ANNUALREPORT

2014

From our General Manager

From our Board President

Bruce Phlegar

Our co-op is 40 years old this year, a milestone that you our owners made possible. I wonder if in 1975 our founders imagined their idealistic experiment would grow into the vibrant community-based business that we all participate in and benefit from today. They must have envisioned the hard work and dedication of thousands of owners, employees and board members over the course of decades could generate the positive community changes we have created. Because of their vision and the hard work of many we are able to be here today reporting all of the wonderful accomplishments of 2014. The co-op’s ability to support the community is in direct relationship to the support we receive from our owners. By participating in its activities owners of our co-op can make their community a better place for everyone. Growing sales is the economic engine that makes possible all of the activi-ties of this and all co-ops.

Your co-op needs your support:

» Shop… shop… and then shop some more! Your dollars are well spent and will grow your community in many positive ways

» Attend the annual owner meeting, board meetings and special events

» Participate in our annual customer survey. Let us know what we are doing well and where we can make your shopping experience even better

» Save some cash and help your co-op by purchasing your groceries on our monthly Owners 10% Off Days, the second Saturday of each month.

» Encourage your friends and co-workers to become owners

I am proud of the collective accomplishments we have made over the past 40 years and I look forward to our co-op serving our community for the next 40 years. Together we can.

Gayle Cooley

A seismic shift is taking place in the natural and organic food industry with regard to the level of competition in the marketplace. Not only are natural food chains and conven-tional big-box grocery stores robustly participating in this segment of the industry. Innovative new stores are increas-ingly entering the marketplace and offering an appealing package of product, atmosphere and low prices. In recent years, CDS Consulting Co-op, with sponsorship from National Co-op Grocers (also a co-op), has organized regional workshops to discuss important issues facing cooperative grocers. For 2015, these workshops focus on surviving and thriving in this competitive marketplace. In late March, representatives from both management and board traveled to Asheville to participate in our region’s workshop. One recurring theme was the importance of

differentiating our co-ops by promoting and educating the public about our commitment to local community, along with social and environmental values. In this Annual Report, we have highlighted some of the important ways we have accomplished these goals in 2014. Thank you to our owners and community for your support of Roanoke Natural Foods Co-op. With your continued sup-port, we expect our co-op to not only survive but to thrive far into the future.

Global Ends

Sub-Ends

Roanoke Natural Food Co-op exists to create a vibrant, local and sustainable cooperative community wwhere decisions are grounded in the balance of economic, social and environmental responsibilities.

ECONOMY

HEALTH

COMMUNITY

ENVIRONMENT

EDUCATION

AGRICULTURE

Roanoke Natural Foods Co-op consistently offers food products that are fresh, local, organic, sustainably-raised, non-GMO, humanely-raised, and cruelty-free.

A.

B.

Owners benefit from the well-being and profitability of Roanoke Natural Foods Co-op. A.

B. Local producers, businesses and the community at large benefit from the presence and investment of Roanoke Natural Foods Co-op.

Sustainable environmental practices are linked to Roanoke Natural Foods Co-op's goods and services.

A.

B. The natural environment is protected by use of green technologies and energy alternatives.

Farmland conservation and sustainable farming methods are supported.

Community members have a welcoming and vital marketplace.

Larger cooperative family bonds are strengthened

A.

E.

B.

C.

D.

Owners have a sense of pride of ownership and belonging.

Roanoke Natural Foods Co-op serves as a catalyst for community involvement in positive social changeLocal and global communities are strengthened by a preference for fair trade products and services.

Nutrition and health

The cooperative community is informed about:

A.

B.

C.

D.

The Cooperative Business Model and cooperative principles

Roanoke Natural Food Co-op's mission and ends

Sustainable living

The community has access to a selection of high quality, organic, and healthful foods and products which are reasonably priced.

The accomplishment of our ends is the sole measure of our cooperative's success. This 2014 Annual Report shows in quantitative and qualitative measures how we, through our actions and activities, have impacted our local community and the world in positive ways.

2014 ANNUAL REPORT

The community at large benefits from the presence and investment of Roanoke Natural Foods Co-op.

This number includes our cost of goods, payroll, charitable contributions, and local government taxes.

The number reported is before the CPA audit and patronge refund.

Owners benefit from the well-being and profitability of Roanoke Natural Foods Co-op.

ECONOMY

LOCAL ECONOMY SALES TO OWNERS

TOTAL 2014 DIRECT LOCAL ECONOMIC IMPACT

SALES 2014

OWNER EQUITY

PROFITS 2014

$1,955,553 $5,969,835

$318,631$92,573

INCREASE OVER 2013

13.6%

Owners benefit from the well-being and profitability of Roanoke Natural Foods Co-op. A.B. Local producers, businesses and the community at large benefit from the presence & investment

of Roanoke Natural Foods Co-op.

Based on our Annual Shoppers Survey of 509 shoppers conducted in August 2014.

HEALTH

SATISFIED WITH QUALITY &FRESHNESS OF PRODUCTS

98%

SATISFIED WITH PRODUCT SELECTION & VARIETY

95.3%

OUR OWNERS SAY

The community has access to a selection of high quality, organic, and healthful foods and products which are reasonably priced.

RO

AN

OK

E

NA

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SALES TO OWNERS 2014

$2,992,783 OF OVERALLSALES

50%

OWNER ONLY DISCOUNTS, SPECIALS & SALES

2009 2010 2011 2012 2013 2014

$65,413

$19,166

$33,199$44,691 $45,082

$5,015

This number includes yearly dues, equity investment and joint liability fund for National Co-op Grocers as well as yearly dues for The National Cooperative Business Association.

TOTAL SALES TO OWNERS IN 2014

$2,992,783

COMMUNITY

Community members have a welcoming and vital marketplace.

Larger cooperative family bonds are strengthened.

We serve as a catalyst for community involvement in positive social change and social justice.

Local and global communities are strengthened by a preference for fair trade products and services.

Owners have a sense of pride of ownership and belonging.

SATISFIED WITH KNOWLEDGEABLE STAFF

NUMBER OF FAIR TRADE PRODUCTS OFFERED

PERCENTAGE OF SALES TO OWNERS

NUMBER OF NEW OWNERS

TOTAL OWNERSINVESTMENT IN OTHER COOPERATIVES

TOTAL RAISED IN 2014 THROUGH GIVE UP!(12 ORGANIZATIONS BENEFITED)

SATISFIED WITH ATMOSPHERE & AMBIANCE OF STORE

FRIENDLY & COURTEOUS STAFF

97.9% 267

50.13%

362

3,919$54,198

$20,692

96%

95.6%

FAIR TRADE OUR OWNERS SAY

SUPPORTING CO-OPERATIVES

GIVE UP! PROGRAM

OWNERSHIP

OF PRODUCTS4.1%

70%

20

14

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ACTIVE OWNERS

2,748

Supporting the important work of: Food for Thought, Apple Ridge Farm, Heritage Point Farm, Lick Run Farm, Read-ing Seeds, Historic Roanoke City Market, Appalachian Trail Conservancy, Roanoke Valley Greenway Commission, Radio Free Roanoke, Roanoke Valley SPCA, Habitat for Humanity, & Children's Trust.

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We contribute 5¢ to a local organization everytime our shoppers use a reusable shopping bag.

We organized and partnered with other organiza-tions in 2014 as environmental stewards. The co-op held two cleanup efforts at Wasena Park, organized a team for Clean Valley Council's annual Fall Wa-terways Cleanup, and hosted a drop off site for Fall ECO Day, which is our partnership with Goodwill Industires of Roanoke Valley that collects e-waste.

We strive to reduce our energy usage year after year at our retail locations, offices & farm.

We partner with Goodwill Industries of Roanoke Val-ley to host an annual electronics recycling day.

We recycle and compost as much as we can at our retail locations, offices & farm.

We use compostable containers, recyclable plas-ticware, BPA-free paper for receipts. We also encour-age our shoppers to recycle at our retail locations.

FALL ECO DAY E-WASTE COLLECTIONPOUNDS COLLECTED IN 2014

RECYCLED MATERIAL DIVERTED FROM LANDFILL (IN CUBIC YARDS)

BAGS DIVERTED FROM LANDFILL IN 2014

ANNUAL POWER USAGE(KWH CONSUMED IN 2014)

ANNUAL WATER USAGE(GALLONS OF WATER CONSUMED IN 2014)

ANNUAL NATURAL GAS USAGE(THERMS OF NATURAL GAS CONSUMED IN 2014)

ANNUAL PROPANE USAGE(GALLONS OF PROPANE CONSUMED IN 2014)

COMPOSTABLE MATERIAL DIVERTED FROM LANDFILL (IN POUNDS)

4,700

832

108,400

476,318

1,172,749

5,824

349.20

15,600

ENVIRONMENTAL OUTREACH CONSUMPTION

RECYCLING EFFORTS

SUSTAINABLE PRACTICES

POUNDS COLLECTEDSINCE 2010

95,700

COMPARED TO 2013-4.5%

COMPARED TO 2013-8.8%

COMPARED TO 2013-46.39%

ENVIRONMENT

E-WASTE COLLECTIONRAISING THE ANTE

Sustainable environmental practices are linked to Roanoke Natural Foods Co-op's goods and services.A.

B. The natural environment is protected by use of green technologies and energy alternatives.

The solar modules at Heritage Point produce energy year round to offset some of our power usage. The modules and installation were donated by Direct Connect Solar & Electric.

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EDUCATION

CO-OP SPONSORED CLASSES IN 2014

ATTENDEES

HOUSEHOLDS MAILED TOPER ISSUE

PER ISSUE DISTRIBUTION AROUND THE CITY AT 50+ LOCATIONS

46

337

10,000

3,000

CO-OP CLASSESTHE CO-OPTIMIST

We publish a biannual newsletter, The Co-optimist, as a part of our educational outreach.

We own 17.5 acres of farmland within the City of Roanoke and lease another 7.4 acres, which is Heritage Point Urban Farm. We use exclusively sustainable farming methods.

We offer year-round classes in our Community Room at the Grandin Co-op.

AGRICULTURE

HERITAGE POINT URBAN FARM

PRODUCT SELECTION

Nutrition and health

The cooperative community is informed about:

A.

B.

C.

D.The Cooperative Business Model & cooperative principles

The co-op's mission and ends

Sustainable living

Roanoke Natural Foods Co-op consistently offers food products that are fresh, local, organic, sustainably-raised, non-GMO, humanely-raised, and cruelty-free.

A.

B. Farmland conservation and sustainable farming methods are supported.

2014 TOTAL PRODUCTION

$26,215 2013 PRODUCTION$16,487

437LOCAL

6.6%

1906

CERTIFIEDORGANIC

28.8%

786

CERTIFIED CRUELTY-FREE& HUMANELY RAISED

11.9%

TOTAL NUMBER OF PRODUCTS

6619

CERTIFIEDNON-GMO

693

10.5%

Neighborhood Food Since 1975 | w w w.roanokenatural foods.coop

Net SalesCost of Goods

Wages, Benefits and TaxesGeneral Administrative & Occupancy

2012

5,561,0413,372,879

2,188,162

Grandin

788,093

895,685388,283

904,194(42,206)(73,895)

1,283,968

382,579244,857

137,722

Downtown

(43,651)

96,34162,090

(20,709)0

(22,942)

158,431

26,2157,051

19,164

Heritage Point

(112,095)

83,51036,051

(100,397)2,808

(14,506)

119,561

Consolidated

5,969,8353,624,787

2,345,048

104,341(11,768)

1,402,163680,603

262,282(39,398)

(118,543)

2,082,766

Gross Profit Margin

Total Operating Expenses

Net Income Federal & State Income Taxes

Net Operating IncomeOther IncomeInterest, Depreciation & Amortization

2014 Income Statement

2014 Balance Sheet

Total Assets

Total Liabilities

Total EquityTotal Liabilities and Equity

Total Current Assets

CashReceivablesInventoryOther Current Assets

Property and EquipmentOther Assets

Accounts PayableAccrued ExpensesOther Current LiabilitiesLong Term Liabilities

Owner EquityRetained Earnings

599,176

1,529,153

569,352

959,8011,529,153

247,9860

330,36720,823

889,21640,761

248,79631,77867,017

221,761

318,630641,171

00

0

Admin

(528,006)

326,627194,179

(520,806)0

(7,200)

520,806

Net Income before CPA Audit & Patronge Refund 92,573