Running a grocery store isn’t about profit for this organization but rather about providing a community with healthy, sustainable food. For all those who say cooperatives are loosely organized, hippie-driven start-ups going nowhere, Rainbow Grocery can prove them wrong. After more than 30 years selling sustainable, organic, and vegetarian food in San Francisco, this one-store business has only bigger plans for the future.

Rainbow is a one-of-a-kind organization. It is a cooperative business, which means it’s member-owned and operated and uses representative democracy as well as managers. But it’s also made up of highly autonomous collectives, or smaller groups that operate exclusively through direct democracy. 

Originally, Rainbow Grocery was a bulk-buying project started by an ashram spiritual community of San Francisco in 1975 to provide members with access to inexpensive, vegetarian goods. Through one of its founders and its main buyer Rich Israel, the organization was linked to the People’s Common Operating Warehouse, a political organization using food distribution as a form of community organizing and political education.

Around that time, many other community food stores opened, but thanks to a location in neighborhoods of San Francisco’s counter-culture youth, Rainbow quickly became the busiest. Rainbow’s founders also attributed Rainbow’s success to its emphasis on service as part of its spiritual roots, its attention to the financial details of running a business, and the store’s reputation for superior product selection. According to the company’s Web site, Rainbow was eager to introduce shoppers to a wide variety of healthy products they might enjoy rather than operating from strict ideological criteria about what people should eat.

Meanwhile, the People’s Food System was becoming increasingly politicized and polarized. Within a few years, the members of the Rainbow collective opted to go it on their own, preferring to focus on the issue of food and food access as a right. It turns out that this decision was a smart one.

In the meantime, Rainbow Grocery continued to grow, moving in 1983 to a 9,000-square-foot space where business jumped 68% in the first year. 

By 1988, customers and workers were climbing over each other to get to products in the store, and stores like Real Foods, Living Foods, and Whole Foods began to influence 

the way the shopping public perceived health food stores. No longer was the do-it-yourself hippie collective the standard model. So, in 1992, the store began looking for a new, bigger space. After four years of planning, it opened its current location on Folsom Street in 1996. As with the previous move, sales skyrocketed, this time 55% in one year.

Working together

For the first few months, Rainbow opened with exclusively volunteer labor, but increasing success enabled it to bring on more paid staff, although people were generally not brought on to payroll until after several months of consistent volunteering. As the staff at Rainbow grew larger and more culturally diverse, the need for more defined organizational relationships increased.

In some ways, Rainbow runs as if it were a union between several smaller individual cooperatives, such as its departments, which include produce, cheese, baked goods, maintenance, and cashiers. Workers in each department are members of that department to become members of the store as a whole, but most day-to-day decisions such as hiring, scheduling, and buying are made at a department level. 

The central decisionmaking body for the store as a whole is its board of directors, which was only created in 1982 and is elected annually from the membership. Board members can be the same people who stock shelves, clean the floors, and work the registers and handle requests for large financial expenditures, review the department income statements, deal with outside contracts and legal issues, and create policies for the store, some of which must be ratified by the membership.

“The essence of what is so rewarding about working at Rainbow is that each member has a voice in the way we operate,” the company reported on its Web site. “We may not always agree on how to solve a problem, but everyone has the chance to formulate policies, create committees, propose new ideas, or effect change. We are a constantly changing organization and are always learning new ways to do things .”

A changing industry

The health food industry has changed substantially since Rainbow was founded, and the organization’s Web site said its 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,” the site states. “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.”

A further challenge is that as health food has moved mainstream, the lines between healthy and unhealthy are not so clearly drawn. Certain government organizations sometimes change organic standards to include practices that Rainbow doesn’t believe in. And the company is especially concerned about the advent of genetically modified foods and the lack of government requirements when it comes to testing and labeling. 

“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.”