Natural Harvest Food Cooperative in Virginia has been around since 1979 selling natural foods, including frozen, deli and bakery items plus organic produce and bulk products, such as whole grains, beans and rice.
But the last decade’s steady sales increase – upwards of 5 percent each year – is what convinced the board to explore expansion options.
“We outgrew our former space. We ran out of refrigeration, frozen storage and parking at the old store and that’s when we needed to look at something different,” said Anja Parenteau, general manager.
A comprehensive market study found that new construction was favored versus a facility addition. After a new site on Silver Lake was found, a 12-month construction process began.
The total project cost of $3.2 million was provided through a loan with Bremer Bank, which partnered with the Northland Foundation on financing.
Northland invested $330,000 and teamed up with the Entrepreneur Fund as well as Shared Capital Cooperative to provide the equipment loan. Shared Capital is a national loan fund and federally certified institution that is headquartered in Minneapolis and provides financing to cooperative businesses.
The IRRRB assisted with a $213,188 grant for site-work, and Lake Country Power contributed with its revolving loan fund. Through a co-op member loan campaign, $280,000 was generated.
The doors to the new store opened on April 26, and the responses have been nothing but favorable. The new facility has a fresh, modern look, two check-out lanes and comes complete with a demonstration room where lifestyle, nutrition and cooking classes can be held.
A hot deli and salad bar were added. Patrons can consume their food al-fresco on the patio, which is conveniently situated adjacent to the bike path that leads around Silver Lake.
So what makes Natural Harvest so successful?
They are the only co-op between Duluth, Grand Marais and Bemidji, drawing people from a 100-mile radius, including International Falls and Grand Rapids.
The grocery department strives to offer a complete line of basic grocery items that are of the highest all-natural or organic quality.
Products in the frozen and dairy departments are gluten free, antibiotic and hormone free and locally raised.
The health and beauty aisles are well stocked with natural, chemical free alternatives.
But that’s not to say there’s no competition. The new store is situated at 732 N. 4th Street in Virginia, kitty-corner from a large chain grocery store.
“We compete against gas stations nowadays. Twenty years ago, nobody had our products. It’s changed. Everybody carries natural foods now. We try to differentiate ourselves with being a co-op, which is different. And we focus on our local producers,” said Parenteau, who has worked at the co-op for the past 10 years – first as the produce assistant, then as the produce manager and for the past three years as general manager.
All of Natural Harvest’s produce is organically grown. Fourteen different local farmers supply more than 30 different varieties of produce including asparagus, greens, lettuce, carrots, tomatoes, peas, squash, beans and berries during the summer months.
“The rest of the year, it mostly comes from California. We try to be as local as we can, considering the climate in Northern Minnesota,” noted Parenteau, who added that about 15 percent of the entire store’s products are locally produced.
The co-op currently employs 37 people, 15 of them full-time.
The clientele’s reasons to shop at the co-op cover a wide spectrum. Some customers want to save money buying bulk. Others are drawn to the organic fruits and vegetables for their family.
“There is young, there is old. There are new families and families who have been shopping here since 1979, when we started. It’s people from all walks of life. A lot of times, we see people who got diagnosed with an illness all of a sudden and have been told to eat healthier,” Parenteau said.
One doesn’t have to be a member, or owner, to shop at Natural Harvest, but it does provide advantages. Ownership is obtained by making a one-time investment of $100, which guarantees monthly owner-deals as well as a discount of 5 percent on any purchase once a month.
The co-op switched from a daily owner discount to a yearly rebate model three years ago. If, at the end of the year, the co-op makes a profit, it is returned to the members in the form of a patronage rebate check. The co-op’s governing board of nine people decides on the amount to be disbursed.
With the recent expansion, however, Parenteau doesn’t expect to see a rebate for the next three to five years.
Some challenges Parenteau acknowledges are the changes in the grocery retail industry as a whole. “People are ordering groceries online. That is difficult for us,” she said.
But as of right now, Natural Harvest Food Cooperative is faring well. Last year’s revenue was $2.7 million and this year’s revenue is expected to reach $3.5 million. For 2018, Parenteau anticipates hitting the $4 million mark.
Some upcoming highlights include the installment of roof-top solar panels.
“We have a little bit of a budget window that allows for the installation this year. It is something our members really wanted,” Parenteau said.