In 2008, when the Wedge Co-op took over operations at Gardens of Eagan, it was a first for a natural foods co-op: cultivating the produce that would be sold in the store.
Seven years later, the experiment is coming to a close. The store announced Tuesday that it is placing the 126-acre property on the market.
“I know of a couple of co-ops that operate small garden plots, but we’re the only one that owns a significant-sized farm, and maybe there’s a reason why,” Wedge CEO Josh Resnik said. “It’s a very different business model for us.”
Wedge acquired the farm from the Diffley family, longtime champions of organic farming. The farm, which has cultivated nearly 2 million pounds of organic produce under Wedge ownership, employs a staff of 20 during the peak growing period.
But operating costs are rising. “We engaged a consultant last summer and that led us to do a lot of introspection,” Resnik said. “Making the farm more economically viable was going to require a pretty significant investment, and so we asked ourselves, ‘What business are we in?’ ”
Growth in the number of local organic farmers is another reason behind the sale. “The local farming community has changed so much,” Resnik said, “and there are so many more farms now than there were eight years ago.”
The numbers at St. Paul-based Co-op Partners Warehouse, the Wedge’s wholesale division, bear that out. CPW acts as a clearinghouse for 115 local farmers and producers, channeling their goods to more than 300 area food co-ops, independent grocers and restaurants.
“It’s a one-stop way for local farmers to get their broccoli and kale to market,” Resnik said. “They can spend more time in their fields and less time accruing truck miles on the road. That’s how we’re going to continue to create a strong local organic agricultural system.”
The farm’s current location is its third. Gardens of Eagan originated, obviously, in Eagan, and when suburban development encroached, the Diffleys moved farther out, to Farmington.
The Wedge later relocated to acreage near Northfield and the property, which just completed a rigorous three-year process to gain organic certification, includes greenhouses, as well as packing and cooling facilities.
The Wedge plans to continue operations through the 2015 growing season. “We want to keep our commitment to our employees,” said Resnik.
The co-op’s board has targeted a dozen or so potential buyers, and a price has yet to be determined. “Ideally, we’d love to see it remain largely intact, and just under a different ownership structure,” Resnik said.
Resnik said that despite the sale of the farm, the 41-year-old co-op remains in growth mode. The Wedge Table, a commissary kitchen/cafe/bodega-style retail outlet at Nicollet Avenue S. and 24th Street in Minneapolis, opened in January.
A renovation of the co-op’s bursting-at-the-seams Lyndale Avenue store is in the works, and Resnik said more projects are on the horizon.
“There’s nothing imminent, but we believe there is opportunity for a second full-service store, as well as expansion at Co-op Partners Warehouse,” he said. “When we look at growth potential, those are the growth areas for our business.”
Follow Rick Nelson on Twitter: @RickNelsonStrib