Forget Wall Street: Would You Buy Shares in a Community-Owned Grocery Store?
West Oakland seems to forever be waging a valiant fight against the conditions of its own food desert. A high-crime, low-income area, the neighborhood is written off as the part of Oakland the freeway runs through, connecting San Francisco to the well-tended Oakland Hills. But for those who have a mind to stop and take a look, West Oakland is also a neighborhood of families, homes, schools and activists doing their best to bring business back to the streets that haven’t seen much of it since World War II.
One of its most pressing problems is that it's a food desert, a neighborhood heavily populated by liquor stores selling packaged convenience snacks, and fast-food restaurants selling junk food. No fresh produce is sold at area grocery stores because there are no grocery stores in West Oakland.
But local food activist and head of People’s Grocery, Brahm Ahmadi, recently announced that would change. Not only is he spearheading a project to open a grocery store in the city’s most produce-starved section, but according to his website, this market will be publicly owned, allowing California residents near and far a chance to invest in bringing nutrition to an area that needs it most.
Named the People’s Community Market, the store’s business will act as a salve for several key economic issues. In addition to creating approximately 50 new local jobs, it will circumvent residents' need to spend their weekly grocery money in other nearby cities.
According to FastCompany, West Oakland residents currently spend about $40 million a year in supermarkets throughout the Bay Area. If the People’s Community Market happens as planned, Ahmadi plans to absorb at least $10 million of that, which would go a long way in pumping some life back into the local economy.
But as Grist reports, this will be much more than a traditional supermarket. Ahmadi and his colleagues are aware that the neighborhood has problems greater than its lack of a grocery store, like rising obesity rates, and few local businesses in general, which keeps residents isolated from each other. To answer those issues, the People’s Community Market will also be a gathering place to enjoy a cup of coffee, and an educational space that will provide nutritional cooking classes.
So why the public offering? That’s where things get interesting. Ahmadi recently qualified for a $1.2 million grant from the California FreshWorks Fund, but that only covers about a third of his proposed costs. And though Kickstarter and Indieogogo are successful endeavors for smaller ventures, those funds almost never raise over $1 million. The wannabe grocer and visionary had to come up with something else, so he and his organization chose to raise the rest of the necessary funds with an initial public offering.
Many will understandably ask, "Why not something smaller, like a local community-supported agriculture (CSA) box?" Ahmadi initiated those as well, but as he reported to Grist, he didn't think it was enough.
The minimum purchase for shares starts at $1,000, and investors have to be vetted starting with an initiation process on the company website.
All told, it’s not a far-fetched plan. Detroit grocers like MetroFoodLand have done well with community investments. The model acts a protective measure against corporations like Kroeger—which are focused on bottom-line profits over costs—that will hardly be invested in staying if they don’t see profitable numbers fast enough.
In the meantime, Ahmadi has one year to collect investments before his state-issued license to do so runs out.
While Oakland continues to piece together solutions for itself, its bright spot is certainly people like Ahmadi who think beyond what’s already been done to brave what might become possible.
Would you invest in a healthy urban grocery? Let us know what you think in the Comments.