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The Secrets of Bi-Rite Market’s Thriving Business and Community

Rachel Zurer July 6, 2017

When Sam Mogannam graduated from high school, he literally vowed to never be a grocer. Eleven years working in his family’s community market, Bi-Rite, had given him his fill of that. Instead he trained as a chef, traveled the world, and eventually opened his own restaurant in his hometown. The family sold the San Francisco market in 1989, and that was the end of the Mogannam grocery dynasty. Or so it seemed.

Then in 1997, Bi-Rite’s new owner was looking for an out, and Mogannam and his brother Raphael decided to purchase it back. Thus was born — or rather, reincarnated — one of the most iconic community businesses in a town obsessed with the importance of “local,” a mission-driven gathering spot that has become an anchor of its neighborhood and the broader community.

“When we reopened the store,” Mogannam explains, “we brought a chef’s perspective to the grocery world. We built a kitchen into the middle of the store so that we could prepare foods — as a continued expression of my creativity, but also a way to connect with our consumers.”

These days, after close to 20 years under Mogannam’s leadership, the Bi-Rite family of businesses includes two grocery stores, San Francisco’s first organic ice cream shop, a catering company, a three-acre farm in Sonoma, and an affiliated nonprofit community cooking school, 18 Reasons.

We spoke with Mogannam to hear his best lessons on creating a thriving business that’s also a community hub.

Bi-Rite Market at a glance

Location: San Francisco, CA

Founded: 1940; in the Mogannam family since 1964

Number of Employees: 320

Recognition: Forbes’ Best Small Companies in America, 2016

Structure: Privately owned, for-profit

Certifications/Memberships: B Corp, San Francisco Certified Green Business, Good Food Retailers Collaborative, Social Venture Network

2016 Revenue: $45 million

Mission statement: “Creating community through food.”

The Interview

How did you end up doing what you’re doing today? Why is this what’s worth your time?

Sam Mogannam: I fell in love with food and cooking fairly early. Initially, I thought I wanted to be a hotel manager. I couldn’t get a job in a hotel but knew I needed to start getting experience in hospitality, so I started applying in restaurants and a young chef took a chance on me.

It was those first few months in a commercial kitchen that really sparked something in me. I loved the transformative power of taking raw ingredients and turning them into something that somebody else is putting in their body, and seeing the transformation that continued to happen once that food was eaten and experienced.

Ultimately the reason I do what I do every day is that I love food and I love people, and grocery stores are a great way of bringing both together. They’re a great way of anchoring a community and creating a space where a local economy can thrive. What we’ve done on 18th Street is a prime example of what a local food block can do to create an identity for a neighborhood.

For folks who haven’t been to San Francisco, explain “what we’ve done on 18th Street.”

SM: When I first took over the market in 1997, all the storefronts on the block had metal grates on the windows. There were fewer than 40 people working on the block. Through the late ’80s and ’90s, the neighborhood had gone through a down period where there was a lot of crime. Dolores Park — which now has become an important community gathering place — was unsafe. There was a lot of drug dealing. There were a bunch of storefronts, but none of them were thriving or doing anything that was deeply meaningful for the community.

Soon after we took over, a restaurant company got started a couple of doors down — the Delfina Restaurant Group. They opened up in a tiny little space. They now have six or seven different businesses, and they’ve twice expanded into adjacent storefronts. Then Tartine came, and Tartine has become recognized as potentially the best bakery in the world. We’ve got an extraordinary Japanese restaurant on the opposite corner, and a Korean restaurant on the other corner. Both of them maintain the same philosophy around sourcing great ingredients.

What’s interesting is that the spot that the Japanese restaurant is in currently was considered a cursed corner. But all of the businesses that opened up in that corner prior to Yuzuki Japanese Eatery didn’t use the great ingredients that Bi-Rite, Tartine, and Delfina were using. They failed. It shows how we shape the community’s desire and demand for high-quality, high-responsibility ingredients. Once Yuko opened her restaurant, she did well because she brought that same philosophy that was already existent on our block.

As a consequence, we’ve got a “model food block.” All of the businesses are complementary. We all work together and continue to push the food movement forward and create a community that everybody who works and lives in can be proud of.

There are over 300 people working on the block now too, which is amazing — nine times the number of jobs that previously existed, on one single block.

Bi-Rite’s mission is to “create community through food.” Tell me more about what the word “community” means to you today and how that has evolved over time.

SM: We’ve clearly defined what “community” means for us as a company. There are three primary stakeholders, but really, truly, four stakeholders, for how we define community.

One is our guests, obviously. That’s the people who shop with us. The second is the producers: the people who grow, make, raise, and craft all the amazing food we sell. The third is our staff. We can’t operate a business without a team of people who are equally passionate and caring about connecting this amazing food to these people who are going to buy it and consume it. And then the fourth is our overall greater community and our planet.

We know that we have a responsibility beyond our four walls, beyond the people we actually do commerce with. There are people who live on our block, in our neighborhood, who don’t shop with Bi-Rite, but we have a responsibility to them. There are organizations that do great work in the communities in which we operate that we don’t engage in actual transactional business with, but who are doing work to sustain and to create a much more livable community for us, and so we support them.

We also have a responsibility to our overall planet. So, we want to do everything we can to support producers who are in line with our values. We want to operate a business that’s sustainability-minded and considering of the environment at every step of the way as well.

18 Reasons

Bi-Rite’s nonprofit partner, 18 Reasons, hosts community dinners with local food producers.

Do you have any concrete lessons you’ve learned about what works and what doesn’t in creating that sense of community? How do you actually do it in practice?

SM: That’s great. I love it. I feel like 18 Reasons is a perfect example of going deeper in creating community. And 18 Reasons — the nonprofit that we started in 2008 — was a total experiment.

There was a tiny little office space around the corner, 250 square feet, that friends of ours, guests of ours, were renting to use as their real estate office. They had let us borrow the space a couple of times to do lectures. We brought in a winemaker and a rancher to talk about the work they were doing, to teach our guests — the community of people who were supporting them — more about why their work was so important. Not just about the production and value of the commodity, but also about the impact they were having on the environment. We’ve always taken this approach, that education is an important part of empowerment. We consider ourselves sellers, feeders, but more importantly, teachers as well.

So we experimented with , and when our friends made the decision to move up to Portland, they asked us if we wanted to take over the lease, so we did. We didn’t really know what to do with it, but we decided that we would create a space that would give artists walls to hang work up. There is a tremendous need for local artists to have space to show their work.

We also knew we wanted to take some of these conversations we were having with our guests on the grocery store floor that were two, three, maybe seven minutes long, and take them longer and take them deeper and give the people who were buying cheese or meat or tomatoes the chance to actually meet the humans behind the work. Often when you pick up a product in a grocery store, you forget that there’s a person behind it. And for us, it’s all about the people.

We started to do more tastings and more lectures and dinners, and have now grown the program. We’ve moved into a 500-square-foot space that’s across the street from the market, and now our programming reaches about 3,500 students a year here on 18th Street. We have all sorts of classes, which can range from the cuisine of Azerbaijan to really simple community dinners where we open our doors and, for 12 bucks, people can come and sit down and break bread and meet their neighbors and connect. We’ve had some community dinners where people have literally sat across from each other only to realize that they lived in the same building.

In this world where we’re so hyper-connected through our thumbs, we need more opportunities to connect on a human level, on a face-to-face level, where we can touch each other and break bread with each other. So many of the world’s problems could be solved if we just spent more time around the table.

We’ve done this here on this block, but 18 Reasons’ programming also now includes a whole other set of classes that we do in the five Bay Area counties, in underserved communities. Over the course of six weeks, two hours a week, with students who range from kids to teens to adults to seniors, we spend an hour teaching them nutrition with a certified nutritionist. We’re often tailoring their diet around any particular food-related diseases they may have so they can better manage their health.

Then the second hour is taught by a chef. Oftentimes it’s a professional, sometimes it’s an amateur. The students all work together to prepare a meal and then sit down together and share in a hot meal. For many of the students, it’s the one time a week that they actually get to eat a hot meal that’s nutritious, that’s cooked with others.

We have an extraordinary 86 percent success rate in graduating these students, which means that they have attended five of the six sessions. As we’ve done our longitudinal studies, it’s not a dramatic impact, but we’ve seen a 10 to 12 percent improvement in how our students are changing their habits and improving their diets and the amount of time they’re spending cooking and feeding their families better food.

We know that if people are healthier, then they’re feeling better about themselves and they’re going to make others feel better, and then our community is going to be tighter and stronger and more vibrant.

That’s one example of what we’ve done. That’s within a nine-year horizon, and I’m excited about that work continuing for the next umpteen years.

How is the nonprofit funded? Is it all from Bi-Rite?

SM: It’s funded through private donations, of which Bi-Rite is one donor. But also through grants and through basic fundraising activity that we do throughout the year.

What do you say to the people who question the value of this from a traditional business bottom-line point of view?

SM: I’ve never been driven by how normal businesses run. We know that as a business, we have to operate in a fiscally responsible way. Unless we’re profitable, we can’t do anything. We can’t achieve our mission, we can’t hire good people, we can’t treat them well, we can’t support a good food system, and ultimately, we won’t be able to bring people around the table and see the social change we’re after. I understand being fiscally responsible is important, but I’ve never been driven by the status quo business mindset — or I guess what we used to consider the status quo.

Businesses have a responsibility to the community they operate in. I grew up where community service was driven into me, and have been doing community service since I was a kid.

To me, community service really shouldn’t be, like, this side project. It should be integrated into everything that we do. And when we can integrate it into how we make a living and into our work, then we’re actually doing much more meaningful, important work.

Nobody’s ever really questioned it. I think people see and recognize it and say, “Wow, it’s fucking cool. It’s amazing that you’d do that and still have a business that runs and still treat your staff well and still support a good farming and agricultural system and have fun doing it.” It’s in line with our values. We’re set to hold true to what we believe in. That’s why having a mission is so important.

I think what ends up happening is that those who haven’t bought in are like, “Well, it’s just too fucking expensive,” and don’t understand that by shopping with us, they’re contributing to so much more than just the food that they’re going to put in their bellies. It is a challenge — one that’s definitely difficult for us to manage on a business level, especially as larger companies, now, are adopting our buying practices, and are developing their own community programs, and then it all ends up being under the guise of a larger marketing scheme as opposed to being true values-driven care, mission-driven care.

We know we’re not going to be the market for everyone, but we also know that we need to hold true to our values. Otherwise, the minute that we begin to compromise on those values, we’ll be compromising the impact we can have. And it’s not a compromise we’re willing to make. At least not at this point, and I hope never.

Marchal Elementary

18 Reasons’ Cooking Matters program teaches nutrition and meal prep in local schools.

How did you make the decision to split 18 Reasons into its own nonprofit? And why is that the right choice, instead of having it be part of the for-profit family of businesses?

SM: For us, it was very practical. About five years in, our executive director at the time was moving back east, so we started a search for a new executive director. We found , somebody I had done some work with who had started her own nonprofit in San Francisco. She was great, and when I suggested her coming on board as our new executive director, she said, “Well, why don’t we just merge the two organizations together?” And I was like, “That’s great, an even better idea.”

We both went back and presented the idea to our boards and came back with enthusiastic delight. It was really amazing. Both the boards were excited about the possibility. We had the boards meet and then started the process of merging.

It took about six months, but in the process, we assumed the 501(c)(3) of Sarah’s organization, Three Squares, and 18 Reasons took on that 501(c)(3) status and became its own independent nonprofit.

In 2015, you started the Good Food Retailers Collaborative. You talk about how you see retailers as incubators for other food businesses. How do you think about collaboration versus competition in business?

SM: I believe in sharing. I’m a pretty open book and I’m pretty generous with sharing information. I’ve been given a lot from others in the past, and I’ve wanted to reciprocate and do the same, especially when it’s with folks who share values, folks who are trying to do something important or meaningful or impactful in the communities where they work and live. So, for me there are very few walls. We’ve even had executives from Kroger and Pepsi and Kraft and Nestle who have come through or who I’ve gone and spoken to.

I get fired up about sharing what we do and sharing our story and sharing how we do it, because if more businesses did the right thing and operated from a place of care, from a sense of purpose, then the world would be a better place. That’s what drives collaboration for me. I just know that when people work together, a lot more can get done. It might not get done as quickly, but a lot more can get done in a more sustainable way. And it’s fun. It’s fun seeing people grow. I love being a mentor. I love teaching people. It’s important.

Are there best practices you’ve picked up over the years around how to look for the right type of collaboration partnerships?

SM: I try to understand their motivation for why they want to collaborate. Sometimes you get a total sense that somebody’s into it for their own personal reasons or just financial bottom line as opposed to a triple bottom line. And we’ve made mistakes. I shouldn’t call them mistakes, but we’ve collaborated with people we probably shouldn’t have in the past. I never regret it. They’re good opportunities to learn. I’ve found talking to folks, this constant process of asking the whys — why are you interested? why do you want to do this? what are you after? — helps you get a sense of whether or not they’re truly doing it for good reasons.

What kind of inner work on yourself as a leader does achieving your mission both require and perhaps facilitate? Do you think about that at all?

SM: I’m thinking about that a lot right now. My partner and I are thinking about getting executive coaches, to help us grow as leaders. We’re almost a $50 million company and we’ve got about 320 people working for us. If we add a couple more businesses in the next couple of years, we could be a 500-person company. So we need to take that next step in our evolution as leaders.

We’re currently going through a structure evaluation internally, just to make sure we’ve got everyone assigned in the right roles and responsibilities, that everyone’s clear on what they’re accountable to, and that Calvin and I are also clear on what we’re accountable to, that we’re helping people grow themselves as leaders, and continue to look forward and grow the Bi-Rite family in a responsible way. We’re definitely in an important reflection point.

How do you keep from burning out? You’ve been at this almost 20 years. What kind of specific practices or mindsets do you have to avoid that?

SM: I love what I do. Even when the work is hard or emotionally draining, I still get a kick out of it. I get a kick out of getting my ass beaten on some days, because I can just look at it and go, “Fuck, that was a hard day.” Then I just think about how great the next day or the next week’s going to be after that lesson. It starts there. It starts with just enjoying it, whether it’s good, it’s fun, easy or challenging, and emotionally draining. I still love it both ways.

I take my two days off pretty religiously. I don’t completely disconnect, but I take my time off and I spend my weekends with my family, my wife and my two daughters.

I’m now trying to consistently take about six weeks of vacation a year. We love to travel. For the last four years now, we’ve taken a three-week bit continuously and then I’ve taken single weeks and longer weekends throughout the year, just to make sure we’re getting break times so we can connect as a family and recharge.

I also will go on trips to connect with other retailers, to go to seminars or trade shows. That time away from business and family also helps me recharge and continue to be inspired.

And I cook a lot. I try to spend time on our farm in Sonoma. Being in the dirt is probably one of the easiest ways to clear your mind and to get grounded.

Sam Mogannam

Bi-Rite Market owner Sam Mogannam

Do you have any practices you do every day to clear your mind and stay grounded?

SM: I guess there’s nothing in a meditative sense, but I have a routine that helps me tremendously. I’m an early riser, so I’m typically up around 4:00 in the morning. I spend the first 30 to 45 minutes in my day just reading and seeing what’s going on in the world, and writing. Any time I need to do any sort of thoughtful writing, I do it in the morning. It’s my quiet time.

I review what I’m trying to accomplish for the day and what I’m trying to accomplish for the week on those mornings, and then continue on with my day. But those mornings when I don’t find that time, if I get up late or if I’ve got to get out of the house earlier than normal, I definitely feel the pinch.

Three mornings a week I go to the gym and I work out hard and try to work up a sweat and get my heart rate going and clear my mind that way. It’s been an important part of my maintenance and just helping my endurance and my clarity, no question.

What’s the best piece of leadership advice you’ve ever given or received?

SM: Whenever I’m talking to folks who are starting a business or have a business and are struggling, I always ask them if they have a mission and if the mission is well articulated and if everyone in the organization understands the mission and understands their role in accomplishing and achieving the mission. It’s critical for any leader to bring their team along and to do it in a way where everyone’s going to feel good no matter how hard the work is.

And then I ask if they have a vision that they’ve articulated and written down. Have they been clear about what they’re trying to accomplish, where they want to be in the next one, two, three, five, ten years? And does the entire team know that? Does the entire team know their role in how they’re going to accomplish that? Is there discipline around getting to that goal that is being practiced consistently?

But I think probably the most important thing is that I tell people to love what they do. And if they don’t love what they’re doing, then they’re never going to be effective at leading the team. There needs to be the love of the purpose, but also just love in general, loving of everybody you engage with.

I feel like love is so absent in the business world, and it’s the first and the most important — I shouldn’t say the most important, but it’s one of our three core values.

People are more skeptical of that than of this community work, but I feel that Bi-Rite has thrived because of the love it shares with its entire community.

Tell me about a low point and how you got through it. Some kind of failure or challenge or mistake.

SM: I’ll tell you what’s top-of-mind for me right now: I’m at a low point because I got into an argument with my daughter this morning. I did everything wrong. I got emotional and I got angry, and I let my frustrations come through, and I was calling her out for treating me the same way I was in turn treating her. I’m upset about it, to be honest with you. I’m lower right now than I’ve been in a while because of it. She’s 14, and I’m just learning how to navigate being the dad of a teenager. It’s crazy.

I love that answer. It highlights the fact that we are all full human beings, and that answer had nothing to do with your business. It’s about another big piece of your life.

SM: It has everything to do with my business because my family, my business, everything, we’re all one. There are lines, I guess, of separation, but we’re all in it together and it’s hard for one to be in a good place and everything else to be shitty. It all needs to work together.

It’s similar to how we’re describing how we define our community, when I was talking about our producers, our guests, and our staff. We draw it as an equilateral triangle, because there’s no member of the community who’s more important than the other, and each of those members are inextricably linked and each member of the community’s success is driven by the success of the others.

It’s the same with my family. I can’t be successful at work without the support of my family, and my family’s success is often driven by or dependent on the success of the business. It’s difficult, at least for me, to keep the separations completely clean.

As you’ve been scaling, how do you make sure the rest of the company is living those values and understands it’s all connected?

SM: Everybody in our organization knows the mission and their role in it. We teach it and we talk about it every day. If situations arise, we come back to the mission. And we have lots of missions (see below). We have our overall mission of “creating community through food,” but we also have a product mission that guides us on what we want our product to look like. We have a service mission, which guides us on what we want our service to our guests to look like and the service to each other. We have a training mission, which guides what we want our training and development to look like. So we’ve got these aspirational pieces that keep us aligned and going in the right direction.

The other piece that keeps us working on a real fundamentally strong path going forward is the fact that we have a 10-year vision and we spent about 16 months — part of 2012 and all of 2013 — writing our 2024 vision (PDF). I included every single person in the organization in the process of writing the vision. We were about 250 people in the company at the time.

Initially, a small group of us came up with the outline and the areas we wanted to address. We got seven key buckets we wanted to make sure we covered. What we wanted our food to look like; what we wanted our service to look like; what we wanted life for our staff to look like; what we wanted our impact on the community, our impact on the environment to be; what we wanted our relationship with our vendors to look like; and what we wanted our financial scope and growth to look like.

We started to fill in this outline, and had an initial rough draft that I then shared with everybody in the company. We shared it in both English and Spanish. Then I went to department meetings and literally went line by line and deliberated word over word with everybody in the company. Everybody had a chance to give me feedback. I cherish the copy I used; it’s so full of red marks with the input I got.

I realized at that point that everyone really cared and everyone wanted to do a good job, that everyone wanted to be part of having this impact. This vision then went through a couple more iterations — I also had staff come to me on their own, one on one, because they didn’t feel comfortable talking in a group — and then we finalized it with everyone’s blessing. That then became a shared vision, which gives us the alignment we need and the sense of purpose and understanding of what everyone’s role is.

Now we use our mission and our vision to make sure that we’re hiring appropriately. It’s helped attract great talent to us. It’s also helped us make sure that we didn’t hire people who didn’t fit in. Folks come along and want to be a part of a company that’s going to grow nationally? Well, that’s not what Bi-Rite’s going to be. We’re not going to get much farther than San Francisco. So, if you want to be this VP of Operations who’s going to scale it and turn it into the next Whole Foods, it’s not going to happen here. But if you want a company that’s going to go deep and really make a difference in the community we operate in, then it could be a great place for you.

It starts at the interview process and then it continues with every single day of training, which never stops; we’re all in training every single day while we’re here. Understanding that, I think, helps us also work much better together.

What’s giving you hope?

SM: Oh, God. So much. My daughter’s generation gives me hope. I’m so excited about the next generation of our future leaders. I love interviewing staff members who are in their 20s and talking to them about what they’re hopeful for and what they see. They’re limitless in how they see possibilities. I’m excited about how much they care, how much difference they want to make. I’m excited that they’re wanting to find that intersection in their work that has purpose. I get fired up about it. It makes me really happy to see that.

Learn More

Bi-Rite’s Many Mission Statements

In addition to its overarching mission of “creating community through food,” the Bi-Rite family of businesses has the following explicit missions for other aspects of its business.

1. Service

“We welcome each and every member of our community as a guest in our home. We serve seamlessly, we inspire, we surprise, we feed and are fed.”

2. Product

“We cultivate genuine, dynamic relationships with the numerous and varied individuals responsible for our food. In the ever-evolving food landscape, we make educated decisions and push the boundaries of responsible sourcing. We inform our guests about the true cost of food and advocate a positive impact on our food system. By celebrating craft and heritage, we preserve diversity, traditions, and taste. As a result, our food is honest, memorable, and full of flavor!”

3. People

Mission statement coming in 2017.

4. Training

“Bi-Rite training is a challenging and rewarding journey that cultivates the critical skills necessary for success in any workplace. Trainees and trainers are equally responsible for the results of training — a dynamic process and conversation which fosters growth, strengthens our culture, and reinforces sound operations.”

5. Community

“We are making a difference by empowering youth, strengthening community, and creating resilience.”

Climate Action / Social Entrepreneurship / Stakeholder Capitalism
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