October 11, 2015

Delivery of Healthy Foods and Beverages to Lower Income Areas

I am continually amazed by how experts who make excuses for why certain problems have remain unsolved overlook simpler and less expensive solutions to these problems. For example, a whole population of advocates have pointed out that low-income people living in inner cities, particularly those lacking access to an automobile, are trapped in what are now called “food deserts,” that is, areas in which people lack access to affordable healthy food. Very often, the food deserts have abundant access to less-healthy junk foods, cigarettes, alcohol, and, of course, illegal drugs.

The usual solutions are to put supermarkets in the inner city, or to have farmers markets in the inner city or urban gardens in abandoned lots. While all of these solutions are excellent long-term answers, all have problems or limitations.

Supermarket chains are increasingly reluctant to begin an effort to put a supermarket in an underserved low-income, inner city area. There is an old saying that “No good deed goes unpunished” and that certainly applies to supermarket chains that try to do the right thing. Almost always, labor unions and community coalitions try to force the chain to make various kinds of concessions as a condition of withdrawing objections, and small businesses who perceive they are threatened by the supermarket fight to the death to keep it out. Last September 29, The New York Times published a story about a supermarket chain that tried to open a store in the Bronx, and was stalled by several different special interest groups.

The farmers markets and urban gardens are good solutions for growing foods during the growing season, but they do not provide a complete solution for population food needs during colder weather.

What works all year around is a delivery service that regularly trucks food that is ordered online from the supermarket to convenient locations in the inner city that only need storage space and security from break-ins and thefts. Churches, schools, community centers, and industrial warehouses located in inner cities all can serve this purpose. The Baltimore City Health Department is actually pioneering this idea in a program it calls the “Virtual Supermarket Project.”

When I have spoken with people who have attempted to solve the food desert problem with delivery services, they always say that the “economics of the proposed service do not work for the delivery service.” That strikes me as a phony argument. Certainly, if a delivery service tries to copy a door-to-door service it provides in a wealthier area, the economic argument would make sense. However, delivery to a location that clusters or groups multiple orders, but is convenient for local residents makes a whole lot more sense.

This whole discussion reminds me of the economics of mail delivery, which, by the way, is a way of delivering fresh fruit over long distance from gourmet services like Harry and David. Postal services that have more freedom to change their delivery model, such as the Emirates Post, deliver to clusters, and charge extra for door-to-door delivery. When I was at Pitney Bowes, the major corporate customers we served through our mail delivery services increasingly wanted delivery to clustered mailboxes rather than to individual desktops or mail cubicles.

In some European countries in which postal unions are large and powerful, the delivery obligations are far greater than what we have here in the United States. For example, in the UK, on some routes, letter carriers have to walk up several flights in apartment buildings and deliver mail through slots on the doors of individual apartments. This preserves postal jobs, but it makes delivery service extremely expensive.

The reason I prefer delivery services as a near-term or even a medium-term solution is that the construction of a supermarket, even when the supermarket owner can run through the gauntlet of community special interest groups, locks residents into the choices that supermarket offers. Delivery services give the residents an ability to buy from any grocery store or supermarket within a reasonable radius of the community, which creates more competition. When a supermarket comes into a community, it adds a single competitor, often one that displaces some or all of the small food stores already in place. A delivery service keeps local competitors in place, and adds competition from the outside. Moreover, over time, it can even incorporate long-distance online purchases of non-perishable items to put even more competitive pressure on the local bodegas or convenience stores that fail to offer adequately healthy food. Having access to delivery services makes everyone more willing to be competitive in their pricing and their services for poorer communities.