Hungry for More: Doug Rauch on Daily Table and Taking Chances on Change

Former Trader Joe’s President Doug Rauch spoke with the team about his new venture, DailyTable. Daily Table’s mission is “to help communities make great choices around food by making it easy for them to choose tasty, healthy, convenient and truly affordable meals and groceries.” The following is a condensed and edited version of our conversation. 

ANN MACDOUGALL: Take us back to your earlier career, and tell us how you came to attend the Harvard Advanced Leadership Institute (ALI) program.

DOUG RAUCH: My journey started by going to college, but I had no real idea what I was going to do. I went to work for a natural food company called Erewhon, where I became General Manager and Vice President.

One of our customers was Trader Joe’s. Eventually, Joe Coulombe, Trader Joe’s founder, said can you get us in food, private labels, like we’re doing with wine? Turned out, it wasn’t so easy. To make a long story short, we reinvented buying, and created a different feeling about private label that became about destination, high-quality products. From there, the business grew.

I woke up and thought, my God, I’m a grocer! How the hell did that happen? I thought I was going to be a rocket scientist, or a brain surgeon. I thought, I should go get some education in business. So I went to the Drucker School of Management in Claremont and did my Executive MBA. After that, the CEO asked if I wanted to work on the business plan of how we’re going to grow this business outside of California. I said, sure why not?

I spent the next six months learning and I came up with this plan. I said we’re going to move the business back to Boston, and grow from east to west. At the time, 38 percent of the U.S. population lived between Boston and Washington, D.C. So we came back east, for what I thought would be 3-5 years. And then, two surprising things happened.

One is our three kids all ended up going to New York City, and stayed there. Even when I could have moved back to California I thought, I don’t want to live 3,000 miles from my kids. And the second thing is, we really love Boston. So I had a long career at Trader Joe’s — 31 years, and grew them from $12 million a year to a $7-8 billion business.

The crossroads for me was that I was about to be 57 and I thought, which would I regret more: if I stayed here and grew the business to $15 billion, but didn’t do something else? Or if I go do something else, and the company succeeds and I can’t find anything to do? I thought I’d regret not taking the leap.

But I had no idea what I was going to do. I sat on a number of boards, and then came across a program I had heard about called the Advanced Leadership Initiative at Harvard. You got to use all of the resources of the various colleges, and you work with faculty and students to tackle a major social ill at scale. And at the end, you stand up and tell the faculty and your cohort what you’re going to do. It was that old adage, “to know and not to do is not to know.” I thought, wow, I have the opportunity to do something. That’s what attracted me.

AMTell us about Daily Table today, and also your dream for five years from now. 

DR: Daily Table went through about 15 iterations, all based upon reality on the ground. I started off with this understanding that hunger is a shortage of calories. I quickly found out that it’s a shortage of nutrients. Obesity is the result of hunger in America for most of the food-insecure. That changed everything.

And people don’t have time. About half of our sales come from cooked soups, salads, sandwiches, these sorts of things. The retail mission is critical, because it deals with the heart of the challenge. Our entire nonprofit system is designed around an unequal power differential. If you’re the donor and there’s a recipient, you’re the giver and they’re the receiver. You’re not equal. And because of that, people feel slightly stigmatized, embarrassed or ashamed of going to food banks, soup kitchens, etc. And a large part of the population, 38 percent, won’t use these services because they’re ashamed.

The idea of Daily Table is to create a retail store where people will feel good. We really are a hunger-relief agency that masquerades as a corner market. We have about 9,000 members. The community loves us, and I think we’re doing wonderful work.

The part that’s been a challenge is the economics. It’s far more complex, costly and difficult to break even. Daily Table is about 75 percent of the way there, which 17 months in isn’t bad, but it’s a tough slog to get the rest of the 25 percent of the costs out. We can’t just raise prices because our mission is to be affordable to people on SNAP [food stamps]. We’re opening a second store next year, also in Boston. We’re looking for another area for next year, maybe the Bronx. Our mission in 5 years would ideally be to have Daily Table in 50 cities, providing hundreds of thousands of people access to affordable nutrition. We currently provide 125,000 servings a week.

AMAs someone who’s gone from success to significance — you use those words often — and is really having an extraordinary encore, what’s your view on the encore movement at large, and the potential for encore work in later life to become the norm in this country? What are the opportunities and challenges? 

DR: When Marc [Freedman] wrote his book, and this whole movement, it hit upon the demographic reality that we’re a graying population. We’re living longer and we’re being more productive.

But I think there’s a third part. Retirement as such is a really new idea. Up until modern history, you worked until you couldn’t work, then you kind of sat around and tried to make yourself useful. The wisdom of the aged was important; there wasn’t Google. I think encore as a concept is really critical. And millennials get this already. Millennials are already into encore. Millennials don’t have lifelong careers, they have gigs. In general, no millennial goes to work somewhere for 35 years. They’ll start somewhere and work a couple years, then move on, like opera gigs. That spirit is one we should all have, when we look toward the second and third acts of our lives. We should have a sense of adventure, and think about how to use our skills and experience to make an impact.

I’m a big fan of encore driving meaningful engagement. It can be just helping a neighbor, or a kid learning to read — it can be anything. When we think about retiring from one career, we should think about putting to use our interests, experience, and our knowledge in ways that can provide meaningful engagement for ourselves and for others.

I think happiness is more like something that ensues, versus should be pursued. We all talk about the pursuit of happiness, but not many of us achieve it. A purpose-driven, meaningful life usually means engaging in something larger than yourself. It’s the secret to having the type of happiness that ensues from having meaningful engagement with the world.