Eastside Food Co-op
Minneapolis, MN

Year founded:  2003
Member equity:  $100
Number of members:  6,500
Number of employees:  100
Retail square feet:  9,500

Eastside Food Co-op in Minneapolis, Minn. had one of the highest sales per square foot in the nation, but this wasn’t all good news.  The store’s small size meant that it couldn’t carry enough of what customers wanted.  Survey results showed that they were losing one shopping trip per month with long-time customers who did a big meat and produce shop at other stores to stock up their pantries.  “People were clearly telling us that they wanted more,” said John Lacaria, the co-op’s current interim general manager.

In July 2016, the co-op completed an ambitious expansion that included a focus on convenience and fresh food offerings, by expanding their deli kitchen, adding a seating area, juice bar, fresh baked goods, and a variety of hot and cold sandwiches and entrees.  Additionally, the co-op added a service meat case and doubled their produce footprint.  “People love it,” Lacaria said about the co-op’s expanded services, and continuing to build their capacity to do more is a top priority.  “It’s been a huge draw in the community.  It’s a happy-customer maker,” he said.

Customer demand for convenience—ready to eat healthful meals and fresh ingredients—is seemingly boundless.  What Eastside Food Co-op discovered is that meeting customer needs in this realm paid off, and also required a comprehensive back-of-the-house effort for effective front-of-the-house service delivery.  The deli manager at the time, Anne Johnson, was recently promoted to fresh foods manager, a position created to meet the co-op’s growing needs for food service management.  Johnson now oversees produce, meat, cheese and deli departments.  Each service area under her purview needed to hire and train new people, create new systems, and work together to promote fresh foods.

Johnson said the pre-expansion kitchen “was the size of a walk-in closet.”  Seven people worked in the space, cooking on hotplates.  They were able to do more than you’d expect, but the workspace was completely inadequate and without a stove and oven, the co-op’s scope and variety was limited.  Johnson said customers wanted more hot lunches and soups.  Now the co-op can meet the needs of time-pressed consumers seeking a quick, healthful meal.  Coffee to go, smoothies and hot breakfast sandwiches are especially popular in the morning—things they were not easily able to offer before.

The department has also grown from seven employees to 35, requiring a huge leap in internal capacity.  “It was a huge undertaking,” said Johnson.  “Before we had zero service staff,” and everyone newly hired needed to be trained to work the new service counters in meat and deli.  “We also had people entering leadership positions we didn’t have before or working different roles.”

From Johnson’s perspective, expanding fresh food departments involves a huge attention to staffing.  “It’s easy to think about programs and equipment,” she said, and their expansion also brought home powerful lessons about planning for staffing needs and the future.  “We’re looking at employees as future leaders and making hiring decisions based on where we want to be in five years, not just meeting our current reality.”

It’s been important for Eastside Food Co-op to take that long view, especially considering the many changes the co-op has experienced because of the expansion.

“We’ve had an overwhelmingly positive response to the changes in our store, especially the fresh food departments,” Johnson said.  Now they can clearly see their opportunities as well as necessary improvements, continuing to work more efficiently to bring better value to their customers.

Now that they are out of the “opening” stage, they are working aggressively on price image and product promotion.  They were part of NCG’s Fresh Deals pilot program.  “It’s been allowing us to bring a lot of value to customers,” Lacaria said.  He also said the risks they’ve taken to bring up volume with lower prices have also paid off.  One recent price and product promotion in produce led to sales of 150 cases of strawberries in one week.  “Every single time we’ve done more fresh department promotions to boost value to our customers they have proved it’s a good decision.”

Lacaria and Johnson are fully convinced that meeting customer needs for convenience and service brings in repeat business.  It’s the way they continue to be competitive, for sure, but their approach is to be of service to the members and community.  “Our prices and selection rivals everyone,” he said.