Section 2 Food Procurement & Pricing

Food procurement and distribution

4. Please provide a food procurement plan and distribution strategy including where and how food will be procured, stored and/or warehoused for the retail food establishment.

Answer:

Electric City Community Grocery will procure food from 50+ New York farmers and producers, in addition to several key regional and national distributors. A team of lifelong grocers is thoughtfully designing the store with in-house storage and warehousing top-of-mind, including adequate shelving and back-room space to accommodate a stable level of 25 days of inventory on hand. The store will turn that inventory over about 16 times each year.

Through its partnership with National Co+op Grocers (NCG), ECCG will have access to an advantageous primary distributor cost-plus relationship with United Natural Foods, Inc. (UNFI) and its subsidiaries. NCG represents 164 food co-ops operating over 230 stores in 39 states serving over 1.3 million consumer-owners, with combined annual sales of $2.5 billion.

ECCG will leverage this primary distributor relationship with UNFI to purchase a significant portion of its goods, including some local and regional goods. With NCG managing the relationship with our primary distributor at a national level, the store’s local buyers will be able to focus primarily on forging meaningful direct purchasing relationships with local and regional vendors, as described in detail in the “Farms and Agribusinesses to be involved” section. ECCG will also partner with several local and regional distributors to source unique local and regional goods: Adventure in Food Trading Co. (Menands, NY); Antonucci’s (Gloversville, NY); Regional Access (Ithaca, NY); and Four Seasons Produce (Ephrata, PA).

Ongoing collaboration with the Schenectady Greenmarket helps maintain an equitable and locally sourced procurement strategy. Each Sunday from 10am to 2pm, over 80 diverse vendors from the region already provide food to downtown Schenectady through their year-round farmer’s market. As farmers markets are labor intensive for vendors, many of the Greenmarket’s vendors are excited to partner with us to expand weeklong access to their products.

Farms & agribusinesses to be involved (local emphasis)

5. Please provide a complete description of the farms and agribusinesses projected to be involved including New York farmers and producers.

Answer:

ECCG plans to retail products from the 50+ New York farmer and producer partners shown below. This list includes businesses already partnering with the Schenectady Greenmarket. EECG will work to grow the list as the store matures.

1.cProduce and Plants

• - Lovin’ Mama Farm, Amsterdam

• - Indian Ladder Farm, Altamont

• - Slack Hollow Farm, Argyle

• - Denison Farm, Schaghticoke

• - J.J. Knight & Son Family Farm, Burnt Hills

• - Schoharie Valley Farms, Schoharie

• - Samascott Orchards, Kinderhook

• - Bulich Mushroom, Catskill

• - Saratoga Apple, Schuylerville

• - Buhrmaster Farms Fruit & Produce, Scotia

2. Dairy (Eggs, Milk, Cheese, etc.)

• - Battenkill Creamery, Salem

• - Ronnybrook Dairy, Ancramdale

• - Feather Ridge Farm, Elizaville

• - Jake’s Gouda Farmhouse Cheese, Deansboro

• - RG Cheese Makers, Troy

• - St. Stephen Creamery, Stephentown

• - Hidden Camp Farm, Canajoharie

• - Dirty Girl Farm, Andes

• - Argyle Cheese Farmer, Argyle

• - Cornell Farm, Hoosick Falls

• - Fage, Johnstown

• - BelGioioso, Glenville

3. Meat & Seafood

• - Sweet Tree Farm, Carlisle

• - Mariaville Farm, Mariaville

• - Fin the Fishmonger, Guilderland

• - Bread and Baked Goods

• - Perreca’s, Schenectady

• - Our Daily Bread, Chatham

• - The Placid Baker, Troy

• - Heidelberg Bread, Frankfort

• - Rock Hill Bakehouse, Glens Falls

• - Bread Alone, Boiceville

• - Saratoga Gluten Free Bakery, Saratoga

4. Packaged Grocery

• - Casa Visco, Schenectady

• - Tara’s Kitchen, Schenectady

• - Rulison Honey Farm, Amsterdam

• - Tierra Farm, Valatie

• - 3 Chicks and a P, Rotterdam

• - Buddhapesto, Hudson

• - Mu Mu Museli, Sharon Springs

• - Healthy Gourmet Kitchen, Glenville

• - Saratoga Chocolate, Saratoga Springs

• - Hosta Hill, Housatonic

• - Sunhee’s Farm and Kitchen, Troy

• - Underground Alchemy, Troy

• - RAD Soap Co., Glenville

• - MyForest Foods, Green Island

• - Electric City Roasters, Schenectady

• - Touchy Coffee, Troy

• - Kru Coffee, Saratoga Springs

• - Capital City Coffee, Gloversville

• - Yesfolk Kombucha, Troy

• - Nine Pin Cider Works, Albany

• - Frog Alley Brewing, Schenectady

• - Rare Form Brewing, Troy

• - Common Roots Brewing, Glens Falls

Pricing strategy: support for local and regional farmers & producers.

6. How will the pricing strategy ensure increased marketing opportunities for local and regional farmers and producers?

Answer:

The ECCG’s “good, better, best” pricing strategy will boost marketing opportunities for local farmers by positioning their products at all levels. Typically, local products are featured as “best” due to their superior quality, but the co-op will also integrate local items in the “good” and “better” categories to connect cost-conscious shoppers with nourishing local food. Through our partnership with National Cooperative Grocers (NCG), we will offer a flagship everyday low price program, “Co+op Basics,” as well as three promotional programs. 

Anchoring the “good” tier, the Co+op Basics program offers 200+ low-priced pantry staples that fall in categories with high purchase frequency (at least biweekly) or high household penetration (purchased by most customers in a given demographic). The grocery will also enjoy significant price support on key products that are not available locally (e.g. rice, bananas, avocados) through NCG; but the heart and soul of the Co+op Basics everyday low price program will be competitively low prices on local New York State milk, yogurt, eggs, bread, apples, and seasonal produce, making high-quality local products affordable and accessible. This broadens the market reach for local producers, allowing local customers to enjoy the superior quality and taste of fairly priced NYS-produced goods.

Additional promotional programs supported by NCG further increase exposure for local and regional farmers and producers. The Fresh Deals weekly promotion showcases seasonal local products, Flash Sales create quick-turn excitement around local items, and rotating bi-weekly Co+op Deals, include local products. With decisions made locally, the co-op can respond quickly to help farmers move surplus, highlight new harvests, and share farmer stories. 

Through these core pricing and promotion strategies, the co-op will offer local farmers consistent opportunities to move a high volume of goods from farm, to co-op shelves, to customers' tables.

Pricing strategy: inclusion of low-income customers

7. How will the pricing strategy be inclusive for low-income customers?

Answer:

The Electric City Community Grocery’s inclusive pricing strategy will make fresh, quality food accessible for low-income customers through five key programs:

Hybrid Product Mix: By offering a mix of conventional and organic products, the grocery will provide affordable options without compromising on quality. ECCG will ensure that clean, affordable conventional items are as readily available as premium organic ones.

Double Up Food Bucks: Through this program, SNAP/EBT customers can double their purchasing power for fresh produce, receiving a dollar-for-dollar match up to $20 daily. This means customers can purchase $20 in produce and receive an additional $20 the next day at no cost, providing a continuous source of free fresh food. This program not only supports customers but also boosts local farmers by encouraging consistent produce sales.

Co+op Basics: This everyday low-price program will feature 200+ essential items at highly competitive prices. Co+op Basics is the co-op’s version of a “store brand,” offering reliable, low prices on frequently purchased items.

Zero-Waste Bulk Department: The bulk section allows customers to buy as much or as little as they need, helping them avoid packaging costs and only purchase necessary quantities. This department will feature over 100 pantry staples, herbs, and spices, making it affordable for customers to buy small amounts without the expense of full packages.

Core Promotional Programs: ECCG’s Co+op Deals and Fresh Deals programs will provide regular discounts on national and local brands. The Co+op Deals program negotiates with brands to offer deep discounts, while Fresh Deals features local products at affordable prices, giving customers the opportunity to buy high-quality items at lower costs.

Through these programs, ECCG will create an inclusive shopping experience that supports affordability while offering diverse, healthy food choices tailored for low-income customers.

Pricing strategy: financial stability for the business.

8. How will the pricing strategy achieve financial stability for the business?

Answer:

The Electric City Community Grocery’s pricing strategy is designed to ensure financial sustainability while attracting a diverse customer base. According to the latest market study, a cooperative grocery in Downtown Schenectady is viable, projecting $5.2 million in sales in year one, growing to $6.8 million by year four. This study was updated in August 2024, reflecting the current local market and trends from similar co-ops nationwide.

The “good, better, best” pricing strategy allows for a curated mix of products in each category, catering to three distinct customer groups with diverse preferences. The store’s location—close to both reinvested mixed-income areas and low-income neighborhoods within a region of customers who value local, natural, organic, and socially responsible groceries—positions it to draw a broad range of customers. The longstanding success of Schenectady Greenmarket – including its popular Food Box program for low-income shoppers – reflects the high demand of diverse regional shoppers for locally-sourced, sustainable products.

The co-op’s membership with National Co+op Grocers (NCG), a network of 164 co-ops, grants it access to significant purchasing power. Through NCG’s partnership with UNFI, ECCG will benefit from collective negotiations, securing competitive costs, promotions, and streamlined pricing updates, ensuring consistency in margin management and promotional activities.

The grocery will achieve an overall gross margin of 32.8% in year one, 35.1% in year two, and 36.1% in year three, and expects to maintain a 36.1% gross margin in the long term. A lower gross margin in years one and two is a strategic decision, allowing the grocery to break into the market, interrupt current consumer shopping patterns, and build loyalty with extraordinarily attractive prices on key items. This approach promises to establish ECCG as a primary shopping destination in Schenectady, balancing affordability with long-term financial health.