Natural Foods Merchandiser

Twin cities co-op opens doors to natural home

In a town brimming with natural foods retailers and co-ops, how does one store set itself apart from the pack? For the Linden Hills Co-op in southwest Minneapolis, the answer didn't revolve around vegetables, grains or vitamins, but rather linens, kitchenware, baby clothes and gardening equipment. After three decades of life as a traditional health foods store, the co-op celebrated the grand opening of Linden Hills Natural Home on Earth Day, 2005.

"Our co-op members were requesting different types of products for at least the last 12 years, so we'd been looking to expand for some time," says Jeanne Lakso, Linden Hills' director of marketing and member services. Co-op customers now have the option of walking across the street to a converted turn-of-the-century house to shop for eco-friendly household goods and supplies. "It's the same philosophy," she says. "Organic when possible, local, fair-trade, recycled or recyclable, nonchemical, ethically produced."

The progression from natural foods to natural home goods might seem, well, natural. But the process of expansion and the shift in product focus brought some surprises—and challenges—for the co-op's board.

"It's been a learning curve," Lakso admits. "Because we came out of natural foods and produce, we were used to the quick turnarounds. After 30 years, we understood seasonality—in January we'd sell more supplements, in October we'd sell more pumpkins. We had to learn more about marketing nonseasonal specialty retail." For Linden Hills Natural Home, that includes cloth diapers, nontoxic paints (mixed on-site), organic bed linens and locally made gifts.

One of the store's strategies was to use the attractiveness of Natural Home's new digs. The house had previously been converted into retail space as a quilting store but kept its homespun charm with a professionally landscaped garden and fountain to greet curious shoppers. The co-op decided to use the front porch as a staging area for a rotating selection of seasonal merchandise during the warm months of the year. During the Minneapolis gardening season, sun hats, garden tools and gloves decorate the porch alongside eye-catching hand-dyed, fair-trade tote bags. Another promotional tactic was the revival of a long-dormant retail tradition, the January "white sale," creatively revived as the "green white sale" with Linden Hills' eco-friendly linens and towels.

Despite the advantages of a quaint location and clever marketing strategies, Lakso says the co-op was surprised during the process of developing a market for itself. "When we began [Natural Home], one of our operating assumptions was that we would have a built-in customer base of shoppers from the co-op and we'd develop from there. That was somewhat the case, but not to the extent we thought. Actually, the opposite happened, where people discovered us because of the range of products we carry, and then were pleasantly surprised to find out that we're a co-op."

According to Lakso, southwest Minneapolis is a particularly challenging environment for marketing natural foods and household goods because it's saturated with competition. "There are more co-ops per capita in Minneapolis than almost anywhere in the country; there are 12 in the greater Twin Cities area; the closest one is just a few miles away, and there's a Trader Joe's not far from that. So it's a very savvy community when it comes to natural food."

Competition from online or mail-order outfits handling similar merchandise is also a factor, but Lakso sees an advantage to operating cooperatively in the local community. "I think what gives us an edge is the co-op structure," she says. "In effect, we have a double bottom line: On the one hand, we're trying to shepherd our member-owners' resources so we're financially stable or profitable if possible, but we're also interested in giving back to the community and selling high-quality goods at a fair price."

An added bonus for the new store was the ability to develop Linden Hills Natural Home from the existing structure of Linden Hills Co-op. "Unlike a lot of specialty retailers, we had a lot of our overhead structure already in place: payroll, training, inventory, human resources, board of directors, publicity. They were already there to support the store, so we're able to sell at a better price than a lot of the ?super-naturals' like Whole Foods or … well, is there anyone else?" Lakso asks, laughing.

A flourishing community of small, local and independent shops in the business district of southwest Minneapolis is one reason Linden Hills Natural Home can co-exist successfully with national chains.

Local walk-in traffic keeps the store bustling, but Lakso says Natural Home is starting to see evidence of a wider market. "Just today we got a phone call from somebody asking directions from a small town in North Minnetonka, about four hours' drive from here, so we do see people that come here to buy things they can't find somewhere else."

After only two years in business, Linden Hills Natural Home seems to have hit on a previously underserved niche in the natural-goods market, with an 18 percent jump in sales in 2007. This has not gone unrecognized by some of the more traditionally oriented merchants nearby. Local hardware stores are now stocking nontoxic, low-VOC paint alongside the standard brands, for instance. But if loyalty to the flagship co-op across the street is any indication, naturals shoppers will keep coming home to Linden Hills Natural Home.

Address: 2822 West 43rd St. Minneapolis, MN 55410
Phone: 612.279.2479
E-mail: [email protected]

Number of co-op members: 4,200
Annual Sales: $7.4 million
Percent of sales to members: 67%
Co-op Retail Space: 5,500 sq. ft. Natural Home Retail Space; 800 sq. ft.

Sales by Department
Both stores combined:
Grocery: 44.8 %
Bulk:?6.8 %
Prepared Foods:?12.4 %
Health and Body Care :?11 %
Produce:?20 %
Natural Home:?5 %

Natural Foods Merchandiser volume XXVIII/number 11/p. 50

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