Organic food has grown from a niche business that once appealed mostly to “health nuts’’ into a booming mainstream industry with $40 billion in annual sales nationwide. But one of the original purveyors of natural groceries in the Boston area isn’t reaping any of the profits.
In fact, sales at Harvest Co-op Markets, with stores in Jamaica Plain and Cambridge, are down nearly 40 percent from 2011 — to about $11 million — and the co-op is losing $30,000 a month. The situation is so dire that Harvest sent a plea to its 3,600 members, urging them to spend more on groceries.
“Without more cash on hand soon, Harvest will struggle to make payments, repair equipment, or invest in future of the business,’’ the co-op said in its letter to members. “There’s no way to sugarcoat it. This situation is serious, which is why we’re appealing directly to you — Harvest’s member-owners — for help.’’
Wynston Estis, the co-op’s interim manager, said in an interview that unless business improves, Harvest could close.
A big part of the problem: Organic and locally sourced foods, once hard to come by, are easy to find at any supermarket. And the options often are more convenient, cheaper, and varied than what a typical co-op offers.
“Membership has been stronger in the past,’’ Estis said. “There are a lot of services in the market here.’’
It was dramatically different in 1971, when supermarkets were largely filled with processed and frozen foods, and iceberg lettuce was about as exotic as it got in the produce aisle. That’s when the Harvest Food Cooperative was formed by a group of health-conscious people at Boston University. The idea was to save money and eat better by purchasing grains, produce, and other food in bulk. To defray costs, members had to volunteer their time to help buy, organize, and sell the co-op’s goods.
Before long, Harvest grew into a food store with cooking classes, a recycling program, and a small paid staff to complement members’ donated hours. It prospered and eventually moved into two retail locations in Jamaica Plain and Cambridge. Today, the volunteer worker program is long gone, replaced by 45 full-time and 25 part-time employees in the two stores.
Perhaps just as important, the social fabric integral to spirit of Harvest has frayed. The calender of regular social events that longtime members looked forward to is sparsely populated — the co-op’s online “News & Events’’ section for May featured a pre-Memorial Day Cookout, a members forum, and a listing seeking a new manager for the organization.
Estis said she’d like to host social events and classes at the recently renovated Jamaica Plain location as a way to generate member interest.
“As just a food store, the co-op doesn’t make a whole lot of economic sense,’’ said Adam Frost, who has been a Harvest member for more than 20 years. The computer technician remembers an idyllic, vaguely European cooperative experience years ago complete with yoga classes and Cinema Coöp film screenings.
Beside the fact that organic goods used to be harder to come by, Frost said, Harvest for decades could rely on customers to continue coming out of camaraderie and a sense of loyalty.
“There was a time when the food co-ops enjoyed, in some cases, an exclusive market for natural and organic food,’’ said C.E. Pugh of National Co+op Grocers, an industry group that represents about 150 US grocery co-ops, including Harvest.
But that time has past.
“The vast majority of our membership is co-ops that were founded in the ’70s,’’ Pugh said. “Over time, the demand and the size of the market attracted competitors, particularly in the ’80s when Whole Foods and Wild Oats began to add stores across the country and about half the cooperatives went out of business.’’
It hasn’t gotten much better for the remaining co-ops. For instance, in 2012, the Tall Grass Grocery Co-op, a startup West Des Moines, closed a month after a Whole Foods’ arrival. In 2015, the Duck Soup Co-op in Dekalb, Ill., shut its doors after 40 years of operation, a closure members attributed to the growth of the organic movement.
For Harvest, the wider availability of more natural food in mainstream supermarkets has accelerated its downturn. In 2011, a Whole Foods opened in Jamaica Plain. Two years later — with members defecting — rising rents in Cambridge forced Harvest to leave the space it had occupied for 20 years and move to a smaller location across the street. The Korean grocery chain H Mart opened a store in the former location, bringing even more competition to the neighborhood.
According to the organization’s financial documents, both co-op stores generate about the same amount in sales, but the lease for the larger Jamaica Plain store is $25,000 a month — $10,000 more than rent at the Cambridge Harvest.
At a Harvest member forum in April, participants discussed waning member involvement, and what they said was lack of transparency from the co-op’s board of directors. Prior to the meeting, the board hadn’t fully disclosed Harvest’s financial woes to them, members said.
“Perhaps it’s time we end the liberal charade,’’ one said. Another added, “I only come into the store if I really, really have a need for bulk grains or spices.’’
Stuart Reid, executive director of Minnesota-based Food Co-op Initiative, a nonprofit that provides business services to cooperative startups, estimates the number of retail food co-ops in the United States today at about 300.
“They’re all fighting the same battle to keep money in the community,’’ Reid said. “We [co-ops] don’t have investors, so most of the money is from people in the community.’’ Opening a new co-op, he said, takes $2 million to $3 million.
But some co-ops are managing to buck — or at least fend off — shopping trends. There are still eight food co-ops in Massachusetts, with total revenue of $62.5 million in 2016, according to the Neighboring Food Co-op Association, a network of 35 co-ops across New England. And with less competition than Harvest faces in Boston and Cambridge, the River Valley Co-op in Northampton and the Franklin Community Co-op in Greenfield have seen steadily rising membership over the past five years.
There also are also a few startups in the works, including the roughly 600-member Dorchester Food Co-op, which is raising funds in hopes of opening a store on Bowdoin Street in Dorchester in 2019. Darnell Adams, project manager of the Dorchester co-op, says it needs $1.85 million to get up and running in a part of the city where healthy foods aren’t that easy to get.
“In terms of what co-ops bring to a community, outside of having a viable store, there are also things that are of vital importance to people who live in the community,’’ Adams said. “That means that the co-op is a part of the community.’’
$11.5m
Sales at Harvest Co-op Markets in 2016, down nearly
40%
from $17.1m in 2011.
Shelby Grebbin can be reached at shelby.grebbin@globe.com.
