Doug Rauch: Solving the American Food Paradox
Jose B. Alvarez
Harvard Business School, Marketing Unit
Ryan C. Johnson
Harvard Business School
December 7, 2011
Harvard Business School Marketing Unit Case No. 512-022
Doug Rauch, the former president of grocery store chain Trader Joe's, had long been troubled by the amount of food, especially fresh and healthy produce, which was wasted in the food system. Simultaneously, he was frustrated by the paradox he saw in the U.S. food system: rising food insecurity, broadly defined as a lack of access to enough food to fully meet basic needs at all times, concurrent with an obesity epidemic, suggesting that low-income communities lacked access not just to food in general, but to healthy foods in particular. Rauch believed he could build a non-profit grocery store model that took advantage of grocery stores' built-in waste and channeled that wasted food to be resold at a significant discount. Rauch faced significant challenges in the implementation and execution of his plan, notably legal hurdles related to selling products past their expiration date, marketing challenges, and convincing grocers to partner with him to combat waste. He had to carefully select a partner from a number of interested parties. Finally, he would need to change shopping, eating, and cooking behaviors of a community. In doing so, he hoped to leave a lasting positive health impact and a scalable model for change across the United States.
Learning Objective: Look at new solutions to food policy and obesity issues in the U.S. Examine creative business models and partnerships. Look at private sector's role in solving large societal problems such as obesity and lack of access to healthy foods. Examine business models, logistics, and planning for unique food retail operation. Examine current food retail model and inherent inefficiencies. Identify synergies and alignment in partnerships that will allow for good relationships and also red flags in partnerships that will likely make success hard to achieve. Discuss the benefits and restrictions of a mission-driven operation, especially in the retail context.
Date posted: March 2, 2012