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Arlington Woods, a predominantly African-American neighborhood in Indianapolis, has seen big box grocery chains shut down one after another in recent years. The area is a food desert with no full-size grocery store within a 6 km radius.
“When you need a gallon of milk, you have to travel eight kilometers,” says Terry Coleman, who has lived in the neighborhood for over 34 years.
Now, medical device maker COOK Medical is setting up a new factory in the underserved neighborhood, and the company is building a new grocery store right next to the factory. Coleman and the rest of the area are thrilled.
“We’re only about five minutes away,” Coleman says. “So this will really improve the area. This store will be part of our community.”
Based in Bloomington, Indiana, the multibillion-dollar family-owned maker will invest nearly $ 2.5 million to build Indy Fresh Market, the new 15,000 square foot grocery store, and local organizations such as IMPACT Central Indiana, a multi-member limited liability company, will provide capital and inventory.
Pete Yonkman, president of COOK Medical, says starting a grocery store was never part of the business plan, but they heard from many people that access to food was an issue.
“They’ve left five grocery stores in the past five years and therefore 100,000 people don’t have access to food,” Yonkman says.
Once construction is complete, COOK Medical will hand over operations and ownership of the store to Michael McFarland and Marckus Williams, two young local entrepreneurs who live in the neighborhood. The two men are in their thirties and are childhood friends. They will run the store on a hire-purchase model and expect that within a few years they will own 100% of the store.
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“So our projected sales should be able to pay them back in two to four years,” says McFarland. “So it’s not bad to have your own grocery store.”
They bring with them a lived experience and an understanding of the challenges that residents of the region face on a daily basis. They also operate a small convenience store called Wall Street Grocery in a nearby mall.
McFarland and Williams are closing their convenience store and launching a local grocery chain shadowing program, as well as a training program with the National Grocers Association to prepare for their future roles at Indy Fresh Market.
This model of corporate social responsibility (CSR) is unique, according to Kash Rangan, a professor at Harvard Business School and co-chair of the school’s Social Enterprise Initiative. He says there are three different ways for companies to conduct their CSR efforts.
“The first model is to write a charitable check. This model is out of fashion, no one is doing it these days. The second model: I am working, but it must be aligned [with] my business, “he says. The expectation, especially in public companies, is that CSR work will directly or indirectly increase consumer loyalty and eventually generate profits for shareholders.
In this case, it is very unlikely that most customers of COOK Medical’s grocery stores are also customers of their business. So, says Rangan, this is the third model.
“You are primarily driven by the community,” he says. “The good thing about this is that you are solving a real problem.”
So that the community can reap the benefits of this new store, however, Rangan says COOK Medical may not have a hands-on approach once they pass ownership to local entrepreneurs. With the company’s resources and connections, continued support will prevent this store from closing and abandoning the neighborhood like other big grocery chains haven’t done so long ago.
Even then, with limited financial resources, the community might not reap the benefits of this new grocery store, says New York University professor of global public health Niyati Parekh, who studies nutrition, chronic disease. and food insecurity.
“There must be incentive and education programs,” Parekh says.
She gives examples of programs that provide store credit as you purchase fresh produce. She says leveraging this community-led project by investing in such programs could differentiate this model of grocery shopping.