When fourth generation grocer and YPO member Jeffrey Brown opened his first store in 2004 in a low-income Philadelphia, Pennsylvania, USA, neighborhood with a history of gun violence and hired several returning felons to work in it, he says most people thought he was crazy.
Fifteen years later, he’s CEO and President of Brown’s Super Stores, which ranks in the top 50 U.S. small grocery chains and reports sales of approximately USD500 million. Of his 12 stores, six of them are successful ‘food desert’ stores located in urban neighborhoods previously without access to fresh fruits, vegetables and other whole foods.
Food deserts affect 25 million Americans in 6,500 urban and rural areas. Lack of access to affordable healthy food contributes to high levels of obesity and other diet-related conditions, such as diabetes and heart disease. Brown is changing that.
Other grocers had tried but quickly failed where his stores thrive. Brown credits his success to listening to the community before he builds. Then, in addition to beautifully designed stores and affordable fresh foods, he brings jobs, community services, health care, nutritionists and social workers to his stores.
His own way
Brown, 55, has the grocery business in his blood. His great grandfather operated a corner store in Philadelphia, and his father, Lenny Brown, operated Shop ‘n Bag stores in South Jersey. “My father operated a 10-store chain in South Jersey prior to our family joining ShopRite,” he says.
So, in 1988, soon after graduating from Babson College with a bachelor’s degree in entrepreneurial studies, he formed Brown’s Super Stores. He became a member of ShopRite, the largest retailer-owned cooperative in the United States. The co-op consists of 50 individually owned and operated supermarkets under the ShopRite name.
“My father showed me that there are business opportunities in underprivileged communities and the importance of learning about their food cultures,” Brown explains. “The more I learned, the more concerned I became about the incredible challenges our customers face because of the zip codes they were born into. I wanted to find a way to change that.”
Members of the ShopRite co-op customize their stores to their neighborhoods. They purchase grocery products collectively in larger quantities at lower cost under the co-op banner known as Wakefern Food Corp. Procurement, logistics, tech and sometimes manufacturing are done collectively.
The first ‘food desert’ ShopRite operated by Brown’s Super Stores replaced a store that was doing USD100,000-USD150,000 a week. “We opened doing USD700,000 in the first week,” he recounts. “That caught the attention of public officials who were willing to help us to continue with this work.”
Solving unprecedented problems
Brown joined YPO at about the time as his first success with ShopRite. He joined his YPO forum at that time as well.
“I have forum mates for 20 years who have seen my story unfold,” Brown says. “I value their perspectives from different industries and sectors. I get clues from them to things I should think about and that helps me solve problems for which there are no precedents. The YPO forum helps you improve your listening skills and takes you out of your comfort zone. It really fits into my life’s work.”
In addition to serving as a policy advisor to former U.S. First Lady Michelle Obama’s “Let’s Move” program, he created a Philadelphia-based non-profit, UpLift Solutions, which has helped grocers in 40 U.S. states replicate his model for combating hunger. One component of the non-profit is the Uplift Workforce Solutions program which helps create second-chance employment opportunities for ‘formerly incarcerated citizens’ in and around Philadelphia.
His company currently employs 2,500, of whom more than 600 are ex-offenders. For many, their first job was a result of Uplift’s Workforce Solutions program. Other grocers have also hired graduates of his six-week training program.
First, you listen
Before opening his first store in the community of Southwest Philadelphia, Brown held several Town Halls attended by nearly 1,000 people. He wanted to learn about community members’ backgrounds, religion, family origin and what they wanted in a grocery store. Prior to the opening of his North Philadelphia store, more than 3,000 turned out for the community meeting. These days, similar gatherings continue in his stores’ community rooms.
Community members told him they were offended by other stores because anything expensive was locked up, and they had to ask permission to buy the items. The stores were dirty, prices were high and the food often wasn’t fresh.
One woman challenged Brown, asking, “The Great White Hope has been here before and failed. Why are you different?”
His answer? “I want to be here, that’s the difference. I shared my ideas with them and listened to theirs. I won them over.”
As he drilled down further into the cultures and religions of the area, Brown says, he brought in more culturally relevant products. “We added a department devoted to Halal food. People from Africa wanted a flour called fufu; people from the South missed sweet potato pie. We make the pies in our kitchens and carry the various products from the diverse heritages of our customers.”
Taking a chance on felons
People also told him about issues with employment, public safety, finance and health care. Brown vowed to hire from the community, and soon learned that a large percentage had been incarcerated, sometimes for most of their lives. No one would hire them.
In his first store, Brown hired six ex-offenders. Almost all have since made it into management. One ex-offender currently working for Browns, Anthony Jackson, started his jail sentence at 17 and was in prison for more than 15 years. Brown gave him his first job when he was 35.
“Once I got that job, it was the turning point of my life,” Jackson says. Today, at 43, he makes more than USD50,000 a year as a Brown’s Super Stores frozen food manager.
Filling in the gaps
Many of the stores operated by Brown’s offers pharmacies and walk-in health clinics, which are Federally Qualified Healthcare Centers. “We had to get the government to agree to put them in a grocery store,” he explains, “because that hadn’t been done. The FQHCs make the care much more affordable for the community.”
He adds, “We have an in-house specialist who gets customers pre-approved for entitlements. Most of these services are free. Our goal is to get them benefits to ensure their long-term health and well-being.” Brown also pays for an on-site nutritionist and a social worker.
Finding funds: the 2½ percent challenge
Of course, it wasn’t always easy. To fund his first store, Brown had to win over skeptical financing sources. Grocery business margins are small. The average grocery store operates on a one percent profit margin.
“In the poorest neighborhoods,” Brown says, “trauma, substance abuse and government dysfunction create a 5 percent (of sales) profit deficit. If 2½ percent could be attained in some form of government assistance, I believed I could figure out the rest. However, banks certainly weren’t ready to jump on the bandwagon!”
He put that 2½ percent together with aid from Pennsylvania’s Fresh Food Financing Initiative, which uses public and private dollars to underwrite supermarkets in food deserts. He also used Federal and other tax credits. And then, he says, “I went to work to find solutions.”
“After the first store opened, I got calls from other communities asking for a store. Even banks got interested, and public financing was made available.”
Brown says that while every problem he faced seemed intractable, he thought it was worth a shot. “Even if we failed sometimes,” he points out, “my own force of personality, love of people and interest in their problems really did make a significant difference. I’m bringing every skill I have as a human being to help people and that’s more potent than money.”
The non-profit he founded, Uplift, has introduced an additional success with its Philly Food Rescue, which partners with Uber to better manage food waste. “We use their tech to connect excess supermarket food with soup kitchens. It’s taken off like a rocket ship,” he says. While it is a new program, they have already gained tremendous traction. There are currently 18 donors of food products and approximately 180,000 pounds has been distributed locally.
The soda tax challenge
His biggest current challenge is a 2 ½-year battle over Philadelphia’s soda tax.
The Philadelphia Sweetened Beverage Tax is a 1.5 cents per fluid ounce tax on sweetened beverages. It often doubles the cost of soda, fruit juice, sports drinks, almond and coconut milk that it includes. The tax does not exist in any other Pennsylvania city.
Brown had to close one food desert store in March 2019 because the tax led to a 23 percent loss in sales.
“I haven’t been shy,” he says. “I’m not going to let all this work be destroyed by a poorly thought out policy.”
Lead the charge
“The role our fathers and mothers played in trying to solve social problems was to ‘make a lot of money and when close to death, give to a nonprofit’,” Brown explains. “That model is not likely to lead society to positive changes.”
Instead, he says, entrepreneurs should ask, “How can I bring my problem-solving abilities to help overcome the many challenges in society? You are showing your team how to be about more than just making money. This enhancement in the model, often referred to as Social Entrepreneurship, is a promising way to address society’s most pressing challenges such as poverty.”