Last month, the question was asked, “Who Owns Your Grocery Store?” by Jon Steinman, author of “Grocery Story: The Promise of Food Co-ops in the Age of Grocery Giants,” at his only Bay Area stop of his North American book tour, Cultivate Community Food Co-op, (CCFC). Read on to find the answer to this question for the Benicia/Vallejo area.
CCFC had been invited to speak about the development of Solano County’s first food co-op at the Progressive Democrats of Benicia’s (PDB) monthly meeting. Paula Schnese, CCFC Board President, spoke briefly about why the food co-op is so needed in Solano County. Mr. Steinman spoke as a guest of CCFC at this PDB meeting and his powerful presentation was full of information showing us just how much control grocery giants have over our food system. He continued with a message of hope identifying food cooperatives, grocery stores owned by the people who shop there, as a better alternative. He then went on to show us the many ways that food co-ops are positively affecting local communities.
A few reasons why we need Cultivate Community Food Co-op:
- 45% of Solano residents live in a “food desert”, with limited access to nearby healthy food choices;
- 860 farms exist in the county, 541 of these farms are less than 50 acres in size and 527 generate less than $25,000 per year;
- Solano farmers grow $250-350 million annually in agricultural produce, much of which is exported overseas or to other parts of the US;
- Solano residents spend over $1 billion dollars annually on food related expenses, but this money isn’t re-invested right back into the local community;
- Most of the retailers are national chain stores with limited offerings of organic and locally produced foods and uneven concentration in higher income neighborhoods, and;
- In low income neighborhoods of Vallejo, 75.5% of all stores are liquor stores, corner stores, or convenience stores. One-third of these stores sell no produce or fewer than 5 types of produce.
Jon Steinman is an author and host of the internationally syndicated radio show and podcast Deconstructing Dinner and has spent 13 years investigating every facet of the food supply. It led him to the conclusion that the grocery store is, hands down, the most influential force shaping food, the planet, and our health.
So, who owns our grocery stores? In the U.S., four companies control 60% of grocery sales. Locally, that number is higher with one or two stores being in reasonable proximity to residences. Grocery stores really are the food system’s gatekeepers.
“If 10% of our weekly food budget is at a farmers market, what about the other 90%? It’s almost certainly being invested in a grocery store. So what are we investing in?” Jon Steinman
What ARE we investing in?
Who owns our grocery stores in the Benicia/Vallejo Area?
There are five national chain grocers in Benicia and Vallejo where shoppers spend most of their food dollars: Safeway, Raleys, Walmart, Grocery Outlet, and Dollar General. In addition, many residents leave the area to shop at Trader Joes and Whole Foods.
Safeway is headquartered in Pleasanton CA and owns 900 stores. It employs over 250,000 people. It was bought by Albertsons in 2015 for $9.2 billion after being acquired by private equity investors led by Cerberus Capital Management.
Raley’s Supermarkets is a privately held, family-owned supermarket chain that operates stores under the Raley’s, Bel Air Markets, Nob Hill Foods, Food Source and Market 5-ONE-5 banners in northern California and Nevada. The company was founded in 1935 by Thomas P. Raley in Placerville. His grandson, Michael Teel, became the majority shareholder in mid-2015 and currently serves as Chairman. Raley’s employs around 12,000 people. Headquartered in West Sacramento, CA, Raley’s is the dominant supermarket operator in the Sacramento metropolitan area. Raley’s owns 129 grocery stores.
Walmart opened its first store in Rogers, AR, in July of 1962. It is a publicly traded, family-owned business, as the company is controlled by the Walton family. Sam Walton’s heirs own over 50 percent of Walmart through their holding company Walton Enterprises and through their individual holdings. Walmart was the largest U.S. grocery retailer in 2019, and 65 percent of Walmart’s $510.329 billion sales came from U.S. operations.
Grocery Outlet (GO), based in Emeryville, CA, is owned by Hellman & Friedmann LLC, the current principal owner. GO was founded in 1946 by Jim Read. Grocery Outlet’s net sales rose to $2.29 billion in 2018. Grocery Outlet currently has 323 stores in California, Idaho, Nevada, Oregon, Pennsylvania and Washington and aims to open 32 new stores during 2019. In filing its IPO in 2019, the company said it sees an opportunity to open more than 400 additional stores in its current market area plus another 1,600 locations in neighboring states, with the potential for as many as 4,800 stores nationwide over the long term.
Dollar General opened its first store in Springfield, Ky. on June 1, 1955, and the concept was simple – no item in the store would cost more than one dollar. The chain of 15,472 low-cost variety stores as of March 2019 has become rural America’s grocer of choice. The low-overhead formula: fewer staff, less floor space, and no perishables. That model has spurred rapid growth for the chain in 44 of our 48 contiguous states, particularly in areas that have been slow to recover from the recession. In an article entitled, “Tulsa says no more Dollar General” published in The New Food Economy, Tulsa, Oklahoma is curbing exploitation of black neighborhoods. In the article, Councilor Vanessa Hall-Harper says, “I believe their business model is to seek out food deserts and communities that have no other options, and then they can make it more difficult for other retailers to come in and be successful, particularly, quality, full-service grocery stores.”Dollar General is worth $25.6 billion!
Trader Joe’s (TJ’s) has 503 stores nationwide (as of November, 2019) in 42 states and Washington, D.C. The first Trader Joe’s store was opened by founder Joe Coulombe in 1967 in Pasadena, California. German entrepreneur Theo Albrecht (owner and CEO of Aldi Nord) bought the company in 1979 as a personal investment for his family and held it until his death in 2010, when ownership passed to his heirs. TJ’s is a privately held company now owned by T.A.C.T. Holding, Inc. Headquartered in Monrovia, CA. T.J. has 10,000 employees with a Revenue of $13.8 billion
“The chain ranked low on Greenpeace’s sustainable seafood report card. The packaging is excessive, with even the produce sealed in plastic. The business model forces consumers to buy in quantities large enough to encourage waste. And most of Trader Joe’s products are made on equipment shared with everything you might be allergic to (dairy, nuts) or philosophically opposed to eating (dairy, meat).”— Cameron Scott, San Francisco Chronicle, 2013
The retailer has been characterized as “notoriously secretive” and has been criticized for a lack of transparency by management about the sources of products such as organic milk.
Whole Foods (WF) opened its first store in Austin, TX, in September 1980 and its headquarters are still based there. With over 500 stores, WF has 91,000 employees. Amazon bought Whole Foods for just under $14 billion in June, 2017, the retailer’s largest acquisition ever. The purchase holds implications for the future of groceries and the entire food industry.
And there you have it! These are the people who own our grocery stores!
Now that we have this information, let’s ask ourselves another question: Is this where we want to be spending our food dollars? Currently, we are lining the pockets of the richest people & companies in the country.
According to the National Grocers Association, there are no independent grocery stores in this area. As Jon Steinman shares in his presentation with a slide of a large Safeway food truck, “The truck comes in and unloads food from far away and then loads up the truck with all of our food dollars and drives far away.”
Mr. Steinman’s message of hope:
“So where can eaters find greater assurance in the future of their grocery stores? My research and experience within the food system leads me to only one model. That is the consumer cooperative—food co-ops—full-service grocery stores collectively owned by their customers.” Jon Steinman
“What defines a consumer food co-op? Rather than any one individual or company owning the grocery store, consumer food co-ops spread ownership out to however many people want to become a shareholder,” said Jon Steinman
“Food co-ops are change generators; they’re an economic development strategy; a stimulator of food education and skills; they incubate small scale food based businesses looking to get their foot in the door; they employ more people and pay higher wages than chain stores; and they are a hub of community and connection,” explained Jon Steinman
“At a cooperatively owned grocer, the head office is not only in the community served by the co-op, it’s almost always located directly inside the store itself. With the head office located inside the store, the co-op grocery store becomes home to more jobs, including more full-time positions. Marketing managers, human resources, finance, outreach, any positions that would otherwise be located at a distant head office are instead located within the community.” he wrote.
Jon Steinman’s book tour has ended now. His tour took him across 34 states to visit 128 consumer-owned grocery stores (food co-ops) and another 20 in development. He is back in Nelson, British Columbia with his family in time for the Canandian Thanksgiving.
Last week Jon wrote an opinion piece for Yes Magazine entitled, (what else?) Who Owns Your Grocery Store? Please make sure to read this powerful piece. You can also purchase “Grocery Story, The Promise of Food Co-op in the Age of Grocery Giants” on our website.