Recently, our founder was interviewed by the Hunter College New York City Food Policy Center. Below is the transcription of the interview. You can read the full interview.
Mike Servello, Sr., is the founding pastor of the Redeemer Church in Utica, New York, and the founder and CEO of the nonprofit Compassion Coalition. The nonprofit has been working in central New York State since 2000, and its mission is to serve the underprivileged by providing basic necessities including food, clothing, housing, transportation and employment. Compassion Coalition runs Bargain Grocery, a community-based salvage grocery store bringing food accessibility and food equality to the West Utica area. The store was opened to increase food accessibility and food equality in a food desert and to create a sustainable funding source for Compassion Coalition.
Food Policy Center (FPC): What was the impetus for starting Bargain Grocery?
Mike Servello Sr. (MS): We started Bargain Grocery because we needed to find a consistent funding source for Compassion Coalition donations to local agencies. We were distributing massive amounts of food, personal hygiene products, toiletries and paper products to over 120 local agencies with no outside funding sources.
FPC: Why is this model of a community grocery store that purchases overstock products at a discounted price in bulk and passes the savings on the customer better than a typical food pantry model?
MS: I can’t speak for all food pantries, but in respect to our region, we believe this model is more effective because many food pantries are only open one day a week. People who qualify take a limited amount of food items based on what the pantry has available. Most of the time what is received is not enough to make a complete, nutritious meal.
From a recent study in our region, it was discovered that 70 percent of the food pantries were located in church basements and run predominately by elderly people without adequate volunteers being trained to replace them. What does the future hold for them? Also, the majority of our rural areas have no food pantries. Where do these people go? What about those who would never visit a food pantry due to any of the many barriers, including stigma?
In Utica, 31 percent of the population lives below the poverty line — about double the average for New York State. In Oneida County, where Utica is located, 12.2 percent of the population is food insecure— that’s roughly 28,300 people.
We believe our model is better because we provide access to healthy, diverse foods — including fresh produce — at very affordable prices on a daily basis. Customers have the freedom to choose what they want.
FPC: Is the model replicable in other communities?
MS: Yes, our model is reproducible.
MS: There are a number of cities currently asking us to bring in a Bargain Grocer. The key is finding adequate space in a food-desert area. Next, acquiring funding for a building and all the infrastructure needed to outfit the store, such as freezers, coolers, displays, cash registers etc.
Our model has always been built around a partnership of community members, marketplace, education, the healthcare sector and government, along with passionate people. Those are essential.
FPC: Have there been any other communities that have been successful at creating a low-priced grocery store?
MS: The only other successful store I’ve seen is Daily Table in Boston. Doug Rauch and his team are doing a phenomenal job.
FPC: Are they following your model?
MS: We have only recently been introduced. Our models have similarities but are also unique. We are committed to each other’s success.
FPC: In 2018 Bargain Grocery moved from a 1,200 square-foot space to one that is 12,000 square feet. What was the most challenging aspect of that expansion?
MS: The greatest challenge has been keeping it filled with enough affordable food options on a weekly basis. What I’ve found as I’ve visited stores similar to ours in other food deserts is that they have very limited stock and the prices are as high or higher than those in other, larger stores. We work very hard to make sure all our food is priced very affordably and significantly below the prices in big box stores. That’s why we are always looking for corporate partners that want to make a difference by addressing food equality and food accessibility .
FPC: How has the community reacted to having Bargain Grocery in the neighborhood?
MS: Our community has been overwhelmingly supportive! Utica is a unique city with one of the highest percentages of refugees/immigrants per capita of any city in America. The diversity of our city is reflected in those who shop in our store. There is always a friendly welcoming atmosphere where all are valued.
FPC: Have you received any positive or negative feedback?
MS: The feedback we receive is overwhelmingly positive. Here are a handful of responses we’ve received from people in our community:
“I could not afford to buy the fresh fruits and vegetables I get here anywhere else for my kids. They would go without these if it wasn’t for this store. Thank you for being here for us.”
“Thank you so much for your service to our community! As a senior citizen I especially appreciate the availability of fresh fruits and vegetables that I otherwise could not afford. I also really love the prepared meals since I have such a hard time preparing such nutritious and delicious meals at home for my husband and myself.”
“My husband and I are retired and have our four grandchildren and daughter living with us. No way could we provide them with the fresh fruit and vegetables without this store, not to mention the dairy products and snacks. We have been given the chance to try new products we never could afford in another store.”
We also frequently get feedback on how gracious our employees are: “Every single employee was so friendly and polite, shopping here is a pleasure.”
You can check out our Facebook page to see all the positive comments and reviews.
Negative comments typically revolve around not having more of a variety of items, especially when we receive a limited amount of certain items and sell out quickly without the ability to restock.
FPC: Based on sales, what types of foods seem to be most desirable to consumers?
MS: We sell large quantities of fresh fruits and vegetables, frozen meats, dairy products, cereals, and pastas.
FPC: You’ve been exploring a brick and mortar store in the Bronx. What is the commercial viability and sustainability of this type of grocery store in New York City?
MS: I think the Bronx would be a huge success.
FPC: What are the next steps and how long is that going to take?
MS: We would require a suitable building in a strategic location to serve those who are most in need, and committed corporate partners that would ensure adequate product to keep the store filled.
As far as a timeline, we are actually attempting to bring our first expansion of Bargain Grocery to Albany this year. If we can find more national partners like Whole Foods-Amazon, Ahold-Del-Haize, C&S Wholesale Grocers, Goya Foods, General Mills, food producers etc., we would be able to increase the number of outlets we have in the areas with the most need.
FPC: Bargain Grocery and Compassion Coalition received a large number of donations from Walmart for many years. What is your relationship like with this donor and how has this reliance impacted Bargain Grocery and Compassion Coalition?
MS: On the Compassion Coalition side (which is our mass distribution warehouse for donated goods), Walmart has been a core donor since our inception, giving us 2 to 5 full trailer loads per week of personal care items, paper products, diapers, personal hygiene, toiletries, home goods, etc., for the past 20 years. We have distributed these donated goods to more than 350,000 people, rescue missions, women’s shelters, senior centers, church pantries, our refugee center, and community programs such as our Teacher Free Center, on a daily basis. Over the last year our donated loads have dropped to approximately 2 trailers per month, down about 75 percent. This has affected many of the agencies that relied on us for these donated items.
As a point of clarification, everything we receive on the Compassion Coalition side is donated and distributed as donated product to our member agencies and partners. This is reclaim, rejected, or discontinued product. Because we had no funding, we had to develop a source of income to sustain our ability to receive, warehouse, and distribute these donated goods. We are not quite sure what the problem is with the decline of these goods (the non-food items) and would welcome other sources that have similar products.
On the Bargain Grocery side (which is our funding source), we began purchasing all the salvage perishables Walmart had from our local WM distribution center in 2002. The sale of this product at very low cost allowed us to be self-sustaining. Every week, we would purchase a trailer-full from Walmart that was a mix of meats, fresh product, salads, dairy, and frozen foods at a low salvage rate. Our goal was twofold: to mark the product up just enough to sustain our costs of operation, and to stretch the buying power of those struggling to make ends meet. Since we purchase it at such a low rate, even with the markup, items are typically sold cheaper than you might find at other stores. The plan has worked wonderfully for the past 18 years. We have been able to sustain all costs of our operation, all salaries, all building costs, all shipping costs, everything and still increase the buying power of those on EBT over 30 percent.
Many companies that sell us salvage will regularly place additional items on our purchased load as donation or gift in kind. They understand the mission and are glad to help.
We are still purchasing salvage from Walmart but in much smaller quantities than what we have received for the last 18 years. Less is available because what would have either been placed on our loads as “donation” or sold as salvage is now going exclusively to Feeding America. The problem is food banks can’t or won’t take everything that these distribution centers have available. There is a limit of close-dated perishables, frozen foods, and produce excess on weekends that they can’t handle. This leaves no other solution than to send this excess to landfills. This is where we come in — we have literally taken everything and anything they have sent and tried our best to use it effectively.