Burnsville co-op expands to cope with growth spurt

Expansion plans at Valley Natural Foods reflect continuing growth of stores and co-ops selling natural and organic food.

By Sarah Lemagie, Star Tribune

Last update: November 10, 2007 - 4:33 PM

Valley Natural Foods got its start at church basement meetings attended by a cadre of concerned south-metro residents, some of whom had children with food allergies. Thirty years later, the natural and organic foods co-op boasts about 6,000 members and a Burnsville location that's nearly bursting at the seams.

Many days, "I walk in, and there are two or three carts left, and every parking place is taken," said Susan McGaughey, the store's general manager.

Last month, the co-op announced plans to expand its location near County Road 38, adding 3,000 square feet to its 7,500 square feet of retail space. Much of the breathing room will go toward the store's meat, deli, produce and frozen food departments, McGaughey said.

The $2.6 million expansion, which will begin next spring and wrap up in about four months, is good news to such customers as June Korthauer, the co-op's first member.

"It'll be nice when we get all that extra space," said Korthauer, who said she joined to buy produce free of the "sprays and things" found in many foods on mainstream grocery shelves.

The addition should handle increased traffic at the store for three to five years, McGaughey said. Since Valley Natural Foods moved to its present location in 2001, traffic has doubled to 800 or 900 customers a day, and the co-op's membership has nearly tripled. Sales are up 15 percent from last year, and the co-op paid out nearly $200,000 in profit dividends to members this fall, double last year's figures, said Charli Mills, the store's marketing and member services manager.

Nationally, organic and natural foods sales continue to skyrocket while the grocery industry as a whole remains relatively flat. The Twin Cities is a hotbed of food co-ops, according to the National Cooperative Association of Grocers.

A number of metro-area co-ops -- including stores in Minneapolis, Minnetonka, Chanhassen and Northfield -- have opened or expanded in the past five years. A new co-op in the Orono/Long Lake area is being planned. This fall, the Wedge Co-op in Minneapolis announced that it would take the unusual step of buying an organic farm, and the Seward Co-op Grocery & Deli on Franklin Avenue plans to break ground this month on a larger, new location a few blocks away.

That doesn't mean it's all been smooth sailing. The 37-year-old North Country Co-op in Minneapolis closed this month because of falling sales. And in the south metro, Kowalski's Markets, a larger chain store known for its natural and organic products, shut the doors of its Lakeville branch in January after just 15 months in business.

Valley Natural Foods considered opening a second location, checking out property in neighboring cities such as Lakeville, Rosemount and Shakopee, before deciding to play it conservative and expand on-site. The move will allow the co-op to wait out a somewhat turbulent growth period in the south-metro grocery market. "In this area south of the river, I see sort of an overextension of the grocery industry," McGaughey said.

Sarah Lemagie • 612-673-7557

Sarah Lemagie • slemagie@startribune.com

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