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The nonprofit Fare &amp; Square is a culinary diamond in a rough-and-tumble neighborhood, enriching residents with affordable fresh food and grocery staples.

In most of the country, that commodity is viewed as a produce department stalwart, though a dwindling one, losing sales and shelf space to more fashionable and higher-margin bagged salads. However, for residents of Chester, Pennsylvania, a gritty industrial city of 34,000 just south of Philadelphia, iceberg lettuce used to be an unattainable luxury. That was because Chester was in the midst of a food desert—one of 35 in the Delaware Valley.CBX_FareSquare_1869

At one time Chester was home to five supermarkets. Over the years they closed one by one as jobs and population fled and crime increased. The last supermarket in town, West End Food Center, permanently shut its doors in 2001.

Citizens in this hardscrabble, but proud town—the oldest city in Pennsylvania, settled in 1644, and the birthplace of the Mother’s Day Parade, Scott toilet tissue, jazz great Ethel Waters, rock-and-roll pioneer Bill Haley &amp; His Comets and allegedly the hoagie—were relegated to buying groceries from dirty corner stores or having to trek out of town, even to Delaware, to find a supermarket.

That changed in September when Fare &amp; Square opened its doors—in the same building that had housed West End Food Center—allowing Chester residents to once again purchase fresh produce, along with meat, seafood, deli, bakery, frozen and dry grocery items.

“When we were interviewing prospective employees and talking about the mission of our store, somebody made a statement that really opened my eyes,” says Paul Messina, Fare &amp; Square’s store director. “They said, ‘Do you know you can’t buy a head of lettuce in the City of Chester?’”

That is when Messina’s outlook on the importance of the store changed.

“It hit me that what we were doing became that much more of a mission of love,” he says. “We had to get this done for the people. It was ridiculous that you couldn’t buy a head of lettuce here.”

Pointing to a cooler case filled with heads of crisp, fresh lettuce, collard greens, kale, broccoli crowns, green bell peppers and other produce staples, Messina proudly says, “Now you can’t say that anymore. Now you can buy a head of lettuce in the City of Chester. It is a good feeling.”

Before Fare &amp; Square, grocery shopping was a major time consuming chore—especially for those without cars. A good number of people in Chester are living below the poverty level; the average annual household income in Chester is $19,000. “I had a woman come in the other day and say, ‘Do you know how much money I am saving because I don’t have to take two buses to get to Essington and then take a hack back,” Messina says, using the Philadelphia parlance for a freelance, often unlicensed taxi cab.

Granted, at 16,000 square feet with only four aisles, Fare &amp; Square is noticeably smaller than a Pathmark Supercenter, but it still manages to offer a full selection of produce, seafood, butcher-cut meats, a Dietz &amp; Watson-branded deli, frozen foods, dry grocery, pet foods, cleaning essentials and some other nonfoods.

Fare &amp; Square is notable for two other facts. It is owned and operated by Philabundance, the Philadelphia-based food bank that services the Delaware Valley, and is being billed as the nation’s first not-for-profit grocery store.

If the prototype is successful—and early indications are that it is a hit—the template will be rolled out to other food deserts in the Delaware Valley and copied by other food banks across the country.

Because of its unique situation and location, Fare &amp; Square operates on a premise that is different than traditional supermarkets.

“Pretty much in an urban store like this the merchandising basics are price. Price. Price,” says Bill Clark, president and executive director of Philabundance. “People don’t really care about organic and they don’t really care about local or energy footprint or being green. It is basically, ‘I’ve got to feed my family on a limited amount of money and I want to do it well, and I want to be respected when I do it.’”

That reason—not crime—is one of the key reasons that traditional supermarkets have not been able to make a go of it in inner cities, Clark says.

“We believe it is harder for a commercial grocery store to operate in a community like this because the gross operating margin on $100 million in sales in the inner city is different than in the suburbs,” he says. “In the suburbs there are much more prepared foods, value-added foods, premium foods. In here some of our biggest sellers are 5-pound bags of flour and sugar, cooking oil and Jiffy corn muffin mix.”

Clark says the idea for Fare &amp; Square came about because just-in-time delivery, better inventory control and less recovery for dented product are all having a hand in leading to less donations being available for food banks.

“We were having an increasing problem as a food bank because shelf stable products have been flat to declining across the country,” Clark says, noting that the problem is exacerbated by the growth of food deserts, described by the USDA as a low-income census tract where a substantial number or share of residents have low access to a supermarket or large grocery store. In an urban area like Chester, that is considered a one-mile radius.

“As a food bank we have been trying to support food cupboards and when a commercial food desert happens the demand on the charitable food distribution system skyrockets,” Clark says. “All of the food banks are having a hard time dealing with the growing demand or need and we had to figure out some way of addressing the problem of access, and providing a safety net of food for people that need it.”

Prior to Fare &amp; Square’s opening, Philabundance donated about one million pounds of food a year to churches and other charities in town, and Clark expects that figure will remain constant.

“What Fare &amp; Square does is lower the barrier to get food before people are so desperate that they have to go to a charitable-only distribution center,” he says.

Fare &amp; Square has several advantages that will help it thrive in a food desert that otherwise might not support a traditional for-profit store because it is owned by the nonprofit Philabundance, Clark says. “One is that I do not have to make a profit,” he says.
Funds were raised to purchase the building, which is now tax-exempt, and additional income is derived from tenant Family Dollar, which shares the building. Equipment and fixtures were donated or purchased at a significant charitable discount.

“All of our grocery carts were donated by Giant [Carlisle],” Clark says. “Even people who would normally be seen as competitors were involved. We got financial support from Wawa, Giant, Acme.”

In fact, it is Wawa convenience store milk sold in the dairy case. “We’ve had a very, very close working relationship with Wawa for the longest time,” Clark says. “They are an investor in the store and in Pennsylvania we have minimum milk price laws, so we asked them if they wanted to participate.”

In addition to Wawa, strategic manufacturing partners include Goya, Kimberly-Clark and Bimbo Bakeries.

“Everything in our store is purchased by us through wholesalers and resold,” Clark says. “We do not make a profit and we cannot sell any product that is donated to Philabundace. It is illegal for us to sell donated product.”

But some manufacturers will give Fare &amp; Square a discount on product.

“Spots within the store will get very good pricing offered to us by partner vendors who realize that we are actually a different class of trade,” Clark says. “They can support us with prices that are very attractive.”

Prices are cheaper, compared to suburban Pathmark and Giant stores surveyed, and Fare &amp; Square even stocks some items that those stores did not. Oxtails, smoked turkey tails, Bosco or Borden Singles were not available at Giant, for example.

Fare &amp; Square stocks a large assortment of premium brands. When asked by an observer why both Jiffy Baking Mix and Bisquick were carried when the Jiffy was clearly the better deal for impoverished shoppers, Clark replies, “When you talk to people in a community that has been without a supermarket for a while, they will voluntarily tell you up front that they don’t want you to be an Aldi or Save-A-Lot. They want the national brands. It is a question of respect. That said, the shelf movement on the national brand isn’t what you’d expect if you were in Villanova,” he says, referencing a ritzy Main Line suburb.

However, like on the Main Line, just about everyone at Fare &amp; Square belongs to a club. “This store is a membership operation,” Clark says. “We don’t charge for membership, but by asking people to sign up and get a membership card, and then using that card to identify their household, we have access to consumer purchasing data.”

Fare &amp; Square has 7,688 members as of last count. Not bad, considering there are 10,000 households in the entire city. “We are pulling from a larger area than just Chester, including Trainer, Marcus Hook, Upper Chichester and surrounding areas,” Clark says, adding that product selection coupled with low prices is drawing the shoppers in.
“With our relatively small footprint, the key is to be staples with a little bit of drama so that people enjoy the shopping experience,” Clark says. “You don’t want the food section to look as if it was chosen by a food bank and be all bunker food with the largest selection of varietal beans and rice.”

C-store on steroids
Based on the initial success and customer feedback about Fare &amp; Square, Philabundance is looking to open more stores.

“There are plenty of areas within our zone, like Camden, Moorestown and Philadelphia’s got multiple opportunities,” Clark says. “But there are also areas within striking distance, whether that is Wilmington, Atlantic City or Trenton.”

Clark concedes that Philabundance will not be opening any “150,000-square-foot Wegmans-type” stores, but likely more outlets in the 20,000-square-foot or smaller range. “If we can achieve some kind of scale in our supply chain, we may be able to augment the distribution of smaller, somewhat C-store on steroids formats,” Clark says. “Like a 6,000-square-foot footprint specializing in perishables.”

Similar stores may be cropping up around the nation.

“We’ve had a lot of inquiries from other cities,” Clark says. “People who live in these [impoverished] communities have much higher incidence of dietary-based disease, obesity, hypertension, diabetes, fatty liver. Diet is creating much higher medical costs. We think it is better to reestablish normal nutritional access than it is to throw pills at the problem.”

Before expansion takes placein other areas Fare &amp; Square first needs to work out the kinks in its initial location.

“The merchandise mix is one of the things that has to be tuned,” Clark says. “Because we’re a nonprofit a lot of people thought we were going to have gluten-free this and organic-that, but that is dead. We have crates in the back room filled with stuff we are pulling from the shelves because it did not sell. Whoever thought we’d be selling Robinson’s Lemon Curd? Are you crazy?”

Penn-ing a renovation
Before it was Fare &amp; Square it was West End Food Center. Before that Shop ‘n Bag, and before that it was an outlet of Penn Fruit Co., once one of Philadelphia’s most prominent supermarket chains, known for low prices, flashy promotions and innovative architecture.

After West End closed in 2001, the store sat vacant for a dozen years. “In a space left vacant for so long, you never know what surprises you may uncover,” says Joseph Bona, president, branded environments, at CBX, the New York-based firm that designed the store. Because the project was being undertaken by a nonprofit organization, a tight budget came into play.

“When the old suspended ceiling system was removed, a fantastic original vaulted ceiling was discovered,” Bona says. “However, age, disrepair and neglect had left the task of renovating it too costly, so up went a new, more affordable suspended ceiling system. The replacement ceiling provided exactly what we wanted to achieve for Fare &amp; Square—the sense of a new, bright and updated market.”

Factory fresh
What does the one-unit Fare &amp; Square have in common with multi-thousand store Kroger and Safeway chains? Like its two larger compatriots, Fare &amp; Square may one day operate its own factory.

Currently using the IGA label from its supplier Bozzuto’s, Fare &amp; Square is looking to create its own line of products in certain categories. “We are going to be looking at doing small scale manufacturing ourselves,” says Bill Clark, president and executive director of Philabundance, the Philadelphia-based food bank that operates the store. “We have already trademarked a number of brands, like Community Farms and Community Kitchens.”

Clark says it is getting increasingly difficult for food banks to source staples, like rice and dry beans. “We are starting to do is buy rice and beans in large 2,000-pound bins and use our staff and volunteers to pack them off into one-pound bags as a way to drive down costs,” he says.

In addition to repackaging staples like rice, Clark sees Philabundance one day getting into more detailed manufacturing. “Frozen pizza is a big item in any inner city market,” he says. “Why would I want to go and buy frozen pizza from another state when I could make it and put another 20 people to work? And because we are a food bank, we can make the frozen pizza nutritious and still keep our costs low,” he says.

Read more: http://www.groceryheadquarters.com/2014/01/chesters-little-gem/