Brahm Ahmadi has a few statistics he'd like to share with you:
- 25,000: the number of people living in West Oakland, California
- $58 million: the amount they spend on groceries each year
- 0: the number of full-service grocery stores that currently serve them
Ahmadi, a Bay Area grocer, wants a slice of that $58 million -- and he has faith that his new grocery store will be able to tap into the sorely underserved West Oakland marketplace. But the newly-minted CEO of the People’s Community Market is far from your run-of-the-mill grocery store mogul. Sure, Ahmadi clutches an MBA and a business plan, and sure, he's actively seeking investors. But the real goal of the People's Community Market is to bring fresh, healthy food to people who, sadly and infuriatingly, haven’t had access to it for years.
Back in 2002, Ahmadi co-founded a nonprofit known as People's Grocery. Its goal was to combat this same lack of access to healthy, affordable food in West Oakland. But as Ahmadi recalls, "as community organizers in our mid-20s, we really didn't know anything about business, so our risk of failure was high.” Opening and running a brick-and-mortar grocery store, he and his like-minded colleagues decided, was too risky. As a more flexibly defined community organization, however, People's Grocery was able to connect the residents of West Oakland to fresh, healthy, affordable food in many small ways -- such as community gardens and a mobile produce truck. It ended up taking another decade for Ahmadi to gain the business savvy -- and the community connections -- to feel like he could open and sustain a working, thriving grocery store.
West Oakland's problem is not unique. In places like inner-city Baltimore, Chicago, and Detroit, grocery stores that offer even a modest range of fresh, healthy foods are non-existent. This state of affairs often forces residents, who frequently don't own cars, to take long bus trips to and from the nearest grocery store -- or, more likely, spend their grocery cash at nearby corner stores, which tend to carry unhealthy, expensive, highly processed foods. This cycle incontestably contributes to the problem of obesity among inner-city residents -- 48 percent of West Oakland residents are obese or have unhealthy weight levels -- as well as other health problems, like diabetes.
Despite demand, and need, it's been hard to get grocery chains to open stores in the city. Even Michelle Obama has failed to persuade companies like Wal-Mart and Save-A-Lot to open in low-income neighborhoods, despite the promises they made during her well publicized “Let's Move!” campaign.
And that's where the People's Community Market comes in. Recognizing that his store will have to be a different kind of business if it’s to thrive in West Oakland, Ahmadi has built difference right into its financing structure. Instead of seeking a handful of backers who have large amounts of cash on hand to invest, the community organizer-turned CEO has taken a different route, raising capital for his 12,000-square-foot full service grocery with a direct public offering: shares are priced at $1,000 apiece, and are only being offered to California residents (due to how the company is incorporated under state law).
Ahmadi says that wants his grocery store to be affordable and responsive to the different cultural and food traditions in the larger West Oakland community. Independent groceries, he adds, can enjoy greater flexibility and forge stronger relationships with individual customers than a typical chain grocery. "That social capital enables these groceries to mitigate and reduce their risk around certain challenges that are particularly prevalent in low income neighborhoods -- like problems of theft and high employee turnover -- that supermarkets are extremely vulnerable to."
While he won't have the same purchasing power of the giant chains, Ahmadi believes his store will make up for that deficit by being more nimble -- better able to “jump” on good deals in the wholesale marketplace. And while he intends to keep the prices for fresh produce and whole foods affordable, as a business matter Ahmadi says he’s willing to mark up certain prepared and deli items if it will help balance out his balance sheet. By doing so, he says, "we can blend those margins together and see a total store margin that is consistent with the industry, and [still offer] affordable prices in the areas where it matters most."
Ahmadi ultimately hopes that his community-owned grocery store can become an integral part of the local fabric -- as has already happened in Philadelphia, where Brown’s Super Stores, a local mini-chain that operates according to a similarly community-minded model, not only sells fresh food to urban residents but also hosts in-store education events -- and manages to be very profitable, to boot. Ultimately, he says, “We hope that other community grocery stores and organizations can take parts of our model and implement them themselves."
If you're a California resident and want to learn more about investing in People's Community Market, click here.