History Part II

The Move to 15th and Mission

In the meantime, the Rainbow Grocery and, particularly, General Store divisions had continued to grow. Indeed they had outgrown the confines of their 2,000 square foot storefront on 16th Street. In 1983, Rainbow moved to a 9000 square foot space on 15th and Mission. Business jumped 68% in the first year at the new site. With this influx of money, workers were able to give themselves their first substantial raise and obtain group health insurance. Another advantage of the move was that it allowed the Grocery and General Store divisions to share the same building, which promoted cultural cohesion. Yet, each division retained it own cash register system, policies, organizational structure, etc. There were even rules restricting workers from being in both collectives at the same time. People got around those rules, of course, but there was little inter-divisional, even little interdepartmental working in that period. Another significant organizational development made in preparation for the move was creation of a Board of Directors, who met regularly beginning in 1982. Prior to 1982, all decisions were made in "Joint Meetings" of all workers from the Grocery and General Store divisions.

Design and construction of the Mission & 15th store was financed primarily with approximately $250,000 in customer loans. Rainbow needed to turn to its customers for financing in part because banks would not lend to a worker collective legally-organized along the lines of a charitable nonprofit; bankers would always ask "but who really owns the business?" Thus, when overcrowding inspired Rainbow to look again for a larger space, the collective acted to re-form as a cooperative corporation (a legal form that did not exist when, in 1976, Rainbow originally incorporated). The change in legal form, accomplished in 1993, finally allowed Rainbow to provide bankers with an answer they could, if not like, at least understand: Rainbow is owned by its shareholders, which are its workers."

For several years Rainbow enjoyed the position of being one of the largest health food stores in the Bay Area. In addition, the dedication and commitment of Rainbow workers was instrumental in establishing some of the earliest standards for Organic Certification as well as in marketing more bulk foods than any other store and selling a wider variety of herbs and supplements.

On to Folsom Street

It was not long before the Mission Street store outgrew itself. Even by 1988, customers and workers were literally climbing over each other to get to products in the store. It was also at this time that stores like Real Foods, Living Foods and Whole Foods were opening around the Bay Area. These spacious, well-lit, clean markets began to influence the way the shopping public perceived health food stores. No longer was the do-it-yourself "hippie collective" the standard model. Shoppers' expectations were formed on their experiences elsewhere. As Rainbow approached the end of its 10-year lease, it was more and more apparent that the space at Mission and 15th was not adequate. In 1992 the store decided to begin looking for a new space. It was four years in the making - locating a space, negotiating a lease, coming up with a design, and finishing construction.

One major factor that helped Rainbow in its move to Folsom Street was the ability to get a bank loan ($1 million from First National) with backing from the city government. The city backed (guaranteed) the bank loan in part because Rainbow would be creating jobs and in part because Rainbow was moving into a then economically-depressed neighborhood, an Enterprise Zone designated for economic development funding. The city also lent Rainbow $400,000 in addition to backing the bank loan.

In order to carry off the planning for and the growth involved in the move, Rainbow undertook further organizational refinement. As part of the move, the Grocery and General Store divisions were dissolved and Rainbow divided into Departments as its basic units; Joint Meetings between the divisions were replaced by Membership Meetings. The Membership Meeting created a Storewide Steering Committee to help coordinate the Departments and overall day-to-day operations hoping to free the Board to focus on the larger financial/legal issues and long-term planning.

All the planning and hard work came to fruition with our opening at Folsom Street on April 25, 1996. As with the previous move, sales skyrocketed (this time 55% in one year). And, the financial success allowed a substantial increase in wages and benefits, and "patronage" distributions in keeping with our new cooperative legal structure. The work force, hovering around 100 workers in the final years at Mission Street, doubled in a couple years following the move. The rapid addition of new members to our community made it all the more important that we preserve and pass on our history - so that we appreciate what came before us and so that we can move forward from a common understanding.

The Health Food Industry Today

The makeup of stores with similar origins in the Bay Area has changed. Interestingly, the natural foods business has become a competitive industry, one that strongly mimics the industrial agribusiness complex against which many of the first community food stores rebelled. Of the other stores from the People's Food System only Other Avenues remains. Noe Valley Community Store and the Inner Sunset Community Store are the most recent to have closed. The Good Life Grocery survives as a privately owned business as does People's Refrigeration and Veritable Vegetable (a distribution warehouse). In April of 1997, Uprisings Bakery closed its doors, sadly signaling an end to an era of locally and independently produced food.

Rainbow's place in this new agribusiness is at times uncomfortable and challenging. We strive to compete with giant chains who falsely mimic our collective structure with "teams and team leaders," although they still maintain oppressive hierarchical structures in the workplace. We are constantly forced to examine the products we buy as smaller local businesses are swallowed up by multinational corporations who may not have the same values as the original owners. With health food becoming part of our national awareness, the lines between "healthy" and "unhealthy" are not so clearly drawn. Herbal remedies are now being mass-produced and sold in pharmacy chains like Walgreens and Rite-Aid, instead of wildcrafted in local regions. Soymilk can now even be found at many local corner stores that typically used to only sell chips, beer and beef jerky. (The opposite is also now true, for unlike in the old days, you can find chips, beer and (vegi) jerky on our shelves.) With the advent of Genetically Modified foods and the lack of government requirements when it comes to testing and labeling, we face even more challenges. And occasionally, certain government organizations decide they want to change organic standards to include practices that we abhor.

Despite these challenges there are enough people who are interested in organically grown and locally produced foods to keep our doors open. We continue to stay true to our mission and hope to inspire others in the realms of good food and cooperative living.

Return to Part I