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[21 comments]

Will Former Trader Joe's Prez Succeed Selling Food Past Date?

February 27, 2013

Doug Rauch, the former president of Trader Joe's, is looking to bring more nutritious foods to low-income consumers in Boston, but there's one catch. Mr. Rauch plans to sell foods that have passed their sell-by dates.

Mr. Rauch's non-profit Urban Food Initiative is looking to take recently expired foods and turn them into packaged meals that are priced on par with unhealthier alternatives found in fast food restaurants.

"The No. 1 leading problem is affordable nutrition," Mr. Rauch told The Boston Globe. "For the 50 million Americans who are food insecure, their solution is not a full stomach. It's a healthy meal."

Mr. Rauch, who is looking to open a small store in Dorchester, MA, is financing the project with his own money while looking for grants from other organizations. He told the Globe that he expects the store to eventually provide jobs for 75 to 100 people.

Jose Alvarez, former president of Stop & Shop and an Urban Food Initiative board member, told The Associated Press that the group will need to overcome any perception that the food has gone bad.

"You could have bought this yesterday at Whole Foods or Stop & Shop for $2 and today you can get it at Doug's store for a $1 or 50 cents and it's perfectly fine," he said.

Discussion Questions:

Will Doug Rauch's Urban Food Initiative be a success? How will it overcome the negative perceptions associated with food that is past date?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Will Doug Rauch's Urban Food Initiative be a success?

Comments:

Usually any project with the words "non-profit," "urban" and "initiative" in them don't have much of a success rate. While lower income consumers like cheap food, it seems they really have no desire for healthy food based on product movement reports in difficult areas. I would suggest they take the idea and move it to the more affluent suburbs and convert this to a for-profit model. Everyone likes saving money and the more affluent consumers tend to have a higher demand for healthy food.

David Livingston, Principal, DJL Research

He won't overcome the negative perceptions associated with food that is past date, nor should he.

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Dr. Stephen Needel, Managing Partner, Advanced Simulations

I like this idea. It will require re-framing the expiration date concept to shoppers, but that's not difficult given an effective personal communication program in the stores (with people, not just signs).

With a drop in stock-up trips and a big rise in buying food for immediate consumption versus storing in the fridge for eating later, I think consumers will find this to be helpful and convenient.

Perhaps the difference between success and failure will be the real amount of daily traffic that could stop in quickly; in other words, location - location - location.

Maybe consumers might kick in to help fund the organization via Kickstarter?

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Anne Howe, Senior Vice President, Shopper Solutions, part of Acosta Mosaic Group

I find this concept quite ironic. We've cut back on most vegetable purchases at TJ's because although still within their freshness date, most of their organic produce is stale/poor quality or rots within two days of bringing it home. Really. So it seems to me, that Mr. Rauch has past experience selling expired food.

Rather than selling expired foods in low income neighborhoods, far better to find a way (subsidizing, working with other non-profits, etc.) to get it into food banks which are struggling for lack of enough food donations.

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Ken Lonyai, Digital Innovation Strategist, co-founder, ScreenPlay InterActive

There have been a number of reports saying that the sell by date indicates when the product should be off the shelf of the retailer, not off the pantry shelf and consumed. If the food is not safe to consume and people get sick, the project will fail.

There may have to be some education about calculating the "consume by" date. All this will require some education. However, if the store is located in a food desert, overcoming the hurdles is possible. I would be interested in knowing how the experiment fares.

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Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

If the prices are lower and if vocal special interest groups and the press support his UFI project, it has a chance to succeed. Otherwise it's "stale" food.

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Gene Hoffman, President/CEO, Corporate Strategies International

Full disclosure: I like and respect Doug Rauch a great deal—especially in terms of his serious personal commitment to community service.

That said, the idea of getting nutritious food to people in need is laudatory, but I agree with Jose Alvarez that the P.R. profile of food past its sell-by date is problematic.

I suspect the idea is only as sound as the next sale. So long as there is no problem, everything ought to be fine. First problem—the doors may be shuttered.

As Anne Howe so correctly notes, success lies in how well the pitch can be formed. If it works, it will be a great idea. If not, I'm sure Doug will find another way to help those in need.

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Ryan Mathews, Founder, ceo, Black Monk Consulting

I love the why behind this story, but food past a certain date? As a culture we've been engrained to get rid of food prior to the expiration date so I'm not sure how that will be turned around.

This is such a niche market it could work in certain areas. The perception they'll really have to overcome is: You're poor so you're getting old/bad food. I hope they really take the time to think this through. It almost sounds like lawsuits waiting to happen with public health and safety. According to the USDA, except for "'use-by' dates, product dates don't always refer to home stage and use after purchase," but, if food is mishandled or not stored properly foodborne bacteria can grow and cause foodborne illnesses. Good luck with that, Doug.

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Zel Bianco, President, founder and CEO, Interactive Edge

The perception of the "use-by" date will be difficult to overcome. The idea is good. The execution of the plan will be hard to implement successfully.

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Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

I'm sure this is a well meaning effort, but I have a real problem with the package dates meaning one thing when they are used in for-profit stores catering to the middle class and/or the affluent, and another thing when they are used by non-profits catering to poor areas. The package dates should mean the same thing for all consumers.

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Al McClain, CEO, Founder, RetailWire.com

The age old maxim is "When in doubt, throw it out." This venture is doomed from the start. Many soup kitchens and other organizations that take donations will not accept food past the expiration date. Good luck trying to sell it.

Kurt Seemar, President, Analytic Marketing Innovations

The World Health Organization stated that up to 50% of the world's food supply goes to waste. These food items mentioned in this article are more than likely just fine to consume. I applaud efforts to feed those in need and better utilize the food supply inventory.

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Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

I find the dates on packaging to be a "hard stop" for me when thinking about whether to purchase/consume or not. Perhaps, rather than a store that sells "off-premise consumption" foods, it would be better to make it a restaurant that sells meals (at a reduced rate?) to compete with fast food, but that incorporates the about to expire/recently expired, dated food? That way, it is healthier than the standard stuff sold at fast food, has an element of "excitement" in that the menu changes based on what is available, and it still serves the population it is intended to help. Would that be a better solution?

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David Zahn, Owner, ZAHN Consulting, LLC

"...it's perfectly fine."
No it isn't. Perhaps "imperfectly" fine, but it's older and so at least incrementally, not as good.
This story is about a topic we've touched on before: the three dates—"sell by," "best by," "use by"—that are interchanged in the public perception even though they mean different things. Perhaps it's time to standardize the nomenclature, or just have a "produced on ___" date. Of course if the main point of date labeling is manufacturers wanting to increase turnover, the odds of reform are small.

'notcom'

"...to take recently expired foods and turn them into packaged meals that are priced on par with unhealthier alternatives found in fast food restaurants." OK, so he gets around the brand seeing their product sold at a discount—when is the first reporter going to head out back to check the dumpster and "out" xx brand?

I am not sure what "gray market" he operates in, but it is a bit of a well kept secret that there is a lot of money to be made in this area of "coded out" and/or diverted products. I can't imagine this being an easy path to take for this enterprise. Ditto the comment—figure out how to get this product into food banks and soup kitchens would be a more altruistic use of his time.

'Stanaggie'

From time to time I had the good fortune to find some Cheddar Cheese marked down 50% because it was past date. I often purposely let my Swiss cheese age before I use it. We got back from a vacation and there was a gallon of unopened skim milk a week past the sell by date—it was fine. I have consumed yogurt months after the sell by date—seems even better.

On a great deal of the packaged food we buy, the sell by date can be ignored. A good tip is to put foods that are labeled refrigerate after opening in your refrigerator (jams, salad dressing, mayo, ketchup, mustard etc.) They will remain good a whole lot longer than the sell by date.

'schindler'

This will be an uphill run. These dates indicated that food is okay if correctly handled, and could truly benefit food banks and other donation sites.

Selling expired foods would be problematic at several levels. There is an implicit guarantee of quality and safety from the manufacturer/marketer based on the date. Expired foods are expected to be removed from the shelves—not sold at a lower price. While this is a sometime practice at retail for fresh meats or produce from their retail displays, the marked down bin only appeals to certain shoppers because of major questions about freshness and quality.

Anne Bieler, Sr. Associate, Packaging and Technology Integrated Solutions

They need to focus on helping the poor, not the issues with food that is short or past dating. By doing this, they can offer, educate and improve the plight of the urban poor. Nutrition comes at a cost, and that should be minimized, which is the goal of the Urban Food Initiative.

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Kai Clarke, President, Kowa Optimed, Inc.

The idea is good, but it would be a public relations nightmare. Who wants eat food that "may" make you sick?

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John Karolefski, Editor in Chief, CPGmatters.com

Having worked in lots of soup kitchens and homeless programs over the years, I know that very few people object to outdated food when it is given to them for free, if the alternative is going hungry. But I see problems with selling it, in terms of PR and even potential litigation. Not something I would want to or dare to do.

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Warren Thayer, Editor & Managing Partner, Frozen & Refrigerated Buyer

Selling dated food is not a solution, it has been a problem in the urban community for decades.

In addition to local grocers in the urban community selling boosted items (paying shoplifters to steal toothpaste from a large chain store to sell in their stores), another shady practice was paying chain grocery workers to not throw out bad food but sell it to local urban grocers to sell to urban communities.

Also many urban communities are on food subsidies and won't spend on fresh food if they have to travel several miles rather than walk locally.

Ed Dunn, Founder, (Stealth Operation)

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