Corner Store Program Fails To Reach a Sustainability Level
Executive Summary
September - 2018
The purpose of this study was to assess the feasibility of connecting local farmers with customers in corner store operations located in low to mod income areas of Toledo where fresh produce is typically not offered. By localizing the food economy, we will promote a triple win strategy by aggregating demand for healthy food products, increase community access to healthy foods and increase markets for local producers.
This study addressed the following issues
1. Review other case studies:
2. Assess Farmer capabilities:
a. Select Farmers
b. Product Pricing
3. Select viable corner stores as distribution and sales locations:
a. Selection Criteria/Process
b. Engagement (Interest)
4. Identify implementation strategies:
a. Collaboration (Health Dept., YMCA and OSU Extension)
b. Logistics
Communication (Phone, email, text?)
Payment (Cash/Check/Invoicing/Electronic)
Recommendations to Achieve a Sustainable Long-Term Program
Based on these discussions involving participants within the food supply chain, a “go-forward” recommendation was collectively made by MVGA , Toledo-Lucas County Board of Health, YMCA, and OSU Extension pending the following agreed-upon contingencies:
1. MVGA farmer pricing and inventory offerings are accepted.
2. Implement a one-day per week delivery schedule beginning in August with intentions of reaching volume and variety levels capable of sustaining the program long-term.
3. Re-assess the program on November 15, 2018, for sustainability goals and accomplishments
If the program is deemed unsustainable, it will be terminated with a 2-week notice to all participants.
If the program is tracking at a sustainable rate, it will continue on a 12-month basis with quarterly reviews.
Here is what the program provided:
Area rural farmers were added to fulfill corner store orders through MVGA’s existing Food Hub operation. Because produce was sourced directly from the farmer, pricing was more competitive than using traditional supply chain channels. On the downside, only produce, was available for distribution. Corner stores still have to rely on other inventory sources for other products.
To be sustainable, the program needed 6-8 “base stores” doing weekly volumes of $150 - $300. There were initial commitments from 5 locations. Having this base allowed the program to serve other smaller corner stores who would only purchase $35 per week.
Whose the audience? MVGA designed a marketing program that featured see-through mesh “Grab Bags.” They were available in two sizes; one bag had $5 worth of produce including a recipe card of how to prepare the contents for 2 meals and a $10 version for 4 meals. The $5 bags were designed for WIC users, and the $10 bags were intended for SNAP users.
MVGA committed to providing local produce during a 7-8-month harvest season regionally. During the “off months,” only select items would be available such as apples, potatoes, squash, other root crops. through farmer refrigeration and storage capabilities. During the remainder months, produce would have to be supplemented with items through other sources to maintain program consistency throughout the year.
The program promoted cooking classes held at ProMedica’ s Ebeid’s Market On The Green grocery store downtown in coordination with our partners.
Results:
1. Week one: All stores were provided (about 10 in the beginning) $35 in free produce, display stands, signage and in one case a small, new refrigerator. To our surprise, three of the five base stores canceled the morning of delivery. No explanation was given other than they now were not interested in the program. They rejected the free $35 worth of produce in week one and the “Grab Bag” idea.
2. Week Two: Three of the five small corner store canceled after they were invoiced their first $35 minimum food order. Also, in week two, a health inspector after seeing our display in one corner store rejected our “Grab Bag” produce a display as being unsanitary and didn’t meet labeling standards. None of the produce contained in the bags required cooling including no leafy items.
3. Week Three: One of the base store locations was producing sales over $300. All the other small corner stores had minimal if any sales. Part of the reason is the program was either not promoted or pushed by store operators as they were advised to do so or customers simply did not see the value in fresh vegetables. Produce must be inspected daily to make sure it was still fresh and if not pulled from inventory. We recommended to the store owner (and they agreed) to donate the aging items either to themselves or staff before they went bad. That was not done. Managing produce does require a little effort unlike a bag of chips or candy. Changing operator procedures and customer, purchasing habits take time. There must be an substantial awareness and education committee.
4. Week Four: Only one base store was left. No other base stores were interested in signing on. The program ended.
MAUMEE VALLEY GROWERS RECEIVES AWARD
The Maumee Valley Growers Association (MVGA) received a state of Ohio grant in June, 2018 to study the feasibility of providing fresh produce generated by local small farmers to urban area corner stores businesses located in Toledo, Ohio.
The $15,000 feasibility study determined if there is enough interest between farmers and corner store operators to create a 6-month seasonal supply chain that is sustainable.
“The food industry has many variables that affect the success of this proposal long-term. The farmer must provide enough produce volume and variety to satisfy program costs while at the same time match the needs of corner store customers” says Joe Perlaky, MVGA Executive Director.
The study evaluated the entire supply chain from the farmer to food aggregator, the distributor to the corner store operator and of course with the product provided at a competitive cost to the consumer.
“This has been tried before, and we were concerned about the challenges says Perlaky, however, we developed some ideas on how to take advantage of smaller packaging strategies that would make for easier, unique purchase decisions specific for corner store buyers.”
The study was awarded by the Finance Fund Capital Corporation, (Healthy Food of Ohio Program) and will conclude within 30 days with recommendations to follow.
The Study Addressed the Following Issues:
Review other case studies:
The Food Trust
“Get Healthy Philly Initiative”
“Eat Fresh Live Well”
“Cooking Matters”
Assess Farmer capabilities:
Select Farmers
Product Pricing
Select viable corner stores as distribution and sales locations:
Selection Criteria/Process
Data Collection
Data Classification
Engagement (Interest)
Identify implementation strategies:
Collaboration
Roles and Responsibilities
Logistics
Communication (Phone, email, text?)
Payment (Cash/Check/Invoicing/Electronic)
Program Budget
Details of each category listed above can be found HERE.
Recommendations:
Based on these discussions involving participants within the food supply chain, a “go-forward” recommendation was collectively made by MVGA , Toledo-Lucas County Board of Health, YMCA, and OSU Extension pending the following agreed-upon contingencies:
MVGA farmer pricing and inventory offerings are accepted.
Implement a one-day per week delivery schedule beginning in August with intentions of reaching volume and variety levels capable of sustaining the program long-term.
Re-assess the program on November 15, 2018, for sustainability goals and accomplishments
If the program is deemed unsustainable, it will be terminated with a 2-week notice to all participants. If the program is tracking at a sustainable rate, it will continue on a 12-month basis with quarterly reviews.
