March 31, 2016 Yscouts

Doug Rauch

Doug Rauch Podcast Interview

Doug Rauch spent 31 years with Trader Joe’s Company, the last 14 years as President, helping grow the business from a small, nine-store chain in Southern California, to a nationally acclaimed retail success story with more than 340 stores in 30 states.

Show highlights:

  • Why Doug founded Daily Table
  • Doug’s biggest surprise while spending time at Harvard
  • The biggest misconceptions about the Sell By dates on our food
  • Why it’s important to do cultural checks in an organization

Show links:

What was the most surprising thing about spending time at Harvard?

Millennials today, they’re what I like to call practical idealists. They have the same sort of idealism that I had in the 60’s about changing the world, but they’re much more practical about it. They really understand that they want to do well, but they want to do good also. They want to go get a job, but they want that job to be meaningful. They want to be a positive contributor to society. It’s not enough just to get a high income.

I was with people that really cared about making a difference in the world. Not just furthering their career.

What’s one of the biggest misconceptions about the sell by dates on our food?

Most Americans look at a sell by date and think, “I don’t know if it’s safe to eat it past that date. If it’s after that sell by or best by date, I’m throwing it out.”

The reality is that doesn’t make much sense. If I’m a retailer, and I’m willing to sell you this product on this day, I don’t expect you to run home and drink the gallon of milk that day. But, we as consumers have nothing else to guide us. It comes around to a general sense of not knowing whether your food system is safe.

We don’t trust water in America anymore. One of the crazy things is when Evian was first presented to me as a buyer at Trader Joe’s back in the early 80’s, and we were just laughing. Don’t they know that water is safe to drink in America? Who on earth would buy bottled water, in a plastic bottle, and spend all this money when they could get water out of any tap in America safe?

Was I wrong? I mean, wow. The number of people today that don’t feel their water is safe coming out of the tap is a large percentage. In the same way we really don’t trust eating food past it’s sell by date.

I spent several years dialoguing with the media arguing that food is safe past this display date. You guys are calling them expiration dates. They’re not. Food doesn’t expire on the sell by date. When food is expired, it has no more life in it. It’s like your credit card. If it’s expired, there’s no more life in them. Food at it’s sell by date has lots of life in it. It’s still healthy.

The true expiration date, when you shouldn’t eat it, that’s much later. Businesses give customers a large and conservative window to use product. The very reason is they don’t want them to have a negative experience. Because they don’t want to get sued or they don’t want their brand to take a hit.

There is no relationship between display codes and when I food is actually bad. Display codes are at best, peak flavor. So we are throwing out millions of pounds of perfectly good food, all because we have put code dates that we don’t understand, that are really about product rotation for a store or manufacturer. When I started in grocery in the 70’s, there were no code dates on the vast majority of these products.

Food is relatively cheap in American society. Between the time I started at Trader Joe’s and now, we as a population pay a third less for food than we did then. We pay less than any people in the history of the world as a part of their disposable income. So we don’t value it as much. Things that become ubiquitous and cheap aren’t valued.

How have you been connecting the purpose of Daily Table with your employees?

First off, 80% of our employees come from within a mile and a half radius of the store. In a way, our target audience is actually our employees. So they get it, because they live it in most instances. Many of our employees are on food stamps. They come from a tough neighborhood.

The majority of the 32 jobs in our store are full time. Of those full time that are working 40 to 45 hours a week, I would say the majority of them have second and third jobs. Economically, they need them to survive in Boston.

Every one of our customers and employees that walk in, we want them to get the message. Here’s who we are. Here’s how we do business. Here’s why.

Not by beating them over their head, but by the positive stuff. We’re here to provide delicious, tasty, fresh, convenient, truly affordable meals for all. And to do it in a manner that will move you forward in your life, not hold you back.

We hold meetings with all of our employees. We have regular meetings where we talk about the mission. We ask them to challenge us on where we’re not living up to our mission. The real question is, “Is our mission alive in our culture?” Culture is that unique DNA that every organization has. It is your signature. If our mission isn’t alive in our culture, then our mission isn’t alive. We’re not living it. It’s important for us to do cultural checks.

It’s one thing for an employee to be able to state the mission. It’s another thing for an employee to be able to talk about the areas where we’re best living the mission, and where we can improve on living the mission. My opinion for success is not whether the people at the top of the organization can repeat the mission, but whether the newest employee at the lowest pay level. Do they feel it? Do they live it? If the answer is yes, I regard that as success.

Listen to more episodes from the Built On Purpose podcast at yscouts.com/podcast.