Real Food, A Noe Valley Saga

"...The day-to-day operation of these natural food markets will provide direct consumer feedback on emerging interests and trends and will help us better serve our core customers. We believe that this retail knowledge and experience will translate into new innovative product offerings for our Company.”

More on the Nutraceuticals site under press releases

"I have pictures taken today (09/24) of demolition work being done on the interior. There was a tear in the brown paper and I witnessed 2-3 workers dismantling shelving and putting equipment in boxes. There was still product on shelves and remember seeing a box of Power Bars. Also, a cash register was sitting in a cardboard box and looked as if it had been tossed there. It was obvious the work being done was under haste. There were no public permit notices anywhere on the front facade of the building either.

"IWW-Scotland circulated a link to your duspute.
Best wishes and solidaity,

Jim Mcfarlane iww-clydeside"

Resolution requesting NLRB, DBI and other appropriate agencies investigate the closure of Real Food Co. on 24 Street in Noe Valley.

031556 [Investigate the closure of Real Food Co. on 24th Street in Noe Valley] Supervisor Dufty

Resolution requesting NLRB, DBI and other appropriate agencies investigate the closure of Real Food Co. on 24th Street in Noe Valley.

9/16/03, RECEIVED AND ASSIGNED to City Services Committee. Sponsor requests this item be scheduled for consideration at the September 25, 2003 meeting.

"The space formerly known as Mikey Tom Market sits empty with a BPM 'For Lease' sign in the window. The greedy landlord has yet to lease out that spot.

Real Foods has brown paper up in the windows with notices stating remodeling is under way. There's no signs of activity however. Another market has been ripped out of our neighborhood leaving us with a handful of corner stores and Bell / Ralph's Market on 24th Street.

I'm feeling a little victimized here and frustrated as well. Is there anything that we, as a neighborhood (and a pretty cohesive one at that!), can do? Seems like Nutraceutical has all the cards. Calls to their 800# today went unanswered. I'd like to get a petition going but we saw how little that did in the Mikey Tom case. It'd be great if we pledged to not shop there unless Nutraceutical met our demands -- like rehiring the same loyal workers, etc... It's nice that the Board of
Supervisors is considering this problem but all it amount to is words basically saying to Nutraceutical "We didn't like what you did. Naughty Corporation!" and that's the end of it.

Unfortunately, what will probably happen is they'll re-open the place under some 'boutique' like setting designed to get more money out of us. The battle that is to be fought, if there is one at all, will take place with our commerce. Let your wallet or checkbook be your artillery.

- Erik"

"Looks like the heat is being turned up on Nutraceutical International, the Utah vitamin giant that sacked 30 employees from its Real Food Co. outlet in San Francisco's Noe Valley and closed the store for up to six months without any warning to customers.

"Federal labor authorities are investigating former workers' claims that they were unlawfully fired because of efforts to unionize the staff. Multiple complaints have been filed with the National Labor Relations Board. "The San Francisco Department of Building Inspection is investigating whether Nutraceutical began remodeling work at the 24th Street store without obtaining necessary permits.

The Board of Supervisors' City Services Committee will hold a hearing Thursday on Nutraceutical's business practices. The full board will subsequently vote on a resolution calling on all relevant agencies to "investigate thoroughly any alleged violations that have occurred as a result of Nutraceutical's actions."

Last, but not least, members of the community will meet Oct. 2 at the Noe Valley Ministry to discuss a unified response to Real Food's closure. Peter Gabel, the organizer of the meeting, said a boycott of the store is possible if Nutraceutical does not rehire its former employees and address the neighborhood's concerns. " complete story

"THE REAL FOOD Company store on 24th Street in Noe Valley closed abruptly Aug. 29, and its former employees have been publicly speculating that the closure was a response to their unionizing efforts. Real Food's parent company, Fresh Organics, a Utah-based corporation that also operates under the name Nutraceuticals, is responsible for the mysterious closure. A spate of posts on Craigslist and Indybay.org encourage customers to boycott Fresh Organics' other Bay Area stores. But people who want to support local growers and small farms may want to find other ways to voice their disapproval..." more

"the SF Board of Supervisors will be taking a look (and presumably voting) on a resolution introduced to the Board by Noe Valley Supervisor Bevan Dufty on 9/16. The meeting starts at 9:30, and will be held in Rm. 263, City Hall. (It may be as late as noon until Dufty's resolution comes up on the agenda.)

"The body of the resolution notes the strange circumstances of the store's
closure; it notes the hardships and inconveniences imposed upon former
workers and customers, as well as the allegations that Nutraceutical
Corp./Fresh Organics has acted in bad faith and has possibly violated of
federal law.

"If passed, the resolution would express the Board's 'disappointment' with
Nutraceutical Corp. in light of the broader circumstances. It would also
request that the "NLRB, DBI, and other appropriate agencies investigate
thoroughly any alleged violations that have occurred as a result of
Nutraceutical's actions."

"The NLRB and DBI (Department of Building Inspection) are presently doing
just that. Still, the passage of the resolution would presumably serve to
draw more attention to and heighten the public's awareness of the nuances of
the situation.

"Those of us who have the morning free will plan on attending the meeting,
and Peter Gabel assures us that he will be bringing out a posse. Naturally,
we encourage people from the neighborhood to join us: a physical presence of
concerned citizens makes quite a statement."

Dear People,
Good luck in your struggle against the lockout imposed by Neutraceuticals.
Pat Murtagh
Winnipeg, MB

NL:

I am in complete support with the locked-out and fired Real Foods workers. What RF-NI management has done to those employees is so detestable that I will NEVER again shop at ANY establishment connected with RF-Neutraceutical International.

An establishment that fails to honor workers is an establishement that deserves no honor--i.e., patronization--whatsoever.

Totally fed up with Enron wannabees,
R. Stockwell

Hello fellow natural foods workers,

My name is Tom Kat and I like yourselves was an organizer for the IWW at a natural food store called TWIN PINES Natural Foods in Cincinnati Ohio. Our campaign ended the same way that your did. With the store closing but the only difference was that we had won representation through the NLRB. Once our negotiations had begun our owners Northeast Co-ops terminated operations at the store. Although we had only 5 employees left by the time this happened, it's a total shame that this had to happen to 30+ employees.

Our campaign ended with pickets at shareholders meetings to bring the CO-op bosses to the table to negotiate severance pay for us.

I surely hope that Real Foods hires back the existing staff. I will make a call to the 800 number that you have listed on the blogspot.

In solidarity

tom kappas
Ohio Valley GOC - IWW

"...you can pass the word on that people who are interested in communicating with former workers and/or participating in any related community events may send their comments to rfworker@yahoo.com."

"...Bill Gay, CEO and chairman of Nutraceutical, commented in a March press release that the purchase of the stores "offers [Nutraceutical] a retail presence in a locale many consider to be the birthplace of the health food industry." He hopes that having direct contact with consumers, rather than selling products through a distributor, will help the company to better serve the community, he said....

"...Kloski [then 24th Street Real Food store manager] also points out that no staff members have left or been replaced because of the Nutraceutical purchase. In fact, according to Kloski, the employees feel more secure in their jobs. "The bills are getting paid faster," he says with a laugh. Also, resources will now be available to make improvements, such as putting in new fixtures, replacing the freezer, and painting the walls.

"...According to him, Bill Gay, Nutraceutical's CEO, is a champion of small businesses and does not want to change anything about the store or its involvement in the community.

"It's an ethical company," Kloski says of Nutraceutical. "Large, but ethical.."

Boycott the new Real Foods in Noe Valley?
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Reply to: anon-16098689@craigslist.org
Date: 2003-09-10, 10:40PM

Has anyone gotten a petition going or similar action regarding the Real Foods store closure on 24th Street?

We signed one a few months back when Mikey Tom was closed because of a greedy landlord http://www.savemikeytom.com.

We're dealing with a large out-of-state corporation who could care less about our neighborhood. What they would care about affecting their bottom line. In light of recent news stating the closure was due to planned unionization, I think the people who shopped there regularly should do something en masse because they won't listen any other way.

it's NOT ok to contact this poster with services or other commercial interests

Open letter to the VP of Fresh Organics and plea for community support

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Reply to: kmrx@earthlink.com
Date: 2003-09-07, 8:00PM

9/7/03

Bruce,

It is one thing that you've abruptly disposed of the services of nearly thirty employees; but unfortunately, there are broader, more fundamental issues at stake here apart from the fact that a number of us currently find ourselves without jobs.

At our most recent store meeting in June, you spoke of the relationships that Fresh Organics enjoys with a number of small-scale producers who are practicing sustainable and organic agriculture throughout the Bay Area. You also spoke of circumventing the so-called middlemen - i.e., distributors such as Veritable Vegetables and Tom's - in order to put more money into the farmers' pockets themselves.

The three stores presently operating under the name of Fresh Organics - 24th St. being the most heavily trafficked, the most profitable by far - have worked in symbiosis with the local, agricultural community over the course of some thirty-odd years, helping to promote the popularity of quality produce cultivated through sustainable techniques. In light of the fact that the 24th St. store has been shut down for a period anticipated to last as long as six months, I am wondering what the consequences will be for Full Belly Farms, Terra Sonoma, and all the others to whom you have at least implicitly committed your support.

I understand that about 30% of the entire volume of produce purchased by the Fresh Organics Produce Company used to go to the 24th Street store alone - a statistic particularly worth noting in light of the fact that, prior to the closure of 24th St., the Produce Company delivered to a total of six stores (including the two Real Foods stores at Polk and Fillmore, which, of course, still work closely with the Fresh Organics Produce Company).

Many of your current or former 24th St. employees are familiar with another pertinent statistic: roughly 35% of 24th St.'s total income has, as a rule, been specifically attributable to produce sales. (The figure more or less holds true at the other stores formerly owned by Jane and Kimball Allen, or so I recall having heard at different staff meetings.)

Granted, if the 24th Street store is to be viable in the long run, then certain improvements need to be made to the store infrastructure and what-not. Those of us who used to work at the store are all too aware of the inefficient refrigeration systems, the chronic plumbing problems, the issues related to the usage of space, etc.. Still, the timing of the remodel seems inoppurtune at best. It's no secret that Stanyan Street may find its doors shut, for good, by the month's end; and, should such an eventuality transpire, it will only serve to exasperate the woes of those farmers whose efforts have been so critical to the success of a mutual endeavor stretching back for more than three decades.

Is there anything you can say that will assuage my concerns? I would venture to guess that your most loyal (remaining) employees and customers feel much the same way as I do; moreover, I hope that you will be able to understand why people are so worried, given the broader back-drop of events.

I am no longer an employee of Fresh Organics myself, of course. Still, I remain a member of the community-at-large to which Fresh Organics claims to be committed - a community that, I believe, stands in support of the local agriculturalists who have helped to build a solid foundation for Fresh Organics' business.

Cordially,

Kim Rohrbach
Former Cheese Buyer
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Fresh Organics, Inc. is owned by Nutraceutical International Corp., which is located at 1400 Kearns Blvd. in Park City, UT. The corporate website is http://www.nutraceutical.com; the phone number is 1 (800) 669-8877

Real Foods 24th St closure - e-mail addresses
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Reply to: see below
Date: 2003-09-09, 2:20PM

Try these addresses to send comments about recent actions by Fresh Organics/Nutraceuticals. sdiaz@nutracorp.com. bremund@nutracorp.com. feedback@nutraceutical.com. The Monk. Noe Valley.

Comments scribbled on the reprinted article, an article that seems to be reposted daily.
Comments include:

"I will not shop here"
"Real Foods: You're Done"
"I will not shop at Real Foods when it Reopens"
"Thanks a lot for spoiling our world and neighborhood. Forget about it!"
"Rainbow - it's worth the trip"
"Bell gets my business"
"No union busting, not in our neighborhood"
"Boycott"
"Former employee says: 'Thanks customer for being wonderful. Please boycott upon reopening"

Notice on the papered window of Noe's Real Foods

DRAMA ON 24TH Street: The Real Food Company, a fixture for the past third of a century at the center of Noe Valley, is near to being no more – or, perhaps more accurately, to being reborn with a new name and a new look. The store closed abruptly the evening of Aug. 29 for "renovation"; most of the staff were laid off and told they could reapply for their jobs in four to six months.

By then the store is likely to have been renamed Fresh Organics and to have become a purveyor of – in addition to the familiar assortment of high-end organic produce and groceries – meat, fish, and poultry. So says Sergio Diaz of Nutraceutical International, the Park City, Utah, company that owns Fresh Organics and that bought up three of Real Food's locations in San Francisco when the original owners sold their interest in March 2002. (The other two locations, one on Polk Street and the other on Fillmore, were bought by a southern California concern.)

The Real Food acquisitions mark Nutraceutical's first foray into retail grocery, and the makeover of the 24th Street store is, in effect, the creation of a template for the freshenings of Fresh Organics' other holdings in the area (the Real Food outlets on Stanyan Street and in Sausalito, along with Tom's Natural Foods on Geary Boulevard) and presumably, at some point, beyond the area.

I wrote last week how the Real Food Co. store in San Francisco's Noe Valley recently fired all its workers and closed abruptly, with no notice to customers.

The popular health-food store's new owner, Utah vitamin giant Nutraceutical International, said the layoffs and closure were due solely to long-planned renovations. But that may not be the whole story.

Former Real Food employees are charging that the actual reason they were sent packing was because the store's 30 workers were planning to unionize.

They claim Nutraceutical shut the 24th Street store because the company was afraid of union activity spreading to its other Bay Area health-food shops. Grievances have been filed with the National Labor Relations Board.

Sergio Diaz, a Nutraceutical spokesman, told me that Fresh Organics, the Nutraceutical subsidiary that purchased three Real Food outlets last year for $2.7 million, had no knowledge that the Noe Valley workers were seeking to unionize.

"Fresh Organics is not aware of any union organization campaign among its employees," he said.

"That's absolutely false," countered Simon Knaphus, a former Real Food worker who said he met with Diaz and another Nutraceutical executive, Bruce Remund, several weeks before the layoffs to present a list of demands from the Noe Valley staff.

"They knew we'd been organizing for months and they knew that we had almost 100 percent solidarity," he said. "We used the word 'union' openly in that meeting."

Jonathan Burkett, another former employee who said he also attended the meeting with Remund and Diaz, confirmed that the workers' plans were made clear to Nutraceutical. "We specifically mentioned union activity," he said.

Diaz did not return calls seeking a response to Knaphus' and Burkett's remarks.

Burkett said he was told by Remund after the employees' demands were presented that the company would hold a staff meeting on the matter by today, Sept. 10.

That meeting will never take place. Real Food workers were told around 9:30 p.m. on Thursday, Aug. 28 -- right before the Labor Day weekend -- that they were all being laid off. Customers were surprised to discover the next morning that the store would be closed for the remainder of the year.

Remund did not return repeated calls for comment. The Noe Valley store's manager, Conal Wildow, declined to discuss anything related to the layoffs.

But Diaz said that "our decision to close the store was purely regarding our remodeling. It was something we've been planning for a while."

Former employees aren't so sure. They note that new shipments of produce, cheese and dairy products arrived at the store just one day before everyone was sacked and the doors were locked.

"I went down there to see that weekend," said Mitch Genlot, one of the organizers of weekly union meetings. "All three compost barrels were full of fresh produce. They just threw it all away."

In fact, Genlot was fired by Nutraceutical on June 26 -- after, she says, management became aware that she was organizing the staff. "They said I had a bad attitude," she told me. "But when I asked for examples, the only ones they gave were from more than two years ago."

A month after firing Genlot, Nutraceutical fired Adriel Ahern, who had been the first to approach other workers about joining a union. "They said it was because of my negative attitude," she said. "They said it was affecting my customer service."

Both women have filed grievances with federal labor authorities.

Former employees I spoke with speculated that Nutraceutical was determined not to let union activity at its most successful Bay Area store spread to other health-food outlets.

Along with Real Food branches on 24th and Stanyan streets in San Francisco and one in Sausalito, Nutraceutical purchased Thom's Natural Foods on Geary Street last summer.

"They always bragged about how much more money we made than the other stores," said Kristin Hornstra, who was among the Real Food employees fired just before Labor Day. "This made people at our store angry because we wondered why we weren't being paid more."

Meanwhile, Nutraceutical is pushing to expand its influence over the Bay Area health-food scene. Gus Vardakastanis, owner of the Haight Street Market in San Francisco, said Nutraceutical offered $1.8 million for his store last year.

"I wouldn't do it," he told me. "They said that if they bought me out, they'd cut half the staff."

Similarly, Art Watkins, co-owner of the Food Mill in Oakland, said he rejected a buyout offer from Nutraceutical several months ago. "They weren't willing to pay what I'd want to sell for," he said.

Joseph Murillo, owner of Pacifica Farmers Market in Pacifica, said he too turned down Nutraceutical's buyout offer when he was approached last year. "They tried to lowball me," he said.

Murillo said he was told by the company that because demand for vitamins is slowing, Nutraceutical believes it can boost sales by controlling more retail outlets.

"That's the reason they gave me for why they want to get into a business they know nothing about," he said. "That's why they're scouting all health- food stores in the area."

Because of its steady profits, Nutraceutical was named by Forbes magazine last fall as one of the 200 "best small companies" in the United States.

Nutraceutical's chief executive, Bill Gay, said in a statement that the honor was due in part to "an ongoing emphasis on operating efficiencies."

"We wish to thank our employees for their dedication and hard work," he said, "and our customers for continuing to support us."

Editor -- Like many other Noe Valley residents, I was surprised to find the Real Food Co. shut as I took a stroll down 24th Street last Sunday. I'd just been in the store on Thursday buying produce, cheese and bread. I have been frequenting the store about once a week since I moved to the area more than a year ago.

Now that I know the truth behind the closure, thanks to David Lazarus ("Real Food Noe shuts real fast," Lazarus at Large, Sept. 3), my surprise has turned to outrage.

It's a pretty shady thing to do to your customers, but it becomes a despicable act when you put 30 people out of work without warning. I'm sick and tired of faceless corporations showing no responsibility to their employees or the community where they operate. They're only driven by profit; everything else being expendable.

Nutraceutical has just lost a customer for good. This is not the way to run a neighborhood business, and I will not support them when they reopen. They've left a bitter taste in my mouth, and it isn't from their organic Gorgonzola cheese.

STEVE CROSLEY
San Francisco

Real Foods: Healthy foods with a corporate smile
Resource Center
Bulletin Board Category: Other
Date: 06 Sep 2003

Documentary needs to be done! Read this atricle titled "Real Food Noe shuts real fast" from sfgate.com: I know one of the first people to get the ax and it wasn't for remodeling. She was trying to help herself and fellow workmates to Unionize. Those who followed got this... How's this for timing: Thirty workers at the Real Food Co. store in San Francisco's Noe Valley were laid off the night before Labor Day weekend. The popular natural-foods outlet on 24th Street will be closed for as long as six months while a more upscale interior is installed and more "gourmet" items are put on shelves. If the Noe Valley Real Food thrives in its reincarnated form, two other branches of the Bay Area chain -- which began as a funky neighborhood shop providing healthy eats for hippies -- will receive similar makeovers. But modernization can be rough. The Noe Valley store's manager, Conal Wildow, said Tuesday that all of Real Food's nonmanagement employees were told Thursday night that they were out of jobs and were handed checks for two weeks' worth of pay. The rest of the story is at: http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/09/03/BU102934.DTL It doesn't end here. I plan on documenting the rest on DV. I'm looking to collaborate with others. Interested? Reply to: docunion@yahoo.com

How's this for timing: Thirty workers at the Real Food Co. store in San Francisco's Noe Valley were laid off the night before Labor Day weekend.

The popular natural-foods outlet on 24th Street will be closed for as long as six months while a more upscale interior is installed and more "gourmet" items are put on shelves.

If the Noe Valley Real Food thrives in its reincarnated form, two other branches of the Bay Area chain -- which began as a funky neighborhood shop providing healthy eats for hippies -- will receive similar makeovers.

But modernization can be rough.

The Noe Valley store's manager, Conal Wildow, said Tuesday that all of Real Food's nonmanagement employees were told Thursday night that they were out of jobs and were handed checks for two weeks' worth of pay.

Customers only found out about the move when they showed up the next morning and found locked doors and a sign saying the store is closed for renovations.

This didn't sit well with Georgia Schuttish, a Noe Valley resident who has shopped at Real Food for the past 17 years, often stopping by daily for fresh produce.

"I've never heard of anything like this," she said. "Not giving your workers any notice and not even letting customers know in advance. You just close one day and say you'll stay closed for six months? That's not the right way to do business."

It's certainly not how Jane and Kimball Allen envisioned things when they opened the first Real Food on Stanyan Street in 1969. Six other Bay Area branches followed over the years, scaled back to a total of five when the Allens decided to sell off the chain last year.

Three of the stores, including the Noe Valley outlet, were purchased for $2. 7 million by Fresh Organics, a subsidiary of Utah's Nutraceutical International Corp., a leading maker of vitamins and nutritional supplements.

The other two were bought by Los Angeles businessman Stephen Hong, who, according to the terms of the deal, shares the Real Food name with Nutraceutical.

Sergio Diaz, Nutraceutical's marketing and sales director, said the company never intended to sack 30 Real Food workers right before Labor Day. It just worked out that way.

Similarly, Diaz said the company decided it would be better to spring the closure on employees and customers, rather than give them advance warning.

"There's no easy way to do something like this," he said. "It was an internal decision, and that's how we did it."

He said the Noe Valley store will serve as a prototype for Nutraceutical's other Real Food branches on Stanyan and in Sausalito.

Nutraceutical produces supplements under a variety of brand names, including Nature's Life, NaturalMax and VegLife. The publicly listed company reported quarterly net income last month of $3.2 million.

Real Food co-founder Jane Allen told me that she had no advance word that staffers in her former store were getting the ax. She still owns the building that houses the Noe Valley branch.

"I heard right after it happened," she said. "I was shocked. It's always been a real good store."

Maybe soon it will be even better. Or if you used to work there, maybe not..