In the foothills of Colorado's Rocky Mountains, a waitress named Margaret Isely falls ill after giving birth to her second child. She develops a chronic infection and feels sluggish for months. Doctors don't have any answers, but she finds a book that advises restricting her diet to organic fruits and vegetables, meat and dairy from naturally raised animals, and fish oil and other supplements. Soon after she embraces the regimen, she begins to feel well again. It's a revelation.
After all, this was in 1955, when the latest food fads included Twinkies, Wonder Bread, and TV dinners.
Long before the days of Paleo diets and gluten-free everything, Isely was so convinced of the health benefits of natural eating that she and her husband, Philip, started going door to door lending out nutrition books and taking orders for supplements. A business was born. But Margaret, Philip, and their brood of kids struggled financially for years. They also survived personal tragedy: Two of the seven Isely children died young. Still, Margaret persevered, and by the mid-'70s the business, then called Vitamin Cottage, had grown into two storefronts.
They were not what you would call a "mainstream" family, says Kemper Isely, the shy executive who now shares the title of co-president with his brother Zephyr. (Margaret's love of all things natural was also reflected in her children's names: the other surviving Isely siblings are Heather, Lark, and La Rock.)
"We were pretty ostracized in school, because we had whole wheat bread and didn't drink Coke," Kemper recalls. The kids grew up in the business, stocking vitamins, bagging bulk ingredients, and ringing up customers at the registers.
Sixty years later, Natural Grocers by Vitamin Cottage is a family-run, $521 million chain of 93 stores in the West and Midwest. If the Iselys were outcasts in high school, they're now supplying the cool kids' lunch tables with quinoa and almond milk at exactly the right time: Natural and organic grocery sales jumped from $81 billion in 2012--the year that Natural Grocers went public--to $91 billion in 2013, according to research firm Spins. Now the company has set for itself the ambitious goal of operating 1,200 U.S. stores, a target shared by its two heavyweight competitors, Whole Foods and Sprouts. To keep up, Natural Grocers is trying to become, like them, a household name; last year, it hired its first-ever chief marketing officer.
Its story sounds both familiar and sometimes more idealistic than that of its better-known competitors. Natural Grocers prides itself on staying true to Margaret and Philip's founding principles: There's a staff nutrition coach and an educational book section in most stores, which do not sell any nonorganic produce or anything containing artificial flavors, colors, sweeteners, or preservatives. (The company maintains a long manifesto on what it won't sell and why on its website.) Those principles have sometimes hurt its sales: Recently, Natural Grocers decided to stop selling "confinement dairy products," such as milk from cows that aren't allowed to graze. That meant yanking Noosa, a best-selling yogurt brand. "You can't compromise your standards just to generate sales," says Kemper.
The second Isely generation officially took over the business in 1998, a year after Margaret died, at age 75. (Philip survived her for 15 years.) It was a relatively smooth transition. Zephyr, Kemper, and Heather had been involved in the business for years, with an unlikely fourth partner: La Rock's former wife, Liz.
In dream-team style, the partners each have a special expertise. Kemper focuses on business development and real estate selection, while Zephyr, a self-taught tech whiz who built an early version of the company's ordering system, runs IT. Heather, who grew vegetables on farms after college, now oversees product selection and quality, while Liz worked her way up from managing one store to running facilities company-wide. Because Zephyr and Kemper had been involved in the business the longest, the four agreed that the brothers would share the title of co-president. Heather and Liz are executive vice presidents, but "we're not really hung up too much on titles," Heather says.
Major decisions are made by committee. That includes the decision to go public, which took about four years of discussion. "We run the business on a consensus basis rather than an adversarial basis, so essentially we all have to agree unanimously or we don't do it," says Kemper. No one was outright against the IPO, but there were obvious concerns, including the onerous reporting requirements for public companies and the scrutiny external shareholders would have about the Iselys' unorthodox management style. Before the IPO, "there was a lot of pressure on us to identify someone as the chief executive officer," Heather says. "We're a little bit idiosyncratic. I don't want to say eccentric. Unique? Stubborn?"
To finance expansion without taking on more debt, the four ultimately agreed to go public. With 57 percent of the shares, the family still owns the majority of the business, and its growth is picking up: Revenue, profit, and store numbers have all steadily increased since the IPO. Natural Grocers expects to open 18 new stores in its 2015 fiscal year, some of which will be right next door to Whole Foods or Sprouts locations.
Even as they expand her company, Margaret's children are trying to stay true to her spirit. Her portrait hangs on the walls of the Natural Grocers stores, which close at 9:04 p.m. on weekdays and 7:06 p.m. on Sundays. It's a small homage to the woman who never wanted to kick out customers too abruptly--and whose early interest in healthy eating inspired her to build a lasting, growing legacy for her children and their customers.