From the General Manager...

Editor's note: This is a reprint of Dan Foley's Annual Report to the Membership.

Lots of great things happen at the Wedge. Smiling babies sip smoothies in shopping carts full of delicious organic food. Old friends stop to renew their connections. John Palmer, a combination of Santa and free food, offers samples. Former members often write to say how much they miss the Wedge and wish there were one where they now live.

A visitor from New Mexico bought 24 loaves of our gluten-free bread to get her through until next year.

A couple visiting from Germany said the Wedge would be a reason to move to Minneapolis. We've got a fine staff of friendly and knowledgeable people who try to make everyone's shopping experience a good one.

This year we signed up our 10,000th member, a milestone in our growth. Last fiscal year's sales were over 25 million - 22.655 million at the store and 2.72 million at Co-op Partners - our wholesale operation. Retail store sales to members exceeded 70%, a new high. We now have over 250 employees. The Wedge is still the largest consumer owned single store natural food co-op in the country.

We made one significant change on the sales floor this past year. Our Health and body care department had fixtures from our first expansion project in 1992. Last spring we had a complete set of oak cases, counters and wall shelving designed, built and installed.

Our bakery, which was constructed in 2001, has grown and matured as a department. We now have six full time bakers producing European-style artisan breads, both sourdough and yeasted pan breads, excellent croissants, Danishes, plus new gluten free bread that has been a big hit with our gluten intolerant customers.

We have had four changes in our management team this past year. Since I hire department managers, these changes have made for a particularly challenging year for me, because good managers are difficult to find. As the Wedge grows, the demands of our management positions become more complex. We have new managers in Health and Body Care, Human Resources, the Deli, and at our warehouse, Co-op Partners.

We are losing two very long-term managers. Our outgoing Human Resources Manager, Debra Gagner, has been at the Wedge since 1990. I hired her as a cashier. She became Front End Manager a year and a half later. A year after that she became HR Manager. She created the position and the department from scratch, and did a wonderful job of growing the department over the years, eventually adding a full-time assistant and full time payroll/IT position. Her work as HR manager was one of the key factors that enabled us to handle our rapid growth over the past ten years. She created a culture of fairness, support and accessibility.

Debra earned the respect and admiration of the regular staff, supervisors, department managers and myself. We always felt that she had the best interests of the co-op and fairness to our staff foremost in her mind. We will miss her.

The other long-term manager who is leaving is Edward Brown. I hired Edward in 1990. He had a vast amount of knowledge and experience in the world of produce and an ardent love of cooperatives. He quickly righted a floundering department and made it the best produce department in the Upper Midwest. Edward was always competitive and entrepreneurial. He loved to be the first in town to have berries, peaches, dates - whatever it was, he took delight in being the first or getting the best or an exclusive. He took pride in the quality of the produce and the caliber of the staff. Edward's enthusiasm, drive, entrepreneurial spirit and love for co-ops will be missed.

In 1999, Edward convinced me that we needed to start a wholesale produce warehouse. That warehouse now supplies nearly 100% of the organic produce sold at the Wedge. Last year, sales to other co-ops totaled almost $3 million. The warehouse, which employs 18 people, also stores products and materials for almost all the departments of the Wedge. It is now an indispensable part of our infrastructure. I expect warehouse sales to continue to grow because we have a great group working there.

Last winter Sarah Zaug (then Human Resources assistant, now HR manager) submitted an application for an award to the MN Psychological Association. She led us through a lengthy evaluation process and a month later we were selected to receive their award for a Psychologically Healthy Workplace. The Minnesota Psychological Association recognizes organizations that demonstrate concern for employees' well-being and foster a positive work environment.

Employees are the most important resource of the co-op. This award affirmed that we have achieved a measure of success in creating a good place to work. We know that we have to work hard to maintain what has been created. There is still more work to do, and there will always be new challenges.

There are exciting developments on the national level. There are currently about 300 natural food co-ops in the U.S. Total sales for these co-ops are $800 million. One hundred of the co-ops belong to regional CGAs - Co-op Grocers Associations. There are four CGAs in the Midwest, three on the West Coast, and two on the East Coast. These nine CGAs account for nearly 550 million in annual sales.

In 1999, the CGAs formed a national organization, the National Co-op Grocers Association based on the idea that a national organization could perform certain functions more effectively than regional organizations.

A reorganization plan has been proposed by the board of directors of the NCGA that would create a new structure enabling all 100 stores to function as a "virtual chain" while remaining independently managed and locally owned. These co-ops could negotiate with grocery suppliers and other vendors as one unit. The advantages in terms of better prices could ultimately be in the millions of dollars. These savings could fuel the development of numerous products and services that we are all hard pressed to produce at the store level or regional level. This could mean savings on food costs, credit card fees, telephone bills, insurance, better staff training programs, co-op education,and marketing programs.

The opportunities for greater purchasing power and the efficiencies from economies of scale are really exciting. This can make the cooperatives stronger and better competitors. It could take things to a whole new level. The potential here is enormous!

Another exciting project is the new food co-op software that our IT (Information Technology) Manager, Tak Tang, created. We named our software IS4C (Integrated Systems for Co-ops). This software program is designed to fit the needs of our coops. Last August a group of co-ops in the Pacific Northwest decided to undertake the cooperative venture of jointly pooling enough money to hire an IT staff person to customize our software so they can use it in all of their stores. They've seen it work and believe it is the best software available anywhere. This is very exciting for us and we're looking forward to working with them on this project!

There are many things that need to happen for the Wedge to be successful and be a good place to buy our groceries. Our staff continues to meet the challenges of selling so much food in so little space. Of all the co-ops in this country, I believe that the Wedge has the most dedicated, hardworking, knowledgeable and talented team of people. Visitors from other co-ops regularly compliment us on the talent of our staff and the professionalism of our organization.

My thanks to the staff for their hard work, good service, expertise, and co-operation. My thanks to the members for their loyalty to the co-op and for their support, and, my thanks to the board of directors for the numerous meetings and long hours they have put in this past year. It was a very busy time for them and they worked very hard. I appreciate and value their commitment to making the Wedge Community Co-op a success.

-Dan Foley, General Manager