A former food industry executive turned social entrepreneur has a pitch for solving the problem of food insecurity that involves selling the food it rather than giving it away.
It’s a concept that Doug Rauch, founder and president of The Daily Table in Dorchester, Massachusetts, is taking on the road following his startup of five nonprofit grocery stores in inner-city neighborhoods of the Boston area. The latest one opened four months ago.
With a lease recently signed in Denver and another he expects to wrap up soon in Los Angeles, Rauch hopes the concept will pick up steam in much the way he helped grow retailer Trader Joe’s from a fledgling grocery chain of nine stores in southern California into a nationally recognized brand during his 14 years as company president. Rauch, who eschews calling himself “retired,” prefers to say he “graduated” from his corporate career to nonprofit work. He said he was moved to action by studies that he said showed food banks consistently not reaching nearly 40% of nutritionally deprived Americans.
Rauch acknowledges the record demand that food banks across the country are seeing from those feeling the squeeze of inflation and the post-pandemic sunsetting of government benefits. Still, he worries the true need might be even greater given studies he cited showing that as many as 1 in 3 Americans might be suffering from food insecurity. He also worries that food banks are ill-equipped to meet this need.
“I believe in the food bank system,” he added. “They do wonderful work and they’re necessary, but they’re not sufficient if they only provide a supplemental source of food and can’t reach people who refuse to use them at all because they’re too embarrassed.”
The Daily Table provides access to food seven days a week at below-market prices. Through its participation in the U.S. Department of Agriculture’s Double Up Food Bucks program offered through the USDA’s Supplemental Nutrition Assistance Program (SNAP), The Daily Table also enables SNAP-eligible shoppers to double the value of their food stamps by getting twice the fruits and vegetables for the same price. Examples include fresh kale ($1.29 per pound), bananas (39 cents per pound), and locally grown lettuce ($1.99 each) offered through a partnership with a hydroponic lettuce grower that shoppers can purchase for half of that price. “If you’re on SNAP, it’s 99 cents for the freshest, most incredibly delicious lettuce you can buy,” Rauch said. Discounted grab-and-go entrees are also available.
The stores cover approximately 70% of expenses from the sales revenue, in part through partnerships with food vendors who offer special pricing. The balance comes from donations. But leaders of the Urban Food Initiative, the umbrella nonprofit that operates the stores, must still run a tight ship. The most recently available federal Form 990 filing with the Internal Revenue Service (IRS) shows the charity had revenue of about $5.47 million with expenses of $5.07 million during 2022, leaving it with an operating margin of about $400,000.
Rauch believes in the approach because it allows shoppers the dignity of feeling they’re in control of providing for their families and that the stores are dependent on earning their business rather than the other way around. Anyone can shop at The Daily Table — no questions asked — despite the below-market prices. Some of the regular shoppers include students from the nearby Massachusetts Institute of Technology in Cambridge and other local colleges and universities That doesn’t surprise Rauch since many students struggle with food insecurity far more than is commonly appreciated, he said.
The IRS initially balked at approving the group’s 501(c)(3) application because of its open-door policy but eventually relented. “We pointed out that food banks don’t ask you for a W-2 or tax return. They just assume if you’re there that you need help, so why shouldn’t we do the same? The IRS finally said ‘we agree’ and didn’t push back after that,” Rauch said.
*Photo credit: The Daily Table
