2022 Skagit Valley Food Co-op Annual Report

Annual Report

Letter from the General Manager

Another year gone by, as they seem to do at a rapid pace these days. Maybe it’s the recent state of the world, or simply, that I’m getting older and time flies. I wish I could say that 2022 was a year free of concerns around COVID-19, but that would not be accurate. Certainly, some of the more acute challenges due to the pandemic have lessened. We are no longer working against the massive amount of staff testing positive for COVID, but instead, we are dealing with many longer lasting implications as a result of the pandemic. We have seen a dramatic increase in the cost of all food purchases, in addition to unreliable sourcing of food items, packaging, and equipment. Our team is constantly looking for new ways to source many products that are no longer available through our regular suppliers. The lead time on equipment purchases has been anywhere from two months to one year. You can no longer order replacement equipment on demand like we had grown accustomed to in the past.

One of the biggest challenges early in 2022 was finding people to staff our store. There are many theories as to why people were not interested in working, but nevertheless, finding qualified applicants was slow going. Not only was it difficult to fully staff the store, the demand for good workers required higher starting wages, which in turn, resulted in more wage adjustments for existing staff.

As we move forward, we are struggling on a human level, too. The pandemic took its toll on society and community, and our Co-op was not immune. Many of our staff and their families have been faced with new obstacles such as depression, PTSD, childcare issues, school issues, food insecurity, and loss of support systems. It has been a tumultuous time.

However, it has also been a time filled with much joy and anticipation for a return to some semblance of normal. Our Co-op family has been a means of support and positivity for so many of the staff. Certainly, it has been for me. Our members have also been a jolt of energy and encouragement throughout the year. Skagit Valley Food Co-op is turning 50 years old in 2023! We leaned on those decades of experience a lot the last couple years to get us through.

Slowly, we were able to shift our energy back toward our goals and mission, identified long ago. We are continuing our work to build a local food system that offers our members and shoppers regionally-sourced food they can trust at a fair price. This work is possible because of our dedicated team of employees who embrace our Co-op’s values. And we continue to embrace our employees and strive to pay them the fairest wages. In 2021, we restructured our wages to adhere to the Livable Wage Model, as defined by the nationally recognized living wage calculator, and in 2022 we increased wages again accordingly. We will continue to do so. And while we recognize the cost of living in our area still makes meeting needs a stretch even when earning a prescribed living wage, adhering to the model is a meaningful step that requires a high-level commitment. It also makes us a leader in the co-op and conventional grocery store industry in regard to starting wages.

Sales were strong and significantly above the average growth seen by other co-ops in the western part of the United States. I feel fortunate to have such a talented group of employees to help us satisfy the needs of our shoppers on a daily basis. Unfortunately, the cost of labor, food and packaging, as well as an increased cost of all utilities and services left us short of our targeted budgeted income for the year. But I believe we are on the right track, and we are constantly adjusting and reinventing the way we conduct our daily operations.

I thank you for sticking with us and for allowing us to keep serving you in what is now our 50th year of operation. We are an awesome co-op community made up of a dynamic and powerful group of members and staff, and we will continue to create impact on our local community well into the future.

In Cooperation,

Tony White General Manager

2022 CO-OP BOARD OF TRUSTEES

Britt a Eschete, Member & Community Engagement Committee

Rob Smith, Finance Committee

Brad Claypool, Board Development Committee

Tom Theisen, Board President

Genaro Gomez, Staff Board Member

Tony White, General Manager

Casey Schoenberger, Member & Community Engagement Committee

Kristen Ekstran, Strategic Planning Committee

Not pictured:

Leigha Staff enhagen, Board Administrator

Left to Right:

Let’s start at the beginning... YOU.

The Skagit Valley Food Co-op started as a cooperative natural food store in 1973, and we’ve been connecting people to good food ever since. So what does it mean to be a Co-op? It means we’re a not-for-profit business owned by friends, farmers, and shoppers like you. We have over 23,000 member-owner households, and we do things a little differently.

We operate on a specific set of principles that go beyond the bottom line. We measure ourselves against what’s been called the triple bottom line: financial, social, and environmental performance. In other words, the Co-op is here to take care of our workers, our community, and the planet. And every time you shop at the Co-op, you’re doing that, too.

13,667 Active Member-Owners

178 Employees

128 full time 50 part time

Our cooperative principles ensure we operate differently than other businesses, yet at the end of the day, the Co-op is, in fact, a business, and the bottom line still matters. Remaining financially viable is imperative to stay in business and serve our community. So how did we do? Well, 2022 was another year full of challenges that impacted our profitability.

The financials reflect unprecedented increases on the cost of our inventory and supplies, as well as occupancy costs, like utilities. The frequency and volume of cost

changes made it nearly impossible to keep up with retail price changes needed as a result. The Co-op is still in the process of adjusting prices. Despite these expenditures, the Co-op ended the year with net income of over $200,000, and we returned patronage to our members. While the net income was less than the years before COVID, we are in a healthy financial position and ready to keep serving you.

Skagit Valley Food Co-op Income Statement | Comparison with Previous Year-to-Date

7.33% Sales Growth over Previous Year

$200k + 2022 Net Income

We Love Our People

We've said it before, and we'll say it again: the Skagit Valley Food Co-op is so much more than a grocery store. And the same is true for the people who work here!

Co-op employees are the heartbeat of this organization. They're a group of friendly, energetic people who go the extra mile every day to provide excellent customer service to everyone who walks in the door.

And as an organization, it’s our responsibility to take good care of our people. The graph on the next page exemplifies the loyalty of our team: we have 62 employees who have worked here five or more years. In addition to the opportunity of serving the community, we are proud to offer our employees a number of essential benefits and special perks, including our commitment to a livable wage model.

Employee Benefits

∙ Starting wage of $16+/hr with regular raises

∙ 25% staff discount on almost all purchases

∙ 50% lunch discount on select items (including our famous sandwiches!)

∙ Paid time off

∙ Affordable, high-quality health insurance

∙ 401k matching retirement

∙ Opportunities for training and growth

Livable Wage Model

It goes without saying that our employees are central to who we are and what we do; they’re one of our most important stakeholder groups. In 2021, we evaluated wages across the organization and re-committed ourselves to staff by adopting a livable wage model.

While there are a few livable wage calculators, livable wage is understood to be one that allows workers to fully pay for basic needs. We used information from MIT’s calculator along with a calculator provided by National Co-op Grocers to enter data points related to costs for housing, telephone, heath care, and other household and personal expenses, specific to our region. We revisited the model again in 2022 and will continue to do so year-over-year to ensure all employees are earning a livable wage.

$5.8m Total Wages

Livable Wage

$14.49

Washington State Minumum Wage

$47k 401k Matching

$50k Profit Sharing $15k Holiday Gift Cards

100% of staff

$16.00+ SV Food Co-op Minimum Wage

$251k Total Staff Discounts

$35k Shift Lunches

$216k Staff Groceries

Staff Discount

One of the many perks of working at the Co-op is the staff discount! Employees save on groceries and get 50% off shift lunches. Half-off a Co-op sandwich and cookie? Yes, please!

For years, the staff discount was split into 2 tiers based on hours worked: 15% and 25%. There were also some select items not included in the discount. In an effort to encourage even more employees to shop in the store, all employees* save 25% on all items in the Co-op. *does not apply to staff who average <15 hours/week.

STAFF PROFILE

Baiyu Mukai

Cashier | Employee Since 2005

If you’ve been through Baiyu’s line you know he’s a numbers person. As of Tuesday, May 2, 2023, it was Baiyu’s 1395th day working at the Co-op.

“I often wondered why I had started counting my days working at the Co-op while I never did so at any other jobs I had in my long work life. Maybe the reason was that I was not sure how long I would be working here. Surprisingly, I feel quite fortunate that Bev Faxon hired me as a cashier. She also gave me a forum of writing 47 articles in the Natural Enquirer.”

Baiyu enjoys the interactions with people who give him a lot to think about.

Favorite Co-op Item: organic produce which his wife makes into beautiful meals!

The Co-op’s Award Winning Deli + Bakery

We make food right, and we make it right here! An in-house deli and bakery is as local as it gets. The Co-op Deli opened in 1988, and we’ve been churning out healthy, delicious, hyperlocal food ever since. We’re proud to put the Skagit Valley Food Co-op name on hundreds of foods we handcraft in our kitchens using fresher-than-fresh ingredients: dips and dressings, hummus and hand-cased sausages, soups and salads, pizzas and pastries, and drool-worthy deli sandwiches. If we made it, you know it’s good, and you know the ingredients are some of the best.

585 Local Companies Producers + Makers

And while the Deli faced significant changes during COVID, including limited seating and the closure of our hot food and salad bar, we were still able to provide amazing food to our community.

With the reopening of services and the dedication of our customers, the Co-op sold $2.6 million of our very own handcrafted items in 2022, including deli food, coffee, ice cream, meats, and baked goods—a significant contribution to the $9.4 million total in local sales for the year.

40% Local

$9.4m Local Sales

$23m Gross Sales

Local Companies We Love

Supporting local farms, producers, and makers is our pride and joy. Partnering with our friends and neighbors is a big part of what makes the Co-op so much more than a grocery store. In fact, we work with nearly 600 local businesses, farmers, and artisans. When you shop at the Co-op, not only do you put your hard-earned dollar back into the local economy,

you support the dreams of real people who live here and reduce your carbon footprint, too. It feels good to shop local. It feels even better to shake the hand or give a high-five to the folks who grow our food, make our soaps, illustrate our greeting cards, and happen to live just down the road.

Olympia Coffee Roasters Olympia, WA

This coffee improves lives! We're delighted to embrace yet another opportunity to partner with a local company with shared values. The goal is to provide high quality coffee, sourced with the highest standards of fairness and equality to Co-op customers and community. Together, we are creating a unique coffee experience, from seed to sip and every touchpoint along the way.

Olympia Coffee is a Certified B Corp committed to Fair For All, a set of standards designed to create a better life for farmers, staff, and customers through coffee. In 2018, Olympia Coffee became the first roaster to ensure that 100% of their coffee is Fair For All. The benefits of Fair For All include: better pay (more than double the Fair Trade rate for all coffees), transparency, living wage, farm workers safety, continuous improvement, and highest quality (OCR only purchases coffee with quality standards of 85 points or higher according to the Specialty Coffee Association’s cupping standards). We now serve Olympia Coffee in our Deli, and you can find their exceptional beans in the coffee aisle.

Tortillas Con Madre Lynden, WA

New to the Co-op in 2021, Tortillas Con Madre’s goal is simple: prove to you that not all tortillas are created equal. With a simple 5-ingredient recipe that started in the family kitchen of Lupita Nava, Tortillas Con Madre is an entirely family-run operation based in Lynden. “Con Madre” simply translates to “with mother” in Spanish, and for Lupita, sharing her recipes and creating her family-run business was all done to honor her mother. If ever there was a way to honor your mom, sharing your family heritage with the community is a pretty wonderful way to do it.

Recipes for their tortillas have been passed down from one generation to the next, allowing the family to perfect their simple, but high-quality product. Made without preservatives or artificial flavors and colors, their small-batch tortillas are USDA-Certified Organic, Non-GMO, and vegan-friendly. They’re also packed full of omega-6 and -9, thanks to the pumpkin oil in their recipe. Along with the pumpkin oil, the only other ingredients you’ll find in these tortillas are wheat flour, water, sea salt, and non-aluminum baking powder. That’s it. And that’s what makes Tortillas Con Madre so special: their simplicity.

Organics

$600k Organic Bulk Sales

Like you, we love good food.

We believe good food is defined by more than just taste. Good food is good for our health, our planet, and our community. When you shop at the Co-op, you can trust that your food is real.

The Co-op has always placed an emphasis on organics, and you’ll find thousands of organic items throughout the store. As the first produce department in Skagit County to be Certified Organic, we’ve been leading the charge in organics since 1973 because we believe healthy food matters, and so does the way it’s grown. Choosing organic protects people, pollinators, and this beautiful place we call home.

$350k Organic Meat Sales

What are the benefits of eating organic? Lettuce count the ways! Organics look out for the health of humans, animals, and the environment by avoiding chemicals, like toxic pesticides. You can shop easy knowing your food is safe, and that the people producing it aren’t being exposed to harmful substances either. When you shop organic, you’re also supporting sustainable practices that conserve water, reduce soil erosion, increase soil fertility, and protect the future of food and farming for generations to come.

And remember! Eating organic is the very best way to avoid GMOs.

$230k Organic Deli Sales

$3.6m Organic Produce Sales

$3.7m Total Produce Sales

$3.6m ProduceOrganicSales ~37% Local Produce Sales

FEATURED LOCAL FARM

Produce

Skagit Valley is home to some of the best farmland on Earth. Yes, on Earth. From the best farmland in the world comes some of the best food in the world, and you can find it in the Co-op. With over 80 crops of commercial value on about 75,000 acres of Skagit farmland, you’ll experience the bounty in our backyard every time you visit.

Say it with us: local farmers rock! They work hard to grow food the right way because it’s their passion, and because it’s the right thing to do. We partner with dozens of local farmers to bring you fresh, organic produce straight from the farm, every. single. day.

Waxwing Farm

Mount Vernon, WA

Meet Arielle Luckman and Taylor Barker, two young, fi rst-generati on farmers who are farming on organic farmland right here in Skagit Valley – a few acres just two miles from the Co-op. While neither Arielle nor Taylor grew up on a farm, they both found their passion for farming through various jobs and life experiences. The two met while working at Rabbit Field Farms. It was then that they made the decision to get into business with one another.

While Arielle is the marketi ng, social media, and bookkeeping wizard for Waxwing, Taylor manages the day-to-day fi eldwork. At the Co-op, Waxwing stocks our shelves with everything from the sweetest, most poppable cherry tomatoes to bright and beauti ful rainbow chard. In additi on to supplying us with some of the best produce in the Valley, they also have their own honor-system farmstand where you can pick up some super-local produce grown just footsteps away. And if you’re all about trying all the fruits and veggies, Waxwing also off ers a seasonal CSA to keep you stocked up, all year round.

In 2022, the Co-op sold nearly $1.4 million dollars in local produce! Thank you for supporting our local farmers.

17.1% Charlie’s Produce

Produce Purchases

51.6% Organically Grown Co. (OGC)

22.8% Farm Direct

1.6% Other

6.9% Caruso Produce

Concern for Community

One of the 7 Cooperative Principles, Concern for Community, is a pillar of our Co-op. Beyond providing a vital service as a community-owned grocery store working with other local businesses and farmers, we’re also committed to giving back through a number of community giving programs. Together with your help, we donated thousands of dollars to over 60 non-profit organizations whose missions align with ours by making Skagit a better place to live, eat, and be.

$35

k Donated

On the 4th Friday of every month, you shop, and together we give 4% of the day’s sales to a local non-profit organization.

From school gardens and community kitchens to homeless outreach and the preservation of Skagit farmland, what you put in your cart plays a big part in giving back!

64 Local Groups Supported

$73

k Donated in 2022

Skagit Fruit & Veggie Prescription Program

2022 kicked off with the Co-op’s participation in the Skagit Fruit & Veggie Prescription Program (Skagit FVRx)! Coordinated through United General District 304, Skagit FVRX is a free, year-long healthy eating program that supports families with vouchers (FVRx Bucks) to buy fresh fruits and vegetables, along with supporting nutrition education and connections to local resources for healthy eating and active living.

Skagit FVRx takes a new approach to helping people lead healthier lives by providing access to nourishing foods and supporting people on the path to well-being. With Skagit FVRx, United General has partnered with PeaceHealth and Sea Mar clinics in Skagit to provide alternative approaches to managing diet-related chronic conditions such as diabetes and hypertension. When given the power to buy and eat more fresh, healthy produce, individuals are able to prevent, and in some cases, reverse risks for chronic disease.

Eligible participants receive prescriptions in the form of paper vouchers called FVRx Bucks that can be used to purchase fresh fruits and vegetables at select stores. The 2022 program ran from January through December and provided up to $150 in FVRx Bucks per month ($30 per month per person in the household) along with helpful nutrition information and easy recipes.

As part of our goal to provide good food at a good price and increase healthy food access for everyone, we were proud to be one of the places Skagit FVRx participants can come to find fresh fruits and veggies.

Giving Big for Ukraine

Amy Sible is the Co-op’s Mercantile Manager, and she celebrated her 13th Co-op work anniversary in June. It should be no surprise that her love language is gift-giving—there’s a reason Mercantile has been voted Best Gift Shop in Skagit. Amy carefully selects items in Mercantile with you, and your gift recipients in mind. She also doles out amazing freebies to fellow employees and contributes to online, in-store, and staff giveaways with great enthusiasm. And so, this next sentence shouldn’t surprise you either: “Amy connected with friends, family, co-workers, and Co-op vendors to donate over $10,000 worth of supplies to Ukrainians in need.”

When the war in Ukraine began, she wanted to help and began asking others to chip in. Donations poured in from many of the brands that the Co-op works with, including Smartwool, Darn Tough, Maggie’s, and Vim & Vigr socks, Norpro can openers, Aloha Bay and Goodlight candles, Peepers reading glasses, and Kikkerland rain ponchos, lights, and cutlery. One of the sock brands we carry, Socksmith, sent a heartfelt email to Amy about their intent to help and ended up donating 5,000 pairs of socks! Additionally, Co-op employees and Amy’s friends and family all came together to give tourniquets, survival kids, first aid supplies, tactical knee pads, tents, sleeping bags, personal hygiene, protein powder, baby food, headlamps, and lanterns on their own dime.

$7.7k

Donated

96k Paper Bags

~140 Trees Saved

Tokens for Tomorrow is our longstanding Bring-Your-Own Bag program. Implemented long before the new Washington State plastic bag ban, we encourage shoppers to bring their own bags by rewarding their commitment to reducing waste with a token worth 8¢ to give back to a local organization.

Shoppers diverted nearly 100,000 bags from the landfill, and we donated over $7,700 to groups throughout Skagit!

The Return of Connection

In 2020, the world changed, and so did the way we interact with one another: social distancing created a tangible divide and a longing for community. While the Co-op halted its events and closed our community rooms, the store remained open, and we moved forward and tried to fulfill our commitment to education and engagement as best as possible with a series of virtual Community Conversations. These virtual events held via Zoom were well attended and proved to be a great way to connect and learn with our members and community. We hosted a number of these conversations in 2020, 2021, and 2022 with topics ranging from local food security and the true cost of food to the future of farming in Skagit Valley to informative and interactive Q&A sessions with our GM, Tony White. The Co-op community rooms remained closed to the public in 2022, but we were elated to start sprinkling in a few in-person events. In April, our Outreach team made a butterfly-filled appearance at the YMCA’s Healthy Kids Day – the first outreach event in over two years. Seeing tiny hands reach for a giant Fair Trade banana was a delight! Hearing folks speak such positive things about our Co-op filled us with pride. We also brought back Bike to Farm, our annual tour of local farms on bicycle! An indication of the desire to get out in the world and play, the 9th Annual Bike to Farm drew a record-setting attendance. 35 helmetwearing, carrot-crunching Co-op lovers set out to visit Skagit Flats, Ralph’s Greenhouse, and Living Rain to get a real feel for farming in Skagit Valley.

375 Earth Day Trees

In celebration of Earth Day, the Co-op gives out hundreds of free trees for customers to take home and plant. In 2022, our earth lovers were able to choose from Western Red Cedar, Noble Fir, and Oak trees.

Banana Cards

The Co-op looks forward to reopening our community rooms, resuming workshops, and spending more time out in the community than ever!

We’re not monkeying around! We want kids to experience a real fruity snack while parents shop. Kids 10 and under get a free piece of organic fruit at every visit with a banana card!

2,000 Pounds of Free Fruit

Our 49th Year of Cooperation

At the close of another year, the Co-op continues to be healthy and profitable, despite the ongoing challenges brought on by the pandemic. We are a resilient business, and this has served us well. We are poised to provide great healthy food for decades to come.

To help ensure continued success we have created some new roles within the organization to strengthen our retail operation and make your shopping experience an even better one. I am excited to have hired Michael Marques as our first ever Operations Director. We first welcomed Michael to the Co-op as the Cashier Manager in July of 2020. In his new role, Michael has been developing his retail skill set and working with Department Managers on honing their department’s operations, as well as addressing daily issues as they arise. We have also committed to giving all of our hardworking Department Managers more support by hiring department supervisors to help run their departments. Hiring supervisors has allowed for greater coverage, relieved some of the daily stress associated with being a department manager, and created more opportunity for growth for individuals and our organization.

Last but not least, in August 2023 we will celebrate our 50th anniversary! How amazing is that? We hope you will join us in celebrating all year long!