Last year around this time I wrote some reflections on 2021. You can check it out here. It was comical musings on whether or not I should open a second location. I guess I did that. But I cheated because the first location closed, so we’re back to square one. It’s way too soon to start thinking about a new second location, but it is time to start thinking about some other things for 2023. The immediate goals are to start offering more products: prepared foods with local ingredients are coming next week (more on that next newsletter); maybe sustainable paper products; maybe nuts/seeds/grains from good sources if those exist. Also I want to do more fun events like the grand opening and some fun collaborations with other small businesses around town. Finally a new website is coming since the current one is atrociously outdated.
And then there are some bigger things that I’m starting to think about in more detail. What about a Costco style model where there is a membership fee and all the items are sold at cost? Would that be financially sustainable? It might be. It might also destroy the business. It addresses something that has been on my mind for a decade: how can local, organic food, without the economies of scale of artificially low-priced conventional food, be not just more but a lot more financially accessible. A membership structure I think is the only potentially feasible way to do it. I might go in this direction. I might not. But I’ve started to analyze it on spreadsheets. Which is hard. Because I can’t stand being on the computer for very long.
A significant decrease in food prices under a membership structure also brings about another interesting topic: the percentage of household income that was spent on food over 100 years ago versus now. Take a look at the chart all the way below.
In 1900 the average percentage of household income spent on food was significantly higher than it is today. Back then food cost more simply because there were many more local farms (6-7 million farms for a population of 75 million compared to around 1 million farms for a population of 330 million today) that did not have the production efficiencies and low labor costs of the large industrial farms today. With the industrialization and consolidation of the food industry and widespread urbanization in the later half of the 20th century food prices went down considerably. The same sort of thing happened with clothing. Entertainment, eating out, healthcare, automobiles, travel, and especially housing and higher education make up the bulk of household spending today to meet the demands and pleasures of a modern lifestyle.
A marketing firm that I’m working with, Milk Street Marketing (cool people-check them out if you need help with your business), asked me when we first met who my competitors are. I gave them a long winded, highly ideological, disconnected-from-reality, newsletter-esc spiel (amazing that they still took me on as a client) about how my competitors are not places like Whole Foods, Giant, and Acme. They are rather places like movie theaters, restaurants, travel agencies and airlines, universities, and hospitals and healthcare providers (this was all kind of a joke of course but not really?) Pretty much anything that gets in the way of increasing the percentage of household spending of food back to 1900 levels.
Well, for those for whom this food is less financially assessable, theaters etc are not by my choice but by default indeed competitors if I maintain the current business structure of buying local foods and marking them up by some percentage. Just to use the logical fallacy of appealing to extremes for fun, this would in its extreme form involve trying to unravel a hundred years of economic growth, urbanization, and modern conveniences so that everyone just spends most of their income on food (or supplies to grow food) and not much else. Of course that’s ridiculous. Fun to think about in a Little House on the Prairie sort of way, but let’s not go down that route (unless you wanna?) If however the business structure changes to something like Costco’s model, well, then, looks like places like Whole Foods, Acme, and Giant could actually be real competitors since the prices would be pretty close.
I want local, organic food to be affordable to all. It’s a challenge that could take a long time to figure out. Politicians are not talking about it in any feasible way. We gotta do it ourselves. I hope to have a better answer in 2023.
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