A former exec at Trader Joe’s grows another kind of grocery store

Doug Rauch opened Daily Table in a low-income area of Boston two years ago. The nonprofit grocery store has been a pioneer in its approach to food waste, food deserts, hunger, and obesity.

Difference Maker

Anyone else in his position would be sitting on a tropical beach wearing a flowery Hawaiian shirt, his toes curled in the sand. But not Doug Rauch.

Mr. Rauch worked for 31 years at Trader Joe’s, the last 14 as a president. He helped grow the small retail chain in California into a grocery store with a national presence. He retired in 2008.

But Rauch wasn’t really ready to call it quits. It took a few tries, but after a while, he started growing another food store – Daily Table, located in a low-income neighborhood of Boston.

“I failed retirement,” says Rauch, his eyes crinkling when he smiles.

Since it opened two years ago, Daily Table has been a pioneer in its approach to food waste, food deserts, hunger, and obesity. It’s a nonprofit grocery store, selling healthy food at bargain prices.

The food that Daily Table sells is excess food – either donated by various organizations or bought at steep discounts from big-name companies looking to unload items that are close to their expiration dates. The items are resold at a fraction of retail prices – and yes, they still haven’t reached their expiration dates.

Rauch came up with this model, which has been received enthusiastically by customers, after a stint as a fellow at Harvard University and through collaborations with others in the Boston area working on food issues.

“I love what Doug is doing,” says Sasha Purpura, executive director of Food for Free, a nonprofit in Cambridge, Mass., that rescues excess produce from local farmers markets and distributes it to local food pantries, as well as Daily Table.

“Here’s somebody who’s coming out of a senior role in the corporate food world with a tremendous amount of experience, connections, and intelligence,” Ms. Purpura adds, “and he’s bringing that into the nonprofit world and doing it in such a collaborative, genuine way.”

Daily Table is located on a busy corner in Dorchester, the diverse Boston neighborhood where the actors-musicians Mark and Donnie Wahlberg grew up, as well as the Queen of Disco, Donna Summer. As of a 2007-11 estimate for the Census Bureau’s American Community Survey, more than 45 percent of households in Dorchester had incomes of less than $40,000.

An upbeat scene

Daily Table looks like a Trader Joe’s. Blackboards display welcoming messages in colorful chalk, and some walls are painted in eye-popping orange and green-apple colors. Bouncy music – such as “We Are Family” – plays while shoppers stop to chat with friends.

And there’s the food – stacks of organic cereal, produce piled high on display tables, and in a refrigerated section, precooked meals and fresh salads made on-site. There are almost 60 suppliers to Daily Table, a mix of nonprofits like Food for Free and major companies that include Newman’s Own, Cedar’s Mediterranean Foods, Wegmans, and Whole Foods.

“Quality equals dignity,” Rauch says.

Daily Table accepts only food that meets its strict nutritional guidelines, particularly regarding sugar and sodium. This is the reason the store does not sell orange juice.

“You won’t find anything here that won’t move you forward,” says Rauch, adding that one woman told him she’d lost 15 pounds after shopping regularly at Daily Table.

His manager, George Chakoutis, says he and Rauch “get into it” over the self-imposed limitations every so often. “We could have so much more,” Mr. Chakoutis says. But Rauch won’t budge.

Still, each week brings new and different shipments. “Shopping here is like a treasure hunt,” Chakoutis says as a pallet stacked with 60 donated cases of celery hearts rolls into the storage room.  

In its first 20 months, Daily Table enrolled 11,000 members; 450 to 500 customers are served daily. Chakoutis says that the average size of the shopping basket – that is, what people buy – has doubled, as has the number of items the store carries. “We’re a larger part of their diet,” Rauch says.

All that’s required to join is a phone number and a ZIP Code to ensure that the majority of Daily Table customers are people who live nearby. However, people from any ZIP Code – and of any income level – are welcome, Rauch says: “If Warren Buffett walked in, he’s welcome.”

Kim Chan-Hernandez, a home health aide and mother of three who lives and works in the area, often picks up some lunch from the store.

“I like it for the prices. Look at that – 49 cents for 12-ounce cans of Polar flavored seltzer. How can you beat it? I’ll grab something, quick and easy,” she says, scanning the refrigerated shelves.

Daily Table may be operating smoothly now, but the path to developing it wasn’t so simple. After retiring, Rauch figured he would sit on some boards. But then he realized that most of his time would be spent fundraising. “One, I’m not a fundraiser, and two, why not get money by delivering on the business?” he says.

But the question was, what business? He began to shape his ideas during his fellowship at Harvard’s Advanced Leadership Initiative, where he studied food waste and food deserts.

Catherine D’Amato, president of the Greater Boston Food Bank and one of Daily Table’s suppliers, says Rauch met with her to discuss one of his early ideas.

“He was going to collect all this bread because there was so much of it, and give it to us,” she says. “I told him, ‘That’s thoughtful, but nobody wants it.’ His idea wasn’t big enough. It wasn’t the right idea.”

‘Awakenings’

So Rauch returned to Harvard to retool his plans. And there, he had a number of “awakenings.” One was understanding that “hunger isn’t a shortage of calories; it’s a shortage of nutrients.” Second was that “the model for tackling hunger is outdated, designed around people getting food to eat versus getting good food to eat.”

As many as 49 million Americans are food insecure, says Rauch, citing a common statistic. The data have frustrated him.

“We’re one of the richest nations in the history of food production,” he says. “We have far more food than we need as a society. It just seemed so incongruous to me.”

Championing changes to the tax code was another idea Rauch bounced around. He figured better incentives might lead corporations to make larger donations of healthier food. But he recounts that Ray Goldberg, one of his Harvard professors, warned him not to waste years “wrestling with the IRS.” Dr. Goldberg, who along with John H. Davis developed the Agribusiness Program at Harvard Business School in 1955, persuaded Rauch to work in an area he knew well – retail. “His comments transformed my thinking,” Rauch says.

To get excess healthy food into the hands of those in need, Rauch searched for “inefficiencies in the system.” He found them and channeled what he learned into Daily Table.

Although there are about six to eight other nonprofit grocery stores in the United States, such as Fare & Square in Chester, Pa., “Daily Table’s commitment to health and healthy foods is unique,” Ms. D’Amato says.

But a number of US cities are eager to have their own Daily Table. Officials have visited from places with profiles similar to Dorchester’s – including Providence, R.I., and New York City, “particularly for the Bronx,” Rauch says. “But first, our goal is to be sustainable economically. If we can get to break-even, then we become very scalable.”

Funders that support the nonprofit, making it possible to operate, include PepsiCo, Newman’s Own Foundation, New Balance, and Blue Cross Blue Shield of Massachusetts.

Meanwhile, the model is growing again. In April, Daily Table began offering free cooking classes for all ages. “Doug has grabbed the bull by the horns,” writes Anthony Stankiewicz, chief of staff for the Codman Square Health Center, in an email. The health center, also located in Dorchester, is a Daily Table partner and was instrumental in the store’s launch. It built the teaching kitchen.

Rauch says he failed at retirement, but a lot of people may be grateful he did.

• For more, visit dailytable.org.

How to take action

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