Produce at Berkeley Natural Grocery Company. Photo: Berkeley Natural Grocery Company/Facebook

The Berkeley Natural Grocery building on Gilman Street in Berkeley has been sold, but the beloved 48-year-old Berkeley institution will continue operating uninterrupted, the seller said.

The building at 1330 and 1336 Gilman St. went up for sale for $1.65 million in June. The sale closes in mid-December, according to Laurie Capitelli, the managing partner of the Gilman Group, current owners of the building. Capitelli, an agent with Red Oak Realty and former Berkeley City Council member, wouldn’t disclose the final sale price.

“Before putting the building up for sale, we signed a five-year lease with a five-year option with Bob Gerner to protect the business,” Capitelli said.

Gerner is the founder and general manager of The Natural Grocery Company, which includes Berkeley Natural Grocery, as well as its offshoot, the El Cerrito Natural Grocery. The Berkeley store was founded as Westbrae Natural Foods in 1970 and opened in 1971; it became Berkeley Natural Grocery in 1982. Gerner’s company has rented space in the building ever since its founding. The Gilman Group has owned the building since the early 1980s.

“The new [building] owner is just looking for a stable tenant,” Capitelli said, “I can’t think of anybody more stable than the Grocery Company at this point.” Capitelli said one of his partners died last year and the remaining partners decided to sell the building and dissolve the Gilman Group.

Capitelli described the longstanding relationship between the Gilman Group and the natural grocery as “cordial,” adding, “We anticipate that will continue with the new owner.” He would not name the new owner because the sale is not yet officially final.

Asked if any changes will happen to the building with the sale Capitelli said, “It is a brick building; we did significant seismic work in the early 1990s. He’s [the new owner] looking to see if that seismic work should be upgraded in any way.”

Gerner said he’s sad that his decades-long tenant relationship with Capitelli is ending, “but I expect we will have a great relationship with the new landlord. I feel positive. He [Capitelli] has to retire sometime, you know?”

In many ways, Gerner is the very model of a local business owner. He was born and raised in Richmond two blocks from what is now the El Cerrito Natural Grocery. (Despite their names, the El Cerrito store and its Annex are actually in Richmond.)

“I grew up shopping at El Nido,” the name of the grocery store at the time, Gerner said. “The store opened in 1927 and my parents moved there in 1931.”

Gerner, a graduate of El Cerrito High, started out in the early 1970s making granola with three barrels of honey and 1,000 pounds of oats with a belief that people should eat better. Gerner has also been a national leader in the non-GMO movement labeling genetically modified foods.

In 2002, Gerner created an Employee Stock Ownership Plan which allows Natural Grocery Company employees to earn shares in the business, giving them a financial stake in its success. Workers become vested in the ESOP after five years.

“[The Natural Grocery Company] is now owned 100% by the employees. We have 138 employee-owners,” Gerner said.

Employees stay for decades. Rick Dailey, who managed the Berkeley Natural Grocery store, was a fixture for 35 years, retiring late last year, and Michael Chung, assistant store manager, retired after 32 years.

The new Berkeley store manager is Pierre Jones, who managed El Cerrito Natural Grocery for more than 30 years.

Despite the Natural Grocery Company’s local cred and its loyal employees, Gerner has faced many challenges in recent years.

When it opened as Westbrae Natural Foods in 1971, the market was a pioneering company. Now, the local business faces stiff competition from other local stores like Berkeley Bowl and Monterey Market, not to mention from no less than five national grocery chain stores nearby offering organic and natural foods.

Whole Foods opened a store on Gilman west of the Berkeley Natural Grocery in 2014. Adding to the competition, a Sprouts opened in Albany in 2017.

The Trader Joe’s in El Cerrito Plaza isn’t far from the El Cerrito Natural Grocery. Also, there are two Safeway stores on Solano Avenue, one in Albany less than a mile from the Berkeley Natural Grocery and the other a Safeway Community Market in North Berkeley.

“The stores have been static for the last four years and we’ve had a half a percent decrease (in business),” Gerner said. “This year we are hoping to turn that around.”

Janis Mara covers East Bay real estate as a freelancer for Berkeleyside. She has worked at the Oakland Tribune, the Marin Independent Journal, the Contra Costa Times, Adweek and Inman News, an Emeryville-based...