Fixing “Food Deserts,” One Grocery Store at a Time

Alabama joins a growing list of states promoting supermarkets in low-income neighborhoods.

In and around Birmingham, Alabama, fast food is more than easy to find.

A search for “fast food” on yellowpages.com serves up a smorgasbord of options, including Chick-Fil-A (20 locations), McDonald’s (38 shops), Taco Bell (24 stores), and Church’s Chicken (19 outlets), as well as multiple locations for Hardee’s, Krystal, Burger King, Captain D’s Seafood Kitchen, Bojangles, Sonic, Whataburger, Wendy’s, Subway and Jack’s.

Supermarkets, on the other hand, are much scarcer. The grocery store chain Aldi boasts just three locations in Birmingham proper, while the more upscale Fresh Market chain owns just one store.

In fact, according to a report by The Food Trust, large swathes of Alabama are “food deserts” lacking access to supermarkets with fresh fruit and vegetables and other healthier foods. Nearly 1.8 million Alabama residents – including half a million children – live in low-income areas without adequate access to full-service groceries, the report concludes.

“People are traveling 10 to 20 miles outside their communities to purchase food,” says Jada Shaffer, campaign manager for the non-profit VOICES for Alabama Children, which commissioned the study along with the Alabama Grocers Association.

And that’s assuming people have transportation. More often than not, Shaffer says, families are relying on what’s nearby: gas stations, convenience stores – and fast food.

According to the Centers for Disease Control, Alabama has among the highest obesity rates in the country. More than 32 percent of Alabama adults are obese, while 35 percent of children are overweight.

The areas in red are Alabama’s “food deserts.” Source: The Food Trust

To make it easier for Alabamians to find healthier options in their own neighborhoods, the state recently passed legislation to create a revolving loan fund – the “Healthy Food Financing Fund” – to help finance the construction or expansion of grocery stores in currently underserved neighborhoods. With this effort, Alabama now joins a growing number of states and cities – including California, Colorado, Illinois, Louisiana, New Jersey, New York, Pennsylvania and the City of New Orleans – that have launched similar initiatives.

VOICES for Alabama Children and Voices for Healthy Kids, a joint initiative of the Robert Wood Johnson Foundation and the American Heart Association, are now working to raise $5 million in seed funding from both public and private sources to finance the first projects. Shaffer says several grocers are already expressing interest in applying for funds, and she hopes the first stores will open their doors within 18 to 24 months.

The availability of this new financing will encourage grocers to make investments they otherwise might be unable or willing to make, says Julia Koprak, a senior associate with The Food Trust. “The grocery industry is a very low profit margin industry,” Koprak says. “Grocers – especially the independent businesses – need to make sure they can be sustainable.”

In Pennsylvania, which pioneered this approach, the state’s “Fresh Food Financing Initiative” led to 88 projects between 2004 and 2010. Beginning with just $30 million in seed funding from the state, the fund ultimately leveraged $190 million in total funding from public and private sources. Advocates say the program created or saved 5,000 jobs as well as helped build 1.67 million square feet of commercial food retail space.

In New Orleans, the city’s Fresh Food Retailer Initiative helped reopen the African-American-owned Circle Foods in January 2014, eight years after Hurricane Katrina destroyed the store and the surrounding neighborhood in the city’s 7th Ward.

“We got 9 feet of water in the initial surge,” says Brooke Boudreaux, whose father, Dwayne Boudreaux, has owned the store since the mid-1990s. “We lost all of our inventory – everything.”

The city program provided $1 million in loans and grants to help finance a $9 million renovation of the 40,000-square-foot store, which first opened as a produce stand in 1938. Boudreaux says the store would have stayed shuttered without the help. “Insurance only covered so much, and my parents could only put in so much,” she says.

The reopening of Circle Foods reestablished the store’s iconic status both in the neighborhood and in New Orleans. “We offer a lot of traditional Creole and New Orleans foods you can’t get anywhere else,” Boudreaux says. “We keep rabbit and turtle – especially things the older generation likes. And we have the cheapest bell peppers in the city.”

Circle Foods in New Orleans, Louisiana. Credit: The Food Trust

Circle Foods is also the only full-service grocery store within miles. “You can go six to eight miles and not hit another grocery store,” says Boudreaux. Moreover, she says, many of the residents living nearby don’t have cars or are elderly.

“Even if they can get on a bus, it’s really hard to shop for a family or to carry groceries on a bus,” Boudreaux says.”And it’s less likely that you’re going to buy fresh produce or healthier items. You buy what lasts if you can only get to the grocery store once in a while.”

Several studies in fact bear out the link between supermarket access and better health. For example, one study found that among seniors in rural Texas, those living the greatest distance from a grocery store ate fewer fruits and vegetables (both fresh and processed). Another study – involving adults in New Orleans – found that each additional supermarket in a neighborhood lowered the odds of obesity among residents nearby.

Nationwide, the U.S. Department of Agriculture estimates that 9.7 percent of Americans – about 29.7 million people – live in low-income areas more than one mile from the nearest supermarket. Moreover, reports another study by the Treasury Department’s Community Development Financial Institutions Fund (CDFI Fund), these Americans are leaving their neighborhoods to buy food, thereby depriving their communities of the benefit of those dollars. On average, the CDFI Fund estimates, people in low-access areas are spending $1,120 per person per year in food spending outside their neighborhoods.

All told, the CDFI Fund counts as many as 747 “limited supermarket areas” across the country that are “leaking” more than $12 million a year in food spending that could otherwise stay in a community. These are the areas of untapped demand that could support a major supermarket profitably.

In 2010, the Obama Administration announced the creation of a national Healthy Food Financing Initiative to encourage state and local efforts promoting better supermarket access, particularly in low-income and rural areas.

Since 2011, the federal effort has distributed more than $140 million in tax credits and grants, largely through existing programs such as the New Markets Tax Credit. The Food Trust’s Koprak says these funds have, in turn, leveraged more than $1 billion in private investment. The 2014 Farm Bill also authorized $125 million over five years to expand federal support for these efforts, but Congress has failed to appropriate any money so far.

Nevertheless, the public-private approach taken by these financing initiatives has attracted significant bipartisan support. In Alabama, for example, the state’s new healthy food financing effort was sponsored by Republican State Senate Majority Leader Greg Reed and passed easily through a Republican-dominated state legislature.

“There’s a recognition that everybody eats, and everybody deserves to be able to have a healthy diet,” says The Food Trust’s Koprak.

Both sides of the aisle also appreciate the economic and fiscal benefits of these efforts. Says Koprak: “If a much smaller amount of investment can help improve people’s diets now, states facing budget crises can avoid health care costs down the line.”

More immediately, Alabama’s Shaffer says residents are looking forward to having more grocery stores in their neighborhoods. “People are very excited to have access to healthier foods,” she says.

Anne Kim

Anne Kim is Senior Writer at the Washington Monthly.