Urban Methods, Rural Success

Wholeshare, an Internet-based grocery wholesaler, is gaining traction in an unlikely market: the woods of Vermont. Not exactly the usual grounds for eCommerce startups to find brisk business, but Wholeshare is not your typical startup.

The free service automates online bulk purchasing for food buying clubs. These clubs can collect orders from their members and place a group purchasing order once they’ve reached the volume thresholds dictated by Wholeshare. Alternatively, smaller co-ops and specialty markets, which thrive in agro-conscious Vermont, can stock their shelves through the service directly. With prices averaging 18 percent less than those at supermarkets, the service is highly attractive to these small businesses serving rural communities.

“There are people in Vermont who have to drive an hour to get to a full-service grocery,” says Wholeshare Outreach Director Rob Fish. “With Wholeshare, anyone can run their own natural foods store out of their garage.”

While some co-ops and markets see the new service as a plus, others fear that the lower overheads afforded an eCommerce grocer will leave locally owned and operated businesses unable to compete with pricing. In a recent newsletter to its nearly 7,000 members, Kari Bradley, general manager for Hunger Mountain Co-op, wrote that the co-op, with its staff and overhead costs, has “limited ability to reduce prices.”

However, as Bradley went on to point out in an recent interview with VTDigger, “my sense of things in Vermont is that there’s a social element to shopping … that is something different from an [urban] place where your choice is between Costco and some other big grocery.”

And that is certainly one obstacle that Wholeshare faces as it looks to expand from its stronghold in the New York metro area, where it got its start back in 2010, to more environmentally conscious populations, which tend to be more rural and also more community-oriented than their urban counterparts.

Another potential hurdle for the company’s green image — and a challenge it will have to solve for as it scales — is its reliance on multiple vendors to fill a single order. While the use of three to four vendors per order has initially been a bonus for larger co-ops and markets who may be currently sourcing their products from dozens of purveyors, for individual shoppers, the additional packaging, shipping costs and increased carbon footprint may become an issue down the road.

While urban populations already hooked on the convenience of services like Amazon, which is notoriously guarded about the environmental impact of its packaging and shipping practices — refusing to report on its carbon footprint via the Carbon Disclosure Project the way that 80 percent of large businesses do — may not be as concerned, it may be a red flag that environmentalists wave in the near future.

On the flip side, group buying is a trend that has found traction with the millennial generation and is a sound model to build on as companies like Groupon, Uber and Dropbox have found in smart group-buying plays. While some of these sites, most notably the former, may have boomed and (to a large extent) busted, the mentality that it instilled in an entire generation of young consumers is undeniable.

By leveraging larger networks of consumers banded together with a shared interest in lower prices, greater access to a wider variety of products and the convenience of these goods being delivered to them, sites like Wholeshare stand a chance to disrupt the status quo.

However, Wholeshare insists that they are not trying to usurp local co-ops. On the contrary, remarked Fish, “we don’t see ourselves as competition for small natural-foods stores or co-ops. They are more than welcome to use us as an online ordering system. We also encourage them to start a buying club, which is how many of the co-ops started in the first place.”

Maybe in this new age of convenience, eCommerce and local brick and mortars can find a way to live in harmony after all.