Concept Note for TRC Bargain Grocery Store

SUMMARY

The Riverside Church is proposing to transform its Food Pantry into a Bargain Grocery store.

Expanding the pantry to provide low-cost groceries will allow greater provision of fresh produce and other highly nutritious food, including prepared meals, both to the general public and low-income people who are currently recipients of free food through the pantry.  The Bargain Grocery will use an advanced point of sale system that allows it to track distribution of free food, food donated not for resale, as well as tracking and incentivizing selection of healthy foods.

The Riverside Bargain Grocery, while managed by a professional staff, will initially provide at least 15 jobs for young people, people who are formerly incarcerated and other people who have had difficulty finding stable employment, even while continuing to provide volunteer opportunities currently afforded by the pantry.  In a future proposed expansion, the Bargain Grocery will open a greenhouse on one or more of the roofs of the church, that will provide produce, and provide opportunities for intergenerational learning, with volunteer opportunities for both older adults and young people.

This store will be operated as a non-profit social, with its profits going to provide sustaining support to the pantry program, fund food justice activities and support other social services provided by the Riverside Church.  Should the store prove to be successful, Riverside contemplates building a much larger store as a part of its future development plans.

MODEL AND PARTNERSHIPS

The Riverside Bargain Grocery is intended to be modeled on the Bargain Grocery that is operated by the Compassion Coalition in Utica, New York.  Compassion Coalition, founded by Mike Servello, twenty years ago, addresses urban food inequality and access through a Bargain Grocery that started in a 1,200 square foot store.  In 2018, Compassion Coalition moved its store operations to a new 13,000 square foot store, that includes a commercial kitchen and xx square feet of refrigeration and freezer space.

Compassion Coalition’s Bargain Grocery can sell at 40% or more below the average retail price through wholesale purchasing of large quantities of goods from growers, producers, and major distributors across the country.  This includes produce rejected because of size or appearance, as well as remainder and overstock food, and food approaching expiration.  By large scale purchase of food that would otherwise be wasted, the Bargain Grocery is able to avoid competition with the retail grocery industry while still providing low-cost access to people for whom for-profit grocery stores are inaccessible or too expensive.

Notwithstanding its greatly reduced prices, Bargain Grocery, Utica, generates sufficient profits to provide free groceries to every food-insecure household referred by local social service organizations.  In addition, using its profits and other donated goods, it underwrites furniture for homeless people who are newly housed, school supplies for classes serving 30,000 public school students, and other support for an array of other community services.  All total, Compassion Coalition distributes $20 Million annually in food and other community benefits, with only 4% of its revenue going to administrative costs.

A similar bargain grocery is being developed by Food Link, in Rochester, New York.  This store has already received a planning grant to do its feasibility study, store design and business plan from the USDA.  The Compassion Coalition, Food Link, and Riverside plan to form a consortium both to increase purchasing power, enhance shipping capacity, and to provide each other with technical assistance.

PHYSICAL DESIGN

Riverside is blessed with ownership of enough property to adapt a space for a pilot version of the Bargain Grocery.   The existing Riverside Pantry operates in a 1,094.58 square foot room on the ground floor of the church’s Martin Luther King Building.  Two sections of this space are currently not well integrated.  One of these sections lends itself to a walk-in refrigerator/freezer with display cases for shoppers.  In addition, there is a former Library into which the Riverside Bargain Grocery can expand, adding 843.27 square feet.

This combined space of 1,937.85 square feet opens onto the Cloister Lounge, an indoor open space that is largely unused during the week except as a waiting area for current Pantry recipients and for various art displays.  Using wheeled display carts, part of this space can be used during store hours to add an additional 1,000 square feet to the store during operating hours.  These display carts will feature fresh produce, which will account for 40% or more of the food sold.  On the same floor, there is a storage space of 1,255 square feet that can be converted into a large walk-in refrigerator/freezer that can accommodate large purchases of perishables.

There is room in the Cloister Lounge to add an open café that can serve prepared food.  Riverside has two institutional kitchens on site, which will allow the Riverside Bargain Grocery to strive to achieve zero food waste while being able to sell prepared food both in its café and for take-out.  Because the prepared food will use excess items, it the selections will be constantly changing and different from the standard food options that are usually sold, not just to customers of the Riverside Bargain Grocery, but also to the one hundred staff who work in the building, persons from the community who participate in other activities at Riverside, and a growing number of tourists, another social enterprise initiative being developed by Riverside Church.

Riverside Church has several flat roof surfaces that lend themselves to roof-top gardening.  These includes the roofs over the Cloister corridor (1,149 square feet) and South Hall (8,357 square feet)which is currently used as a playground.  A second stage initiative of the Riverside Bargain Grocery will be the development of a green house and outdoor  garden space on these roofs.  These gardens will grow fresh produce that can be sold in the store and distributed in the pantry.  This will also provide the opportunity to compost food stuffs that would otherwise be thrown away.  More important, the vision for these gardens is to provide an intergenerational opportunity for older adults to volunteer their time to mentor youth who do internships in the gardens developing vocational skills while learning about roof-top horticulture.

BLENDED PANTRY OPERATIONS

Riverside has for a long time operated the Pantry in a way that respects the dignity and worth of recipients.  The Riverside Bargain Grocery provides an opportunity to enhance that experience as well as better serve people struggling with food insecurity.  The Riverside Bargain Grocery will afford the resources for a sophisticated registration and point of sale system.  This will allow better needs assessments and tracking of Pantry applicants to include health information that will allow the Pantry to incentivize selection of foods that enhance health.

Pantry enrollees will receive a debit card that contains free “purchase” points as well as health food incentives.  Pantry recipients will then have the freedom of shopping on their own without distinction from paying customers.  Pantry recipients will be able to purchase food beyond their grant.  The Riverside Bargain Grocery will accept both WIC or EBT, allowing customers to maximize their purchases.  Persons using a Pantry debit card will be indistinguishable from other customers in the store, protecting their confidentiality.

The point of sale system will track Pantry debit card “purchases” so that real time reports can be provided on both the quantity and cost of food distributed at no charge.  In addition, the point of sale system will have the capacity to track food donated on not-for-resale terms.

Revenue from the Riverside Bargain Grocery will allow Riverside to implement a robust nutritional education program that will be available to any customer, including Pantry recipients.    This will include an individual nutritional assessment with a certified nutritionist, as well as cooking and healthy eating program.

Because the Pantry will be able to track nutritional needs tied to “purchases”, it will be in a position to contract with Value Based Payment networks to provide tailored food as medicine for Medicaid recipients with chronic conditions and other medical conditions that require enhanced nutritional support.

DEVELOPMENT PLAN

This concept note is written to for the purpose of encouraging discussion of the proposed Riverside Bargain Grocery, and to initiate a development process that will allow the store to begin operation twelve months from now.  The first stage of this development effort will include discussions with Food Bank stakeholders, including funders, to ensure that the Food Bank can continue to operate successfully and improve the quality and quantity of its operations integrated into the Riverside Bargain Grocery.

Riverside Church will pursue planning grants from Government initiatives such as the USDA Healthy Food Financing Initiative, the New York State Empire State Development Corporation, and New York City’s FRESH program.  Also under consideration for a planning resources are the Family Food Foundations, the New York State Health Foundation, and the Kellogg Foundation.  Planning will include a feasibility analysis, a business plan and physical design, all of which will be used to solicit capital funds.

Capital funds will be used to build out the facilities, purchase commercial equipment, a tailored point of sale system, and an initial fleet of trucks for food pick up, and provide start-up funds to bring on staff and invest in additional purchases.  It is anticipated that the start up costs will need to cover a month of pre-operations, including pre-opening marketing, and the first 90 days of store operations, after which the Riverside Bargain Grocery is expected to be financially self-sustaining.

Riverside Church recently acquired a dormitory that is adjacent to its nave.  This has lead the Church Council to establish a Development Committee to develop a long range plan for its use of space.  Many religious institutions have developed market rate housing that contributes to the gentrification of New York City as the best way to secure their financial futures.  Riverside Church has chosen to instead focus on social enterprise that is mission-oriented even while ensuring the long-range financial viability of the church and its programs.  The Riverside Bargain Grocery is a pilot of the Riverside Development Committee, intended to serve as proof of concept for the church’s engagement in social enterprise.  Should the Bargain Grocery prove successful in its initial location, the Development Committee contemplates building a larger Bargain Grocery as part of its overall development plan.

STAFFING

The Riverside Bargain Grocery will be initially staffed by management experienced in retail grocery operations, including a senior manager, a buyer, and a store and warehouse manager.  In addition, the staff will include a nutritionist to provide nutritional assessments and culturally appropriate nutritional education.  Drivers, warehouse workers, cashiers and stockers will be hired from young people, people who were formerly incarcerated and other people who have had difficulty finding stable employment.  As operations grow, the goal will be to promote employees initially hired in entry-entry level positions, providing opportunities for advancement as well as new openings for others.

Because of its growth in operations and hours, the Riverside Bargain Grocery will be able to offer a robust volunteer program, that affords volunteers meaningful opportunities, both in basic store, café, and ultimately, garden operations, as well as interfacing with employees as mentors and job coaches, with customers as personal shoppers, and in cooking and nutritional training programs.  Not only will this program solicit volunteers for the Riverside congregation, academic institutions, and the local neighborhoods, it will also encourage volunteerism by low-income consumers with the goal of providing vocational experience that allows these employees to move into paid positions as they become available.

GOVERNANCE AND USE OF SURPLUS

As presently contemplated, The Riverside Bargain Grocery will operate under a non-sectarian, wholly- owned subsidiary of Riverside Church.  The Board will be recruited from the Church congregation, including its Social Services Committee, the local communities, other stakeholders, including consumers of the Riverside Pantry, and members of the larger community who can offer professional expertise to ensure the success of the corporation.

It is anticipated that after its first year of operations, the Riverside Grocery will begin to generate a surplus.  Once this surplus proves to be sustainable and the corporation has built up sufficient operating reserves, the board will be responsible for periodically directing those surpluses, first, to expand Bargain Grocery operations, second, to support other food justice initiatives both internal and external to Riverside Church, third, to support the existing operation and expansion of social services at Riverside Church, including its Barber Training Program, the Shower Ministry, and the Homeless Shelter, and finally, to support other social justice ministries such as Coming Home, which provides formerly incarcerated men and women with reentry support, the prison ministry which provides services for people who are presently incarcerated, Sojourners, which provides support for immigrants in detention and post-release, and the Sanctuary Program which provides sanctuary for immigrants seeking support.