Dive Brief:

• A new Whole Foods Market store in Bridgewater, New Jersey, is growing oyster mushrooms in a small display farm right in the produce section, according to Supermarket News. The farm will grow about 120 pounds of mushrooms each week. 

• The system is operated by Smallhold, a Brooklyn-based indoor farm that distributes its technology to restaurants. Whole Foods is the company's first retail partner, Supermarket News reported.

• The oyster mushrooms are started at nearby farms, including a Smallhold location, and are moved to the lighted store display in the final stages of growth. Shoppers can then choose between yellow, blue and pink oyster mushrooms after they are harvested by a Whole Foods or Smallhold employee. 

Dive Insight:

Whole Foods managers say the mushroom display is a draw for shoppers who know they will get the freshest possible product from the in-store mini farm. And because there's no need to transport the mushrooms, the retailer can offer them at a lower price point and still cover costs.

This unique installation is both educational and practical and also reflects Whole Foods' position as a mission-driven company trying to set standards of excellence for food retailers. The project embraces three of the company's six core values: selling the highest quality natural and organic foods, satisfying and delighting customers, and caring about the community and environment. And because Whole Foods shoppers are already hungry for transparency and locally grown food, this seems like a savvy and low-risk plan for the retailer to play up its strengths in a visually compelling way. 

Mushrooms are a good choice for an in-store mini farm because they're a high-margin, high-output crop, Adam DeMartino, co-founder and COO of Smallhold, told Supermarket News. According to The Packer, a record 109 million pounds of certified organic mushrooms were produced in 2016-17, 20% more than the previous season. 

While the new Whole Foods outlet in Bridgewater recently opened, it's anyone's guess whether future in-store mini farms will be featured in Whole Foods under Amazon's ownership. Amazon seems more interested in centralizing supply and marketing operations and having some grocery outlets handle non-food items — such as electronics and apparel — to fulfill online orders. Because of these changes, exhibiting in-store produce-growing displays for the satisfaction and delight of customers could end up being a lower priority for Whole Foods going forward. Still, this new tech could help quell shopper concerns that Whole Foods is changing too quickly and losing its identity under its new parent company

The natural and organic grocer isn't the only retailer that's embarked on in-store growing projects. A Hy-Vee store in Iowa produces 15 pounds of lettuce, basil and mint weekly from hydroponic "grow walls" both outside the store and in the produce area. As mainstream consumers become more familiar with, and interested in, vertical farming and hyper-local produce, supermarkets could invest in these systems to capture environmentally conscious shoppers and differentiate from competitors.