When the My Street Grocery truck pulls up in front of a low-income housing complex in Portland, Ore., neighbors make their way curbside to shop for fresh produce or buy meal kits that will feed a family of four cheaper than a fast-food restaurant. Across the country in Atlanta’s Castleberry Hill neighborhood, business is bustling at Boxcar Grocer, where the corner convenience store has been updated with farm-fresh produce, healthful snacks, and high-concept design.
Entrepreneurs are setting up shop in the nation’s urban food deserts, expanding options for a market that has been overlooked by traditional grocers. “We want to create a prototype that will serve multiple community needs,” says Boxcar co-founder Alison Cross, who started the store with her brother, Alphonzo Cross. Despite their social good aspirations, they have deliberately steered clear of the nonprofit model. “To create change,” she says, “we need to prove that this can be done for profit.”
My Street Grocery also operates as a for-profit social enterprise. Founder Amelia Pape says she started planning the business while earning an MBA from Portland State University. One of her first class assignments was to identify a market failure and devise a solution. She focused on food deserts, defined by the US Department of Agriculture as low-income neighborhoods where a substantial portion of the residents live more than a mile from a supermarket. Despite Portland’s reputation as a foodie haven, the city has its share of neighborhoods with few healthy food options.
To reduce overhead and serve more neighborhoods, Pape and her two co-founders settled on the mobile grocery model. Another mobile grocer—Fresh Moves—delivers to Chicago’s Englewood neighborhood in a retrofitted city bus.
Pape and company tested their idea last fall by setting up temporary food stands in several low-income neighborhoods. The pilot demonstrated demand. Using Kickstarter, the online fundraising platform, they raised more than $10,000 in contributions to buy and refurbish their first truck.
Both enterprises make consumer education part of their business model. My Street Grocery works closely with Oregon State University Extension to connect customers with cooking classes and offers culturally appropriate recipes. Ready-made meal packs include recipes along with premeasured ingredients like whole wheat pasta, fresh green beans or spinach, and canned tomatoes. My Street Grocery is also seeking approval to accept food stamps. That means navigating regulatory challenges, Pape admits, “but it’s something our customers want.”
Boxcar Grocer has developed a network of urban farmers who rent six indoor market stalls to sell their produce directly to customers. The Boxcar brand is a nod to the neighborhood’s many railroad warehouses and also connects with cultural history. “Trains are great connectors. The store is an immediate way to make the connection between urban and rural land. We’re helping people realize that there are still black farmers,” says Cross, who is African American. “For many people in our generation, our parents left the farms and never looked back.”
Business has been growing faster than the brother-sister team expected. Their brick-walled store—which feels more like hip bistro than mini-mart—is appealing to a wider demographic than they envisioned. “Health food stores don’t cater to people who look like me,” Cross says. “We have an opportunity to market to people nobody’s marketing to.” Their biggest competitor, Cross adds, isn’t Walmart. “It’s McDonald’s, KFC, and Burger King. How do we change the mindset of a generation of upwardly mobile people who think that taking your kids to McDonald’s makes you a good parent?”
Food tastings are just one way they’re reaching out to new consumers. “Many people think healthy food is elitist, upper income, and white,” Cross says. With free samples of kale salad and other tasty snacks, she’s hoping to take a bite out of that misconception.