Reference no: EM133383642

Daily Table Case Study:

The growing social trends surrounding organic foods and healthy eating have helped companies such as Whole Foods and Trader Joe's become power players in the grocery market. But the high price of organic food remains a hurdle to expanding this market, especially to include lower-income families. Trader Joe's has positioned itself as a lower-cost option, yet the prices it charges still keep it out of reach of many working families. In response, the company's former president, Doug Rauch, decided to open a new kind of health food store in 2015. Daily Table, a nonprofit, membership-based grocery store, sells fresh produce and prepackaged meals at affordable prices. It operates one store in Dorchester, Massachusetts, a moderate-to low-income suburb of Boston, and a second in Roxbury, a neighborhood within the city of Boston. It has expansion plans sighted for New York, Los Angeles, Detroit, and San Francisco.

The innovative approach to groceries seeks to address several elements of the "food paradox" simultaneously. First, hunger is a major problem worldwide, as well as in the United States. One in six Americans can be categorized as hungry, and according to the U.S. Department of Agriculture, nearly 50 million Americans-including 7.9 million children-are "food insecure." Yet nearly one-third of the nation's annual food supply, or 133 billion pounds, goes uneaten. Grocery stores that offer high-quality food tend to cater to wealthier consumers, and they discard more than $165 billion worth of food annually, often simply because it has minor aesthetic flaws or blemishes. According to the Environmental Protection Agency, food waste is the single biggest source of waste in municipal landfills. Not only are people from low-income sectors at risk of going hungry, but they also lack reliable access to nutritious and affordable food. In turn, they often suffer health problems related to their poor diets, including diabetes, heart disease, anemia, and so forth. Some communities don't have access to traditional grocery stores; thus, smaller family-owned stores often fill this gap and may sell overripe produce. However, as the only healthy option available, those retailers can mark up the prices, such that the food sells at double the price it would go for in conventional grocery stores. That is, the people who most desperately need healthy food cannot access it. To address all these issues at once, Daily Table works with conventional supermarkets and restaurants to recover food that otherwise would go to waste. These relationships benefit both parties; the supermarket or restaurant reduces the margins of its losses by up to half, and Daily Table receives inventory for its shelves. It also visits local farms and fisheries to source excess produce and fish. For example, when New England enjoyed a bumper crop of apples in a recent season, Daily Table partnered with the nonprofit Boston Area Gleaners to obtain more than 10,000 pounds of excess fruit that otherwise would have rotted. The apples, brought from local farms, sold for $0.49 a pound. The fish wholesaler and distributor John Nagle Co. brings its excess cuts of fresh fish to Daily Table every few weeks. Daily Table can then sell the swordfish, ahi tuna, and salmon, which can cost as much as $30 a pound, for as little as $5.99 a pound. Such prices certainly are appealing, but they might not be enough to overcome perhaps the greatest competition Daily Table faces: namely, the fast-food chains that provide fast, plentiful, easy food service options for lower-income families. To enhance its competitive standing, Daily Table therefore introduced prepared meals, starting at $1.79, with sides ranging from $0.50 to $1.00. The grab-and-go, ready-to-eat meals are ideal for some families, though for others, Daily Table also encourages purchases of convenient, ready-to-cook meals. Some of the tasty ready-to-cook meals also get prepared in the stores' kitchens, onsite. Rather than the high-fat, high-sodium choices at fast-food restaurants, these alternatives give consumers greater access to wider choices of fresh food, rich in nutrients. Beyond these choices, Daily Table also works to ensure that it provides its primary customers with a sense of dignity. Low-income consumers often sense a stigma associated with visiting food pantries or soup kitchens. Daily Table thus cannot risk leading customers to feel as if they are receiving charity when they shop there. For example, though its prices are vastly discounted, it charges for all the food it sells. This strategy has another benefit, in that it increases the chances that Daily Table can survive as a self-sustaining business. In another tactic to avoid the stigma of charity, Daily Table's store environment looks like any other trendy supermarket, with clean aisles, wooden crates to display the fresh produce, a friendly vibe, and windows that look into the kitchen area. Finally, it identifies its valued customers as members. To ensure it primarily serves the community in surrounding neighborhoods, Daily Table established membership standards. The first time customers visit, they must share some basic information to receive their (free) membership. On subsequent visits, they provide their zip code and phone number, which confirms their membership, without any need for a physical membership card. Checking for whether customers are from the local neighborhood may raise some privacy concerns, but Daily Table assures customers that no such information is ever shared with outside institutions. Still, Daily Table has faced some challenges, as well as some criticisms. The first introduction of the concept led to concerns that it would sell expired produce that conventional supermarkets could not sell by law. According to this view, the stores are a sort of dumping ground for food rejected by the rich and affluent, discarded and left as crumbs for the poor. In response, Daily Table cites a report from the Natural Resources Defense Council and Harvard Law School that reveals that "sell by" and "best by" dates on food actually provide little relevant information because the dates are mostly unregulated. Therefore, Daily Table calls its food "rescued" instead of "expired." Regardless of what it is called, selling officially expired food creates several legal and regulatory challenges for Daily Table. By working with regulatory authorities, it acquires the necessary permits, though the back-and-forth interactions with bureaucratic institutions often hinder the smooth functioning of its business model. The retailer also largely depends on grants and donations to keep its prices low. The resulting financial constraints require Daily Table to rely on word-of-mouth marketing; many consumers still have not heard of it.

Answer the question:

How does Daily Table address the needs of each of the different stakeholder groups: employees, customers, marketplace, society, and environment?