Patrick Robinson — West Seattle HeraldCarrie Ferrence, co-founder, inside the Stockbox prototype in Seattle’s Delridge neighborhood.

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The adventure of new ventures.

Last year, M.B.A. students at the Bainbridge Graduate Institute in Seattle began hunting for a business-based solution to the problem of “food deserts” — low-income neighborhoods lacking access to healthful, affordable food. (More than 23 million Americans live in such places, according to the Department of Agriculture, which maps them here.)

The result? Stockbox Grocers, a start-up that converts reclaimed shipping containers into miniature grocery stores and operates them out of parking lots in under-served communities. Its slogan: “Good food, where you live.”

Founders: Former classmates Carrie Ferrence, 33, and Jacqueline Gjurgevich, 32, registered Stockbox as a limited liability corporation in July, a month after completing their graduate studies. Now they’re both working full-time, handling everything from securing permits to cultivating community relationships and selling veggies.

Employees: None.

Location: Seattle.

Pitch: Stockbox intends to promote access to fresh food — and turn a profit — by blending the dependability of brick-and-mortar shops with the low overhead of pop-up retailers and food trucks. “We take away the high set-up cost,” Ms. Ferrence said. “We take away the high ongoing operating cost, and we focus on the inventory that moves most efficiently. Most families, most communities, buy the same five to 20 items, week in and week out, so they only need to go to a huge grocery store once or twice a month to get the remaining items.”

For that reason, Stockbox focuses on perishables like juice, milk, dairy, meat, produce and other staples. Not only does this limited range of heavy-turnover items help a whole market fit in a shipping container, Ms. Ferrence believes it can boost profitability, too. “Huge grocery stores are fairly inefficient,” she said. “They depend on 15 percent of their inventory to carry the profitability of the rest of their store.”

Traction: Stockbox took second place at the University of Washington Business Plan Competition in May and also won the contest’s “best service/retail” category, earning a total of $12,500 in prize money. On Sept. 12, the company opened a temporary prototype selling more than 300 types of items in the Westhaven Apartments parking lot in Delridge, a Seattle neighborhood where grocery options are limited.

“No one’s really put a grocery store in a parking lot before,” Ms. Ferrence said. “We wanted to be able to bring it to life, show people what it would really look like.” The last day of the eight-week pilot is scheduled to be Nov. 7. Stockbox plans to open its first permanent store this spring in one of two Seattle neighborhoods, Delridge or Skyway. Plans are to open two to four stores next year.

Meanwhile, Ms. Ferrence and Ms. Gjurgevich have received calls from entrepreneurs in more than half a dozen cities — including Detroit, New Orleans, San Francisco, and Washington — most of them looking to franchise the idea. Stockbox plans to open at least its first 10 to 20 stores itself but is considering franchising after that. “People are thirsty for this,” Ms. Ferrence said. “It’s been great to see that people look at the idea, they see the business, and they see a way for it to work where they live as well.”

Revenue: The company does not release revenue figures. The Delridge prototype began collecting modest revenue in September and gets between 20 and 25 customers in an average half-day, Ms. Ferrence said. Projections are for the permanent stores to take in $600,000 a year in revenue with a profit margin, eventually, of between 5 percent and 8 percent.

Financing: Stockbox’s $12,500 business plan competition winnings became seed money. A Kickstarter drive that closed Sept. 15 garnered $20,129 from 195 contributors. Eighty percent – or about $20,000 — of the company’s costs for refrigeration and initial marketing efforts were covered by Healthy Foods Here, a local initiative funded in part by the Department of Health and Human Services.

To get their first permanent store off the ground this spring, the co-founders plan to rely on a mix of grants and bank loans. They said they also hope to open a couple more stores in 2012, for which they’ll seek angel investments. “Our models do have us being financially sustainable, but we’re not a tech start-up, we’re not going to have huge returns,” Ms. Ferrence said. “We’re looking for investors who want to support something that is giving back to the community, so they don’t need to have the 10-times return.”

Marketing: The partners have been relying primarily on a grassroots, do-it-yourself effort to get the word out. They’ve been attending community group meetings to forge relationships, posting fliers, getting supporters to put up yard signs and distributing coupons.

Competition: Most food deserts aren’t completely barren. Residents are accustomed to shopping at convenience stores, which may carry some staples but prioritize alcohol, cigarettes, lotto tickets, soda and junk food over components for healthful meals. “It doesn’t feel good to take your kids into those stores, but those are the established places to shop in the community,” Ms. Ferrence said. “Similar to any retailer, we’re competing against what people have been using for many years.”

Stockbox will also compete with big grocery stores, but those are typically a couple of miles away and inconvenient to reach by public transportation.

Challenge: Getting consumers to change their habits. At the prototype, Ms. Ferrence said, “we would see people standing 20 feet away in the parking lot, just staring at the store. We had to invite them in. They just had no concept of what was going to be inside.” To win repeat customers, she added, Stockbox will have to break down the idea that a “real” grocery store needs to be 30,000 square feet and carry 50 types of toothpaste.

What do you think? Can Stockbox serve its community and climb into profitability? And what’s the best way for its co-founders to help shift shopper behavior?

Article source: http://feeds.nytimes.com/click.phdo?i=6d03d6306c3717eb12225143ac4c56b8