Detroit Fresh Food Access Initiative

3.Attention to workforcedevelopment and grocer capacitybuilding: High quality grocerystores with excellent service andproducts attract customers. It isimperative that store managers andemployees possess all the skillsnecessary to operate a high-qualityestablishment in a challengingenvironment. Technical assistanceand training will help grocers achieveoperational excellence, whileworkforce development will notonly improve the customer experience,but also will give grocery industryemployees the tools necessary forupward mobility in the sector.4.Innovation in retailing andcommunity relations: By lesseningthe obstacles to grocer innovationand encouraging the adoption ofbest practices, Detroit can empowergrocers to employ unconventionalstrategies for meeting the challengesthat they face. In addition to creatingoperational improvements, innovativepractices will improve the perceptionof Detroit’s grocery industry.Resources should be devoted topractices, such as: Partnering with local communityorganizations Piloting customer transportationprograms Increasing access to food rescueprograms Upgrading to energy efficientlighting and fixtures, in additionto other sustainable practicesAs these recommendations areimplemented, grocers will be betterable to capitalize on the city’s unmetdemand, and Detroit residents willbenefit from increased access to freshfoods. To tackle this important challengemost effectively, the grocery businessattraction and retention program mustbe established as soon as possible.Essential to the development of Detroit’sgrocery sector, it will require substantialfunding to effectively support existinglocal grocers and impact new retailerattraction. As the overall lynchpin,the business attraction and retentionprogram will ground the implementationof the other recommendations bya variety of partners.Food is a basic human need; yet, manyDetroiters see this need go unmet intheir neighborhoods. As evidenced bythe large number of diverse stakeholderson the DFFAI taskforce, it is imperativeto dedicate resources to addressing thechallenge of limited fresh food access inorder to promote the health and vitalityof Detroit’s residents and neighborhoods.5

Why address the issue of food access?Over 500,000 Detroiters live inneighborhoods characterized as“food deserts”—areas that requireresidents to travel more than twice asfar to reach a full-service grocer thanan alternative, and often less healthy,food supplier.1 In some Detroitneighborhoods, residents avoidneighborhood grocers due to perceivedquality or selection problems. Marketresearch has found that there could beas much as 210 million to 377 millionin Detroit consumer spending that is notcurrently being captured by Detroit’sgrocery sector.2This lack, or perceived lack, of qualitygrocery stores creates serious challengesfor the health of Detroit’s neighborhoodsand its residents. Throughout the city,community organizations, developers,and residents widely report theperception of poor grocery store accessas an impediment to the attraction ofnew residents.3 Recent market researchrelated to the Detroit downtownhousing market identified the lackof quality retail options as a hindranceto the marketability of residentialprojects, as well as an area where newdowntown residents want improvement.4In Philadelphia, the introduction of newsupermarkets in previously underservedneighborhoods increased home valuesby 4-7% and positively impacted therate of housing appreciation in theneighborhood. In particular, downwardtrends in housing values in low-incomeneighborhoods were largely mitigatedby the addition of a new supermarket.5In addition to impeding neighborhoodredevelopment, poor grocery store accesshas serious public health implications.Numerous academic studies have madeclear the connection between diet anddisease. Research shows that, not onlydoes the availability and cost of healthyfood vary across communities, but alsothe availability of nutritious foods ispositively associated with consumption.6Since African-American residents maybe more reliant on their local neighborhood for healthy food—due to limitedaccess to private and public transportation—those living in neighborhoodswith supermarkets generally havehealthier diets.7In Detroit, Mari Gallagher’s 2007 fooddesert study tied the lack of fresh foodaccess to poor public health outcomes.Diet-related health outcomes in bothDetroit and its suburbs are worse whenresidents have to travel farther to accessgrocery stores than alternative foodoutlets—even after accounting fordifferences in income, education, andrace. Detroiters living in these “out ofbalance” areas are even more likely tosuffer premature death.8Focused CitywideAttention to FreshFood AccessFood Policy Task Force:New York, New YorkThe City of New York drewattention to the problem of poorfresh food access through MayorBloomberg’s aggressive campaignto address unhealthy eating.In November 2007, the cityannounced the creation of a FoodPolicy Task Force to oversee all thecity’s food-related policy efforts.The Task Force, consisting ofrepresentatives from the Office ofthe City Council, the Departmentof Education, the Department ofHealth and Mental Hygiene, andHuman Resources Administration,will coordinate all relevant agenciesin their efforts to make nutritiousfoods more easily accessible tolow-income residents. For example,the Task Force will oversee aprogram to encourage bodegas inimpoverished areas to offer fruitsand vegetables, as well as otherhealthy, lower-fat products. Additionally, the Mayor anticipates thatthe formation of the Task Forcewill simplify and reduce the costsof developing/expanding grocerystores in underserved areas.(Sources: Diane Cardwell. “City Hires Coordinator of Food Policy.” The New York Times. 21January 2007.; “Mayor Bloomberg and SpeakerQuinn Announce Effort to Increase Access toHealthy Food in Low-Income Communities.”New York City Department of Health and MentalHygiene. (Press Release). 22 November 2006.)123456786Mari Gallagher Research & Consulting Group. Examining the Impact of Food Deserts on Public Health in Detroit: Stranded in the Food Desert. July 2007.Social Compact Detroit 2007 Drilldown, Social Compact 2008 Detroit Grocery InitiativeGuest, Greta. “More Farmer Jack Stores to Close in Detroit.” Detroit Free Press. 20 December 2003.Katherine Beebe and Associates. Downtown Detroit Residential Market Study. Sept. 2006The Reinvestment Fund. The Economic Impacts of Supermarkets on their Surrounding Communities. Reinvestment Brief. Issue 4.Cheadle Allen, Bruce M. Psaty, Susan Curry, Edward Wagner, Paula Diehr, Thomas Koepsell, and Alan Kristal. 1991. “Community-Level ComparisonsBetween the Grocery Store Environment and Individual Dietary Practices.” Preventive Medicine. 1991, 20:250-261Morland K, Wing S, Diez-Roux A. The contextual effect of the local food environment on residents diets: the artherosclerosis risk in communities study.Am J Public Health. 2002;92;1761-7.Mari Gallagher Research & Consulting Group. Examining the Impact of Food Deserts on Public Health in Detroit: Stranded in the Food Desert. July 2007.

Many cities, including New York City,NY, Chicago, IL, New Orleans, LA,Philadelphia, PA, and Oakland, CA,have recognized that there is a publicpolicy imperative in their neighborhoodsto address the issue of fresh food access.Nationally, many organizations,including the Kellogg Foundation,Local Initiatives Support Corporation,PolicyLink, and Initiative for aCompetitive Inner City, haveidentified the lack of grocery storesin urban neighborhoods as a majorchallenge to community revitalization.They join academics and food securityorganizations that have long linkedgrocery store access with the economicand physical health of communities.The Detroit Fresh Food Access Initiative(DFFAI) represents one part of a largercommunity concern about the access ofurban residents to healthy foods.This concern has been expressedthrough urban farming initiatives andcommunity activism, as well as in moreformal policy contexts like the DetroitFood and Fitness Initiative and theMichigan Food Policy Council. It is outof this growing call to look specificallyat retail access to fresh foods in Detroitthat the Detroit Fresh Food AccessInitiative was formed.The Community Response: Formation of theDetroit Fresh Food Access InitiativeThe creation of the Detroit FreshFood Access Initiative was a naturalresponse to: market research documentingunmet grocery sector demand, public health impacts illustratedin the Food Desert study, and constant community complaintsabout the lack of quality groceryoptions in the city.As the City of Detroit’s dedicatedbusiness attraction and retentionagency, the Detroit Economic GrowthCorporation (DEGC) recognized itsrole in creating an economic climatesupportive of high quality grocerystore development in Detroit.In partnership with Detroit Renaissance,the Detroit Investment Fund, andLaSalle Bank (now Bank of America),DEGC began to study the issue ofneighborhood food access in depth.With the generous support of LaSalleBank, DEGC was able to retain theservices of The Food Trust—a nonprofitorganization that had studied the issueof grocery store access in Philadelphiaand created the innovative Fresh FoodFinancing Initiative as a response.Additionally, DEGC and its partnersspent several weeks conductingdozens of industry interviews to betterunderstand the Detroit grocery sector.As a result of these collaborativeefforts, the Detroit Fresh Food AccessInitiative was formed in October 2007;the taskforce’s co-chairs include JaneShallal, President of the AssociatedFood and Petroleum Dealers, WarrenDisch, a regional vice president forSUPERVALU’s wholesale divisionand outgoing chairman of the MichiganGrocers Association, and Olga Savic,Acting Vice President of BusinessDevelopment at DEGC. Taskforcemembership was broad, but mainlyindustry and economic developmentfocused. It included independentgrocers, national retailers, wholesalers,developers, industry associations,regulatory, planning and economicdevelopment agencies, academics, banksand other financial intermediaries.The taskforce was convened toexamine the barriers to attracting orexpanding grocery retail operations inthe City of Detroit, as well as possiblemethods for overcoming those hurdles inorder to increase Detroit residents’ accessto healthy foods.To accomplish this goal, the fulltaskforce met three times from October2007 through January 2008, whilesub-committees conducted additionalresearch between meetings. The reportis the outcome of that collective work.7

What is the Demand for Full-ServiceGrocery Stores in Detroit?In order to focus the taskforce’s charge,Social Compact—a Washington D.C.based non-profit organization specializing in urban market analytics—studiedDetroit’s potential for grocery storedevelopment. Their analysis was greatlyaided by the industry expertiseof taskforce members.Given the proliferation of places wherefood is sold, it is important to clearlydefine the grocery stores that DFFAIwas interested in studying. Grocerystores, as DFFAI defines them, areretail outlets that carry a full line ofgrocery, meat, produce, dairy, andbakery items. They can include limitedassortment stores (full line of groceryitems, just with fewer choices), outletsserving specific demographics (likeupscale or ethnic), conventional supermarkets, or superstores that carrygeneral merchandise in addition togroceries. They do not include storesthat sell an extremely limited amountof fresh food, like convenience stores,drugstores, or dollar stores.Social Compact’s 2007 Detroit Drilldowndetermined that Detroit was a muchlarger market than previously thought,with a sizeable buying power. Detroit’s933,000 residents had 2.0 billion moreaggregate income than previouslycounted. In addition, Detroiters werespending 1.7 billion in retail purchasesoutside of the city.998Social Compact 2007 Detroit Drilldown.Detroit residents spend 975 million ingrocery expenditures annually, which,using the International Council ofShopping Centers’ (ICSC) average salesper square foot figure of 351, impliesthat Detroit would be able to support2.8 million square feet of grocery retailspace. Yet, when accounting for allgrocery stores in Detroit, includingsome that may not be classified as fullservice—Detroit has only 2.2 millionsquare feet of actual grocery retail space.This difference can be interpreted as anunmet demand for an additional 600,000square feet of general grocery retailspace in the city. The difference betweenthe supply and demand of grocery retailspace based on purchasing power isalso known as grocery leakage(See Fig. 1). These calculations implythat Detroit is experiencing annualgrocery leakage of 210 million.When considering only full-servicegrocery stores, the estimated amountof retail leakage increases. Industrystandards assume at least 10,000 squarefeet of retail sales space is needed for aFigure 1: Lost Consumer Spending in Detroit’sGrocery Sector

full-service grocery store. After removinggrocers who do not meet this benchmarkfrom the retail leakage calculation,there is only 1.7 million square feetof full-service grocery retail space inDetroit. This means Detroit residentscould support up to 1 million additionalsquare feet of full-service grocery retailspace, or that leakage in this sector iscloser to 377 million—almost doublethe more conservative estimate.at 3 square feet of grocery retail perperson. Though the tri-county areaaround Detroit shows an average of2.95 square feet per person, Detroithas only 2.34 square feet per person(See Fig. 2). Approximately 694,000people—or 74% of the city population—have access to less than 3 square feetper person of grocery retail space.Furthermore, 88,000 people haveaccess to even less than half that amount.This difference points to the need forprecise neighborhood level analysis thatwill better incorporate the presence offull-service grocery stores, as well asother retail food outlets that mightconsume residents’ grocery dollars.However, even when assuming thelower retail leakage estimate, Detroitcould support at least one largesuperstore, several conventionalgrocery stores, and the expansionof several existing grocery stores.While suburban residents have roughlyequal access to small and large grocerystore formats, Detroit residentsprimarily choose from small formatstores. For the purpose of their analysis,Social Compact defined large formatstores as larger than 30,000 square feet.To provide some context, the FoodMarketing Institute reports the nationalaverage size for a grocery store is47,500 square feet. Larger storescan provide more selection and may bemore attractive to consumers. Only 23%of Metro Detroit’s stores larger than10,000 square feet are located in theCity of Detroit, while Detroit’s share ofthe tri-county region’s stores greater than30,000 square feet is even smaller—atonly 8%. Residents outside of Detroitmust travel about 1.05 miles to a largeformat grocery store, but those insideDetroit travel an average of 1.72 miles.Over one third of Detroit residents travelfurther than 2 miles to reach a largeFigure 2: Grocery Retail Availability Per CapitaWhere is the DemandLocated?To begin understanding which partsof Detroit present opportunities fornew store attraction or existing storeimprovement, Social Compact used afew additional metrics to determinewhich neighborhoods were underservedby grocery providers. These metricsincluded the grocery sales area perperson, as well as the average distanceto large format grocery stores.A recent survey of national retailersby Social Compact and ICSC revealedthat the national average for grocerytrade areas could be roughly computed9

format store (See Fig. 3). Coupled withpoor access to personal vehicles anddifficulty transporting groceries homevia bus, this can be a formidable distanceto travel for regular grocery shopping.Social Compact’s findings show that notall neighborhoods suffer the same lackof fresh food access. Northwest andwest Detroit have significantly moreconcentrated grocery retail leakagethan other parts of the city, with smallerpockets of concentrated leakage alongthe northern city limits, far-east citylimits, the Livernois-McGraw area, anda few other areas. These neighborhoodsdemonstrate demand for new stores.When looking at grocery access fromthe perspective of larger format stores,residents in Southwest Detroit, portionsof the greater downtown area, theLodge Freeway Corridor, northeastand far east Detroit must travelsignificant distances. These neighborhoods may provide opportunities forexpansions and improvements to existingstores, in order to provide a higherquality experience closer to home.Finally, Social Compact worked withhandshake—a marketing agency knownas an industry leader in behavioraltargeting, diversity, and segmentationmarketing—to analyze whether amarketing program aimed at behavioralchange in the grocery shopping habits ofFigure 3: Large Grocery Store Proximity10Detroit residents would produce results.Handshake found that Detroit residentsexhibit a great desire in Detroit to eathealthy foods, but have little access tonutritious options. Handshake concludedthat a “healthy eating” campaign,coupled with a grocery store expansionand attraction effort, would likely resultin high levels of behavioral change, asmore Detroiters would seek out healthychoices in their neighborhoods.These findings, including the extent towhich Detroit residents are underservedby existing full-service grocery storesand the receptiveness of Detroitresidents to marketing geared towardsthe purchase of fresh foods, underscorethe demand for additional full-servicegrocery retailers. Not only are manyDetroit residents underserved in theirneighborhoods, they would be highlyresponsive to the presence of new orimproved stores in their communities.

Why is Detroit’s Grocery Store Demand Unmet?Detroit suffers from two disparateproblems. Some neighborhoods simplylack any full service grocery stores, andare instead serviced by conveniencestores, dollar stores or other fringe foodoutlets. Other neighborhoods havefull-service grocery stores, but theseestablishments may not always providethe selection or quality that neighborhood residents demand. Various factorscan be considered responsible for thesecurrent conditions. Perceptions about Market Strength:Poor perceptions of Detroit’s marketstrength are widespread, due topopulation and income undercounts.Since accurate market informationis difficult to access, many retai

The Detroit Fresh Food Access Initiative was convened to specifically address the role of traditional food retail . outlets in fresh food access, with the goal of recommending ways to strengthen the overall grocery industry as a delivery mechanism for fresh and healthy foods. These traditional food retail outlets, namely neighborhood