How access to fresh food divides AmericansAugust 15, 2013: 2:05 PM ET
Swaths of urban America are USDA-designated food deserts. Experts may disagree on the term and the numbers involved, but the problem is real.
By Iris Mansour
FORTUNE -- Hunt's Point Terminal Market is the largest produce market in the world. More than 200 million pounds of fresh fruit and vegetables pass through its gates each year, and then onto supermarkets, restaurants, and stalls across New York. That means 22 million metropolitan New Yorkers eat something from Hunt's Point each day.
But this wholesale market is an oasis. The 113-acre site sits in the South Bronx, home to one of America's poorest congressional districts -- one where residents have limited access to fresh food.
Twenty-nine million Americans live in urban and rural food deserts, according the U.S. Department of Agriculture (USDA). By this definition, Americans in low-income rural areas have to travel at least 10 miles to get to their nearest supermarket. While city dwellers from low-income neighborhoods have to travel a mile or more
In America, where the car is king, a 15-minute, one-mile drive doesn't seem unreasonable. But if you live in a dense city like Washington D.C., that may mean having to take two hour-long bus rides in each direction to get to a supermarket, with shopping bags in tow.
Oneikah Delgado walks two hours to buy her family food. The 40-year-old mother of six lives in the Bronx's Baychester neighborhood. Delgado makes her monthly visit to Part of the Solution (POTS) in the Bronx, where they have a food pantry for people to supplement their household supplies with canned vegetables, fresh produce, eggs, beans, and grains. About 80 people visit the pantry each day, which happens to be a few blocks away from a supermarket.
And this is where the term food desert falls short. According to the USDA, Delgado's Baychester neighborhood isn't a food desert. In fact, using the same definition, none of the Bronx is. But the experiences of people visiting POTS suggest otherwise. These areas might have access to bodegas or medium-sized grocery stores, but for low-income families, they are not a reasonable option. "There's a struggle every day. Not only with finding food but with finding it at a decent price," says Stephanie Ann Serrano, a local resident who's been volunteering at POTS for two years. "In areas where they don't have many supermarkets, they have bodegas, and bodegas usually raise their prices. They could be paying double the amount."
But why the supermarket shortfall? The industry made more than $600 billion in 2012. "The perceptional issue is that low-income people don't spend money. But if they're at high density there's a market," says Don Hinkle-Brown, CEO of The Reinvestment Fund (TRF), which since 2004 has financed over 90 supermarkets in underserved areas of Pennsylvania. Since then, the model has spawned similar programs in New York, Louisiana, and California.
Brian Lang, Director of the National Campaign for Healthy Food Access at The Food Trust says supermarkets stay away because urban settings force them to rethink the shape and size of their stores. Walgreens (WAG) can't transplant its standard rectangular layouts from the sprawling suburbs into tightly packed neighborhoods. TRF's Hinkle-Brown highlights another issue. A supermarket's employees tend to live very nearby. "If they're operating in low-income areas, they're less work-ready. It takes six months longer to train them, and insurance costs are higher in urban areas," he says.
Jeffrey Brown has experienced these problems firsthand. He operates six ShopRite supermarkets in former food deserts and five in suburban areas. He explains that suburban grocery stores, like his own, can expect to make a 1% net profit after tax, while his urban stores initially showed a 4% loss, resulting in a 5% gap between urban and suburban profits.
Brown says that over the years, community engagement, deeply customized stores, and innovative financing strategies have helped him overcome the challenges. He has worked with everyone from the local clergy to the NAACP before opening a store, to better understand the community's needs as well as their tastes. Halal food might be more appropriate in one store while West African products may work better in another.
As for financing, he's worked with TRF and The Food Trust to think of ways to close the gap. Giving tax incentives or subsidizing landlords so that they can offer lower rents over time are two such measures.
Food access is becoming a national issue. A key goal of Michelle Obama's "Let's Move" campaign is to eliminate food deserts by providing financial help and incentives to get more supermarkets set up in these neighborhoods.
Hinkle-Brown explains that in 2004 he couldn't get a meeting with a national grocery store. But today Target (TGT) and Wal-Mart (WMT) are opening smaller urban stores. "They realized that the big business frontier of revolutionary growth was behind them," says Hinkle-Brown.
Walmart has a made a commitment to open 275 to 300 stores in food desert areas by 2016. Steven Restivo, Senior Director of Communications at Wal-Mart, describes supermarkets as "magnets for further development." They attract new people to the area and create a customer base for beauty salons, movie theaters, and specialist grocers that wasn't there before.
Meanwhile, pharmacy chain Walgreens says that 45% of its stores are located in or around areas that don't have access to fresh food. And it is making the most of its locations in inner cities by adding fresh produce to their shelves.
Despite efforts to bring fresh food into urban areas, there is no guarantee that this will have an impact on people's diets. For that to happen, the price of fresh food, which has been climbing steadily for years, has to rival the price and convenience of fast food more readily found on people's doorsteps.