CODE BREAKERS

MICHAEL GARRY

The Food Co-op in Port Townsend, Wash., a 39-year-old organic food market near Seattle with 5,000 active members, is carving out an unusual distinction for itself: the U.S. food store with one of the more active quick response (QR)-code programs.

The Food Co-op is using posters to familiarize members with QR codes.

About a year ago, the 11,000-square-foot co-op with $11 million in annual sales launched an educational program to promote local and regional vendors with QR codes, the square, checkered two-dimensional bar codes that link smartphones to all manner of digital content. The co-op is demonstrating that QR codes can be implemented at retail on a shoestring budget.

The co-op began placing QR-code-bearing signage on shelves in multiple departments alongside of products from such suppliers as Dave's Killer Bread, Small Planet Organics, ECO apples, Duck Creek Quacker & Spice, Pastry Design By Anca, Guayaki herbal tea and Mt. Townsend Creamery. Shoppers scanning the QR codes with their smartphones are mostly treated to YouTube videos about the vendors.

Earlier this year, the store put up a bulletin board display with a QR-code primer and all of the vendor QR codes, as well as codes linked to videos of co-op staff and board members.

“It's fantastic if people are able to take a picture of the QR code next to produce and get a video of a farmer talking about how this is grown on the soil on the part of the peninsula,” said Brwyn Griffin, outreach/education/marketing manager for the co-op. “Part of our mission as a co-op is to educate people on the different ways our food is produced. We're using it in a number of ways but fundamentally the educational component was what appealed to me.”

For Dave's Killer Bread, Milwaukie, Ore., the QR-code menu varies monthly, bringing up everything from a video about the company's unusual co-founder Dave Dahl to coupons, podcasts and articles. “The QR code on the shelf sign can stay the same while the content behind it can change,” noted Griffin. To redeem the coupons, shoppers show text from a Google document on their phone to the cashier, who retrieves and scans a paper coupon.

“QR codes are tools with seemingly unlimited potential for consumer education about our company's story and products,” said Dahl in a Food Co-op statement.

Common in Japan, where they were developed in the mid-1990s, QR codes are becoming a frequent sight in this country in magazines, billboards, signs, packaging and other printed material, as well as on websites and Facebook pages.

They are slowly catching on among food retailers and CPG vendors seeking high-tech cachet and added content for any number of applications. QR codes, which cost little to implement, appear limited only by the imagination of the user and the prevalence of smartphone adoption, which Nielsen put at 28% of mobile phone owners last fall and rising rapidly. Among smartphone owners, 30% to 40% have downloaded a bar-code scanning app, according to Scanbuy, New York.

Other food retailers that have experimented with QR codes over the past year include PCC Natural Markets (another Seattle-area co-op), Price Chopper Supermarkets, Wegmans Food Markets and D'Agostino Supermarkets.

In January, Grocery Shopping Network, Minneapolis, which designs and hosts websites and mobile apps for food retailers, announced a QR-code program for its existing customers. GSN works with retailers to identify the best use for QR codes, and provides a printable PDF of the codes.

Retailers collaborating with GSN include Gordy's County Market, Eau Claire, Wis., which recently used QR codes to promote its “Brew Crew” club for beer enthusiasts at a beer festival, said Gregg Knorn, client performance manager for GSN. Coborn's, St. Cloud, Minn., recently helped launch its mobile phone app by putting a QR-code link to it in emails and the weekly flier, said Knorn. GSN plans to put QR-coded signs at the checkout registers of stores to allow shoppers to bring up a retailer's Facebook page or Twitter feed on the phones.

YOUTUBE VIDEOS

The Food Co-op's QR-code program was the brainchild of one of its members, Jack Olmsted, a social media consultant and video producer. He brought the idea last year to Griffin, volunteering to collect video testimonials from local vendors and attach them to QR codes that could be posted on shelf talkers in the store — a service he provides for free.

Olmsted said he learned about QR codes from Ricardo Rabago, social media specialist at PCC Natural Markets, which has been using the codes on shelf tags and circular ads. Olmsted said the key to QR-code programs is linking them to compelling content. “A lot of companies just repurpose content on their website, but that's not appealing to people.”

Olmsted's videos, which are available on YouTube (where they are formatted for mobile phones), cover a wide range of vendors and personalities. A video on Dave’s Killer Bread (linked to the store’s QR code but not produced by Olmsted) tells the story of Dahl's redemptive journey from a life of drug addiction and crime, including 15 years in prison, to the creation of his signature line of organic breads at his family's bakery.

In other videos produced by Olmsted, Michael Vicha, head cheese maker at the Mt. Townsend Creamery, talks about the making of his “off-kilter” cheese. In another, Anca Hasson, head of Pastry Design by Anca, discusses her various creations after being introduced by her 9-year-old daughter Isabella. “People were touched by the mother-daughter video,” Olmsted said.

Before his recent death at 64, Joel Levy, president of Duck Creek Quacker & Spice in Port Townsend, described in a video how he invested in equipment to support the production of his Hometown #1 blended seasoning. Instead of signs, the co-op made QR-code cutouts and attached them to canisters of the seasoning with rubber bands.

The videos provide the kind of personal insight into local companies that a few lines on a label could never equal, said Olmsted. “Co-op people want information about where their food is made and who is making it.” Such information might lead them to support a local product, “even if it's more expensive.”

The co-op next plans to use a QR code to promote a local group's effort to create a school garden and change the menu in school lunchrooms to healthier fare.

Olmsted underscored the low cost of his QR-code project, for which he leveraged several free Internet services, including YouTube and Google documents. The Ventipix software package he uses to create QR codes and analyze usage cost $25 — without analytics, QR codes can be produced online for free — and his Vado HD video camcorder cost $39 on Amazon. He edits his videos for free on YouTube; for the Dave's Killer Bread video, he created hotlinks to coupon offers in the description text. Olmsted tracks the number of times the co-op's QR codes are scanned. “The great thing about QR codes is the analytics behind them,” he said.

When the QR-code program was launched late last year, “we had a lot of people in the store asking questions, saying, ‘How cool,’” Griffin said. More activity is expected this summer when the store is frequented by tourists from Seattle usually equipped with smartphones. Overall, though, Olmsted described the code-scanning activity in the store so far as “spotty.”

It picked up in January and February when he wrote about the QR-code program in the co-op's newsletter and provided a code in the article that readers could scan to see the vendor videos and coupons. He varied the content of the newsletter code three times over two months. “It comes down to awareness,” he said. “People talked about the codes and used them.”

Griffin said “a good percentage” of the co-op's members have smartphones — “enough to make it worth doing the project.” However, Olmsted believes the percentage is still too low. But he remains optimistic that in the future QR codes will become more of a factor as more people own smartphones and know how to use them. “The reality is smartphones are not in every pocket,” he said. “It's a puzzle waiting for another piece to be in place.”

Meanwhile, he is satisfied that the co-op's QR program has “created education and awareness,” pointing to the adoption of codes throughout the community. He doesn't expect the codes to start affecting sales of products until 2012 or 2013. “It's just a matter of time before the population has the [smartphone] technology and we see an ROI,” he said.