Former Trader Joe's President Doug Rauch aims to make healthy meals for low income consumers with his Urban Food initiative
Doug Rauch, the former president of Trader Joe’s who made millions of dollars marketing cheap but chic groceries across America, plans to sell meals prepared with food that is edible but has passed its sell-by date to low-income consumers in Boston.
Rauch said he knows the concept may at first sound unpalatable, maybe even objectionable, but he’s convinced that his Urban Food Initiative has merit. The idea is to take food “waste” — perishables at, near, or past their expiration date that supermarkets throw out daily — and turn it into healthy meals priced like a McDonald’s Big Mac. Rauch compares the nonprofit’s mission to the work of Goodwill, which resells donated clothing at affordable prices.
Rauch, who is negotiating to open a 10,000-square-foot store in a building owned by the Codman Square Health Center in Dorchester, said the Urban Food Initiative emerged from his research into hunger while studying as a fellow at Harvard University’s Advanced Leadership Initiative from 2010 to 2012.
Although most people have access to enough food, he said, many inexpensive meals are unhealthy, contributing to obesity, diabetes, and other medical conditions that have reached epidemic proportions.
“The number-one leading problem is affordable nutrition,” said Rauch, who worked for 31 years at the California-based Trader Joe’s grocery chain until he retired in 2008. “For the 50 million Americans who are food insecure, their solution is not a full stomach. It’s a healthy meal.”
The store would sell takeout items such as soups, salads, stews, casseroles, and wraps that are low in fat and high in nutrients, according to Rauch. The space would also feature a teaching kitchen where people can learn to cook quick, healthy meals. In addition, the shop would sell packaged chopped vegetables and offer milk at or past its sell-by date for as low as $1 a gallon — a price that makes it competitive with soda.
Rauch is funding the project with his own money — he won’t say how much — and is in the process of receiving about $400,000 from various organizations, including the Boston Foundation and Blue Cross Blue Shield. He is also seeking to raise additional funds. So far, Rauch has a volunteer board of directors and is starting to hire for the store, which he expects will eventually employ 75 to 100 people.
The Dorchester site would serve as a test model for the Urban Food Initiative, which he wants to replicate across the country. Rauch said he selected Dorchester because it is one of several Boston neighborhoods underserved by grocery chains and has welcomed innovative food ideas such as community gardens and farmers markets.
The issue of food waste has attracted more attention following alarming estimates of global population growth and concerns about the ability to produce enough nutritional food. Rauch and others say one way to tackle the problem is to reclaim some of the roughly $47 billion worth of food that supermarkets throw out each year, much of it edible. That amounts to roughly 10 percent of the total food supply at the retail level, according to industry estimates.
Curbing waste in supermarkets is particularly important, said Gawain Kripke, policy director for the antipoverty organization Oxfam America. “This is the pinnacle of the food supply, where food already has a massive investment in it,” Kripke said. “Labor, energy, and transportation costs are all embedded in it, so being efficient at that level is critical. . . . Losing food when it’s ready to eat is a tragedy.”
But to succeed, the Urban Food Initiative will have to deal with what is likely to be a common reaction to the idea: It’s peddling unwanted food to poor people.
Jose Alvarez, who served as president of the Stop & Shop supermarket chain from 2006 through 2008 and is an Urban Food Initiative board member, said the organization does not want customers to think, “Hey, I’m going to be eating the rich man’s garbage.”
Alvarez said the organization needs to get out a simple and pointed message: “You could have bought this yesterday at Whole Foods or Stop & Shop for $2 and today you can get it at Doug’s store for a $1 or 50 cents and it’s perfectly fine.”
To do that, Rauch has started holding focus groups with Dorchester residents and meeting with community leaders.
Some people, like Kiki Carter, 33, a stylist at Ketta’s Hair Salon and self-described neighborhood entrepreneur, reject the concept, saying Dorchester does not need food other people consider undesirable.
“We don’t want it,” Carter said of the proposed store. “Why would we?”
But Ben Cressy, a neighborhood organizer in Codman Square, said he is open to the idea.
“I’m not sure if people would perceive it as an insult,” Cressy said. “If it’s surplus and it’s usable, I’d rather have it in the hands of people who can use it than see it go in the trash.”
Under Massachusetts law, merchants can sell “expired” food as long it is “wholesome” and still aesthetically pleasing, meaning the food smells and tastes good. Such items must be clearly marked and shelved separately from unexpired products. Currently, that accounts for a tiny fraction of supermarket sales, but that could soon change. New rules proposed by the Massachusetts Department of Environmental Protection would ban commercial food waste from state landfills, requiring supermarkets and other institutions to find ways to divert organic waste elsewhere.
The culture of US supermarkets is a major obstacle to making better use of past-date food, according to Alvarez. Consumers have come to expect large displays of gorgeous fruits and vegetables, requiring grocers to stock far more produce than they can possibly sell.
One recent food waste study estimated that US supermarkets on average discard $2,300 worth of out-of-date food per store every day. Many pull items two or three days before their sell-by dates, according to a report by the Natural Resources Defense Council, a nonprofit environmental group in New York. Sell-by dates are not set by law, but by manufacturers themselves, and are generally conservative.
“Every apple in the store has to be perfect, and that drives the entire supply chain,” said Alvarez, who works as a senior lecturer at the Harvard Business School and wrote a case study on Rauch’s project.
But when lettuce begins to wilt or bananas develop brown spots, there is no dependable way to quickly get the still-edible but not perfect food off the shelves and into the homes of those in need. The Greater Boston Food Bank, for example, relies largely on volunteers and the majority of its products are nonperishable items, such as canned goods, collected from distribution centers. The organization has increased its focus on produce, but it accounted for just 25 percent of the 41 million pounds of food distributed in the past year.
Transporting food to the Dorchester store daily will be expensive: Rauch estimated it will cost about $300,000 annually — or about 8 percent of projected sales.
The Urban Food Initiative is one of several ongoing efforts aimed at improving access to healthy food in Boston, including a campaign to build a new food co-op in Dorchester and a nonprofit cafe recently opened by Panera Bread in Boston where customers leave suggested donations instead of paying set prices.
“It’s an intriguing idea,” Catherine D’Amato, president of the Greater Boston Food Bank, said of the Urban Food Initiative. “And it’s interesting to see entrepreneurs who have traditionally worked in the profit side looking at the nonprofit side to create models for food sustainability.”
Leaders at Codman Square Health Center agreed to talk with Rauch about opening a store on their property because they consider it compatible with healthy-food initiatives they already run, according to the center’s Anthony Stankiewicz.
Doctors at Codman write “prescriptions” patients can use to buy fruits and vegetables at a local farmer’s market, and through a partnership with Healthworks, the health center operates a low-cost gym in its building at 450 Washington St., the same site where Rauch wants to open his store.
“We take a pretty holistic view of health, and Doug’s idea fits in with that,” Stankiewicz said. “We’re in a food desert here, without healthy options, and this is an opportunity to help address that issue.”
Gail Latimore, executive director of the Codman Square Neighborhood Development Corp., said the proposal could provide an option missing in the neighborhood: wholesome prepared meals, available to go. But she acknowledged there is “a little tension in some areas of the community” over the question of using food past its sell-by date.
“It made sense to me based on what I heard; there’s a lot of interest now in getting total use of food,” Latimore said, “but we want the community to speak on this.”