Last year, when a million pounds of organic apples suddenly hit the market and drove down prices to 30 cents a pound, Edward Brown gladly paid from 80 cents to a dollar to his family-farm organic apple grower in Washington State. In a typical grocery store, Brown, who is the produce director at the Wedge Community Co-op in Minneapolis, might have had some explaining to do. But for the more than 8,000 members of the Wedge, paying more for essentially the same product was a sound business decision.
If this strategy flies in the face of the mainstream way of doing business, consider that sales at the Wedge average $1,818 per square foot (more than 4 times the industry average for stores greater than 6,000 square feet), and that produce represents 20 percent of total sales volume (against the industry average of 12.5 percent to 14 percent.)
Brown—like everyone else associated with the Wedge—believes principles need not be surrendered to dollars to create a successful business.
Among those principles is paying family farmers enough money to make a decent living. Jersey Boy Farm, the Washington apple grower, is just one example. "I go to their farm," Brown says, "and agriculturally, they're some of the best stewards of the earth. I believe their product is worth more, and the Wedge community agrees, even though the prices are sometimes double the retail price of another organic apple."
Paying farmers enough to compensate their hired help fairly and earn a reasonable profit has been a Wedge policy since 1985. "We look over the crop year and analyze it—things we liked, things we didn't like, things we'd like changed," Brown says. "By January, we craft a written agreement, signed by both parties [to pay] a sustainable wage." A market wage, dependent on the California market and the vegetable market in general, can hurt organic farmers, Brown says. "We ask [organic] farmers what they need to stay in business. Sometimes that premium can be up to 100 percent over the California organic market ... [but] we need to keep our family farmers on the land."
Of course, this noble philosophy works because Wedge members are equally enlightened. "[Our customers] will pay a premium for a quality product once they understand the ramifications. They vote with their dollars, even if it means paying more. I wish more retailers could see that," Brown says.
The Wedge employs some smart—if more mundane—replenishment tactics. The Co-op Partners Warehouse program, launched two years ago, is a sort of just-in-time wholesale supplier owned by the Wedge. Partners Warehouse delivers perishable produce and dairy products to the co-op as often as four times a day. "It's a neat pipeline," Brown says, noting that in a recent week, "We peaked out with a record of $94,000 sales in produce." The Wedge is "seldom out of stock of anything," he adds. "If we are, the truck's going to be in, or our air freight's going to be in, and we can just hustle it right over. We really have a good turnover of product, and freshness [is what makes] our reputation."
Local and regional organic farmers are the top-choice suppliers, Brown says, but he also buys nationally. One of the Warehouse's goals is to reach out to other co-ops. "[The Warehouse is] not trying to make any money. We're trying to break even and put [partner] co-ops into a very strong retail position in organic foods," Brown says.
Although the 1,000-square-foot produce department gets marquee billing, the Wedge's relatively new meat department is making a name for itself, Brown says. "We have high standards, both in organic and really thinking out the natural, free-range and antibiotic-free label. We basically cater to those two—we don't have a low end to the meat department." Last Thanksgiving, the Wedge went through "dang near a semi load of turkeys," he says. "Meat's been a very successful addition."
The one thing that hasn't changed over the Wedge's 27 years in business is its emphasis on people. Half the management team has been there 10 to 20 years, and employee turnover is low, Brown says. "We have a base wage plus a very aggressive benefits package that all full-time employees get. We [also] have 'community service hours,' where you accrue roughly 20 hours per year. We try to encourage people to go out into the community and volunteer, and we'll pay them their wage up to their accrued 20 hours to work as volunteers. We try to feed the community that feeds us." Employees are also welcomed in any of the 10 to 15 education classes the Wedge holds for customers each month.
"We're finding that word of mouth is the biggest educational factor," Brown says. "Someone [has] learned to soak oatmeal for eight hours and it comes out more of a European porridge and they realize the digestive enzymes are valuable and they feel better—well, heck, they'll tell two or five people."
Success through high standards and moral integrity—the Wedge fits perfectly into an industry founded on the principle that what goes around comes around.
Natural Foods Merchandiser volume XXII/number 11/p. 42