How a remote Alaska town gets its groceries

May 3, 2020

When Gustavus, Alaska, was cut off from its grocery supply chain, one resident decided to take matters into his own hands.
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When Gustavus, Alaska, was cut off from its grocery supply chain, one resident decided to take matters into his own hands.

BY Zachary Crockett

On a Tuesday afternoon in late April, a small barge set off from Gustavus, Alaska, en route to the world’s most remote Costco warehouse.

The 96-foot ship hummed through the choppy waters of the Icy Strait, past vast expanses of wilderness, snow-capped peaks, and breaching whales. Seven hours later, when it reached Juneau, a few intrepid men loaded its deck with $20k worth of eggs, flour, meat, canned goods, and produce. 

It returned to Gustavus in the twilight haze, like a bird bearing provisions for its chicks.

Like many of America’s rural and remote towns, Gustavus has an arduous supply chain. Even in good times, getting groceries to an isolated enclave in Southeastern Alaska requires some serious logistical wrangling. 

But when the town’s usual transport methods were disrupted, its 446 residents found themselves in the midst of a pandemic with diminished access to affordable food.

And one man — the town grocer — decided to take matters into his own hands.

Life at the edge of a glacier

Gustavus is remote in a way that only Alaskans can truly grasp.

Situated on a 38-square-mile plain along the Icy Strait, it is a place where moose outnumber people — where rugged seascapes meet towering glaciers, hemlock forests, and grassy knolls. It is home to 40 mammal species, 500 varieties of moss, flocks of kittiwakes, and a K-12 school with just 54 students.

The town had no electricity until 1985, and no phones until the mid-90s. To this day, no roads connect it to the outside world.

Scenes from Gustavus, Alaska (Sean Neilson)

“You either gotta fly here or boat here,” says Calvin Casipit, the town’s volunteer mayor. “And everybody knows each other in 3 or 4 different ways.”

Its residents — a mélange of biologists, retirees, and innkeepers — live on streets named Glen’s Ditch Road and Weedle Fish Drive, and gather once a year for a 4th of July parade featuring slug races and a game called Chicken Poop Bingo.

As the gateway town to Glacier Bay National Park, Gustavus is highly dependent on the 3-month summer tourism season, when thousands of travelers book bed & breakfasts, fishing trips, and wildlife tours. But with the park closed until July 1 and much of the world still in lockdown, the local economy is in distress.

Kimber Owen, who runs the charter boat service Sea Wolf Adventures, has already suffered from $460k in cancellations. Around town, cooks, bear hunting guides, and park rangers sit dormant. Though certain businesses are now permitted to reopen in Alaska, many are choosing to stay closed.

“In our budgeting for the next year, we’re not counting on a whole lot of sales tax income,” says Casipit. “Nobody’s coming.”

But in dark times, one business has given the town a glimmer of hope.

The town grocer

On a side street on the Western edge of Gustavus, a neon “OPEN” sign shines brightly through the lodgepole pines.

This weathered wood building is something of a lifeline for the isolated community: Inside, local residents can find fresh produce, meats, canned goods, toilet paper, hardware, lumber, work clothes, pet food, and sporting goods. It’s as if a mini hybrid of Costco and Home Depot were supplanted in the middle of nowhere.

It’s called Ice Strait Wholesale, but locals have dubbed it Toshco — a combination of the owner’s name and the chain from which he sources most of his goods.

During the health crisis, Toshco has remained in operation, utilizing cones for social distancing (Sean Neilson / Icy Strait Wholesale)

Toshua Parker, who opened the store 10 years ago, is something of a legend around town: His great-grandfather, Abraham Lincoln Parker, was the area’s first permanent homesteader back in 1917.

After losing his Arizona-based commercial real estate business in the wake of the Great Recession, Parker, then 30, returned to the town he grew up in.

At the time, the only way to get groceries was by private barge or plane. This made the local grocery store prohibitively expensive: A gallon of milk that sold for $5 in Juneau cost $12 by the time it arrived in Gustavus, largely due to the logistics of getting it there.

“There was just so much margin,” recalls Parker. “And I knew there had to be a way to do a better job.”

Parker did some work around town, scrounged together $3k, and began taking a state-subsidized ferry to Juneau, where he bought Costco inventory to resell in Gustavus at a small markup.

As the store grew, Parker and his father launched their own freight company, purchased the town’s gasoline station, and bought two of their own ships — a $300k “insurance policy” that gave Parker tighter control over the supply chain in case of an emergency.

During COVID-19, these preemptive moves have become crucially important.

Toshua Parker (edited in), with Toshco in the background (Sean Neilson/Toshua Parker, via Facebook)

In the winter of 2019, Alaska legislators cut ferry service to Gustavus. Then, right at the onset of the coronavirus outbreak, the town’s only dock closed for a 4-month repair. The usual fall-back option, an air taxi, charges $0.50/lb for any item it delivers. At that rate, the cost of delivering a gallon of milk would be more than the price of the milk itself. 

“Alaskans are used to being prepared for disruption,” says State Rep. Sara Hannan, who serves Alaska’s 33rd District, which includes Gustavus. “But this was really a perfect storm of problems.”

Quarantined residents were left without an option for affordable groceries.

So, Parker loaded a few shipping crates onto his 96-foot barge and began making weekly pilgrimages across the Icy Strait, to the tiny Costco in Alaska’s state capital.

The world’s smallest (and most remote) Costco

Built in 1993 as an experiment to test smaller markets, the Juneau Costco is the smallest, both in size and scope, of the chain’s 785 warehouses. It may also be one of the most critically important: Many of the isolated small towns in Southeastern Alaska rely on it for food items they otherwise wouldn’t be able to get.

“The small-market format doesn’t really make sense for us anymore,” Kevin Green, a VP at Costco, told The Hustle. “In Juneau, though, it really works.”

Once per week, Parker takes a tally on what the residents of Gustavus need and makes the 7-hour journey to Juneau to stock up. Gauging demand — especially in a time of shortages — is tricky business.

“It’s an art form, not a science,” says Parker. “The town might have a 100-gallon swing in demand for milk from one week to the next without any explanation of why. One week, nobody wants whole milk; the next week, everyone wants 2%.”

Toshco employees have been on the phone nonstop, taking down special orders from Gustavus residents — everything from washing machines to baking powder.

Oftentimes, Parker maxes out on the rations Costco imposes at the store to protect against panic buying.

“We’ll place a $20k order, but they’ll still only give us one pack of paper towels,” he says. “I understand why they’d do that, but we’re not a single person panic buying; we’re trying to feed a whole community.”

Top: The 7-hour one-way journey from Gustavus to Juneau (The Hustle / Bing Maps); Bottom: The Costco in Juneau, Alaska (Getty Images)

Relying on goods purchased from Costco keeps Toshco honest.

“Most grocery stores you go to, you don’t get to see the wholesale cost of what you’re buying — you don’t know what their margin is,” says Parker. “I can’t mark something up 5x because they know exactly how much something costs at Costco.”

The average grocery store makes extremely thin margins (~2.2%) and makes money by turning over large volumes. Parker says his margins are even thinner — almost to the point of subsidizing the community — due to logistics.

For example, he buys 24-packs of eggs at Costco for $4.50 and sells them in Gustavus for $7.99. That leaves just $3.50 to cover not just the costs of his grocery store (labor, refrigeration, stocking), but the 14-hour freight journey, fuel, loading, and other associated transportation costs.

Certain items, like toilet paper, call for additional logistics.

For these things, Toshco uses secret suppliers as far away as Utah. Goods that can’t be found at Costco are carted by truck up to Seattle, then to a freight warehouse in Kent, Washington, before making the journey to Juneau. From there, it’s another 7-hour barge trip to Gustavus.

“Thinking outside of the box [is] the secret to success,” says Parker’s father, Lee. “You start by brainstorming non-traditional sources — vendors that most folks may be surprised even have toilet paper in their inventory. Then you get on the phone and start calling everyone around the country until you find a place to buy a pallet.  Some of Toshua’s finds are brilliant. And because of that, Toshco has TP when the rest of the world has empty shelves.”

Parker’s ship, the M/V Claim Jumper, in action (Sean Neilson)

The process can take many days — and one little misstep can impact the entire community of Gustavus.

Several weeks ago, Parker couldn’t find milk or eggs in Juneau, so he turned to his sources down south. He found a supplier in the lower 48, but by the time it got to Seattle it had missed the barge. The next ship out was a week later.

Another time, a supplier forgot to include the meat in an order. They paid to send it by plane but bad weather delayed it for 3 days. By the time the meat arrived in Gustavus, it had all expired.

“You have to think proactively,” says Parker. “Because by the time there is a problem, it’s way too late to fix it.”

The importance of the rural grocery store

This story isn’t unique to Gustavus: Around the country, rural and remote grocery stores are serving a critically important role for their communities during the coronavirus pandemic.

David Procter, a professor at Kansas State University and director of its Rural Grocery Initiative, has spent more than a decade studying the impact of grocery stores in communities with less than 2.5k residents.

“Small town grocery stores are having kind of a renaissance because of COVID-19,” he says. “Everyone is stuck at home and buying locally.”

Gustavus’s 446 residents are stratified (Sean Neilson)

Procter says that stores like Toshco serve 3 critical purposes:

  1. They serve as economic centers: “When someone spends $50 there, they are recirculating their income back into the town.”
  2. They are typically the main provider of healthy food: “Without the grocery store, it’s usually convenience stores with processed foods.”
  3. They are community hubs: “Everyone in town goes there, and they are, sometimes unintentionally, social gathering places.”

It is not uncommon for individuals like Parker to take things into their own hands when the one grocery store in town goes out of business, says Procter. But what makes Toshco unique is the extreme lengths its owner has gone to, recreating a complex supply chain from scratch to feed an entire town.

Sean Neilson, a wildlife photography guide and 20-year Gustavus resident, frequents the store for the many eggs his two small children consume.

“Going to Toshco to get a gallon of milk might take you 45 minutes,” he says: “4 minutes to drive there, 1 minute to get the milk out of the fridge, and 40 minutes to catch up with someone you bumped into.”

Justin Marchbanks, the owner of a local construction company, has relied on Parker’s ship to bring in cement and girder beams he uses to build bridges. Ordinarily, he’d have to pay up to $18k to rent out a landing craft for transport; Parker offers the service for a small fraction of that, based on weight.

“I just don’t even know how he keeps things straight,” Marchbanks says of Parker, who he grew up fishing with. “They’re dealing with everything the town needs, from pallets full of flour to containers full of hardware. I don’t know how they manage it all.”

Even the town’s mayor has to tip his hat. 

“Toshua pretty much saved the town,” says Casipit. “I really don’t know what we would’ve done without him.”

The sun sets over Gustavus (Sean Neilson)

When the barge pulled into Gustavus on a recent Wednesday, it was cause for celebration.

“It’s like Christmas when the load gets here,” says Parker. “Everyone is waiting for it. Word gets out, and they all seem to know when it’s coming.”

This time, the shipment even included flour — an item that is scarce in major metropolises with more robust supply networks. When Parker’s parents, now living in Arizona, heard about the haul, they requested a bag by mail.

“They can’t get it, but up here we’ve got a couple pallets,” Parker says, with a chuckle. “In Alaska, we always find a way.”

Note: Many of the images in this story were provided by Sean Neilson, a wildlife photography guide who lives in Gustavus. You can support his work by buying prints from his online store and following him on Instagram.


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