By admin 
When I moved to Sacramento three months ago, I was in the midst of a new grocery world. I was no longer surrounded by Midwestern chains such as Jewel-Osco and Mariano’s but instead was seeing names such as Raley’s and Jewel’s sister company, Safeway.
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One spot that stood out upon arrival was Sacramento Natural Foods Co-op. I stopped by the store during my first week in town.
Some of the prices immediately raised the hair on the back of my neck. While I knew the Co-op is not a typical grocery store model given that it is member-owned and tends to work with local growers, I wanted to find out more about how it sources and prices its goods.
I spoke with Brian Munn, president and general manager of the Co-op, to better understand how the store prices its products, how its groceries are different from regional and national chains and what market changes might mean for future prices. I also reviewed the costs of similar products at regional and national chains located in the Sacramento area.
After concluding my reporting, I realized that some of the Co-op’s prices are not that different from the same or similar products carried by Trader Joe’s or Raley’s. And many of the groceries, particularly in the produce aisle, are a lot different from those at regional and national chains.
Here’s a look at how the Co-op operates and what it means for consumers:
Strawberries
Product: One pound of organic strawberries
- Sacramento Natural Foods Co-op: $5.99 on sale from $7.99
- Raley’s: $5.99
- Trader Joe’s: $5.49
Established in 1973, the Co-op has longstanding relationships with the farms it buys its produce from directly. All produce is organic, and most of that product is from California, with about 50% sourced locally — which, according to Munn, is defined as within 200 miles of the store. They aim for and pull the majority of their produce from within 50 miles. The store also owns a 20-acre farm in Yolo County.
When not buying directly from farms, the Co-op relies on organic produce suppliers. Co-op produce might be labeled “various local growers, CA” when it comes from a supplier as opposed to directly from a farm. Consumers also might see produce from neighboring Arizona, Nevada and Mexico. Products from Mexican are shipped in when a fruit or vegetable is in demand and is out of season in California, Munn said.
On recent trips to the Co-op, watermelons were sourced from nearby Terra Firma Farm in Winters and organic red fingerling potatoes came from the well-known Fully Belly Farms in Guinda.
A pound of organic strawberries were on sale, marked down from $7.99 to $5.99, from Monterey County’s JSM Organics — the same price as Raley’s and not that much more than Trader Joe’s $5.49 organic strawberries.
JSM Organics provides strawberries to the Co-op every summer, Munn said, and is preferred over its neighbor, berry giant Driscoll’s.
“It’s a lot more sustainable model and something we like to support,” even if the Co-op’s strawberries are likely going to be a dollar or two more per pound, Munn said.
For the Co-op’s produce, Munn said a customer is guaranteed they are getting a product that is “grown in soil that was taken care of, picked by farmworkers that are being taken care of.”
Peanut butter
Product: Organic peanut butter
- Sacramento Natural Foods Co-op: $5.49 (18 oz)
- Raley’s: $6.89 (16 oz)
- Trader Joe’s: $4.49 (16 oz)
Peanut butter is a staple in many American pantries, a big reason being that it’s so affordable.
When a consumer arrives at the nut butter section of the Co-op, there are some eye-popping numbers at first glance. That’s because the store highlights local producers in the middle of its shelves. As of this week, El Dorado County’s Riverview Orchard almond butter takes center stage at $21.99. The Co-op added labels next to the price indicating that it is a women-owned and California brand.
Unlike most grocery stores, the Co-op does not charge for product placement and, as a result, makes its own decision to place local items on the middle shelf, Munn said.
“We give them a (prominent place) right in the middle, even though people are going to see that and say ‘Sac Co-op is expensive.’ It’s a perception,” Munn said. “And you go to other stores, they are going to put the sale items … right in front of you.”
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Most of the other nut butter products are significantly cheaper and from bigger brands that some consumers may be familiar with such as Justin’s and Once Again.
The bottom row had organic peanut butter priced at $5.49, with no jars left in the aisle before afternoon hit on Tuesday.
Customers won’t find Jif or Skippy at the Co-op because the store does not consider those products “clean,” Munn said. For the Co-op, clean means a product meets the store’s particular standards, which include a long list of items that “are not something we want you to put in your body,” Munn said. He named “bad oils” for nut butter as an example.
Ground beef
Product: one pound of ground beef, regenerative agriculture label and organic
- Sacramento Natural Foods Co-op, regenerative agriculture label: $10.99
- Sacramento Natural Foods Co-op, organic: $18.49
- Raley’s, regenerative agriculture label: $11.49
- Raley’s, organic: does not stock item
- Trader Joe’s, organic: $8.99
Ground beef has been in the news a lot lately because prices have been skyrocketing — but not at the Co-op.
In the last week of August, a shopper could get organic ground beef at Trader Joe’s for the same price as the Co-op’s regenerative agriculture labeled ground beef: $8.99 a pound. Regenerative agriculture is a sustainable farming practice focused on soil health. Some of the goals of regenerative agriculture include capturing carbon in soil and improving water use efficiency.
This week, the Co-op’s regenerative agriculture labeled beef was no longer on sale and back up to $10.99 a pound. Its organic ground beef is much pricier. The organic product is from a California farm, whereas the regenerative agriculture product is from a Minnesota company sourcing from farms in the West, Midwest and Northeast.
“In the meat department, we are really looking for the best product out there. We are looking for agriculture that is a sustainable business, taking care of the animals and taking care of the land as well,” Munn said. “That’s really where a lot of our focus has been lately, on regenerative agriculture.”
Because the Co-op’s supply chain is more diversified compared to some other grocers and the store tends to work with smaller producers, it is not as vulnerable to disruptions such as the war in Iran and the COVID-19 pandemic. The Co-op’s ground beef prices have risen due to inflation, especially with gas prices increasing, Munn said, but, for the most part, the product’s prices have been steady.
Future prices, growth
As with beef, because the Co-op’s focus is on a wide variety of local suppliers, prices tend to go up with regular inflationary costs and less so with the big swings from national and global events that customers may see at a more traditional grocery store.
One example of how the Co-op’s suppliers are more immune from some of the recent price hikes seen by larger companies: Products are often delivered by a pickup truck instead of an 18-wheeler, which relies on diesel. Diesel costs have risen much more steeply compared to gasoline prices since Iran closed the Strait of Hormuz following conflict with the United States and Israel. Even if the Co-op sees sharp price increases from its suppliers, Munn said the store tends to hold its prices and eat the margin until costs level out — or, he said, it gets to the point where they have to keep the lights on and, in turn, raise prices.
Unique to co-op grocery models, all profits are invested back in members and the store. If the Co-op has a profitable year, members are issued refunds.
For next year, Munn expects a roughly 3% inflation rate on the store’s products.
“We definitely are seeing things kind of level out and steady a bit,” Munn said. “It was really volatile over the last two to three years, where we were seeing really sharp increases on a lot of products.” He cited eggs as an example, which were affected by the bird flu.
Beyond prices, the Co-op wants to expand in an effort to reach other Sacramento-area markets. Its flagship will remain, Munn said, but the business hopes to spread the cooperative model.
“This model, being able to be owned by the community, should be in every area of America,” Munn said.
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