Despite the unprecedented challenges and uncertainties of 2021, last year saw several examples of co-ops achieving significant success through reinvestment in their stores — from newly formed co-ops to expansions to the opening of additional stores. Here, as part of an ongoing series, are a few examples of co-ops that completed successful onsite expansion projects in 2021.

Sioux Falls Food Co+op, Sioux Falls, S.D.

The story of Sioux Falls Food Co+op’s (SFFC) expansion is literally one of a co-op rising from the ashes. When a store fire in 2014 forced SFFC to relocate into a former video store, few people would have guessed that in a matter of years the co-op would be successfully completing a major expansion.

SFFC’s recent $2.5 million expansion project more than doubled the size of its existing store, from 4,000 square feet to 8,200 square feet. In 2018, the co-op started preparing for the expansion, which culminated with a grand opening in July 2021.

To finance the project, a member capital campaign raised $1.3 million in newly issued preferred shares and rolled over member loans that had originally been loaned to the co-op after the fire. SFFC secured the rest of needed capital from their local credit union with a USDA-backed loan, the first of its kind in South Dakota.

The expanded physical space had several new benefits. A new refrigeration system has reduced electricity use in aggregate and allowed a switch to a more environmentally friendly refrigerant. The co-op’s new seating area allows it to host classes, events and tastings and grow its outreach offerings. And to reach new customers, the added space has enabled SFFC to add more budget-friendly labels, additional space for Co+op Basics items and more choices in staple food items.

SFFC expects to see membership increase by 35% to 1,500 within 24 months of the expansion and increase sales by 40% to $5 million in the next 36 months.

The expansion has had a positive impact on the Sioux Falls community, as well, including living-wage job creation, increased sales of local products, and educational opportunities. “We went from 22 employees to 34 and growing,” SFFC General Manager Patrick “We increased sales of local products — our number of local vendors has gone from 82 to 90 and growing. Our local sales are up 22% over last year, and we plan to focus heavily on local in the coming years.”

Throughout the project, SFFC worked closely with NCG Store Development.

“[NCG] provided a service that we found invaluable,” said Sayler. “In fact, our project had no chance of getting done without them. They were there to provide specific services at all the of the major milestones of the expansion.”

Friendly City Food Co-op, Harrisonburg, Virg.

After starting up in 2011, Friendly City Food Co-op (FCFC) began planning for a new expansion in 2016. After a few fixture plan changes, construction started in June 2020 amid the pandemic, and FCFC completed the 2,000-square-foot expansion in spring 2021.

“We decided to move forward with the expansion in the middle of a pandemic and lock downs,” Friendly City General Manager Steve Cooke said. “Our small 4,600-square-foot sales floor would limit our capacity, and we expected sales to be off anyway, so why not grow our footprint, and use the down time to do the hard work of construction?”

NCG Store Development advised on a lease extension that added term to cover the length of assets and loans, secured $120,000 in landlord investment, additional signage and increased control over neighboring uses. NCG also developed a favorable financing plan using the Federal Healthy Food Financing Initiative (HFFI). The project had a local angel investor and was financed with member loans, as well. 

“Lease negotiations with [NCG Store Development Director] John Guerra and our local attorney got us a better lease with financial support from our landlord to pay for the parts of construction that will remain with the building after we are gone,” Cooke said.

“NCG was also very helpful in the phasing project to keep assortment intact during the remodel and plan adjustments and equipment reselection during the pandemic,” Cooke added. “Planning out the potential phasing, and fitting the project to our budget, helped us achieve a project that will allow us to grow sales and improve shopper satisfaction.”

Since completion of the project, Friendly City has seen significant sales growth (averaging over 25%), along with a broader mix of products — both from new and existing vendors. Additionally, the co-op’s cost plus pricing from UNFI went down slightly due to the larger volume at which they’re purchasing. 

Cooke said that membership numbers have also increased due to Friendly City’s capacity to better serve the community. “Local residents are noticing and hearing from their neighbors that this is a good place to shop. Some of that is related to our being a safe place to shop during the pandemic.”

Cooke said he has been continuously inspired by the support of the community. “Throughout everything, our community rolled with the changes, and encouraged us,” he said. “Even when we were resetting the whole store, moving all the gondolas, and shelves were empty with parts of shelves and uprights strewn all around.”

Just Food Co-op, Northfield, Minn.

Just Food Co-op had been discussing expansion for years but had found difficulty in executing a plan. Since its startup, the co-op had slowly acquired adjoining spaces in their building, though not added retail space. NCG Store Development provided early guidance on the scope of the project during costing and phasing. After some early challenges in the budget and fundraising, they started construction on the project in July 2020.

Sherri Meyers, Just Food’s general manager at the time of the project launch, credited NCG’s assistance with keeping product assortment intact during the remodel. NCG also helped with budgeting and equipment reselection during the pandemic.

“Everyone here knew NCG would do what was best for the co-op,” Meyers said.

NCG assisted in the renegotiation of an expiring lease to get additional term and $300,000 in landlord investment and control of their shared parking lot. With the growth, every department received much-needed additional square footage, with the entire sales floor growing from 4,000 to 6,000 square feet.

The most significant additions included a completely revamped deli and a new customer seating area. The co-op refaced the exterior with new signage and a community mural. Just Food celebrated the completion of the project with a grand reopening in May 2021.

Just Food’s sales are above projection, and they are once again growing sales that had been flat before the pandemic, with weekly customer transactions between 800 and 900 over last year.

“It’s a strong indication that our shoppers are coming back from the construction, pandemic and supply chain challenges that we experienced last year,” Just Food Co-op’s current General Manager Luke Schell said. “Overall, a very warm and inviting shopping space was created for shoppers and staff to enjoy for years to