In the previous post I spoke about the origins of The SEED, the reports that encouraged collective action, and the first steps we took in centralizing cold storage and distribution of nutritious food in our community. In this post I touched just briefly on the fact that we began our wholesale distribution program Good Food Distribution as a social enterprise.
This week we’re looking at what a social enterprise is and why we’ve used this model over the years when addressing food access gaps in our community.
What is a social enterprise?
Definitions can vary in complexity, but the way that I have put it over the years is that it is the use of business and economic principles to achieve a social and/or economic outcome. In the case of The SEED we have developed food access programs that involve selling food to people. Fundamentally, they’re set up much like a business where we have income, expenses, manage profit and loss, and have aspirations to scale to enable more people to participate.
Where our social enterprises have differed from traditional businesses is that our focus is not on increasing profit, our focus is on increasing access to nutritious food, particularly community members facing food insecurity. Because food insecurity is an income-based issue where people simply do not have enough money to buy the food they need, we need to sell the food at the lowest cost possible so people can afford to buy more with the same money. If the food is purchased and re-sold at the same price, how are business principles applied? This is where sliding scale comes into play.
Sliding Scale
For over six years now, The SEED has run social enterprises that deploy a sliding scale purchasing model. Selling items on a sliding scale means that we have two prices listed for products, the low price is what we paid for the product and the lowest price we can sell it for, and the high price is set to what you’d expect to pay at a retail store. Customers are able to choose what they pay anywhere on that spectrum, with no questions asked. Since we sell some products at retail (higher than we paid for it) we make some “profit” on that sale. Those “profits” help pay for our operating costs like staffing, fuel, materials, etc.
Since we started the Community Food Markets (now named SEED Markets) in July 2017 we have learned so much about how effective selling food on a sliding scale can be. In 2019, we partnered with the Community Engaged Scholarship Institute to evaluate our sliding scale markets and determine to what degree are we increasing access to nutritious food among people facing food insecurity. The full report can be accessed here, and here are some highlights:
- 29% of market customers told us “I am able to buy a lot/a little more, and now I am able to eat as many fruits and vegetables as I would like”;
- 21% of market customers told us “I am able to buy a lot/a little more/or same amount, but it is still not enough”.
- 58% reduction in the number of customers who reported worrying about running out of food after shopping at the community food markets
- 37% reduction in the number of customers who limited the types of food they buy because of a lack of money for food after shopping at the community food markets
- 45% reduction in the number of customers who reduced the quantity of food they purchased due to a lack of money for food after shopping at the community food markets
- 55% reduction in the number of customers who reduced the quality of the food they purchased due to a lack of money for food after shopping at the community food markets
- 22% reduction in the number of customers who skipped meals due to a lack of money for food, with several customers from households with income under $20,000
These are some pretty significant results, all from lowering the cost of food for people. You might have noted that the second bullet shows that a fifth of the participants stated that even though they were able to buy more, it is still not enough. In a future post, we will highlight what we have done in recent years to address this gap.
We see that sliding scale can have some great impacts on food accessibility, but what about the business/social enterprise outcomes? Profits is in quotes above because running programs and social enterprises is a lot of work and our costs have always been higher than the income we generated through retail sales, yet without the participation of people buying food at retail rates the amount of money we would have to get from other sources would be even higher. So, while we do not expect that our sliding scale enterprises will cover all their costs through sales alone the way a business is expected to, retail participation definitely helps with our bottom line. There are other reasons we sell food on a sliding scale:
- The SEED is seeking to include the whole community in building solutions around food insecurity, and by selling food at retail rates we can include people who may not have the money to donate or the time to volunteer, but they need to buy food and it is a great way to support our mission
- Encouraging people who are not facing food insecurity to shop with us is a means of demonstrating to the public how much emphasis The SEED places on the quality of products and services we offer to the community – donors don’t need to take our word for it, they can experience what we offer for themselves
- We are dedicated to removing the stigma surrounding the experience of poverty. By selling food on a sliding scale with no questions asked, some people are paying retail rates and some people are paying the lowest price, and because it’s all done in the same place no one needs to know who has a lower income.
Social enterprises can be a great way to encourage participation across income levels while offsetting some program costs and achieving a social mission. Since starting the Markets in 2017, we have applied our learnings to other enterprises, the Upcycle Kitchen and Groceries from The SEED. While the Markets were on a hiatus during the peak of the pandemic, we have since reopened them and you can visit us every Saturday at the Guelph Farmers’ Market until late October.
Because we continue to have expenses that go beyond what the social enterprise model can fund, we want to thank our current funders that include:
- The United Way of Guelph Wellington Dufferin
- Harvest Impact by 10C
- The Sprott Foundation
- The Women’s Foundation of Canada
- City of Guelph
- Service Canada – Canada Summer Jobs
- The Cooperators
- Public Health Agency of Canada – by way of partnership with the University of Guelph
- Schad Foundation
- Agrifood Canada Youth Employment Services Program
And we would like to thank each of our private donors. Despite being a program of a Health Centre, we do not receive core funding through any ministry and your donations are instrumental to the sustainability and growth of our work.