Use of local food stores booming in recession

URBANA – During these recessionary times, people may have cut back their spending in some areas, but apparently good food is not one of them, at least in Champaign-Urbana.

When Common Ground Food Co-Op opened the new store in Urbana two summers ago the co-op had 1,700 members. Now it's reached over 2,500, exceeding expectations and allowing plans for expansion. And sales have almost tripled since then.

Meanwhile, over at Strawberry Fields in Urbana, in the last two to three months sales have been ticking upward, particularly in produce and local foods.

"People don't have to sign up (to be members of the co-op) to shop here, so we weren't sure what to expect," with respect to membership, said Common Ground's general manager Jacqueline Hannah.

The co-op was aiming to have 2,100 members (it's a one-time fee of $60 to be an owner-member) by the two-year anniversary of being in the new location on the east side of Lincoln Square Village.

"It was huge," she said of the effect of moving from the Illinois Disciples Foundation building in Campustown.

New members include employees working in the area, students and area residents, she said.

"They get the idea that the community owns the co-op, and they want to do their part to own it and support it," Hannah said.

What's turned many on to the co-op? A lot of people saw the documentary, "Food, Inc.," about the U.S. food industry and were inspired to eat more locally-produced food and support local farmers, she said. Recently the co-op sponsored a screening of the film at The Art Theater in Champaign.

The store currently leases about 3,500 square feet of space and will soon expand into an additional 500 square feet south of its shop. That space will be used for offices, coolers and shelving.

"We're seeing the fastest growth in local food and refrigerated food," she said, prompting the need for additional cooler space.

Whereas a typical grocery store may see 3 percent to 5 percent of its sales from produce and a co-op will do 8 percent to 12 percent in produce, more than 20 percent of sales at Common Ground come from produce, Hannah said.

The co-op now also has the option to lease an additional 6,000 square feet of space mostly north of the store in Lincoln Square. Hannah said owners will start discussing that possibility this fall.

"We're definitely seeing the growth to justify it," she said.

According to the National Cooperative Grocers Association, which has 114 member co-ops in 32 states, sales are up nearly 8 percent in the first half of 2010 compared with the same period last year. Their members' annual sales are close to $1.2 billion.

"Co-ops credit their success to positioning themselves as their communities' ideal source of local, organic and natural foods, provided by a staff that understands and is eager to inform customers about the benefits of these items," said Kelly Smith, director of marketing and communication for the association.

At Strawberry Fields, which sells produce, bulk foods as well as nutritional supplements, the store, which also has a cafe, has seen the food end of the operation grow more quickly than the vitamins and body care section, said general manager Jack Wallace.

"We're seeing people buy more per visit. And we're seeing a lot of new customers," Wallace said.

His theory is that people are cutting back on higher-priced items like vitamins and are eating more healthful foods instead.

The demand for and supply of local foods has been "really kind of exploding," he said.

Strawberry Fields has for years carried produce from Urbana's Blue Moon Farm, but has also added more local food such as tilapia from a south central Illinois farm and chickens raised in Douglas County.

At Natural Gourmet, a health foods store in the Shoppes of Knollwood in Champaign, owner Gay Amorasak said sales have been "holding steady" throughout the recession. Her shop has a cafe and carries some grocery items, but is mostly focused on nutritional supplements.

"There's definitely more interest in organic foods and local foods," she said. Small shops like hers, she said, "have to find niches."

Her niche is gluten-free food and some gourmet food items like breads and pastas and snack foods, she said.

Common Ground and Strawberry Fields actually started as a co-op back in the early 1970s, then in 1974 they branched off as separate organizations, Wallace said – Strawberry Fields as a private business and Common Ground as a co-op. The two were also located close to one another in the area now occupied by the Beckman Institute on the University of Illinois campus.

"We share a lot of the same customers," Wallace said. And he doesn't see the two as competitive but complementary.

"The interest and passion for local foods has had a positive effect for all of us," Hannah said. "Between the farmer's market, us, and Strawberry Fields, Urbana is becoming a hub for local and organic foods."

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