Exploring Correlations of Corporate Concentration & Food Access in Rural Nebraska
By: Melanie Canales and Aaron Johnson on 8/7/2024
Cover photo by Jimmy Emerson, DVM via Flickr, Creative Commons.
The Grocery Gap Atlas is a geospatial analysis tool designed to illuminate corporate concentration in the grocery industry, how it affects food access, and who that impacts. We use the Herfindahl-Hirschman Index to estimate market concentration. This index is used to determine market competitiveness – the closer a market is to a monopoly, the higher the market’s concentration and the lower its competition. This map also measures food access using data that allows the model to offer more nuanced analyses of real-world conditions where access diminishes with distance and is influenced by market concentration and capacity of resources. When assessing correlations between concentration and food access, patterns emerged that suggest potential relationships that vary among economic and demographic conditions. We also have analyzed data on correlations that exist within typologies identified by the American Communities Project.
Data
The American Communities Project uses a vast array of data to categorize communities into different typologies for analysis. Using a wide-range of factors that include income, race, ethnicity, education, and religious affiliation, the ACP identifies fifteen types of counties and has mapped these types to show political, socioeconomic, and cultural discrepancies across the country. When analyzing how concentration correlated with food access, the Grocery Gap Atlas found that concentration is negatively correlated with food access at -.15, meaning that places that are more concentrated tend to have somewhat worse food access. When analyzing data across the urban to rural spectrum, the Grocery Gap Atlas found that there is a slightly stronger negative correlation between concentration and food access in rural areas. Rural areas experience the highest negative correlation, suggesting that where rural areas experience higher concentration, food access tends to be even worse than overall.
When analyzing the correlation between concentration and food access across ACP typologies, three of them stood out: Aging Farmlands, Native American Lands, and Hispanic Centers. They showed strong negative correlations between high market concentration of poor food access. As of 2023, Native American Lands have the highest negative correlation at -.52. Aging Farm lands and Hispanic Centers are also strongly negatively correlated at -.28 and -.23 respectively. This data suggests that when market concentration increases, food access decreases, a correlation that positions the census tracts within these geographies in the most concentrated and poorly provisioned zones of the Grocery Gap Atlas. When combining factors like rurality, demographic, and community typologies, the negative correlation between concentration and food access sheds light on distressed conditions in hundreds of tracts of most concern, with thousands of people struggling to feed themselves in a monopsonized bivariate zone.
View from the ground
Nestled squarely within one such zone with limited grocery options in a highly concentrated market is Emerson, Nebraska. Emerson lost its only grocery store in 2018.
“It used to be a saying, that a town needed a bank, a post office, and a grocery store to survive. And if you didn’t have any one of those things, the town would die. So that was kind of one of the seeds to get the grocery store going,” said Brian Horak.
Horak runs Post-60 Market, a grocery cooperative that opened in Emerson in 2022. The town, observing its own decline, cooperatively raised funds to purchase an American Legion building and convert it into a grocery store that services not just itself, but the counties surrounding it. Three surrounding rural counties claim Emerson: Thurston, Dakota, and Dixon.
As noted above, Native American Lands have the most negative correlation between market concentration and food access, at -.52, and Emerson’s census tract in Thurston county reinforces this correlation; this tract faces higher concentration than 74% of tracts across the US, but only has better food access than 24% of tracts. Emerson’s census tract is part of the Aging Farmlands typology, where census tracts conditions tend to have a negative correlation of market concentration and food access at -.28 and on average a market concentration higher than 98% of tracts while only having better food access than 24% of tracts.. Hispanic Centers closely follow Aging Farmlands in negative correlation between concentration and food access (-.23), a correlation further demonstrated by Emerson’s census tract in Dixon. This tract’s market concentration is higher than concentration in 77% of all tracts, but endures the worst food access of the the Emerson tracts with higher food access than only 22% of tracts. Emerson’s rurality also reflects the impact of high concentration and low food access— rural areas have the highest negative correlation of all the urbanicities.
As an old hand in the grocery business, Brian recognizes the limitations of a small grocery store in an area feeling the impacts of high concentration and poor food access. When the next closest option for a full-service grocery store is an hour away, his goal for Post-60 is to answer what can be a daunting question:
“We’re not going to meet everybody’s needs. We’re too small. But the goal is to answer the question: what’s for supper tonight?”
In a town of 800, Brian and the co-op board of Post-60 have 120 investors and counting. Many of the investors are Nebraska residents who have left Emerson, but have bought shares in the grocery store because they want to see the town succeed. Many have relocated to Sioux City, another borderlands area that sits between Nebraska and Iowa. Though the city spans census tracts in Dakota county (Nebraska) and Woodbury county (Iowa), both counties are dominated by a single grocery company. Hy Vee captures for 58.3% of grocery sales in Dakota county’s service area, and 60.3% of grocery sales in Woodbury county’s service area. Of course, if residents would prefer not to patronize Hy Vee, Walmart has made itself a robust alternative, having sequestered an estimated 34.2% of Dakota county’s market share. In Dakota county alone, 94.5% of the market is estimated to be dominated by two corporations that are doing very little to alleviate poor food access. Brian recognizes this failing, and seeks to address it with all that Emerson has to offer.
“We’re not going to compete with Walmart. We’re not going to compete with HyVee or anything. But if we can carry a lot of local products, it will keep it unique to us.”
Brian knows that what makes Post-60 a success is its cooperative structure. He imbues the store with these principles, stocking shelves with honey cultivated by their neighbors, Graf Bees. He relays tales of a local woman who uses the store’s back room to make pizzas, keeping their freezer stocked with best-sellers. He sells pot holders made by a local resident of the nearby nursing home. Even the public schools source all their produce from Post-60. A pragmatist, Brian also recognizes how thin his margins are when competing with the buying power of monoliths like Hy Vee and Walmart. He sources 99% of the store’s products from Associated Wholesale Grocers (AWG), but he struggles to get distributors to stock such a small store in an isolated area. Applying for grants and increasing their investor base allows Brian to make technological and personnel upgrades that make Post-60 more competitive like rebate coupons and pick-up/delivery services, but he’s also dreaming bigger. Emerson is not the only town in the area to lose a grocery store, and Brian’s vision for Post-60 is that it have the capacity one day to service surrounding towns that also suffer under conditions that make food access abysmal. Sharing buying power to attract more distributors, a wider grocery delivery radius, grocery vending machines, grocery lockers, to Brian, the only constraint on Post-60’s reach is finding ways to finance a small, local grocery store in a land of grocery giants.
“I mean, you always want to make money. But our motivation is to be a service to the community. So as long as we’re paying our bills, and we’re putting a little money in the bank, we’re ok. The rest is just to help the town succeed.”