Night Shifts
During my second year of college I transferred to an upstate school to study Biology. Like many of my fellow students from working families, I started doing minimum wage shifts in campus dining services as a dishwasher and line server. I took late afternoon and early morning slots around my classes, but also tried to leave time for non-paid activities, such as apprenticing once a week at the radio station to get a coveted DJ shift, and eventually training and working as a Volunteer EMT-D on the local ambulance service. Looking back, and considering my grades, I probably should have left more time to study.
After a couple semesters bussing tables, shoveling meals on students’ plates and making sandwiches as “the Deli guy”, a friend hooked me up with red eye shifts at the late-night café, where students would go between study sessions for burgers, pizza and fries. The set up was simple, a flat top grill, a fryolator with two deep fry baskets, a countertop pizza oven, coolers and a cash register. I would be responsible for opening, stocking, preparing orders and ringing people up, and then cleaning up for close by 3 A.M., leaving 4-5 hours of sleep until I needed to wake up for classes. Ah, to be young, ambitious and full of cortisol!
It was my boss, though that really made the experience awesome. “Manny” was the night café manager and had a ton of pride in doing the job right. He was built like a fireplug, was always smiling and upbeat, and usually started and finished shifts with an espresso in hand. He probably taught me the most by example of work ethic and working style. He was among the hardest working folks I knew, always about efficiency and effectiveness, even if we were just running a greasy spoon for stoned and hungry students. At the start of the shift, he’d have me grill up a few dozen patties and prepare, wrap and stack the sandwiches. Then we’d run a few pizzas through the treadmill on the little pizza oven, the kind that always leaves some nasty acrid burnt crust on the ends. Fries were easy, we’d just do them in batches throughout the night, salt them and leave them in the warmer. We’d always be stocked up and ready for the post-dinner rush and could smoothly ring up and check out the first few waves of customers. When things slowed down, we could prep more burgers and pizza. We also did other greasy spoon standards, like buffalo wings, jalapeno poppers and mozzarella sticks. It was probably these many shifts coming home smelling like fryolator oil that later inspired me to start working at a local Food co-op and sell healthier fare.
The work was all pretty smooth for me, but where I had some challenges was the clean-up and breakdown at the end of the shift. We closed up around 2 A.M. and I was usually pretty beat, and I would do a half-assed job of squeegeeing all the congealed grease off the flat top into the grease trap, and my mopping skills were barely passable. Manny took it on himself to not write me up or fire me, but to stop what he was doing, usually inventorying, ordering and restocking, and come over to correct my techniques, particularly with mopping, where I would just be lightly dabbing the floors. He’d take the mop, shaking his head and tell me, “Not this, do it like this,” and he would lean into it with short, quick swings of the mop to make sure we got all the grime and crud off the floors, so tomorrow’s customers wouldn’t wipe out when they walked in. Likewise for wiping down counters and tables and squeegeeing the flat top grease, just a little focus and effort to get the work done efficiently.
I eventually figured it all out to Manny’s approval and the shifts were actually pretty fun, even when crazy busy during finals weeks or after I had done an overnight shift as an EMT the night before. Manny turned out to be super easy going, but was really strict about one thing, that closing time was closing time. If we had laggards and loiterers at 2 A.M., he would start blasting Gypsy Kings at full volume over the speakers. I still twitch when I hear Bombaleo. I had a different trick. I’d toss a few pickled jalapenos directly onto the flat top and turn on the vent, and as a biology nerd I knew that the capsaicin would aerosolize and we’d give the slowpokes a very mild, late-night pepper spray wake-up call.
We’d occasionally shoot the shit during shifts. Manny was married, which didn’t stop him from flirting with many of our younger female customers, and he was from a war-torn country in Central America. He was not able to go back, for political reasons it seemed. Manny also wasn’t just the night café manager, he was also a full-time graduate student. He was working 5 shifts a week and then studying engineering during the day. So, not only could he work circles around me, but he was probably a lot smarter too.
One time I asked Manny why he couldn’t go back to his home country, since he talked about it occasionally and seemed to really miss it. He had been in the army, on the losing side in the civil war and the other party was now in charge, which wouldn’t bode well for him. He felt fortunate to have been accepted to study at the university and he was making the most of the opportunity. Manny kept his politics to himself, but his story hit home for me.
Manny had learned to work hard and smart as a young revolutionary, committing his mind and energy to a future where everyone in his country could share in the bounty they created. Hearing it through his words gave me a lot more color into why people struggled, but also how they carried that energy forward when things didn’t go their way. Here he was, ringing up students, making chicken wings and studying his ass off in the country that helped put down his revolution. Once in a while, towards the end of the shift when he was recording inventory and shrink numbers, he’d allow me to fry up one last pile of burgers and chicken sandwiches. I’d take them back to my friends and roommates, a feeling of triumph as I’d walk into the dorms stinking like the grease pit, with a sack of late-night sustenance for the stoned and studious, who’d greet me with a cheer as I shared in the bounty too.
We Need To Reimagine Grocery To Better Serve All Stakeholders (video)
From a panel organized by Food+Tech Connect and S2G Ventures:
Why We Need A Public Food Sector
I have lived in Austin for over 15 years and I am a home owner, dad and entrepreneur. My wife and I have raised two kids here and love Austin. However, I am still processing the events of February 2021, including the collapse of our deregulated energy infrastructure, the lack of preparedness by city, county and state agencies to respond quickly and effectively to the snowballing disaster and the ongoing trauma, stress and displacement being experienced by thousands of my fellow Austinites.
One of the major areas of fragility in our city is our food system. I would like to share my thoughts on this, but first some background. I am a 25+ year veteran of the food industry and I have a unique perspective on this subject. My experiences include local and regional food procurement and retail operations in New York, Florida, Texas and elsewhere, various food service and farmer’s market gigs, and seven years leading the national Grocery division at Whole Foods. In this role, I led a team that grew grocery/center store sales to over $5 Billion annually and I was immersed in supply chains, assortment planning, category management, product development, private label/store brands, and negotiating wholesale agreements, including a multi-year, multi-billion dollar contract with our national wholesale partner. I left Whole Foods in 2016 and have spent the last 5 years as a board member, advisor, founder and partner in service to over 20 natural products retail, packaged food enterprises, NGOs and community groups, including Farmshare Austin and the Austin Travis Food Policy Board. For further info, please see my LinkedIn profile.
As context, the Covid-19 pandemic exacerbated already existing food inequities in Austin that are largely along lines of race, class and geography. Over 25% of Austin households are food insecure according to recent data, with numbers even higher among children. This means that thousands of adults and children in our metro area regularly miss meals or have few options for a healthy diet. I think it is insane in a city with so many billionaires and successful entrepreneurs that we are letting our neighbors go to bed hungry and malnourished. What kind of city are we?
Austin’s history of segregation and racist urban development policies have created a food system that prioritizes innovation and availability in wealthier, white neighborhoods, while many middle and lower income neighborhoods, primarily Black and Hispanic/Latin, have fewer choices and lower quality options. My frequent comparative shops of grocery stores in Southeast Austin and North Austin versus Westlake Hills or Circle C provides ample evidence of this food apartheid. And that is on a good day. Covid-19 has brought with it a huge increase food bank traffic, with thousands of local residents lined up for emergency food aid on a regular basis, along with radically different shopping patterns that have strained supply chains and forced retailers to slim down offerings and focus on staying in stock. The additional shock of winter storm Uri in February emptied grocery shelves pretty quickly across the city, with many retail chains and wholesalers taking weeks to fully recover their inventory par levels and preferred assortments. Many friends and neighbors ran out of food and waited in line for hours at grocery stores during and after the storm.
Austin is wholly dependent on the private sector for our food supply, primarily in terms of retail, wholesale, small scale processing, food service and charitable sectors. There is yet to be an inclusion of policies such as food security, food access or food sovereignty in emergency management planning. Despite Austin’s global reputation as a progressive foodie destination, food is not a common good for our residents, but is treated as a commodity for those with access and resources, or as a charity for those without. This is a major shortcoming of framing food as a private good.
The private sector does many things well. Grocers carry an astounding array of products, including many organic, sustainable and locally grown foods. They have been able to cater to tastes and trends of all demographic groups, from fifth generation Texans to recent immigrants to folks with food allergies and any combination of the above. Grocers provide great coupons, ads and promotional deals and have integrated online ordering, pickup and delivery while trying to keep customers and employees safe during the pandemic. They have been a huge provider of Covid-19 vaccines and health resources, in the absence of a truly functional public health system or universal medicare. They are our charitable neighbors and community members that we couldn’t imagine living without.
Yet these activities are all part of part of their business models and competitive strategies and are wholly dependent on market conditions. Are they able to compete on price, quality, assortment? Can they attract and retain a labor force that is compensated and treated fairly? Can they manage their supply chains and vendor relationships and stay in stock on what customers want? Recent crises have shown the vulnerability of most private sector supply chains and retail outlets, with most enterprises experiencing out of stocks, assortment changes, price inflation and quality issues. Food banks and food access NGO’s have picked up considerable slack during the pandemic, but they are also dependent on private sector enterprises further upstream for donations, such as food manufacturers and distributors, as well as national partners such as Feeding America, who redistribute goods from the private sector.
It’s important to note that food retailers run off of razor thin profit margins. Most retailers net out 1-2 cents of profit for every dollar of revenue. Their operations, procurement and supply chain, pricing strategy and expense management are all geared towards managing this bottom line, while not losing ground on their topline revenue or market share. The Austin retail market is one of the most competitive in the country. HEB-Central Market, Costco, Wal-Mart/Sam’s, Target and Amazon-Whole Foods dominate the market and a handful of other national chains such as Randall’s (Safeway/Albertson’s), Sprouts, Trader Joe’s, Natural Grocers compete for market share with Asian and Hispanic grocers such as Fiesta, 99 Ranch and H-Mart, as well as convenience stores and locally and family owned chains. We even have the only retail cooperative grocer in Texas, the venerable Wheatsville Coop, of which I am a long term member, but they are less than 1% of the retail market share. These chains put all of their efforts into retaining customers, growing their sales base, updating and refining their product assortment, managing their supplier relationships, navigating E-commerce fulfillment and delivery and of course, surviving the challenges associated with Covid-19. Larger retailers are also notorious for cutting deals with big food manufacturers to guarantee them shelf space in return for additional revenue, a practice that causes concentration of ownership in the food system, pushed junk food and highly processed ingredients and hurts smaller, more innovative companies that don’t have deep pockets.
The pandemic has caused a spike in sales for many large chains, but industry analysts, including myself, predict that many stores will see sales declines in the coming months as customers change spending habits, vaccinations increase and restrictions continue to relax. And all of these retailers are completely dependent on transactional relationships with their customers. Folks need to spend money to keep these businesses going, with the occasional exception, and there is no such thing as the right to food for those who need it. This is why SNAP is among the largest and most important food access initiatives in the world, because it enables people to spend money on food and generates further economic activity. However, private sector retailers are not public utilities, no matter how much we’ve grown accustomed to depending on them for basic needs.
All retailers are dependent on another, less visible portion of the supply chain that I’ve mentioned, called wholesale. Much wholesale distribution is now vertically integrated by large chains, but there are a number of large national and regional wholesalers that service these retail chains, including United Natural Foods, KeHe, McLane, Brother’s Produce and more. The profit margins on wholesale are even slimmer than retail and their supply chains are focused on efficiency and productivity, including “just-in-time” inventory. That is why I refer to them as wholesalers, not warehouses, since their business model is built on managing inventory turnover, concatenating the optimal mix for their retail customers based on what turns the quickest at the best profit margin, calculating how many pennies can be squeezed out of each warehouse slot and how much additional revenue can be extracted from suppliers through various marketing and ad vehicles through rebates and chargebacks that are invisible to consumers. This business model is a major reason why Covid-19 and Uri created large scale out of stocks and empty shelves across the city for days and weeks on end. There is no backstop or “safety stock” when the bottom line is at stake.
This reliance on the private sector creates a great deal of fragility in the local food system. Yet our food supply during a crisis is completely dependent on these enterprises. Frankly, this is terrifying and should give city officials pause given recent events. As someone who has been immersed in this world for many years, I feel it is irresponsible of the City of Austin to not have an emergency food plan that is independent of the profit-driven business models of private sector retailers and wholesalers, and takes pressure off of the donation-dependent food banks and food hubs that have been carrying more than their fair share of the food security burden.
I want to frame the rest of this discussion in terms of creating a public sector food commons for Austin. A commons is a regulated institution that is accountable to and shared by the people for their mutual benefit. (Please see works by Nobel Prize winner Elinor Ostrom or researcher Jose Vivero Pol for further background on the commons in the modern world, and the scholarly dismantling of white supremacist Garrett Hardin's “tragedy of the commons” mythology. For more background on food utilities see more from John Ikerd. )
This concept of the commons would mean that food become a public good, with a sector of the food system committed to ensuring that this most basic human need is guaranteed to all who need it. Food should be a human right, especially good food that is nutritious, culturally relevant and ethically produced. We can start to address this on a municipal level, with the following suggestions as a starting point for building public sector food infrastructure that is resistant to crises and shocks in the supply chain.
Create a public sector emergency food utility:
Austin should look into leasing warehouse space in several industrial areas (or in multiple postal codes) around the metro area in order to procure, build and manage inventory of ambient grocery products for emergency food distribution, in case of weather, public health, ecological or other crises. This inventory should cover multiple product categories that could be stored at room temperature, has long shelf life and shelf stability, and should be culturally relevant and appropriate to Austin’s diverse populations. The shelf stable or “center store” departments of most grocery chains comprise more than half of their sales, so there are many product categories to cover, including water, juices and beverages, rice and grains, dried beans and legumes, canned/aseptic packaged soups, beans, vegetables, meals and entrees, bagged and boxed snacks, nuts and dried fruit, condiments and sauces, pasta and noodles, tofu and plant-based meat analogues, protein bars, powders and other nutritional supplements, and many more.
The goal here would be to carry and rotate enough inventory at each of these sites to support the caloric and nutritional needs for thousands of local residents in a culturally appropriate manner for at least a month, when and if a given crisis arises again. The inventory should be managed down and reordered as it codes out, and either donated or sold at or below cost to local partners that would handle the public or retail interactions, including food banks, food access NGO’s (such as Texas Center for Local Food, Farmshare Austin, Common Market or Dell Medical), public cafeterias (see below), community food activists, locally owned grocery or convenience stores or discount food outlets. By buying a limited number of items per category in volume, logistics costs could also be kept down.
While I don’t believe the city should be in a direct retail relationship with residents, since that would add significant operational costs and complexity, my friend Brahm Ahmadi of Community Foods Market in Oakland has suggested otherwise, “Public sector ownership could solve a problem that grocers serving lower-income communities are faced with: Providing low prices and high wages while also covering operating costs and producing net operating profit. Public sector ownership could reduce pressures to produce net profits, or even to break even. The gap between revenue and operating expenses could be funded out of the city budget. The store could be positioned as a subsidized public service similar to a water utility where customers pay a subsidized rate for a common good. Another potential benefit is that these stores could be more committed to remaining in the community as a long term anchor, as opposed to corporate stores that shut down without much regard for the impact on the community (such as the recent closures of Kroger stores in So Cal because of hazard pay requirements).”
This would put City of Austin upstream in the context of food insecurity, but with more control over what ends up in the pantries of food insecure households and stronger relationships with food access focused NGO’s and community organizations and activists. Hence, it would be a move towards food sovereignty at the municipal level. The quality and sourcing standards should be consistent with Center for Good Food Purchasing (GFPP) standards that are being used at AISD in cooperation with the Austin Food Policy manager. This could create a tremendous pull in the supply chain for organic, regenerative, humanely-raised and worker-friendly products that would benefit many stakeholders in the economy and enhance ecosystems. And while there may be bureaucratic hurdles to overcome between the city and AISD, creating an additional supply network for the school system to tap into would be mutually beneficial for the food utility to have an additional outlet for inventory and demand planning of products.
In terms of governance, the city administration should do outreach to communities around the city to support and create visibility for this public food utility, particularly in the Eastern crescent, so there is shared dialogue and feedback on what is being stocked on a regular basis and how the utility is being used to eliminate food apartheid. The establishment of an oversight board or food utility commission is one way to go here, with community representatives being elected or selected to participate. The food utility should also prioritize hiring individuals from marginalized and impacted communities to ensure that the staffing and leadership of this infrastructure reflects the communities it is serving. That also goes for vendor contracts and supply chain, prioritizing Austin residents from Black and Hispanic/Latin communities that can own businesses that could supply products or materials to the utility on a contract basis, in additional other local and national vendors that meet the quality and sourcing standards. In terms of municipal operational management, I would suggest that creating a regional food system planning office through the food policy manager could be a start, while also creating this community engagement and accountability process.
Public food service as a commons:
Austin is one of the best food towns in the country, perhaps the world. The collapse and struggle of much of the restaurant and hospitality sector during Covid-19 has made us miss dining out, but has also been a painful economic burden to owners and workers. While the federal government has made some efforts to bail out the sector, it has not been commensurate with the need. The missing link here is a public sector investment in food service and hospitality that would tap the vast creative talent pool, experienced workforce and ample supply of amazing ingredients and connect the dots with the tremendous need to resolve hunger and food insecurity, particularly among younger residents and communities of color. The experience of Belo Horizonte, a city of 2.5 million residents in Brazil that has been working to eliminate hunger, should be instructive here. The city’s creation of a municipal food system planning department has been able to link farmers, nutrition experts and consumers through a variety of solutions, including the establishment of free public cafeterias. Using local, healthy and sustainable ingredients, the public cafeterias are popular and well attended. By not charging fees or establishing means testing, there is no stigma attached with stopping by and ordering a good, quick meal. Rich and poor alike enjoy the benefits, but it’s most crucial for folks without resources. And crucially, they are able to employ experienced chefs, line cooks, servers and other staff, something that our battered food service sector could surely use. While we may want to consider some modifications to this program, including, the size, location, menus and culinary focus, creating hospitality as a common good that provides good jobs, good meals and another income stream to local growers and producers, could be a strong sister project to the public food utility. It could also function as another physical space to revive and strengthen the live music scene as it returns. Such an institution may be another means of enabling good food for all and could add to Austin’s sterling reputation as a global foodie hub, but one now focused on justice and equity.
Invest in regional scale processing:
Less than 1% of the food consumed in Austin is grown locally. The amount of food consumed in Austin that is also processed and manufactured locally is unknown, but most likely also very small in proportion to the total. Yet, Austin has an admirable local farming community, as well as a thriving ecosystem of small scale food startups and growth companies that are producing a variety of products for the local and national market, from sauces, chips and salsas to frozen entrees and milled flours. These enterprises are fun and hip and tend to be affiliated with Naturally Austin and the progressive minded natural products sector of the food industry, of which I am a longtime member. However, there is not a stable local infrastructure for many mass market, basic food items that are sold in grocery stores, nor is there a middle ground of food industry infrastructure between our many local farms and the consumers at the end of the value chain. This infrastructure would include co-manufacturing, toll packing, and processing facilities for agricultural products that would add value, such as canning, aseptic or retort packaging, ultra-pasteurization, IQF (individually quick freezing), dehydration and milling, as well as facilities that could process and manufacture consumables such as snack chips, breakfast cereals or shelf stable baked goods like cookies, crackers or pastries. There is no scalable solution for preserving the annual summer bounty of tomatoes into jarred or canned sauces, and likewise the annual winter crop of greens does not have market outside of fresh sales.
When you consider that the farmers market sector is just over $1 Billion in annual sales and the grocery/Ecommerce sector is over $1 Trillion, it gives a sense of scale of the true nature of food consumption in this country. Processing is very much a necessary and egalitarian aspect of food consumption and should not be looked down upon by good food advocates or local food snobs. It is also where the vast majority of profits are to be had in the value chain, as consumer packaged goods companies regularly scale and sell for large multiples of their annual sales and profits.
Yet due to deindustrialization, industry consolidation and free trade agreements, much of the processing and manufacturing infrastructure is located out of state or out of the country. For example, most shelf stable store brand soups, beans and ready to eat meals for a number of the large grocery chains in Austin are processed out of state and even overseas. I know this for a fact because that was part of my job at Whole Foods, overseeing our private label assortment. And the co-packers we used were the same ones that our competitors used, just the product specs, ingredients and recipes differed. Locating more of such facilities in and around Austin could serve to not only create supply chains and inventory for such goods that could be sold locally or nationally in retailers, food service or even across town to the public food utilities, but could also create skilled, unionized, middle-class manufacturing jobs for many of the young poor and working class people in Austin that do not have a viable career path in the food industry outside of entry level food service or retail clerks, even if they have graduated from venerable, farm-skill focused programs at Urban Roots or Farmshare Austin.
A publicly owned manufacturing sector could also create revenue to partially fund the food utility program. Austin could create a one of a kind municipal-level manufacturing sector that could not only feed into the food security needs, but could also establish leadership in racial equity and food sovereignty by benefitting all members of the value chain, from farmers, workers, skilled engineers, food banks and consumers.
Technology and fulfilment for the public good:
Austin is a global hotspot for the tech sector and has a deep bench of experience, expertise and know-how. Due to the challenging geography, traffic patterns and public transportation infrastructure, getting food to the people may be the glue that binds the commons together in Austin. Creating a food commons app that acts as a public exchange where Austinites can upload their info, needs and locations can be triangulated with availability and location of delivery drivers or cyclists who could pick up goods from grocery stores, restaurants, food banks or public cafeterias for delivery, at no charge to users. App drivers or cooperatives could be contracted at living wages to create an additional public employment sector that competes with the digital sweatshop of typical delivery apps that service restaurants and grocery stores with extortionate rates and poor compensation to their gig workers. There is a growing network of platform coops and delivery coops around the world that are doing such work and Austin could be the first city to enshrine such work under the food commons umbrella. Such a sector could also generate income for the city by devoting a portion of the workforce to pickup and delivery for the private sector, for community members that have the means to pay a given delivery rate for groceries or meals that they buy. Based on the current market valuation of such private sector actors, there is ample demand for such services in the wake of Covid-19.
On a related note, I would also strong advise the city to invest in a dozen or so emergency snow plows and vehicles, as well as road salt and sand in case we get another freak snow event. I would also recommend that all such emergency food infrastructure be equipped with solar batteries and/or electricity generators, at least until our state grid is either properly regulated or hooked up to the rest of the country.
Conclusions:
These are a few of my ideas around preventing the collapse of local food systems during crises. While I have personally always been a bit of a “prepper” and making sure my family has enough food and resources to survive such a crises, that practice is useless without the community and public resources to support my neighbors. We need think in terms of public infrastructure preparedness for disaster and crisis, that could also act as a means of reducing hunger and food insecurity and a backstop to the energetic mutual aid projects underway, all while creating more public oversight and institutions in the food system. And such a plan would involve deep and extensive community outreach, engagement and leadership development. Good food, good jobs, good community feels like an Austin things. And Austin should take careful notice of the robust and extremely well thought out food policy planning in New York City that tackles many of these issues.
We have the impetus to create a more viable, transparent and sustainable food system that is accountable to the public interest, not subject to the fickle whims of the marketplace and resistant to the next wave of climate and public health shocks. Do we have any other choice?
How Kroger’s Hazard Pay Roulette Sacrifices Essential Workers
Kroger announced the closing of three more West coast stores on March 10th. The Los Angeles closures follow on the heels of similar announcements in Seattle and Long Beach, totaling 7. The country’s largest full service grocery chain has thrown down the gauntlet for cities that have rolled out hazard pay mandates. Municipal governments are attempting to ensure fair compensation thresholds for frontline retail employees. Workers are going above and beyond the normal duties covered by collective bargaining agreements, literally risking their lives at work during a pandemic that has killed hundreds of food system workers and sickened tens of thousands more.
Like other large retailers, Kroger has done very well during the pandemic. They’ve earned record profits of $2.5 Billion, on sales of $132 Billion and comparative store sales of 8% in an industry where 1 or 2% is considered strong. Despite this windfall, the closures are putting hundreds of employees out of work and leaving community members looking for a new place to buy groceries. Kroger has also been very vocal in their opposition to the mandates, justifying the closures in “underperforming” stores where they couldn’t cover these incremental expenses, and inspiring further legal action via the California Grocers Association.
Like any business, grocers must balance their expenses, cost of goods and retail prices to hit a particular gross margin target, usually in the 35-40% range. Gross margin, or gross profit, for this purpose is calculated as ((retail price minus cost)/retail price). Gross margin is what keeps the lights on, keeps the paychecks coming and makes sure the supplier invoices are filled. It is a weighted blend of the individual unit gross margins across thousands of products multiplied by their unit turns in a given timeframe.
Payroll is usually a big chunk of expenses in a given retailer, typically 12-15% of sales across the store for mid-size formats, although many mass market and discount retailers are lower and specialty/natural shops are higher. Since most retailers scrape by with a 1 or 2% net profit in normal times, temporary hazard pay bumps incurring 2-4 points of additional labor expenses across the store will make stores unprofitable. So, while it may seem reasonable to have panic attacks about fulfilling these pay mandates, there are examples of how retailers can adapt expenses, price and margins to pursue a strategic objective.
A few years ago, New York City mandated a $15/hour minimum wage. Given the city’s astronomical cost of living, it seemed like a reasonable new wage floor. Retailers had to adjust their business models accordingly, especially if bound by collective bargaining agreements that created legal frameworks around their employee relationships; ie, they couldn’t just start laying folks off or adjusting schedules willy-nilly to save money. They had to look at store level expenses and supply chains, including promotional discounts and product costs, distribution mark-ups and logistics, and most importantly, pricing strategy. Pricing is really the major do or die trigger for achieving gross margins, but it is very sensitive to consumer perception. Price increases can tank product velocities if not managed well or if competitors are holding the line. With tens of thousands of items to balance their pricing and margin needs, and a marketplace with competitors all implementing the new wage, New York City retailers made the pay boost happen.
Another angle is when retailers’ expenses are stable but they decide to take on a new, more aggressive pricing strategy. This can happen in different ways, like when competition decides to move in across the street and tries to put you out of business, or when entering a new market to gain customer share and go after the incumbent stores. Either way, it’s price war time, and keeping in mind the formula for gross margin, this is always where things get dicey. Retailers start looking at their assortment, promotional vehicles and retail prices and decide which items should be lowered. They huddle up to see how they can cover the markdown, either through additional supplier discounts, shifting margin targets by department or just by eating the loss and forecasting what your new gross margin will be in this new reality. This is not very sophisticated, as most retailer enterprise software can do this with a few keystrokes, or staff can compile the impacted items on a spreadsheet, plug in recent unit movement with old and new pricing, and calculate a new blended margin. And since most retail chains blend their gross margin dollars across many locations, either by metro area, region or enterprise level, these minor losses are usually offset by making adjustments in other geographical areas, or in less impacted departments across the chain. It is not uncommon for department margins to get bumped up or down every year every year in order to pay for more competitive pricing in other departments. Or like in my old job, where the margins just kept going up and up in order to subsidize enterprise level pricing and assortment objectives. Your job as a merchant is find the money by negotiating supplier programs, managing assortments and adjusting planograms. You make it happen. Executing a strategic priority that impacts the bottom line is a regular occurrence in retail.
That is what makes the hazard pay reaction by Kroger so unsettling. They are a very intelligent operation, probably the best in the business. They have one of the best private label store brands programs in the world. They are the de facto largest health food store chain in the country. They are investing heavily in smart grocery carts , Ecommerce fulfillment and direct to consumer, underwriting food justice initiatives, sponsoring SXSW food access panels, and their commitments to low prices and cultural diversity are now a meme. Their efforts are undergirded by sophisticated data and business intelligence that understands what their customers want and how to set prices and assortment by store, by season, by metro area or geographical region, with an eye out for market share dominance and fending off brutal competitors like Wal-Mart or HEB. They are coming off of a year of eye-popping profits, that followed several years of tremendous shareholder buybacks totaling almost $7 Billion, including nearly $1 Billion since August 2020 . And they are full speed ahead on employee vaccinations, PPE expenditures and safety precautions, even if they are using these as a rationale against hazard pay.
But in true winner takes all fashion, the bridge Kroger won’t cross is prioritizing additional compensation for the thousands of employees that carried their business and implemented all of these initiatives at store level, day in, day out before and throughout the pandemic. They would rather fight elected officials, spite their labor force, and turn their backs on communities instead of centering the business on the health and welfare of their dedicated employees. This is how food apartheid happens. It is a shameful, unnecessary episode for America’s largest grocery chain. Their communities and employees deserve so much better.
Originally published here: https://lnkd.in/dhjktgQ
How Anti-Trust Is Making A Comeback
Anti-trust movements may be making a rapid comeback in grocery retail. As Amazon continues to expand its grocery reach, overtaking Wal-Mart in apparel sales, and retail giants like Wal-Mart, Target, Costco and Dollar General dominate market share across the board, a distinct cohort of independent grocers and NGO’s are coming to similar conclusions in documents released this week and this past February. The consolidatedbuying power and market penetration of big food retailers hurts competition, manipulates consumer choice, stifles better health outcomes and product innovation, and needs greater public oversight.
The Center for Science in the Public Interest helped get this party started a few years back. In 2016, they dropped a bombshell report called Rigged, detailing the vast monetization of retail space in stores and how the deep pockets of big food companies get them preferred placements in stores and online. And just this past February, CSPI built on this fact-finding exercise, releasing a searing letter to regulators and members of Congress calling for greater oversight and regulation. In the letter they state, “CSPI requests that the FTC investigate and issue guidance concerning trade promotion, category captain, and online retail practices in the grocery retail industry. These practices impact competition in the grocery aisle, dictate the choices available to consumers, and undermine the health of millions.”
The common practices of retail category management and trade promotions generates more than $50 Billion a year in revenue. Chains charge brands for shelf placement, and at checkout counters, online, on endcaps and other displays. These revenue streams by retailers are budgeted, and merchandising staff must come up with the necessary dollars lest they miss their financial targets and face disciplinary action. The result is a system that favors bigger brands with deep pockets, who are able to afford $100,000 or more for displays or up to $1 Million for national placement.
For the consumer it means that demand is manufactured. Towering stacks of soda, chips and sandwich cremes greet customers at the end of aisles, in entryways and at check-stands. For food producers without deep pockets, not flush with speculative capital or in categories that don’t budget in trade allowances, particularly fresh fruits and vegetables, it means they are at a competitive disadvantage. And if you have ever wondered why there have been so few BIPOC-owned brands in mainstream retail, these practices that favor incumbent brands are a major obstacle to change who owns, controls and profits from food production.
And trade spend stifles innovation by retailers. At one point in my previous life, one of our top brand partners was doing $120 Million in annual sales and was forking over $20 Million right back to us for trade spend. A new brand getting an elbow in the door for a new product line or a creative line extension therefore means a calculated risk for the retailer. They lose access to the easy money for that space on shelf from incumbents. In my previous life, every time my team would launch a new startup brand in high velocity categories like snacks or energy bars, the leading brands would remind us how much of their trade dollars we would be missing out on for every slot not handed over to them. For a retailer to turn down this money, they would have to either have a strategic mandate to push innovative and local items, fresh produce or more healthy options, or they would need to be told to do so by a regulatory agency or antitrust laws.
And just this week, the National Grocers Association, a coalition of over 21,000 independent retailers across the country, has released a white paper in partnership with the 1,100 member Association of Wholesale Grocers. The document calls for federal investigation and oversight into what they describe as economic discrimination by grocery power buyers. According to the white paper, mass market chains used the Covid-19 pandemic to leverage their market share and supply agreements to get first dibs on household essentials, effectively locking many competitors out of the supply chains. Independents who did not have the scale or purchasing power of national chains were not able to secure inventory of toilet paper, canned soups, cleaning products, and other popular items as easily. Or, they were overcharged by wholesalers, to the extent that independents could sometimes find inventory of such items cheaper at their mass market competitors than from their own distributors.
Looking at this from the brand angle, CPG companies segment out their retail customers by “channel of trade”, in industry parlance, like mass, convenience, independent, or natural/specialty. Brands have different pricing, promotions and ad programs depending on the cost structures and distribution models of retailers in these channels, in order to hit certain growth targets and revenue thresholds. The market power of mass chains also enables them to negotiate deeper, more frequent promotional deals, harvesting billions in trade spend, while getting priority for national new item placement or line extensions. “Economies of scale” is just shorthand for throwing your weight around to pressure suppliers to meet your terms and volume needs because they cannot afford not to. So when a brand is able to receive a six figure purchase order versus four figures, it factors into their partnership decisions.
Independent retailers, while still falling prey to the trade promotions hustle, have nonetheless been able to differentiate themselves by better catering to local tastes, supporting start-up’s and homegrown brands, and putting more efforts into marketing fresh products. They carry the obscure, homespun, authentic items that you can only find in particular cities or states, made by producers in it for life, livelihood and community, as opposed to the quick cash-out, underwritten by venture capitalists hoping to fuel the next hot acquisition by Big CPGs. But these points of differentiation are not always enough to keep the lights on. The independents also live and die by their ability to stock necessities and popular items, while still pricing competitively with the mass merchants down the road. Unlike Whole Foods, which faced similar challenges years ago, the independent retailers aren’t looking to get acquired by the monopolists. They are instead going in swinging.
The independents led by NGA and AWG are calling for investigations into the monopoly practices of mass retail and stricter oversight by regulators who have been out to lunch. They are demanding vigorous enforcement of Robinson-Patman, Sherman Anti-trust, the Clayton Act and state level regulations to curb what they call economic discrimination. They want FTC and DOJ to look under the hood of the cozy relationships between Big Retail and Big CPG, “to determine whether dominant retailer bargaining leverage is imposing discriminatory prices, terms, and supply on independent grocers.”
These recent anti-trust developments signal a sea change in attitude towards the grocery retail sector. The laissez-faire approaches of regulators and public officials has enabled a system that favors consolidation and integration, hurting local economies, competition and consumer choice, while stifling innovation and better health and wellness options at retail. With the trauma of Covid-19’s food insecurity, supply chain disruptions, and mass merchant profiteering still fresh in everyone’s mind, there couldn’t be a better time for regulators to wake up and get to work.
Originally published here: https://lnkd.in/dvWtTJU .
How New York City Is Revolutionizing Good Food Policy
Originally published at https://www.forbes.com/sites/errolschweizer/2021/03/23/how-new-york-city-is-revolutionizing-good-food-policy/?sh=301b5d43779e
New York City has released a comprehensive and groundbreaking food policy document. Food Forward NYC: A 10 Year Policy Plan is a sweeping overview of goals, strategies and operational considerations to ensure that the city is building an equitable, sustainable and healthy food system for all New Yorkers. In light of the Covid-19 exposure of the fragility of our food system, the exploitation of essential food system workers that make it tick and the daily food insecurity faced by so many, the policy plan is quite timely and necessary.
Led by a team under Kate Mackenzie, NYC’s Director of Food Policy, who was tasked with coordinating efforts from over 300 organizations and agencies, the Food Forward plan acknowledges the complexity and enormous scope of New York City’s food system. Over 8 million people call the city home, with over 500,000 food sector employees and 40,000 food businesses. The city is among the most ethnically diverse places on the planet, with stores and restaurants that cater to nearly every culture and palate. New York City also sits at the heart of a lush agricultural region, with hundreds of dairy, meat and produce operations within a few hour’s drive. The vast majority of NYC food businesses are independently owned and operated, a big difference from the corporate dominated foodscapes of many metro areas. Nineteen billion pounds of food enters the city annually, yet nearly 1.6 million residents are food insecure, a staggering number considering the city’s global reputation for food innovation and variety. The report also acknowledges the racial inequities of health outcomes and economic mobility, as well as the vulnerability of the coastal metropolis and it’s food supply to climate change.
New York City’s food system is described as distributed, unlike other city essential services such as streets, water and electricity. There is no central hub or authority governing the supply, quality and availability of food, although there is already significant regulation around permitting, zoning, and other oversight areas. The city is a major distributor of food, such as the Hunts Point Terminal Market and supply chains developed by Chinese, Caribbean and other immigrant communities. As detailed by Brooklyn Borough President and Mayoral Candidate Eric Adams in his recent report of the Brooklyn food system, the city is also a major producer, processor and manufacturer of food, from urban farms to bakeries to small scale manufacturing. And New York City is already well known for its retail and consumer-facing outlets, from 14,000 bodegas and supermarket chains, to over 24,000 restaurants and bars.
The food system plan has 5 overarching goals: food access for all New Yorkers, worker protection, good jobs and economic opportunities; modern, efficient infrastructure and supply chains; sustainability from production to disposal; and education, communication and administrative support to implement the plan. The first goal is a huge hurdle with such food insecurity, and there are detailed plans around leveraging and adding to federal SNAP benefits, as well as expanding school meals access for whole families and a variety of tactics to increase availability and access of fresh foods and vegetables. The second goal also details admirable strategies, in particular the expansion of worker ownership, enforcement of fair scheduling, advocacy for stronger federal labor protections, and workforce and career development programs to onboard more local residents into food sector jobs. While the policy plan doesn’t transform NYC into a solidarity economy or worker’s paradise, it is a significant step forward at this scale, and still leaves the door open for improvement through further organizing and public pressure.
Addressing New York City’s food supply chain challenges takes up a big chunk of the plan. Critical distribution infrastructure and storage, packing, processing and production needs investment and strengthening, and food hubs, regional aggregation centers, and waste disposal facilities also seem high on the radar. The final section, on administrative organs needed to implement these policies, is ambitious, including participation in a regional food working group and data sharing projects, establishment of a food justice fund, and significant cooperation and communication requirements across city agencies, NGOs and community groups.
A major theme running through the policy goals is a commitment to the Good Food Purchasing Program. This comprehensive sourcing and supply chain framework developed by multiple stakeholder groups in collaboration with the Center For Good Food Purchasing, articulates five values that guide food purchasing decisions. These include local economies, nutrition, valued workforce, environmental sustainability. This framework means that food purchases by enrolled institutions must take into account the treatment of workers, the use of pesticides and GMO’s, the nutrient content and density, how animal proteins are raised and sourced, and many other metrics relating to the environment and climate. Launched in Los Angeles in 2012, GFPP has since expanded to 20 cities and 53 institutions with over $1 billion in annual purchases, already the size and impact of a mid-size grocery chain or large restaurant chain. With their school system being among the largest public procurement and food access institutions in the country, New York City enrolled in 2017. The city expanded the program across all public agencies in 2019, effectively committing all municipal food purchasing to the rubric.
According to Alexa Delwiche, the Executive Director of the Center for Good Food Purchasing, "New York City is the one of the largest purchasers of food in the nation, second only to the Department of Defense. Through the City's visionary leadership and strategic focus, along with committed agencies working tirelessly to keep the city's most vulnerable residents nourished and a community-based coalition ensuring the City remains accountable to their commitments, New York City has proven that if GFPP is possible at this scale, it's possible in all public institutions; local, state, and federal."
The plan has caught the ear of mayoral candidates, with public figures such as Andrew Yang, Eric Adams, Dianne Morales and Scott Stringer commenting positively on it and detailing in depth their own plans for food access and food justice . It may be the first time that a concept such as food sovereignty has entered into common parlance and is rapidly gaining recognition.
The plan is not perfect though. Public procurement standards under GFPP auspices only influence municipal supply chains and require public engagement and organizing to be implemented. The exploitation of gig workers and undocumented immigrants, particularly in food delivery and street vending, is still rampant. And just because food businesses are small and locally owned doesn’t mean that they aren’t taking advantage of their workers. And while New York City may be less dependent on national chains, the reliance for food security and access still falls primarily on a more heavily regulated private sector, as opposed to more public sector infrastructure such as food utilities or public cafeterias that would distribute food for free. And the connections between policy implementations and the extensive networks of community mutual aid groups that cared for their neighbors and built tremendous solidarity during the pandemic should be more overt.
However, what the policy plan also stumbles into in all of its vastness and glory is that New York City is sketching out a Right To Food. This concept, articulated as The right to adequate food is realized when every man, woman and child, alone or in community with others, has the physical and economic access at all times to adequate food or means for its procurement by the U.N. FAO, is sorely needed in a country with such vast inequities in food access and affordability. The policy plan puts to rest the illusion of individual responsibility, instead articulating the complex web of socio-economic relationships and supply chains that enable and empower folks to access good food. By lining up infrastructure, procurement and administration to address food insecurity and sustainability throughout its supply chain’s and communities, New York City is taking an incredible leadership role in food policy for the 21st Century.
This One’s For The Clerks
You know, I just hate it when folks downplay the need for living wages by referring to working people as unskilled. What does that even mean? I assume anyone who uses that term has never run a pallet jack over their toe or nicked their thumb on a box-knife during an overnight shift, let alone rang up dozens of customers with a perfectly accurate till at shift’s end.
Since much of my adult and professional life has been in retail, I’d like to focus on some of the skills and talents that many of my wonderful colleagues have demonstrated to pay the bills and ensure that everyone is fed. They are now performing these difficult jobs in the shadow of a pandemic, where the work is the bridge between hunger and a stocked pantry, anxiety and peace of mind, and everyone’s wellbeing.
I don’t recall a time or place when my retail or service colleagues did not possess a range of marketable and necessary skills to get through the working day and meet the needs of the customers. This goes for both the spreadsheet jockeys who could run a V-lookup or build a pivot table in a drunken stupor, to the highly caffeinated clerks on early morning shifts who could break down, pack out and clean up a 2000 case load by 9 A.M.
My favorite job as a stock clerk was when my stores would have rear-load dairy coolers, where you were able stock the shelves from the back, and were not on the service floor. I’d get to my shift at 3 or 4 A.M., break down the loaded pallets into individual cases, typically 50-75 cases of mixed product, usually milk, butter, eggs, juices, yogurts, etc. Usually each pallet was wrapped in several layers of heavy duty shrink wrap, which had to be cut off, rolled up and discarded out of the way. I’d stage and rotate by shelf date each of the cases over to their section and stock 75-100 cases an hour for several hours until the load was packed out.
This stock clerk gig, which I did on and off for years among other roles at retail, exemplifies a number of the skills that retail workers have to perform and master every day:
• Physical stamina: you burn a lot of calories moving boxes, and you have to pace yourself pretty aggressively to get a load broken down, stocked and fronted. On the low end you are picking up, moving and unloading 200-300 cases per shift, but if you end up in a busy store during a holiday timeframe, you could easily be doing 500-600 cases a shift.
• Ergonomic skills: You are constantly moving, lifting, turning, bending over and stretching during the shift. Unless you want a brief career where you pop a tendon or twist an ankle, you have to be conscious of how you move and how to maximize the efficiency and speed of your movements while minimizing efforts and exertion.
• Box-knife skills: I am old school and prefer regular old boxcutters or carpet-knives, but many chains now require the use of big and clunky safety cutters, which have a plastic handle and metal shield over the cutting blade. You are cutting open hundreds of boxes per shift, so knowing how deep to cut, cutting straight and true, and always cutting away from your body are very helpful skills in being safe and efficient.
• Customer skills: in the midst of all this physical exertion, you’d have to frequently pause and listen to a customer’s concerns or questions, help them out, and then get back in the groove. It wasn’t just multitasking, but the ability to downshift and upshift your energy from body to brain and back in order to be helpful, intelligent and sociable to the folks whose money was paying your wages.
• Hand/eye coordination: when you work with your hands for a while, you develop a lot more dexterity and better reflexes. By handling thousands of cups of yogurt or cartons of eggs for months on end, I’d get faster at stocking and stacking them, neater and tighter. Like a circus juggler, I’d rarely ever drop anything, and I always caught a plummeting bottle or box on its way down.
• Communication, both written and verbal: a lot of information needs to be shared between shifts, staff and management. It’s important to be articulate and know what to relay so that the department is run efficiently and any issues with deliveries, short coded product, quality concerns, temperature, special customer orders, etc., are all communicated.
• Basic Math: If you are a replenishment buyer in addition to being a stock clerk, you are also responsible for doing the orders to make sure product is incoming on a regular basis. Depending on the department, you have to familiarize yourself with hundreds or even thousands of individual sku’s. And depending on how effective the retailer’s enterprise software is, your replenishment orders can range from being highly manual, with no sales data or backstock info, to being highly automated and algorithmic, where your job is to mainly manage out of stocks in a perpetual inventory system. I worked in a system where you ended up doing a lot of simple math in your head, estimating how much product needed to be reordered based on how much sold through, how much was still in backstock and how much could fit on the shelf depending on how many facings each sku, and all the while keeping in mind the day of the week, time of the year and whether or not each item is on a markdown that would create some elasticity in demand… for hundreds of items, every workday.
• Moderately Heavy equipment skills: Pallets are 40”x48” and weigh hundreds of pounds when fully loaded. Once they are being moved on a pallet jack, they have a lot of momentum and can very easily injury someone, including yourself. A forklift is likewise serious business and you need to get trained and certified by a specialist to drive one of those things as they weigh thousands of pounds and need to be properly balanced when turning or moving with loads. And likewise, cardboard bailers require your full attention, as the hydraulic press can easily kill someone if not used properly.
So, these are some of the skills needed in just one type of job in a retail setting. Any given grocery store will have hundreds of employees, each doing these jobs and many more to keep shelves stocked, products fresh and customers happy. And keep in mind, all this was before the pandemic, and the challenges for retail workers that the crisis has created.
Hundreds of retail and supply chain workers across the country have died. Thousands more have had their lives, incomes and careers disrupted once they got sick with the virus, which has left many workers and their family members with chronic and ongoing health problems. These folks deserve a living wage, protection to unionize and collectively bargain, health care benefits, hazard pay, paid sick leave, and access to PPE. They deserve customer mask mandates in stores and staffed up shifts so there is ample support to keep stores cleaned and sanitized to prevent the spread of the virus. The clerks and their skills have kept us all fed, now let’s make sure they are taken care of.
Originally posted here.
From The Bronx to Bessemer, Essential Workers Fight Back
Originally posted here.
Essential workers have been risking their lives stacking boxes, driving trucks, ringing doorbells and delivering necessities for millions of Americans during the Covid-19 pandemic. Hundreds of workers in retail, meat processing and supply chain have died and tens of thousands have been sickened by the virus. Recent events from The Bronx, New York to Bessemer, Alabama illustrate that supply chain workers are standing up in solidarity and demanding to be better compensated and treated with dignity.
On January 17, over 1,400 workers at the Hunts Point Produce Market in The Bronx went on strike at the massive facility which handles over 300,000 pounds of produce daily. The strike attracted national attention when Bronx-14 Representative Alexandra Ocasio-Cortez showed up in solidarity wearing Timberlands and bearing Café Bustelo. Rep Ocasio-Cortez rallied the workers, many of whom live in her district, "When you're standing on this line, you're not just asking for $1, you are asking for transformational change for your lives, over the lives of every food worker across this country, for kids or food workers across the country," Ocasio-Cortez said, "Because there's a lot of things upside down right now in our economy. And one of those things [...] is the fact that a person who is helping get the food to your table cannot feed their own kid. That's upside down.” The efforts look like they have paid off, with workers voting on a settlement that will meet their demands.
Throughout the pandemic, as tens of thousands of supply chain workers were infected and hundreds died, wildcat strikes and walk-offs were tactics workers used in meat processing, retail, and manufacturing to protest unsafe working conditions, low pay and lack of safety precautions across the country. Whole Foods workers staged sickouts in stores across the country and Buzzfeed printed an internal company email from Whole Worker, calling for collective bargaining, hazard pay, paid sick leave, mask mandates for customers and other relevant demands.
And on February 8th, nearly 6,000 employees at an AmazonAMZN fulfillment center in Bessemer, Alabama, will started the process of voting on whether or not they will form a union. This process will be the culmination of an employee organizing campaign with the RWDSU union, which kicked off when employees notified the National Labor Relations Board on November 20, 2020 that they wanted to hold an election to create a bargaining unit for workers in the facility.
Amazon workers have been organizing for years to gain better conditions at their facilities. Under the umbrella of Amazonians United, employees have organized in a number of facilities across the country, including Sacramento, Chicago and Queens. Others won prayer hours at a facility in Minnesota staffed heavily by Somali Muslims, a campaign that gave rise to the national Athena coalition. And the high-profile firing of Amazon manager and whistleblower Chris Smalls led to extensive public protests and the formation of The Congress of Essential Workers.
Throughout the pandemic, the union representing over 1.3 million supply chain workers, the UFCW, has been a consistent champion for all essential workers, partnering up with Senator Bernie Sanders to write an open letter to retail CEO’s, and has scored real wins for their membership, lending credibility to the need for labor organizing:
· In October, UFCW announced a new hazard pay agreement for 56,000 Stop & Shop workers across New England, New York, and New Jersey.
· Grocery cooperative ShopRite agreed to a COVID-19 hazard pay deal to retroactively compensate nearly 50,000 union workers for work over the summer, an idea that has gained some high level traction.
· 18,000 union workers represented by UFCW and the Teamsters at Stater Brothers grocery stores and warehouses had $2 per hour hazard pay reinstated.
· A UFCW local in Northern California has negotiated one of the country’s most comprehensive safety agreements with Safeway, including paid breaks for workers to wash hands, adequate supply of cleaning products in stores, increased staffing, payment to employees who are required to self-isolate due to COVID-19 infection and financial assistance with child care costs.
The real-world, material gains that UFCW and the Teamsters have won for their members are consistent with how unionization benefits frontline workers. And the expansion of unionization across market sectors tends to lift the boats of all workers, even if they are not unionized. According to a 2017 study by the Economic Policy Institute:
Union workers earn more. On average, a worker covered by a union contract earns 13.2 percent more in wages than a peer with similar education, occupation, and experience in a nonunionized workplace in the same sector.
When union density is high, nonunion workers benefit from higher wages.
As an economic sector becomes more unionized, nonunion employers pay more to retain qualified workers and norms of higher pay and better conditions become standard.
Unions reduce inequality and are essential for low- and middle-wage workers’ ability to obtain a fair share of economic growth
Union wage boosts are largest for low-wage workers, larger for black and Hispanic/Latin workers than for white workers, and larger for those with lower levels of education
Unions help raise women’s pay and help close wage gaps for Black and Latin workers.
These last two point are especially compelling given the food industry’s reckoning on diversity and equity issues in the wake of Black Lives Matter. If unions continue to demonstrate their potential to right the ship on wealth gaps and inequality, they will expand their reach and bargaining power in a diverse workforce.
And keep in mind that the House of Representatives already passed the PRO Act (Protect the Right to Organizing Act) back in February of 2020, which would expand collective bargaining and give workers more rights during disputes.
Longtime labor supporter Senator Elizabeth Warren recently said that if you don’t have a seat at the table, then you’re probably on the menu. The essential workers who mask up, clock in, stack and deliver millions of packages for consumers daily during the Covid-19 pandemic have undoubtedly earned that seat.
5 Steps to Reboot Grocery Retail
Mastered economics 'cause you took yourself from squalor
Mastered academics 'cause your grades say you a scholar
Mastered Instagram 'cause you can instigate a follow
Look at all these slave masters posin' on yo' dollar
-JU$T by Run The Jewels
Covid-19 is the first real stress test that our food system and supply chains have experienced in the 21stcentury. The pandemic highlighted the deep fissures in the industry and ripped away the pretense of “sustainable food”. It showed that we have made little progress moving past our food system’s origins in plantation slavery, Native American genocide and land theft. The impacts of Covid-19 in the food and agriculture sectors have been felt most acutely by the essential workers foundational to the supply chain. Considering the potential impacts of the climate change related crises that are sure to come, we have our work cut out if we are to fulfill a vision of a more just, sane and sustainable food system.
We’ve Failed Food Workers
No stakeholder group has carried a greater burden during Covid-19 than essential workers in food service, retail, manufacturing and CPG. The latest data show that almost 83,000 supply chain workers have been sickened with the virus, and over 360 have died. This data doesn’t come near to illustrating the shocking impact of the pandemic on all supply chain workers, such as the hundreds of frontline retail workers that have also died, according to UFCW.
The federal government failed to protect these workers, and even put them in harm’s way. OSHA, the agency tasked with protecting workers on the job, completely failed in its role, refusing to issue an enforceable emergency temporary standard. And the Trump Administration exacerbated the dangerous conditions, by issuing an executive order last April, at the behest of big meat monopolies, forcing meat plants to stay open despite the rapid transmission of Covid-19 within the plants. the administration later released guidance to increase line speeds, which surely sped virus transmission in dirty, crowded facilities staffed by exhausted personnel.
It’s not as though things were hunky-dory before March 2020. Essential workers have faced decades of wage stagnation. If wages had kept pace with productivity, we would have a $24 an hour minimum wage, and not still be haggling for a $15 an hour floor. Seen from another angle, working and middle class people have been robbed of nearly $50 trillion in income since 1975, or over $2.5 Trillion annually. Meanwhile, the top 1 percent of income earners have increased their share from 9 percent to 22 percent in that timeframe, while the bottom 90 percent have seen their share fall from 67 percent to 50 percent. In a year of Black Lives Matter-catalyzed reckonings of race and inequality, do I even need to mention that it’s mostly old white dudes who inhabit that top income bracket? They made money the old-fashioned way, LOL.
The pandemic-induced economic crisis exacerbated these conditions. While over 400,000 died, 67 million folks lost work, 98,000 businesses closed and 1 in 6 Americans, over 54 Million people, were struggling with food insecurity, the Dow hit 30,000 and the collective wealth of 650 billionaires increase by $1 Trillion to over $4 Trillion, nearly double the wealth of the bottom 165 million Americans. And while thousands of individuals, enterprises and non-profits have mobilized to take care of their customers, workers and communities, retailers at the commanding heights of the food system and supply chain leveraged the pandemic to generate enormous profits for a small handful of shareholders and executives, while sharing little with the workers that kept everything going. The wealth of the Walton family alone has grown by $40.7 billion during the pandemic, nearly 26 times the amount of all hazard pay for all 1.5 million Wal-Mart associates in the same timeframe, putting to rest forever the misguided notion that better pay would result in higher prices.
But as Arundhati Roy has written, the pandemic is a portal, a gateway between one world and the next.
What could that portal lead to in our corner of the economy, in supply chains and the food system?
First, Breathe.
Next, I’d have a banner over that gateway, quoting legendary East Village artist Seth Tobocman, “You don’t have to fuck people over to survive.”
Then I’d start some civil, yet uncomfortable conversations around what we could do to create and build this fair, just, sane food system and supply chain.
Got a Vonnegut punch for your Atlas shrugs
-El-P
A Seat at the Table
Retailers need to give food workers a seat a the table. Unions, the folks that brought us the weekend. Unions, the folks that built the middle class. I grew up around family members, friends and neighbors that were unionized. But what a paradigm, shift I experienced in the natural products sector,[4] not only a curious antipathy to organized labor, but an outright denial of the role that unions have played in our society. It was like another dimension, where the bosses, benevolent for the moment, knew best. Obviously, that moment passed.
Is it any coincidence that the extreme wealth and income inequalities since 1975 paralleled a similar declinein unionization rates, particularly in the private sector? On the other hand, unions have delivered impressive wins for their members during Covid-19, in particular the Teamsters, UFCW and RWDSU , while also advocating for all essential workers to have hazard pay, living wages, paid sick leave and safer work environments. And workers in supply chain and retail sectors have been getting more restive given the conditions they face, walking out or going on strike to win better gains from employers. As I have written elsewhere , this year promises to be very interesting on the labor front, and history has proven the value of unions for working people, in particular women and BIPOC folks. Black people in particular have much higher wages, better health insurance and pensions when unionized. The PRO-Act, which passed the House a year ago, is the most important piece of pro-worker legislation in decades, promising to introduce enforceable penalties for companies that violate workers’ rights, expanding workers’ collective bargaining rights and strengthening workers’ access to fair union elections. Or as Abe Lincoln once said, “Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.”
We need to reconsider the resistance to and avoidance of unions and worker’s solidarity. They have proven far and away to have been the best allies for all working people during the pandemic and deserve a seat at the table. What role can your organization play in the struggle for worker’s justice?
2. Farm Worker Justice
We have long exploited farm workers, and a just and sustainable future requires that we rethink the way we treat and pay them. None of us could eat without them. Yet they are among the most exploited and underappreciated members of our supply chain, lacking the basic labor protections that the rest of us take for granted.[5] In 1938, the Fair Labor Standards Act established workplace protections, such as the minimum wage, a 40-hour work week, overtime pay and a ban on child labor. To pass this bill, FDR needed to appease Southern Dixiecrats who didn’t want to compensate their workers fairly, so they left farmworkers (and domestic workers) out of the bill. Now farmworkers, who are majority Latinamerican and immigrant, have been exploited by generations of farmers big and small and consumers have been inured to prices not taking into account the dignity and wellbeing of farmworkers.
Vice President Kamala Harris, whose home state of California passed overtime pay for farmworkers in 2016, has introduced legislation, called the Fairness for Farm Workers Act, that would mandate overtime and end minimum-wage and overtime exemptions. A recent study in Massachusetts added credibility to this bill, concluding that giving workers overtime pay would add just 2[6] percent to farmgate cost, meaning that while it could easily be amortized into a rounding error by the time a product got to the consumer, it would also mean a 17 percent pay bump for farmworkers. According to Foodtank, farmworker advocacy groups such as Alianza Nacional de Campesinas and National Young Farmers Coalition (NYFC) are collaborating to help secure protections for farm workers impacted by Covid-19. In a letter to congress, Alianza de Campesinas articulated critical concerns: the exclusion of food system workers from relief, addressing food supply disruptions, and the lack of healthcare and economic assistance for marginalized communities, as well as the resurgence of sexual violence faced by women farmworkers. Farmworker justice exists at the intersection of race, gender and class in the food system, and literally none of us would be here now without these folks who are growing and harvesting our food, so it’s time we looked out for them and treated them with the respect and dignity they deserve.
When it comes to farmworkers, we need to come together and ensure that they are compensated fairly and treated with dignity, even if that means making adjustments to cost structures and value propositions that have been built upon their stress and exploitation.
3. Confront White Supremacy
I once remarked to Carla Vernón, that I’ve attended many natural products meetings that were whiter than Ku Klux Klan rallies. And author Raj Patel has a test that he gives food companies: if the Klan took over your business or your board of directors, how much would they have to change?
As context, Julie Guthman writes, in the United States “land was virtually given away to whites at the same time as reconstruction failed in the South, Native American lands were appropriated, Chinese and Japanese were precluded from landownership, and the Spanish-speaking Californios were disenfranchised on their ranches.” This pattern was repeated in the 20th century, as thousands of Black farmers were displaced or chased off the farms they built after Reconstruction. The consolidation of this rural land for conventional agribusiness production, as well as the cheapness and availability of it for the back-to-the land counterculture, that gave rise to the natural products trade, both further entrenched land ownership and food production by and for white people. Is it any wonder that the organic/regenerative sector idolizes Wendell Berry, Sir Albert Howard, or this guy but rarely mentions George Washington Carver, Booker T. Whatley, or Fannie Lou Hamer ?
The point here is that white supremacy is pervasive in the food industry, not only in terms of the ownership, management and governance of most major food and supply chain enterprises, but also in terms of the values, priorities and belief systems. From the conditioned belief in bootstrap individualism that blames health and wellness outcomes on individual lifestyle choices, to the persistent, nagging paternalism of NGO’s and CEO’s telling BIPOC folks what they should be eating. Or the dominant economic dogma that such problems can only be resolved by competition and free markets, like opening glitzy chain stores in gentrifying neighborhoods. It is no wonder that retail stores are heavily policed spaces of racialized trauma, as Dr. Naya Jones says. If I had a dime for every time I heard or experienced a white supremacist-rooted trope in a respectable retail setting over the past 20 years, I’d be retired by now. And it’s very rare that I have worked with any outright sieg-heil’ing knuckle-draggers. The casualness makes it that much more insidious and tough to address.
But those of us who present as white have the most work to do here: we must confront our privileges, ourselves and our organizations and question and correct decision making, ownership and financing structures that do little to redress these imbalances in power, talent development and resources in our industry. Back in the 1990’s, some of us anti-racists in the NYHC hardcore punk scene had a saying: Treason to whiteness is loyalty to humanity. Word.
How can we confront and address white supremacy on an individual level, by looking at our assumptions and biases, but also on an institutional basis, regarding who is making decisions, who is benefiting, and who is left out?
4. Values-based Procurement (GFPP)
My chosen trade is retail purchasing and supply chain, and I’ve held these roles at the store, regional and national levels for a range of retailers. I am fortunate to have worked with companies that fought the good fight for ethical and mission-based procurement in the private sector, enabling the development and popularization of Organic, Non-GMO, Fair Trade, humanely-raised and sustainably caught products, categories supply chains. Likewise, NGO’s working with the public sector have picked up these ideas and ruan with them, further refining the standards and applying them outside of the retail sectors where they could continue to grow and prosper.
Leading the way is the San Francisco-based Center for Good Food Purchasing , whose program provides a metric based, flexible framework that encourages large institutions to direct their buying power toward five core values: local economies, environmental sustainability, valued workforce, animal welfare and nutrition. (Disclosure: the author has volunteered with the Austin cohort since 2015).
The standards framework was inspired and influenced by private sector retail folks like myself, as well as community members, trade unionists and elected officials. While its primary use has been for school systems and other public and institutional contracts, the Center’s standards framework is just as relevant to other private sector actors in the supply chain who have not yet started to address these issues. As procurement becomes a hotter employment trend, procurement professionals will need to focus on more than just getting the best cost of goods or quick turnaround times that stress and exploit stakeholders downstream. They will need critical thinking skills and considerations of diversity and inclusion, and this values-based framework will make the roles accountable, holistic, and compelling as a career path in such a chaotic, crisis-prone food system.
The darker side of procurement is how much of the supply chain utterly failed to take into account ethical issues in supplier management during the pandemic. Every single worker death at a meat processing plant or produce operation was immediately followed by a purchase order from a retail or wholesale customer, whether they were mass market chains, natural food stores or smaller, specialty distributors. There were no ramifications in the supply chain for hundreds of deaths and thousands of illnesses, communities stressed and wrecked, families shattered. Business kept grinding on, workers kept getting sick and dying.
This isn’t the only way. The Coalition of Immokalee Workers, a Florida-based and farmer-led standards and advocacy organization, has negotiated legally binding contracts and codes of conduct with buyers that articulate clear penalties for growers who abuse their workers or create conditions that lead to sickness and death: the growers lose the business. According to a 10 year, longitudinal study by Harvard University, such worker driven initiatives are the most effective way to establish responsible supply chains, particularly by giving workers a seat at the table. Greg Asbed, co-founder of CIW, recently told me; “If you have a lot of purchasing power, you can demand more humane conditions, you can demand compliance with fundamental human rights in your suppliers’ operations, you can improve the lives of millions of people… if you decide to wield that same volume purchasing power for good as opposed to evil. All of this comes together to form an actual enforcement of the rights in the Fair Food Code of Conduct. That’s the power of the purchase order.”
Greg also laid it all out for us pretty starkly, “Whatever they call social responsibility in the food industry has been a joke, a fraud… it is absolutely empty and soulless and unreal. It is everything that has not worked and has been done for public relations purposes for the corporations, not the workers. That all became clear when Covid came down and all these outbreaks came to the press, did any of the buyers step up and say that we can’t allow this to keep happening? Not one.”
The frameworks and best practices for values-based procurement have already been stress tested, and it protects and empowers the stakeholders most prone to abuse otherwise while assuring the supply chains function optimally. We just need more retail and wholesalers to get with it.
Values-based purchasing was birthed in the natural channel, but has been stalled and watered-down in the greater food industry. With its adoption growing in the public sector, how can we make these standards foundational to our whole food supply?
5. Worker ownership and a solidarity economy
Ownership and governance are two major hurdles for racial and economic justice in the food system. Fortunately, there is a movement afoot to diversify the wealth and decision making power for enterprises, and there is significant historical precedent and momentum. Worker ownership models, such as employee stock ownership plans (ESOP’s), worker cooperatives, employee owned trusts, perpetual trusts and multi-stakeholder cooperatives are becoming more popular, particularly among millennials and younger BIPOC workers who have been marginalized and exploited in traditional corporate environments. The benefits are many for all involved, including greater employee engagement, better company performance and better employee wellbeing and happiness, and are well documented across thousands of such enterprises. This includes familiar brands like Bob’s Red Mill, King Arthur Flour and Equal Exchange, or international icons such as The Mondragon Cooperative Complex and John Lewis UK. There are also dozens of scrappy startups involved with USFWC and NYC NOWC, values-driven businesses that are putting worker and community benefit at the core of their purpose. This should be a familiar clarion call to those of us in the natural products trade.
The financial considerations for employees are well documented, with household net wealth 92% higher for employee-owners than for non-employee-owners; employee-owners having 33 percent higher median income from wages; employee-owners are much more likely to have great benefits, including flexible schedules, retirement plans, access to childcare, parental leave, and tuition reimbursement; and employee-owners having substantially more job stability than non-employee-owners. The model is also spreading to the tech sector and flourishing among website and mobile app developers who are getting wise to the predatory and extractive practices of unicorn tech startups.
Many of the folks in this sector are looking beyond the atomized marketplace they must function in and building networks towards a solidarity economy, a 21st century version of the cooperative commonwealth that social reformers envisioned in the Gilded Age to overcome poverty, exploitation and racism by creating networks of like-minded enterprises that could supply and support each other. And in the shadow of the silver tsunami of baby boomer business owners facing retirement, Alternative Ownership Advisors, who recently helped Organically Grown Co. transition into a perpetual trust model, has articulated a set of legislation needs to enable the growth of the employee/worker owned sector, including tax incentives for business owners, incentives for capital providers to finance such enterprises and encouraging more states to allow these enterprise forms to legally incorporate.
How do we make worker and employee ownership norm?
These are just a few ideas that I’ve been noodling on recently. As someone who is pretty busy supporting a number of mission-driven retail, CPG and NGO enterprises, I have been privileged to keep a roof over my head and food in the pantry. I have had the time and energy on nights and weekends to consider the current crisis, research and articulate what we could do differently from here on out.
I know and love so many wonderful colleagues in natural products retail, supply chain and startup land who are committed, energetic and well-resourced to remake society towards justice, equity and sustainability. But I am deeply anxious and skeptical that those of us who have stayed healthy, housed and employed will not anticipate and prepare for the next crisis, especially in solidarity with those on the frontlines that are bearing the highest costs. I am very concerned about the resistance we will face from vested interests, reactionaries and conspiracy theorists who can’t see past their own short term self-interest. Covid-19 is doing a lot of damage and we should consider it a preview of what’s to come. Climate change is here, and there will be no mask mandates or vaccine rollouts that can save us from the growing threats of wildfires, superstorms, rising sea levels, mold epidemics and ocean acidification. We can only imagine how these climatic events will drastically impact the folks who are already disempowered. We have yet to correct, resolve and heal from these power imbalances. There’s a shit ton riding on this and we have work to do.
What are your learnings from this crisis and what is your commitment to building supply chains that are fair, just, sustainable and transparent?
3 Retail Food Trends To Watch In 2021
Originally published on January 19, 2021 on Forbes.com
Welcome to 2021. As former V.P. of Grocery at Whole Foods, I helped roll out the trend forecasting “trend” several years ago and I love how it’s been picked up and improved by more retailers and industry heavyweights. Retail buyers know their stuff, and there have been some compelling predictions made over the years. Some of these shout-outs are self-fulfilling prophecies, since retail buyers also have the power to make and break trends in their respective stores. On the other hand, no one has ever really been held accountable for how correct their crystal ball was, so I do take many of these predictions with a grain of sea salt. In that vein, here are my takes.
BIPOC-owned brands and industry initiatives to boost diversity
The Black Lives Matter movement and the George Floyd memorial protests have forced a soul searching in the food and CPG industry, which has a majority White and male ownership, leadership and investment cohort. A growing realization that who owns and profits from food companies is very different from the shoppers and supply chain workers who keep the wheels turning, is inspiring entrepreneurs, activists and investors to push for a food system that reflects our changing society, and is more diverse, fair and just. The JEDI Collaborative is forging ahead with trainings and workshops for thousands of food retail professionals across for-profit, finance and non-profit sectors. In CPG world, a cohort led by Project Potluck is leading a movement of trend-forward brands that are forging ahead with authenticity, diversity and equity built into their DNA, including A Dozen Cousins, Partake Foods, and more.
Organic continues to prosper
Organic food sales have doubled over the past decade to $50.1 billion in 2019, according to the 2020 Organic Industry Survey released by the Organic Trade Association. Almost 6 percent of the food Americans now eat is organic, which is tremendous. Organic products are also more affordable and accessible than ever. They are available at farmers markets, through SNAP, at Wal-Mart and Costco, at discount food outlets, and through the value priced organic private labels (store brands) at almost all grocery stores. The growth of organic farming and processing has allowed Americans across all income levels and ethnic groups—82% of households—to eat some percentage of organic food. That would have been unimaginable when I was working at a little food coop in the 1990’s.
And here’s the scoop from a couple of fellow travelers in natural products retail who wished to remain anonymous, “We have transitioned full commodity categories in stores to organic, as we were able to locate supply and partner with manufacturers who could meet our scale and needs.” And they’ve also seen “a huge uptick in organic produce and renewed interested in healthy products with transparent standards. COVID-19 reminded people that they are in charge of their own health care and food choices.” Organic remains a silver lining and growth segment in the food industry, proving that good food is pandemic-proof.
Food sovereignty, especially Indigenous-owned enterprises
"Food sovereignty is the right of peoples to healthy and culturally appropriate food produced through ecologically sound and sustainable methods and their right to define their own food and agriculture systems...", so brilliantly articulated by La Via Campesina’s Nyeleni Declaration. But it is best summarized by Steph Wiley of Brooklyn Packers , “Food for us, by us”. Good food activists and values-based procurement teams working with Center for Good Food Purchasing, Real Meals Campaign, as well as innovative organizations such as Mandela Grocery Coop, Black Church Food Security Network, Isla Vista Coop, Detroit Black Community Food Security Network, and the Central Brooklyn Food Coop practice food sovereignty as a means of overcoming the intentional food apartheid built into our food system that separates health and wellness outcomes by race, geography and class. Think of food sovereignty as the antidote to the sanctimonious, individualist, body-shaming narrative embraced by economic elites, where the only solution is to open trendy retail stores in rapidly gentrifying neighborhoods, contributing to the displacement and alienation of working class residents. Kind of defeats the purpose, right?
By transferring more control of food production, procurement, distribution and retail to communities that have not historically had control of such options, food sovereignty is enabling greater numbers of people to eat culturally relevant, organic, whole food diets, resulting in better health and wellness outcomes. Plus, food sovereignty is a welcome departure from the mainstream understanding of food security that does not address power dynamics and political economy in the food system.
The popular wave of Indigenous-owned and led food enterprises is among the most exciting exemplars of this trend. After 530 years of resisting theft, displacement and genocide,
Indigenous peoples are bringing their worldviews and techniques to the forefront of the food industry. Leading lights such as Sylvanaqua Farms, The Sioux Chef, NATIFS, Sierra Seeds, Tanka Bar (Disclosure: author is a Board Member of Tanka Bar), and Alliance of Native Seedkeepers are building revenue streams for Native American-owned enterprises that unite two worlds, which is how Chef Brian Yazzie puts it, marrying traditional and modern ingredients and techniques. This market visibility is funding and energizing the efforts of Indigenous farmers and producers to reclaim farming and land management techniques that have been appropriated by White permaculturists and regenerative agriculture practitioners. And consumers and retailers should stoked be for the ingredients and sensory experiences as these trends move to the forefront of cuisine and CPG.
Of course, the trends towards e-commerce pickup and home delivery, store brands/private labels, stay-at-home cooking, plant-based and plant-forward eating, immune-boosting products, plus continued customization and personalization in food marketing will all continue unabated, but those should all be obvious by now if you have read many of my colleague’s excellent trend reports. Overall, I expect 2021 to be a very disruptive year in this brave new world of food retail and supply chain.
Keep in touch for more observations and analysis @grocery_nerd on Twitter or @grocery.nerd on Instagram. Be safe out there.