Food is distributed based primarily on market logic. Market logic is not concerned with ensuring everyone has a nourishing diet. Given that food is central to individual and societal health, this is a major contradiction. Governments have had periods of intervening to assure more equitable distribution, but less so since the end of WWII (see Get Started, Problems, Planning). In the absence of more robust government intervention, food distribution in many communities has become more concentrated, with increasing numbers of people who struggle to access an affordable nourishing diet. The market will not resolve the numerous structural problems that have emerged, so governments, particularly at the municipal level, will have to take action, both to shift the behaviour of the dominant retail system and also to create more opportunities for diverse food distribution avenues..
The problematic structure of food retailing and food distribution in Canada
Canada has one of the most concentrated food retail markets in the Western world. In 2009, AAFC estimated that the 4 largest food retailers (then Loblaw, Metro, Sobey's and Safeway) held about 72% of national market share (a high degree of concentration, given that the typical measure of concentrated markets is 4 firms controlling 40% of a market, the CR4). Since then, the market has become even more concentrated. Sobey's bought the Canadian stores of Safeway from its US parent company and Loblaw purchased Shopper's Drug Mart so it could move more food through their pharmacies and use Shopper's pharmacy supply chains to supply their food store pharmacies. Similarly, Metro recently purchased large Quebec pharmacy Jean Coutu. Walmart has also expanded its offerings and is now the 4th largest retailer in Canada even though its sales are substantially lower than the big 3. The CR4 is probably now around 80% of the food retail market. Only in Quebec do the independents still hold significant market share, with about 60% (AAFC, 2015). These scale and concentration pressures are expected to increase due to the recent purchase by Amazon of Whole Foods and anticipated grocery wars over on-line food shopping.
Associated with these concentration trends are reductions in the number of supermarkets but with more sales / store. The formats are getting larger, which means the locations to site stores keep shifting. E-commerce means that some stores become inaccessible to walk in traffic because they are dedicated to picking e-retail orders. Some cities like Toronto, Montreal and Vancouver do relatively well because of the large numbers of small independent and ethnic retailers that dot the cities. Other medium to large municipalities like Edmonton suffer from extensive concentration. One study of that city concluded that at least 4 more major retail outlets were required for the downtown (Mah, 2015), and it wasn't obvious that the 3 main retailers in the city would build them.
Because supermarket location is seen as a private business decision, within the frame of municipal zoning rules, the assumption is that the market will effectively "allocate" grocery stores to the appropriate locations, but in many towns and cities this does not necessarily happen. Companies will favour medium to high income neighbourhoods and there are many examples across the country of low income and racialized communities that are poorly served by the dominant retail system. Although in many large cities, there are numerous ethnic stores catering to specific populations that compensate somewhat for the inadequacies of the big 3 retailers, these are unevenly dispersed, and less common in smaller communities and rural areas. All this suggests important roles for the state, both federal (see Goal 3, Reducing corporate concentration) and municipal, given their planning responsibilities.
Barriers: prices, locations, mobility and culturally appropriate foods
Classically, retail concentration produces higher prices for consumers and lower prices for suppliers, including farmers and processors. Canada's federal Competition Bureau has investigated the big retailers for abuse of power with suppliers, confirming the thesis that such concentration leads to more pressure on suppliers.
Consumer price effects are, however, more complex because the big 3 retailers, while in a dominant position, are worried about the impact of low cost retailers like Costco and Walmart on consumer price attitudes. Consequently, prices might not be as high as they might otherwise be. according to market concentration theory. This, in turn, makes it more difficult for governments to identify abuse of market power.
Availability of automobiles, transit routes, and the existence of physical barriers are relevant to food retail access. Studies from the USA and the UK indicate that populations without cars typically pay more in money, time, and energy for access to quality food retail stores. Wealthy neighbourhoods typically have greater car ownership than low income neighbourhoods, so income stratification affects food access. Age is also a factor as seniors typically have lower mobility than younger age groups. Many citizens with disabilities report mobility and other related challenges to acquiring a nourishing affordable diet (cf. Abbas, 2008). Low-income citizens can have additional challenges, including Illiteracy, confusion due to stress, oppression by society, the humiliation and disempowerment of depending on a nutrionally inadequate foodbank diet, and the erosion of basic food skills . Yet low income shoppers are often more food literate than high income earners. Immigrant Canadians often bring with them food shopping, storage, and preparation skills that long term residents have lost, but other mobility factors limit their ability to take advantage of those skills. Access to cultural appropriate foods is an additional challenge. Within diverse major urban centres this is somewhat less an issue, but small to medium sized towns and rural areas offer a predominately European diet (TFPC, 1996).
These challenges raise the question whether the dominant retailers are really interested in serving low - income shoppers. Although some banners preference low income neighbourhoods, for the most part the dominant chains focus on middle and upper income earners.
Common retail / shopper characteristics of relevance to food access problems and solutions (adapted from TFPC, 1996)
- Data from the US Food Marketing Institute (FMI) in the mid 2000s revealed that 12-15% of shoppers are loyal to one retailer and that generates 55-70% of sales. But this means that some 85% are not loyal to one retailer, suggesting there’s lots of room to shift shopping location if a diverse array of food access options are available.
- In the mid 2000s, FMI also reported average spending per shopping trip in the US $25. The figure would likely be a bit higher in Canada given exchange rates. This suggested that many trips are not major stock ups and do not require a car. According to Statistics Canada, the average Ontario household was spending approximately $85 a week in local shopping (and another $35 in restaurants), but how many trips is that and to what kinds of stores?
- In some cities, surveys have found that 20-25% of car trips are for food shopping.
- The main shopper in US households averaged 2.44 food shopping trips per week in the mid 2000s (Dunkling et al., 2004)
- How many customers are required to serve variously sized retail formats? Urban designer Peter Calthorpe was working from a standard ratio of 10,000 people or 2 sq. mi. of mixed density housing to support a full service grocery store. Smaller operations would require considerably less, although if there were several small retailers offering different items, they might collectively require a comparable population base comprised of both permanent residents and transient commuters.
- Chains have typically assumed that 30% of sales will come from within a 1 mile radius and 60% within 2 miles (Faludi, 1992)
- Many downtown stores are in the 5000-20,000 sq.ft range, but those under 5000 sq ft. tend to be categorized as convenience or specialty. Many specialty stores have supermarket features and fall in the 1000-5000 sq. ft range and these might be appropriate sizes near stations.
- The standard North American estimate was historically that 65-75% of consumer dollars were spent in supermarkets and 25-35% in specialty/convenience outlets (TFPC, 1996).
- A UK study concluded, perhaps optimistically, in a food desert area of the City of Leeds, that with the right supports, private food firms would embrace social inclusion (Wrigley et al., 2003)
- Physical accessibility will often trump price (time vs. price), even for low-income consumers; mobility is a key question (In the UK, <500m seems to encouraging walking and shopping)
- Loyal customer base reduces need for economies of scale (whether luxury or captive market). Loyalty can be a product of a number of factors, including lack of mobility and lack of income to spend on shopping in other locations (Dunkling et al. 2004).
- Large format stores don’t necessarily reduce the time and distance involved in shopping – is one-stop shopping a myth? There’s some evidence that larger stores don’t necessarily carry a wider range of inventory, thereby they do not minimize the number of trips required. They may also not reduce the amount of time spent shopping because the large size often generates time inefficiencies. A dominant shopping group is those who want to save time (the other is those who want to save money). Stores serving this segment don’t mind if bargain shoppers go elsewhere (Dunkling et al., 2004).
- In many cities, there have been spatial mismatches between low income people, labour force needs, services and workplaces (Clifton, 2004)
- Ethnic foods found more in small format, main streets kinds of shops
- Neighbourhood shops in the 5000-10000 sq ft range tend to draw independents rather than chains.
- Low - income neighbourhoods often have higher aggregate purchasing power because of greater density than higher income neighbourhoods, but store locations don't necessarily reflect that reality.
The situation of northern and remote communities
Northern communities are experiencing food insecurity at much higher rates than anywhere else in Canada (see Get Started, Colonial history). Food brought in from the south and sold through grocery stores is extremely expensive. To address these problems, the federal government for many years ran a transport subsidy program (the Food Mail Program) which was transformed in 2011 into Nutrition North (for some history see Fitzgerald and Hill, 2016). Although the federal government made changes in 2016 and 2019, the program is criticized (cf. Qikiqtani Inuit Association [QIA], 2019; Food Secure Canada, 2019) for:
- how expensive foods from the South remain (especially healthy fresh foods), with arbitrary pricing and a lack of transparency about retailer subsidies and whether retailers pass on the entire subsidy to eaters. The federal government since 2019 has been implementing processes to make audit reports more widely available, but it is not clear this addresses all the transparency concerns. "The average cost of the Revised Northern Food Basket in March 2018 was actually higher by over 2% since March of the previous year, and only 1% lower than in March 2011, prior to the launch of the Nutrition North program" (Food Banks Canada, 2019). Additional subsidy has been provided during COVID but the impacts are not yet apparent.
- supporting country foods and the supplies to facilitate hunting and fishing; these supports were made part of the Harvester Support Grants and Young Hunters Program but the lack of integration between them and the Nutrition North subsidies creates inequities and imbalances for food availability.
- a focus on grocery stores, when there are numerous alternative distribution opportunities that are not similarly supported.
- administrative fragmentation.
- inadequate community eligibility criteria, which continues to limit communities that critics believe should be part of the program.
- although changes have been made based on community feedback, many still believe consultation with northern peoples over program designs is still insufficient.
These food security challenges are likely to worsen due to climate change (cf. Human Rights Watch, 2019).
Solutions - new concepts
Food and agricultural urbanism are slowly (re)emerging as new urban planning fields. In both concepts, food is central to the effective functioning of a City. They challenge the traditional view in urban planning that food is primarily a rural concern.
Several other core concepts are related to this new kind of urbanism. As set out by Watson (2020), short food supply chains (SFSC) are a core objective of the alternative food system, one that empowers small production and retail companies in localized markets (Morgan et al., 2008). The alternative system looks to empower and validate each link in the supply chain and retain the majority of value capture with the primary producers (Marsden et al., 2000) - in essence, shortening the supply chain.
For the alternative system, there are three kinds of SFSCs (Renting et al., 2003). The first category, face-to-face, refers to interactions that occur directly between consumer and producer. The mechanisms, or rather activities, involved in these interactions include farmers’ markets, pick-your-own and farmgate sale stands. The second category, proximate, refers to an exchange of goods between a producer and consumer that shares cultural or physical proximity. These interactions typically occur through the use of intermediary actors, though typically fewer than the dominant food system. These actors function as guarantors of product quality to consumers and broaden producer access to consumers. Examples of this type of interaction include food co-ops and food box schemes. The last category is extended interactions. These interactions typically occur between a consumer and a producer that do not share regional or even cultural commonalities. It is the regional significance embedded within the products that make for a “shortened” supply chain. An example of this type of interaction would be purchasing Fair Trade Ethiopian coffee beans. In this category, there is information inherently recognized about the product by virtue of its name. The challenge for the alternative system is that the dominant system, recognizing that shoppers are increasingly attracted to it, are attempting to look like the alternative (see The Nature of Transition).
As such, then, there are many different actors playing important roles in alternative retailing and short supply chains, often referred to as alternative food networks or AFNs. They often play the roles of brokers, bridgers, advocates and informers. The network is often comprised of an eclectic mix of entrepreneurs, NGOs, community organizations and local government.
Governments in Canada focus on the 10-20% of economic actors providing 80-90% of the food, commonly the large corporations. The government position is buttressed by the large actors who frequently argue against alternative approaches, fearing that they may erode their business over time. The remaining actors are diverse, with typically more local supply chains and this reality builds resilience in several ways. It is estimated that because of the just-in-time delivery models of the dominant actors, most food retailers in urban centres have approximately three days of fresh food and up to seventeen days of all other food products available (Bristow and Kennedy, 2013; Medical Officer of Health, 2008), much of it sourced internationally since on average 30% of what Canadians consumer comes from international sources, much higher for fruits and vegetables, many processed goods and many beverages. In the face of international disruptions - dramatic weather events, pandemics, trade and other economic disputes and blockades, labour disruptions - these supply chains are vulnerable. Centralization and large scale also contribute to vulnerability, whether domestic or international. Canada's dependence on a few very large pork and beef slaughtering operations was exposed during Covid - 19. Disruptions also change consumer behaviour, hoarding being a dramatic example. Given the rigidity of the dominant retail supply chains and their reliance on inventory modelling, specialized varieties and breeds, and specific packaging and branding, pivoting in the face of disruption is challenging. In contrast, diversity can lead to greater access across many communities The fall 2020 federal throne speech speaks to the need to build a more resilient Canada, but there is little indication that any government fully appreciates the role that a diverse food system can play in helping to create it.
Financing the transition
There are several dimensions to financing this transition. Community food projects follow a somewhat common trajectory. They are often piloted with funds held within the community organization, grants from donors, private foundations or government. If successful, the programs are scaled with a more diverse set of funders. Government grants are often augmented with significant contributions from other sources. However, given the short-term nature of government and foundation granting practices, these programs often struggle to sustain themselves after the initial 5-10 year period because the funders move on to other projects. A common criticism of foundations is that their theories of change keep shifting, often a result of the latest change management ideas, and they then lose interest in providing long term support to projects that don't fit their new theory. Similarly, government grant programs often shift with election cycles and results. Both types of funders often have a bias against mature projects, instead focusing on what's "new". Granting agencies do not necessarily consult well the potential grantees to determine what would really work, as they consider themselves experts in grant program design. NGO leaders often lack the skills to be effective for the long term in these very complex environments, and this can partly explain as well grant maker reluctance to continue. Equally problematic, the NGO-funder relationship is not always an honest one, with NGOs fearing that if they tell funders about failures, they'll be cut off. The most effective approaches, as a result, don't necessarily emerge and inform how granters think about change. This, in turn, can cause grant program leaders to turn to another theory of change rather than base it on the realities of their grantees.
If the community project has some market revenue streams, these can sometimes be augmented over time to make up for grant shortfalls. It may be feasible for 30 to 50% of some project costs to be funded this way as the project matures. It is critical, however, in most cases for community projects to work in fees, charges and sales from the beginning as many partners will resist contributing have received a service for free during earlier periods of the project. Community projects, however, are rarely self sustaining because their social purpose functions are not fundable by markets. Many NGO leaders spend most of their time fundraising for projects, in part because the different granters, despite some efforts to co-ordinate their funding efforts, mostly operate as single agents. Perhaps even more insidiously, NGOs are often forced to design food programs to meet the funders requirements, rather than do what would be most effective. They are forced to shift funds from different budget categories to compensate for the limitations imposed by the funder. The result is that many programs fail over the medium term.
Clearly, repairing this ineffective relationship / granting cycle is paramount to successful funding the transition over the longer term. It will require greater collaboration across government, foundations, big donors and NGOs. There have been a few successes in this regard, and these must serve as the templates for change. Some programs will have to involve larger pots of money. The return, as with so many other areas presented on this site, will come from savings in health care expenditures.
The changes required to planning processes identified in this section may require changes to training and planning processes more than additional funding. This at a minimum will require budget re-allocations, often challenging given the rules surrounding government budget making. In some cases, increased support for things like public markets may generate greater economic activity that can warrant higher fees being charged which can partially compensate for budget increases.