Day-old food takes on a new life

I love this idea. Dough Rauch, the former president of Trader Joe's, is launching a new business built around selling food that has passed its official sell-by date but is still perfectly consumable. The idea is to make quality food available to people who otherwise might not be able to afford it.

The Department of Agriculture estimates that $47 billionof food is wasted by retailers in the U.S. every year.

Rauch's Urban Food Initiative plans to launch a 10,000-square-foot store in a neighborhood in Boston where many low-income families live. If the goal is to reach lower-income families with affordable foods, that seems to make sense, at least on the surface.

A big challenge, however, is whether lower-income people will warm up to a store if the perception is that they're buying castoffs from more well-to-do customers. A hairstylist working in the same neighborhood toldThe Boston Globe that Dorchester does not need food that others consider undesirable.

But what if, instead of putting these markets solely in low-income neighborhoods, Urban Food Initiative tried to locate them in areas where a broader cross-section of the population lived and shopped?

That seems to be the model used by Ron Shaich, the CEO of Panera Bread, when he launched PaneraCares, a nonprofit offshoot of his public bakery company that is built on the premise of customers paying what they can afford for food. Each PaneraCares is a full-service cafe just like Panera Bread, but instead of a cash register, there's a donation box.

Some of the food at PaneraCares comes from unsold goods at the for-profit cafe. But just like the food that's passed its sell-by date, the food is still healthy and safe for consumption.

Rather than locate the PaneraCares cafes in low-income neighborhoods, part of the company's mission is to locate in areas that are economically diverse. Ostensibly, there's a practical business reason behind this since the premise is that those who can afford to pay will, while those who can't might pay less or nothing at all.

"We can't sustain it if we go to a neighborhood where there are only poor folk," Shaich told a TEDx conference in St. Louis when the nonprofit was launched.

But another consequence of locating in areas that lower-income and higher-income people might frequent is that the stigma of buying someone else's castoffs is softened. It becomes, as Shaich told his TEDx audience, "a cafe of shared responsibility."

On average, Shaich says PaneraCares takes in about 80 percent of what the full retail price on items would be. He suggests that that's enough to sustain the effort and open new stores.

I love the idea of lowering the amount of food that retailers waste every year. And when hunger remains pervasive among families, launching efforts like the Urban Food Initiative and PaneraCares suggests how strong entrepreneurs like Rauch and Shaich can truly effect change.

If the ultimate desire is to help the poor with such initiatives, however, then the right thing is to try to do them in a way that doesn't stigmatize the poor, but instead emboldens dignity with efforts that attract all segments of the economy. When the Urban Food Initiative opens, I hope to be among the first to shop there, and I hope others of all levels of income follow. 

Jeffrey L. Seglin, author of The Right Thing: Conscience, Profit and Personal Responsibility in Today's Business and The Good, the Bad, and Your Business: Choosing Right When Ethical Dilemmas Pull You Apart, is a lecturer in public policy and director of the communications program at Harvard's Kennedy School. 

Follow him on Twitter: @jseglin 

Do you have ethical questions that you need answered? Send them to rightthing@comcast.net. 

(c) 2013 JEFFREY L. SEGLIN. Distributed by Tribune MediaServices, Inc.