Access to healthy, fresh and affordable food is unfortunately not a given in all parts of the globe, nor in the U.S. Improving food access is a founding tenet of the good food movement, and today there are many national, regional and local organizations with missions dedicated to improving food access across all demographic levels and geographic locations.
One such organization is The Food Trust in Philadelphia, PA. Earlier in my career I had the privilege of working with, and then for, this organization on a Farm to School Grant for Philadelphia Public Schools, a district whose free and reduced lunch participation was around 81% at the time. Last winter, I was asked to work with The Food Trust to conduct a national scan of distribution networks that serve small stores (defined as including corner stores, bodegas, convenience stores, fuel-based retail and rural grocers). The project was funded by the Robert Wood Johnson Foundation. It explored the food access question not just at the store level, but to better understand the supply chain that moves food from production to small stores. A link to the full report, Healthy Food and Small Stores: Strategies to Close the Distribution Gap in Underserved Communities can be found here.
While conducting the interviews for this project, I was fortunate to talk with a diverse group of supply chain actors, ranging from food brokers to distributors, manufacturers, storeowners, procurement directors and nonprofits with a mission to improve food access. We found distribution networks spanning remote and dense areas of the globe (this should come as no surprise to anyone who has eaten a strawberry in the dead of winter or ever had a cup of coffee), but these networks faced barriers in supplying customers of small stores with fresh and healthy food. Barriers ranged from cost and delivery minimums to consumer demand and product handling knowledge, yet the barrier most difficult to address with an overarching policy or programming solution was how to motivate private business owners to modify their inventory to include items that are fresher and more nutritious.
In conducting interviews with owners of stores of various sizes, I was struck with how much risk they assumed when they began purchasing more nutritious foods, especially perishable foods. I interviewed many store owners that viewed their fresh program as one of their most successful, yet they understood the apprehension that so many other storeowners feel before making this important business decision.
There are several ways that food systems stakeholders in both supply chain operations and facilitation roles are helping to address storeowner risk. Initiatives to provide cold storage equipment, marketing materials and technical assistance are being subsidized and funded by nonprofits, municipalities and suppliers leveraging government grants, corporate donations and/or philanthropic funding. These programs offset some of the financial risk, but do not cover the full cost of implementation including the time invested by individual storeowners.
Once a fresh program is implemented, the ongoing margin structure accounts for the increased labor, utilities and spoilage cost associated with stocking fresh items. A report published by the National Association of Convenience Stores (NACS) and United Fresh titled Building the Business Case for Produce at Convenience Stores, cites that “at convenience stores, perishable groceries have a 43% margin, compared to merchandise overall at 29%.” The report also mentions a study conducted by the Hudson Institute showing that “lower-calorie products drove virtually all the growth of consumer packaged foods sales.” With this increase in demand and a higher margin for fresh foods, stores that are able to expand their inventory to include healthier foods may find it advantageous for their business as well as the health of the community in which they are located. The factors driving whether or not a retail business is in a position to introduce these products are related to the upfront risk of investing in equipment and testing market acceptance.
One of the suppliers I interviewed suggested that when a storeowner or manager is making the decision to supply new products, they should test them at a time of the year when the store experiences the most customer traffic, and stock the product for at least 30 days. If customers typically view a store as a place to purchase convenient, high-calorie snack items, it will take a few visits for customers to change their perspective of the store to one where they can purchase fresher and more nutritious items. Within the time period, a storeowner may have to replenish fresh inventory that has not sold, which will negatively affect the store’s bottom line for that month. Absorbing this loss is likely at the heart of a storeowner’s hesitancy, especially if they are going to have to invest in equipment and utilities to keep perishable product at required temperatures.
How a storeowner executes a new fresh food program will have a significant impact on the success of the initiative: ensuring that food is displayed in an appealing way; having a plan for how to move produce before it spoils (offering smoothies or other foodservice items – we learned that some storeowners use it within their own homes); and, if the store is located within a low-income area, applying to be an approved vendor for food assistance programs like SNAP, WIC or other local fresh foods supplemental nutrition programs. All of these steps involve investment of time and money, yet consumer trends indicate that the current food landscape is ripe (pun intended) for fresh and health foods to be sold within a diversity of retail settings; small stores included.
There is also increasingly more research and technical assistance available to storeowners interested in making this change. The recent Food Trust report is one example. It features several case studies of stores and their suppliers that have been successful in integrating more fresh and healthy foods in their assortment. Each case study also includes advice for storeowners and highlights products that have been successful.
What isn’t as immediately apparent, and the purpose of this post, is the great risk these businesses have taken in an effort to improve the health of their own bottom line and that of the customers they serve. I feel that it’s important to recognize and acknowledge this as much as the positive public health outcomes; to give credit to these pioneers and encourage others to follow, because it is the risks taken by food-based business owners across our country that will improve access to healthy, fresh and regionally produced foods.