Bi-Rite Market Poster Child for How to do “Small Food”

U.S. grocery retailers are looking to Sam Mogannam, owner of Bi-Rite Market in San Francisco’s Mission District, to stay up to speed on the trend toward a smaller-scale, personal, community-oriented food experience. Bi-Rite seems to be ahead of the curve on exceeding not only consumer demand for more locally produced, sustainable, fresh food, but consumers’ desires to learn about where that food comes from and how it is produced. As opposed to the specialty food store business-as-usual of keeping successful trade practices under wraps, Mogannam has the surprising habit of welcoming competitors into the store, spreading the market’s influence beyond just the foodie-centric Bay Area.

As San Francisco Magazine notes, “Anyone hoping to do well in the grocery business would be advised to take notice of Mogannam’s actions during his ten-minute morning tour of his store…That relentless editing and a razor-sharp focus on hospitality account for much of Bi-Rite’s extraordinary success—making it one of the most-watched markets in the country.”

Ever since Mogannam took the reins 14 years ago from his father and uncle, sales have grown by $1 million every year. No wonder other retailers want to visit and see what all the fuss is about, especially in an economic time when it isn’t rare to hear about small businesses that are losing that kind of cash per year. Overall, Bi-Rite’s sales have increased exponentially from $1.25 million in 1998 to $13.8 million in 2010.
Bi-Rite now has a family of businesses, with Bi-Rite Creamery & Bakeshop opening in 2006 in collaboration with his wife, Anne Walker, and business partners Kris Hoogerhyde and Calvin Tsay. Two years later, the non-profit 18 Reasons was founded by Bi-Rite, acting as a local community outreach and education center with tastings, classes and dinners that bridge the gap between food producers and eaters. During this time of year, Mogannam makes it a point to cook harvest meals for the staff at 18 Reasons. Staff members are also taken on fieldtrips to local farms and dairies in order to educate them about the market’s products so that they can better converse about the food with customers. Investing in his 94 employees in this way is just one of the many reasons Bi-Rite has come into the spotlight.

Mogannam has been offered many an opportunity to grow the Bi-Rite name, but instead he has chosen to keep it small and continuously improve the business models that are already in place. When seafood sales started to drop, Mogannam wondered if unsustainable fishing practices were the reason. So Bi-Rite made the switch from farmed to wild sockeye and King salmon and transitioned from yellow fin tuna to Pacific albacore. Now seafood sources are all local (aside from one salmon producer in Alaska), staff are educated about the store's seafood sources, and seafood sales were up by close to 30 percent in the past year.

To provide an even more transparent experience for customers, there are samples of produce, cheeses and other items throughout the store, empowering customers to decide for themselves. The array of samples along with the abundant, theatrical deli counter makes the store feel at some moments more like a lively farmers market than a grocery store. This is just the kind of quaint, engaging, friendly environment Bi-Rite has worked so meticulously to create.

Mogannam is hitting the pavement to advance the market’s very first cookbook entitled Eat Good Food and preparing to open the second Bi-Rite location in another section of the city. There are aspirations to construct a 1,000 square foot roof greenhouse where herbs would be grown throughout the year. The current store houses a rooftop herb garden as well as beehives, providing honey that finds its way across the street and into some of Bi-Rite’s ice cream made with local dairy.

Yet another distinct aspect of the business is that Bi-Rite runs its own farms in Sonoma and Placerville which supply produce to the store. Bi-Rite has proven to invest in its suppliers in a way that might seem unorthodox within the larger grocery industry. For example, without being prompted, Mogannam took it upon himself to host a fundraiser for Soul Food Farm, a pastured egg supplier to the market, after the farm burned down in 2009.

While they can’t help every supplier out of a bind, this seems to be a literal demonstration of what Bi-Rite means when they say their mission is to “build community around food.” Mogannam explains this ethos to San Francisco, “We want to prove that a small store can make a difference. That it’s possible to run a food retail operation without relying on what the supermarkets say are all the rules.”