Did Doug Rauch Just Fix Food Deserts and Food Waste?

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Photo by Michael Piazza

The gorgeous head of frisée lettuce is chopped and rinsed, so I top it with a spoonful of Mediterranean lentil salad and a few salty capers. I ladled up a beautiful white bean and spinach soup whose warmth and slight spiciness is perfect for a cold day. As I sit down to enjoy my lunch, I realize I’d probably pay $20 or more for a freshly prepared meal like this downtown somewhere. The cost to me for the soup, the lettuce, the lentils, and the capers? About $4.

As I put another bite of the crunchy, salty salad in my mouth, it hits me that this entire meal might be in a dumpster or landfill somewhere if not for Doug Rauch.

Who’s Doug Rauch? He’s a grocery industry veteran who, rather than retiring to someplace warm for rounds of golf, decided to change the way low-income Bostonians buy food—and along the way, rescue some food.

Rauch opened Daily Table near Codman Square in Dorchester last June to national media attention, in part because of the 64-year-old’s long career in the Trader Joe’s front office, and partly because of the peculiarity of the business model. Daily Table is a nonprofit grocery store—the country’s first—whose mission includes selling nutritious food at deep discounts in a neighborhood that has been ravaged, historically, by diet-related disease. Rauch and team are able to mark the food down by sourcing what they call “excess food,” such as undersized or aesthetically imperfect produce left in local fields or packaged food nearing its “sell by” or “best by” date.

During New England’s bumper crop of apples last fall, for instance, Daily Table partnered with the nonprofit Boston Area Gleaners to bring in more than 10,000 pounds of excess fruit from local farms, which Rauch sold for $0.49 a pound. Rauch estimates that at that price, he took a loss on the apples when one considers the backend costs of paying employees a living wage and driving to the orchards to pick them up.

“People would ask me, ‘Why not charge $0.99 a pound?’” Rauch says. “Because our mission is to deliver affordable nutrition. At $0.49, even a mother on SNAP [Supplemental Nutrition Assistance Program, formerly food stamps] can afford the apples.”

Daily Table is strategically situated among Bostonians who are more economically disadvantaged than their neighbors in other parts of the city and where diabetes, obesity, and heart disease – all connected to diet – have become major public health crises. In 2010 The Food Trust discovered that Boston’s poorest neighborhoods—including Roxbury, Mattapan, parts of Dorchester, and East Boston—are not adequately served by fresh food sources like supermarkets or food co-ops. These neighborhoods are sometimes called “food deserts” or “food swamps” for their lack of fresh food options and glut of fast food retailers and liquor stores. The conventional thinking is that without access to full-service supermarkets, Bostonians with budgetary and transportation constraints must buy their food from convenience stores, which typically offer fewer fresh produce options and more unhealthy packaged foods at higher prices.

But full-scale supermarkets also sell lots of the bad stuff as well, which is why Daily Table sells only products that meet certain nutrition guidelines for sodium, sugar, and other potentially harmful ingredients. Think organic, whole wheat bread instead of Wonder. Daily Table doesn’t publish its guidelines because “we don't want our customers to feel that they're sacrificing taste for nutrition, or that they are part of a ‘program,’” Rauch says, adding that he’s confident the market is “hands-down, the healthiest food store in America.”

About 40% of the market’s total sales come from ready-to-eat-meals prepared on-site—like my deliciously spicy white bean chili—which also must meet health standards, Rauch says. In a hard-working community where convenience is king, the prepared foods are cheaper and healthier than most items on a fast-food extra value menu. But while Daily Table’s ready-to-eat meals still provide a more nutritious answer to the question, “What’s for dinner tonight?,” Rauch says he’s even happier to see more customers picking up other items as well. Since opening last summer, customers’ average transaction has increased by greater than 50%, showing Rauch that “in a community that doesn’t have much disposable income, we’re becoming a greater part of their everyday diet.”

After 31 years with California-based grocery chain Trader Joe’s, successfully leading the company’s expansion to the East Coast in 1996, and retiring in 2008 as president of the company, no one would blame Doug Rauch for spending his golden years on a beach somewhere with his feet up and a drink in his hand. But that’s not Rauch.

“I don’t really believe in retirement,” he says. “I don’t believe people are well-served by not being engaged with a community. Humans get the deepest sense of meaning and happiness by contributing to helping people outside of yourself.”

In 2009, Rauch was named a senior fellow at Harvard’s Advanced Leadership Institute, a program that helps former executives transition from the corporate world into helping solve some of the world’s major social ills. It was here where Rauch put meat on the skeleton of an idea he had to address food waste and insecurity.

He’d witnessed for decades the obscene amount of waste supermarkets and other retailers create, but he’d more recently discovered another hidden epidemic: one in six Americans occasionally struggles to afford nutritious meals.

At the end of his fellowship, Rauch stood before colleagues and professors at Harvard, presented the problem he’d studied, and was asked the all-important question: what are you going to do about this?

“It’s such a daunting problem, that if you can make a dent in that, you have to,” he says. “Given my knowledge and my many years of experience in the food industry, I had to give it a stab.”

The concept for Daily Table was hatched in 2012, but it would take another three years to open the doors. Rauch and his team spent time in the neighborhood, pitching the idea and hearing residents’ questions and concerns. Some of the strongest early criticism came from neighbors who perceived Daily Table’s business model as dumping secondhand food on a poor community. Early news headlines saying the store would be selling food that was “expired,” “aging,” or “past its prime” didn’t do much to dispel this myth. Rauch says it was this feedback that caused him to pivot from his original plan to procure some foods that had passed their sell-by or best-by dates. While these foods may have been perfectly edible, Rauch says “it would be hard for [customers] to feel this is a first-rate product,” as the task of educating them on the complexities of product coding would have been “an uphill battle.”

He also wanted Daily Table to cater to those who might be too proud to ask for food from a pantry or soup kitchen. From the natural light falling amply on wooden bins full of potatoes or apples or lettuce to staff who greet each visitor with a kind smile, Daily Table more closely resembles a trendy suburban natural foods market than a sterile nonprofit food pantry or government office.

“Let’s find a way to bring healthy food to the working poor in a manner that delivers dignity, where they don’t feel stigmatized —so that they feel better about the exchange, instead of feeling there’s a power differential,” he says.

Meanwhile, Daily Table is achieving its other, less publicized mission: curbing food waste, which affects as much as 40% of all food sold in the United States, according to the United States Department of Agriculture.

Many Daily Table finds are destined to be the next victims of the misleading and wasteful food dating system Rauch got to know intimately during his three decades with Trader Joe’s. My Mediterranean lentil salad, for instance, has a “use by” date on the package – which refers, roughly, to its day of peak freshness— that reads “Feb. 20.” Most supermarkets will not accept products within 30 days of their code date, however, because of the time it takes to process a product once it’s in the store, Rauch says. So Haverhill-based Cedar’s, which makes my lentil salad, would most likely have to throw out product it cannot ship to stores, unless it finds somewhere to sell or donate the excess product. Enter Daily Table, which accepts the salads as a donation or for next-to-nothing and sell them for $0.99 each—about 85% off the regular retail price.

The store is also rescuing excess food and fish from local farms and fisheries. Following a banner year for apple orchards in 2015, Daily Table partnered with a local nonprofit to glean and sell tons of excess fruit that would have rotted in the trees or on the ground. Members then bought locally grown apples for a fraction of their wholesale value, creating a donation-based supply chain arrangement that Boston Area Gleaners executive director Laurie “Duck” Caldwell says is putting a dent in the massive amounts of edible food wasted on local farms and orchards.

In total, the Waltham-based nonprofit reports donating nearly 71,000 pounds of rescued, Massachusetts-grown food to Daily Table the last half of 2015—more than 4,000 pounds a week – including apples, squash, potatoes, and leafy greens like kale or collards.

The business also recently caught the attention of local fish wholesaler and distributor John Nagle Co., which brings its excess cuts of fresh fish to the store every few weeks. Recent text message alerts from Daily Table advertised fresh-caught swordfish, ahi tuna steaks, and salmon for $5.99 a pound—prices Rauch says locals haven’t seen since 1970.

Have Rauch and company discovered that the long-elusive road to improving food deserts intersects with that of reducing food waste? Rauch is certainly confident in the model, which he believes will result in improved health outcomes among Daily Table shoppers over time. He envisions a city dotted with Daily Table markets, and says he is currently in negotiations for a second, or even a third store in or around Boston.

Challenges exist, of course. Daily Table is not financially self-sustaining and depends on grants and donations to keep prices low—though Rauch says his goal is to have each market reach a break-even point. The finances being what they are, Rauch adds that he’s sure many of the store’s Dorchester neighbors don’t know what’s happening at Daily Table, as he relies almost solely on word of mouth for marketing.

Still, he may be correct in stressing that the Dorchester market has already cracked a previously evasive code in American poverty and nutrition: “If you can offer people healthy food for as much or less than they would pay for less nutritious food, they’ll buy it.”

Daily Table
450 Washington St, Dorchester