Whole Foods Co-op has grown over the years into a full-service store

3/14/2011 2:13:18 AM

The beginning ingredients: some rations of beans, a few portions of oatmeal and small amounts of flour.

These aren’t scratch items for a recipe, but rather some of the first foodstuffs sold in 1970 at the Chester Creek House, a small alternative store in an unfinished basement in Duluth’s East Hillside. Now,

40 years later, the communal house of about 10 young adults seeking a substitute to the industrial food system has become the

6,000-member, full-service organic grocery store known as Whole Foods


“We all had in mind a shared philosophy to live in a simple, more sustainable way,” said Kathy Bogen, who joined Chester Creek House in 1971 and later became a Whole Foods board member in the late 1980s. “It’s an old idea that is being brought back now.”

Riding the rise in organic food consumption, the member-owners of Whole Foods have watched annual sales shoot up from $275,000 after a decade of business in 1980, to more than $10 million after 40 years in 2010.

With $4.6 million in sales in 2005, Whole Foods’ management convinced a

sometimes-reluctant board to borrow and spend $5 million to build its 7,500-square-foot current home at 610 E. Fourth St. It was a smart business decision. In the first year, Whole Foods had nearly 70 percent growth.

“That was pretty staggering,” said Sharon Murphy, Whole Foods’ general manager since 1988. “Now, we are doing (about) 10 percent growth per year.

“I hear people come in and say, ‘Oh, it’s just like a grocery store,’ ” Murphy said. “That’s OK. That’s OK now to feel like a grocery store.”

It took nearly 40 years to become that grocery store. In 1970, some members of the Chester Creek House would drive to a Twin Cities warehouse to buy whole grains, rice, beans and other basic commodities to sell out of their basement in Duluth.

“A lot of people were experimenting with a vegetarian diet and eating lower on the food chain,” Bogen recalled of the 20-somethings in the house. “It was all tied into our concern with ecology and personal health and a healthy planet.”

Bogen, a teenager living with her parents at the time, would clean and stock bins with food. She often ran the register during the store’s few open hours. With a $5 membership fee, customers would weigh their purchases, and then Bogen and other volunteers would collect change from a little cash box and give them a receipt.

“The idea was to reduce the overhead costs on it to where it was affordable for people,” Bogen said. “It was marked up the necessary percentage to pay the people that went to pick it up in the Twin Cities, to pay the costs to keep it going.”

Whole Foods’ first major move was to a small storefront on Seventh Avenue East and Eighth Street in 1973. Inventory was diversified and included a small cooler for cheese and yogurt.

“That place was hopping,” Bogen said. “There was more of a structure in place.”

Volunteers were divided into teams to staff the store or serve on the board of directors, and the management collective Creative Energies ran it.

In early 1980, the board was convinced to take over the lease of the West End Buying Club at 2020 W. Superior St. It was a poor business decision.

“For our needs at the time, we were doing fine,” Murphy said. “We had very little overhead, and we only had one employee in the store. When we doubled our expenses and divided our membership with a second location, we struggled very hard.”

Murphy, a member of the collective, said they weren’t very experienced managers, and there was a “general dislike of advertising.”

“We opened the doors and nothing happened,” she said.

The western Duluth location was closed by 1983, but later in the decade, sales were increasing again, and Whole Foods was outgrowing its store. A planning committee looked into another move. The decision, however, wasn’t unanimous.

“Some people wanted to keep it small and personal and only member-workers shopping there,” Bogen said. “Others — and I was of this opinion — wanted to have the food and the co-op spirit more accessible to more people in the community. We were in favor of expanding to a larger site that could make us more visible, more parking, more products for people. I felt that way. I didn’t want to keep it a private, to-ourselves kind of thing.”

A membership meeting laid out the plans to move to a larger store. They discussed increasing the membership buy-in fee from $5 to $100 and set the stage for its move to 13th Avenue East and Fourth Street, the current location of Burrito Union.

“It was pretty radical,” Bogen said. “It’s interesting because the people that have (membership) numbers under 60, we all bought in at that meeting. We lined up and paid our dues.”

The new store alleviated the crowds of the old co-op with aisles instead of a loop, scanners instead of pricing items by hand, a larger selection of produce and some packaged products.

“It was just a big leap forward for us,” Murphy said. “It was great. We were doing regular advertising by that time. We brought in new community people to our store.”

More than a decade later, growth spurred another move to its current location in the Central Hillside. The size of the store tripled to accommodate a full line of groceries, a deli and health-care products.

And as for the people that didn’t agree with the co-op’s move in the mid-’90s?

“They might not have liked it, but they came back,” Bogen said. “It was the only game in town.”

Bogen continues to support the co-op and its more diversified products 40 years after its inception, but says the true mission of the Chester Creek House has been diminished.

“It’s operating more like a business, and things cost more,” she said. “It’s definitely more expensive, so I don’t think it’s holding to that ideal. Our original co-op really catered to low-income people, and one of the big ideas was to provide healthy food at an affordable price. … That is a really big shift. It’s now more of a store that carries high-end things, and I would say it has more of an image of being more exclusive.”

Murphy said Whole Foods would look to continue to capitalize on this expanding organic food market, with a second store not out of the question. She said the standard measure for expanding is about $2,000 of annual sales per square foot, and the co-op is currently at about $1,500.

“The important thing is that the customer feels comfortable coming into the store,” she said. “That’s what we want to do, make people feel welcome.”



<-- Back