Rick Haggen has spent nearly 40 years turning his parents’ small chain of neighborhood markets into one of the largest independent grocers in the Pacific Northwest.

Yet decades after taking over the family business with his late brother, Don, the grocery chain owner is not finished helping the company make its mark in the supermarket world.

“You don’t want to just say, ‘Well, we’re done,’” Haggen said. “You always want to improve.”

That improvement now involves a major rebranding effort for Bellingham-based Haggen Inc., which owns 13 Haggen Food & Pharmacy stores and 15 TOP Food & Drug stores in Washington and Oregon.

The facelift will place all TOP stores under the Haggen banner within the next few years. It will also introduce a new store theme—”Northwest Fresh”—which company executives said will emphasize products with more natural, locally produced ingredients.

C.J. Gabriel Jr., Haggen’s president and CEO, said the remake will let the company move forward under just one brand name instead of two, which has been his major goal since taking the top spot at Haggen in 2011—shortly after The Comvest Group, a Florida-based investment firm, bought a majority share in the grocery chain.

”It’s always difficult for any retailer to have to manage two brands, but especially for a small one,” Gabriel said.

After a test-run last November at a former TOP store in Bellevue, the Meridian Street Haggen store in Bellingham was selected as one of the first locations to get the new treatment.

Gabriel said the Meridian store was chosen in part to reflect the company’s appreciation for its hometown roots. In addition, he noted, the outdated store that was originally built in 1957 before being renovated and dedicated in 1979 “needed some love and care.”

Traditional grocers go organic

While profits for U.S. grocers dropped each year from 2007-2011, supermarkets are still part of a multi-billion dollar industry. In 2011, American supermarket sales totaled more than $580 billion, according to the Food Marketing Institute.

As a private company, Haggen does not disclose financial information. Multiple media and industry reports, however, show the chain’s annual revenue tops at least $500 million.

With its move to more natural products, including organic and gluten-free goods, Haggen is following a national trend in which larger, more traditional grocers are overtaking specialty food stores in organic food sales. Supermarket chains and club or warehouse food retailers made 54 percent of U.S. organic sales in 2010, according to the Organic Trade Association.

Gabriel said Washington shoppers’ tendencies toward natural products has surprised him. As an food and beverage veteran—previously a senior executive with industry giants such as Albertsons and PepsiCo Inc.—Gabriel said he’s never seen a regional organic food ethic like the one Washington consumers share.

“Yes it’s a national trend,” he said,” but I would say Washington leads that trend.”

A history of being first

It’s a different world from the time Ben and Dorothy Haggen, along with Dorothy Haggen’s brother Doug Clark, invested $1,100 in a small Bellingham grocery store in 1933 amid the Great Depression. The trio started out by emphasizing high-quality products and customer service.

As the company grew, it began to set itself apart by being among the first grocery stores to offer a variety of amenities considered common today. Haggen was the first store in the Northwest to offer a self-service meat department. It also was the first to open an in-store bakery.

After Don and Rick Haggen took over the company and developed the TOP Foods store brand, the grocery chain introduced the region’s first 24-hour store, and in the 1980s, an Everett location became the first supermarket in the nation to open an in-store Starbucks coffee shop.

Another in-store Starbucks opened shortly thereafter—in the Meridian Street store in Bellingham.

New brand brings new focus

The Meridian store’s makeover is still underway. New signage has gone up in the aisles, new products have been placed on shelves and new wall decor showing green and yellow rolling farm hills borders the store’s walls.

Peter Olsen, Haggen’s director of marketing, said there’s still more aisle markers and tags to be hung around the store, but the main pieces of the rebrand are in place.

Many of the store’s departments remain in their same locations, including the deli and the meat department, as well as the pharmacy. Gabriel said the chain will emphasize its in-store pharmacy services over the next few years.

“The pharmacy customers inside a grocery chain are typically some of your most loyal customers,” Gabriel said.

Haggen is also making investments in its supply management system. The company recently announced it was teaming up with Utah-based Park City Group to develop technology in Haggen stores allowing managers to better track sales and inventory to improve its product selection.

As the rebrand moves along, Olsen said each makeover project would be unique.

After the test run in Bellevue, the company’s marketing team has learned the importance of catering the changeups to each store’s customer base, he said.

“Every store, every community is a bit different,” Olsen said.

Evan Marczynski Photos (Click images to open slideshow)