HEADLINES


ENTREPRENEUR EXPANDING ONLINE GROCERY BUSINESS INTO BAY CITY, SAGINAW- MLive, by Andrew Dodson
April 29, 2016

MLive

A Midland entrepreneur hopes to cash in on the trend of paying a little more for groceries for the convenience of doing the weekly shopping online.

He's alone in the Great Lakes Bay Region market for now, but he knows the likes of Amazon, Walmart and Instacart — all of which offer online grocery shopping and delivery — are expanding across the country.

"I originally built this idea so my wife didn't have to go shopping every week," said Robert Putt, a father of four and founder of Tavolo Market, which launched in March. Today, it has about 30 customers.

"It's a premium, but for some people, it's worth it," the 36-year-old said.

Putt, an Auburn native, is now looking to expand Tavolo (Italian for "table") from Midland into Bay City and Saginaw. He's targeting double-income families who may not have time for a weekly grocery trip, but also tech-savvy senior citizens and stay-at-home moms.

All food and produce found on the business' website www.TavoloMarket.com is marked up about 25 percent to cover the cost of technology and pay contracted shoppers to hit up local Kroger stores once an order is placed. So, if a 16-ounce jar of Jif peanut butter costs $2.65 in the store, expect to pay about $3.56 through Tavolo. A flat $4.95 fee is also charged for all orders.

All orders placed between 9 a.m. and 9 p.m., seven days a week, are promised to be delivered within a three-hour window. Orders placed after 9 p.m. are delivered at the beginning of the next 12-hour window.

After hitting the order button, a contracted shopper heads to the local Kroger store — Putt hopes to expand into Meijer in the future — and does your grocery shopping for you. That person then drives to your home and drops off the order. Customers can greet the shopper, or leave a cooler at the front door for them to fill with their grocery order.

While Putt is telling customers to expect their food within three hours, most orders since launching have arrived in about 90 minutes or less.

"We're saying three hours because we're new," he said. "Our fastest so far has been 30 minutes."

Background
After graduating from Michigan Technological University with a master's degree in materials science and engineering in 2004, Putt went on to a career with a manufacturing firm in Detroit and later with Bechtel Marine Propulsion Corp. in Idaho. After Bechtel, he signed on with Amazon, where he worked his way up the chain at distribution centers in Kentucky and South Carolina for the internet giant.

"You would not believe the intensity required to get your package to your door on time," he said. "Amazon is so automated and so precise that it requires you to be at the top of your game at all times."

While he loved his job at Amazon, his young family was growing quickly. He decided it was best to move back near his hometown and took a job with Bay View Food Products and later Advance Auto Parts in Bay City, where he runs the its distribution center.

The job, he says, is more relaxed than Amazon's distribution centers, giving him more time to spend with his wife and four children, ages 18 months to 8 years old.

"Because it is a smaller scale, I found myself wanting something more to challenge myself and exercise my business mind," he said. "That's why I decided to start Tavolo."

He wakes up at 5 a.m. daily, spends about an hour or so on the side business, then heads to work until about 5 p.m., when he comes home to spend a few hours with the family. Before going to bed, he typically puts in a few more hours of work, which includes teaching himself how to code and manage his business website.

A growing trend
According to a 2015 Nielsen study that polled 30,000 people online across 60 countries, one-quarter of respondents said they order grocery products online. More than half — 55 percent — are willing to do so in the future.

Even so, 61 percent reported that they still find shopping at the grocery store to be an "enjoyable and engaging experience."

But Putt believes that's changing.

"There is going to be a lot more disruption in the grocery market in the near future," he said.

The first generation of Tavolo is going to focus on delivering grocery orders, which could eventually include wine and beer orders. But Putt knows a "drive-thru" path is the most efficient model, where people order their food online and drive to a local distribution center to pick it up.

"Technology now also allows us to detect when someone is near the store, so it pings us and we can have the order outside, ready to go," he said. "It's all about chasing the last mile of delivery."

"The last mile" is a transportation supply chain term that represents the most expensive part of the process. UPS, for instance, can get a lot of freight to Bay City, Midland and Saginaw fairly cheaply, but delivering packages to each of the individual homes in those cities is a much bigger expense that requires dozens of trucks.

"The last mile is really expensive," Putt said. "And really, the whole grocery pipeline is really expensive. The one thing I have resources to fix right now is that last mile. I don't have the capital to buy inventory or build warehouses or put a building in. The last mile in this model doesn't really exist right now because the technology is so cheap to just do it."

For now, he's hoping to build a larger customer base.

"The real struggle right now is getting people to use the service for the first time," he said. "We haven't had a one-time user yet. I think once people start using it, they develop that habit and really enjoy it."

He currently has five contracted shoppers for his online grocery venture and hopes to hire more in Saginaw and Bay City. Those who are interested can email him at putt@tavolomarket.com.