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Natural food co-ops aim for lower prices

Cheaper organic offerings have led to increased sales

By Nicole Norfleet, Star Tribune (Minneapolis)
Published: June 8, 2024, 6:03am
3 Photos
Josh Kohanek and Rudy, 4, pick up groceries May 7 at Seward Community Co-op in Minneapolis. (Shari L.
Josh Kohanek and Rudy, 4, pick up groceries May 7 at Seward Community Co-op in Minneapolis. (Shari L. Gross/Minneapolis Star Tribune) Photo Gallery

Natural food co-ops are known for their organic produce and fair-trade coffee. Their chutes of bulk grains and jars of hard-to-find spices. Their wide assortment of cage-free, farm-fresh eggs and nut grinders that let you crush your own container of almond butter gooeyness.

But what many consumers don’t usually associate with today’s co-ops are cheap prices.

Changing values and economic pressures, though, have pushed natural food co-ops to focus more on affordability. This year, natural food co-ops have seen elevated sales as they have dramatically increased cheaper organic offerings such as United Natural Foods Inc.’s Field Day brand. Co-ops have also recently begun to add less expensive, conventional and sometimes even less healthy items including Coke products.

The changes signal an evolution in philosophy from the hippie roots that helped pioneer the Twin Cities co-op movement in the 1970s and went on to sweep the country.

“Co-ops have and continue to struggle over should I stock that product or not,” said C.E. Pugh, chief executive of the National Co+op Grocers organization, which is based in St. Paul, Minn. “It doesn’t really meet my values. It’s not local. It’s not organic. It’s not natural. It’s just inexpensive. We are beginning to see co-ops experiment with it.”

At the Mississippi Market co-op off Seventh Street in the Dayton’s Bluff neighborhood of St. Paul, customers can buy a variety of locally sourced and organic food such as air-chilled, free-range hens and farmstead cheese — staples of all three of the Mississippi Markets.

But the East Seventh store, which serves a neighborhood with 19 percent of residents below the poverty level, also has added Coca-Cola, Sprite and 100 items under the discount Essential Everyday private brand, which is owned by SuperValu, now a subsidiary of United Natural Foods. It stocks Jif peanut butter and other national brands found in conventional stores.

“We have observed significant growth in the sales of these products, prompting us to gradually expand the selection across various departments, including grocery, cheese, wellness, and produce,” Yani Clement, Mississippi Market’s purchasing director, wrote in an email. “Currently our conventional product selection at the East 7th store makes up around 9 percent of our total product offerings. This expansion not only provides customers with more affordable options but also ensures that we continue to cater to a diverse range of preferences and budgetary needs.”

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A higher percentage of sales at the East Seventh store also comes from Mississippi Market’s “Co-op Basics” line of products — natural or organic household goods that are priced below the suggested retail price.

Co+op Basics, which National Co+op Grocers started in 2016, was “a game changer” for co-ops because it gave small independent cooperatives the buying power of a larger chain to negotiate lower pricing of organic products, Pugh said.

That negotiating power was essential as more mainstream stores began to offer their own organic private labels.

“Whole Foods has Whole Foods 365, Kroger has Simple Truth, Target has their own organic brand, and Walmart has their own private labels,” Pugh said. “We didn’t have anything like that, and we were just getting blown out of the water pricewise.”

Now, food co-op sales are on the rise thanks in a large part to their increase in cheaper organic goods and conventional grocery products, Pugh said. During the first quarter of this year, sales at the 230 or so co-op stores that are part of the National Co+op Grocers were up 5 percent compared with last year, boosted by a 30 percent jump in Field Day sales.

Over the past decade as a whole, the growth was 2 percent annually, Pugh said.

Since the end of the pandemic, the Wedge Community Co-op has seen store traffic increase with people shopping more frequently.

“We strive to provide options for people,” said Rebecca Lee, senior director of purchasing and merchandising at the Wedge. “As we adapt, as all of us adapt to increased prices, we look for more options for people so that they can continue to buy those free-range eggs like they want to but have another option for olive oil that’s less expensive.”

Buying in bulk is still a major way for people to save money at co-ops. It’s 52 percent less to buy the same oats in bulk as it is packaged, Lee said. Other items that are cheaper in bulk are honey (44 percent), olive oil (28 percent) and coffee (20 percent).

“If you don’t need a lot of something … you can buy a quarter cup at a time. You don’t have to buy a whole package,” Lee said.