trader Joe’s private label program, the embodiment of an entire approach to retail. Almost as old as the grocery chain itself, private label is simply an item sold under the retailer’s name. Synonymous with “generic,” it is typically just a copy of a heavily branded product. In principle, the retailer can strip out advertising costs, slap on a plain label, and pass on the savings to the customer. In practice, especially at that time, the private label was drab, associated with inferior quality and only grudgingly placed in the basket. Trader Joe’s private labels would become the exact opposite. And it is no overstatement to say that the line of products that resulted transformed the entire industry for better and worse.

• To embody his vision, he surrounded himself with the self-taught. For a store serving the overeducated and underpaid, Joe brought in the undereducated, and offered to overpay them; this allowed him to carefully select a certain type of employee for central management: extremely intelligent but never clever; generalists who liked hard labor; strivers who wore their enthusiasm the way Joe wore his Hussong’s Cantina T-shirt, just under cover, but blaring out. Joe cultivated an office full of these human golden retrievers, and he groomed them first into astute foodies, then into retailers in that etymological sense. Turnover was virtually nonexistent during his reign.* He valued their sense of wonder at the world as it expanded before them and relied on their fresh takes to cut through received wisdom.

Part 2: Distribution of Responsibility

• I hear repeatedly about trucking recruiters* who cruise for drivers from homeless shelters, soup kitchens, recovery wards, prison work-release programs. Many more come from minimum wage retail, from construction, from several tours of duty overseas. These men and women are promised “Guaranteed jobs!” “No experience? No problem!” “Get paid while training” “Fantastic money!”; salary quotes range from the reasonable and enticing (“Earn up to $60,000”) to the patently absurd (“$100K per year and freedom!”). They are offered free one-way bus tickets directly to training centers if they quit their old life. They are housed in company motels with all costs paid for up front by the company, and assured they can pay back everything from future earnings.* Meals are provided. And with just a quick signature on the third or fourth day, suddenly they are students, who have taken on real-live student debt to prove it, training to earn a commercial driver’s license. Once in the classroom, they are pounded with further praise for seizing this chance to control their own destiny. The job they were initially offered vaporizes, and an even better offer appears. Now they can become owner-operators, and by signing just a few more papers, they will get their own truck without having to pay a cent. Once they accept, they will then be run ragged, desperately trying to make good on their end of the bargain, spending their next six months deciphering pay stubs, trying to understand why running tens of thousands of miles at $0.30 to $0.90 a mile never gets them more than $100 a week, not realizing until far too late how difficult it is, at which point drained of the motivation that initially made them useful to the carrier, they are bounced out of the industry, financially crippled, embittered, and often too proud to admit it.
• Trucking used to be a middle-class job. This was during the long golden stretch from 1935 to 1980, when transportation was a tightly regulated, almost cartel-like industry. Federal law, as applied through the Interstate Commerce Commission, restricted the number of carriers, allowed overt price collusion between those that remained, and exempted the entire industry from antitrust laws. This was not a good thing, nor a sign of a healthy industry, but it allowed a small cohort of carriers to grow extremely powerful, and correspondingly provided the perfect conditions for collective bargaining.
• This golden era was anticompetitive, inefficient, and opposed across the political spectrum from Ralph Nader to Ronald Reagan, but it provided a stable, respectable income for the individual trucker. Then, literally overnight, with the scrawl of President Carter’s pen, everything shifted. Trucking underwent a radical course correction, deregulating in extremis if you were a driver. Carriers multiplied, authorities fell from the regulatory sky, nonunionized workers flooded the market, and the price of transport dropped by 20 percent in just the first few years.

Part 3: Self-Realization through Snacks

• Our society is awash with founders, all listening to the same leadership podcasts, doing the same kettlebell lunges to improve grip and leg strength at the same time, then dissolving identical Tim Ferriss–approved muscle-building complexes into their post-workout shakes to transform their previously similar mesomorph bodies into something even more metabolically equivalent. All while making parallel grandiose-style projections about their own app, disruption, or innovation whereby their personal self-interest miraculously aligns with the interest of society writ large and places them as CEO/founder/servant-leader on the very prow of the vessel of civilization.
• A corporate buyer for Safeway asked Julie to send samples to every single one of his category managers and every single grocery manager at every single division. He loved Slawsa, swore he had a jar in his home fridge, and told her he was going to introduce it at one of his conference calls. Julie wrote an entire presentation for him to introduce the product there. When I see her more than two years later, she is still waiting. No movement. No word. No new product in stores.
• To make sense of these delays, both the hesitations and outright disappearances, understand how overwhelmed buyers are. A single buyer might oversee fifty categories, each with thousands of SKUs within it. At almost every major chain, that buyer is also rotated into a new category every year or two, an intentional destabilizing strategy to keep them from making personal relationships with multi-billion-dollar ag companies that historically start to offer outright bribes as soon as a personal relationship is formed.* This might make for a good business move, preventing a glut of overpriced Conagra products, but it also prevents the buyer from ever getting any deep knowledge about the categories they are covering. “I keep running into these buyers that are just bewildered,” an old-school food manufacturer tells me. “They don’t know competing items in their category. They don’t know the supply chain. They don’t even know price. All good people, but completely overwhelmed and confused by the volume they are now responsible for.” A buyer for Roche Bros. Supermarkets, a small twenty-store chain in the Northeast, tells me he averages thirty to forty cold calls per day, this on top of six to eight hours of scheduled meetings. Buyers at Whole Foods national are sent five hundred new products per month. There is very little time for considering details or nuance, or investigating the product beyond the superficials of the pitch meeting.
• Once you agree to ship that free product, we have statistics. Just over twenty thousand new products hit the shelf each year. Eighty-nine percent of those fail within eighteen months.
• Grocery does not just make its money off people buying things in its stores. It makes its money off its vendors.
• [Buyer] simply demands a payment from the young entrepreneurs who come to his office in exchange for putting their items on his shelf. The entrepreneurs are desperate. They are probably already leveraged, and so what is a little more debt to them? They also have no hope of a return if their item is not on a shelf. And if every buyer in the industry begins to do the same thing, they really have no choice.
• The euphemism is “trade spend” and it is an area of the industry nobody wants to talk about too loudly because it is so murky and backward. The idea that the best products are on the shelf—rather than, say, the producers who ponied up the biggest bucks—benefits the supplier and the store. And what the customer doesn’t know can’t hurt them.
• In its simplest form, this trade spend comes as a “slotting fee,” which is a pure cash-for-placement exchange. The buyer asks for money; in return you get inches on the shelf. Not a special endcap display, not a center spot right at eye level, just inches, somewhere. These payments amount to $9 billion a year in industry profit. To get a sense of how lucrative these can be for an individual store, in January 2017, one national retailer was charging $55,000 for 22 x 12 inches of shelf space. For a single month. This is a retailer likely operating with those industry-wide 1.5 to 3 percent gross margins, so we are talking rocket fuel to their bottom line.
• But slotting fees are nothing. They are so transparent and obvious that many retailers have moved away from them. In their place, a mad, inventive spree of different taxes and extractive demands has emerged. There are “promotional fees” (subsidizing the cost of two-for-one deals, tag sales, and other discounts). There is “freefill” (a free case or ten in each flavor for the retailer to sell at 100 percent profit). There are “advertising fees” for unwanted but mandatory placement in the company’s internal newsletter (a promotion that almost no one will read and will produce no benefits), or fees for receiving the privilege of being broadcast on their “radio network” (a network that consists of interrupting whatever Muzak is bopping from their in-store speakers to announce your product). There are negotiations around the length of credit. There are payments for waste, spoilage, or just because your product—that they bought—doesn’t sell. There are mandatory “requests” that you use their specific overpriced proprietary supply chain “solutions” (“You must pay for our style of bar code, despite the fact that it costs two times the normal amount and the difference disappears into our pocket,” a consultant tells me), and fees for package redesign or store-mandated market research. There are fees on top of fees. And every movement or change offers new opportunities: money is demanded when the retailer opens a new store or refurbishes an existing one, when a competitor opens up nearby, when the category gets its annual overhaul.

Part 4: The Retail Experience Lorr (the author) got a job at Whole Foods to get the inside scoop. New employees must complete a twelve-hour orientation about the mission and philosophy of Whole Foods.

• Concussive effect of repetitive dull content ** Passing the probation vote [to be hired at Whole foods] requires a two-thirds majority in which each team member fills out a skills sheet anonymously ranking our abilities. ** We [Whole Foods employees] are told to apologize for any and every mistake, especially if it isn’t our fault, unless, of course, the customer is complaining about injury or food-borne illness
• Andy gives us a secret phrase to use whenever we are stumped: “Sounds important.” It can be deployed almost universally to respond to questions we don’t fully understand, hectoring we don’t necessarily deserve, demands for advice we don’t particularly have
• Mr. Green is the Orwellian name for the Whole Foods internal security team
• Human Capital Management, or “just-in-time scheduling”
• somewhere in the last ten years, just-in-time manufacturing morphed into just-in-time scheduling.
• He [Walter] only opens once or twice a week so he never completely adjusts to any schedule.
• Another [study] found that 60 percent of retail workers said that they needed to be available to fulfill every work schedule that might be assigned in a given week
• There are professions where we expect people to be “on call”—doctors, first responders—but they are compensated for that both financially and in civic respect
• [O]organic does not mean healthier, but rather is an option to pay extra to limit the externalities of production
• [W]e pluck melons just on the verge of rot and take them into the back room, where a woman who speaks no English stands all day carving them up into chunks and packing endless grab-n-go containers.

Part 5: Theater of Retail

• I kept thinking of the medieval practice of simony, where the wealthy could pay money to be released from their sins.
• Government regulation of our food is as spotty as a fourteen-year-old boy’s first beard
• These audits rarely occur unannounced, instead unfolding with all the spontaneity of a doctor’s appointment. … [because] People don’t hire you to blow up their deals.
• It [the pig farm] was not filthy, nor a hellscape. It was instead an intensely alien, highly functional place for animals to live a sad, short life before they were set to die.
• Anthropologist Daniel Miller studied purchasing decisions of Britons and Trinidadians and came to the conclusion that most people didn’t even know whether they liked something until after they shared it with others.

Part 6: Bottom of the Commodity Chain The horrors of shrimp

• Tun-Lin is a man from Myanmar who makes his way to Thailand only to be sold into slave labor on a shrimp boat. He left Myanmar not even knowing what a factory was, only that if you work hard you can make good money. He watched his best friend die on a shrimp boat and then get kicked over the side. After five years of slave labor on the boat he simply asks the captain if he can leave and is set free. This chapter goes into much more gruesome detail about what life was like aboard the slave ship.
• NGOs estimate 17 to 60 percent of Thai shrimp includes slave labor like Tun-Lin in its supply chain
• This is called transshipment at sea. It saves fuel for the larger refrigerated fishing vessels, and it allows some boats to stay out almost indefinitely. Resupplied by others, they turn into floating prisons for trafficked workers.
• Rule number one when hiring people is you do not hire locals. They will want to go home. They will have families. You want someone who will live here twenty-four
• Peeling shrimp is delicate labor, and despite all advances in technology, nothing can yet do the work better than small, nimble fingers.
• The [commodity] word comes to us etymologically from the French commodité, meaning convenience
• thirty years ago, fresh shrimp epitomized class. They cost more than steak
• since 1980 prices [of shrimp] have fallen while production has increased some 3,000 percent.
• It turns out for as of yet biologically unexplained reasons, a female shrimp who loses a single eyeball gets fast-tracked through puberty
• A cycle of spectacular growth, overnight riches, and then sudden collapse came to define the Asian shrimp industry.
• [dropping an unpopular supplier or food is] catering to the aesthetic sense of consumers who don’t like to be associated with ugly things

Afterword

• The Whole Foods philosophy is far more Texas libertarian than it ever was East Coast liberal. This comes from the early organic movement which saw the gov as failing to regulate agriculture and corrupt.
• Whole Foods was the leader in progressive activism in the food industry. Then somewhere by mid-2016, everyone I knew doing that type of work got sacked.
• Humanity can’t just play defense. We need a good offense too.
• [a Trader Joe’s purchaser told a story about] visiting a factory selling extremely profitable “handmade pies” that he watched get unloaded from a truck, unboxed, and reboxed into different, more “handmade” packaging. When he rushed back to tell Joe, the only response was one of those chuckles and, “Oh, maybe don’t go visiting any more suppliers without calling ahead first.”
• “What did you do once you became a better version of yourself? Where did all this self-improvement lead? The answer was always back to more yoga
• it’s not that we are what we eat, it’s that we eat the way we are
• Thai producers who have poured themselves into costly reforms only to watch buyers balk at their new prices and seek cheaper product elsewhere
• He [Tun-Lin] says he will open a store. A big store with lots of food the people in his village haven’t seen.