Mitchell Stevens checks out the organic produce at Bi-Rite Market in San Francisco's Mission District. An additional location is pegged for NoPa. Lori Eanes for The Wall Street Journal

San Francisco's Bi-Rite Market, the go-to grocery for many of the city's foodies who don't mind paying more for the store's organic products, is getting ready to build on its success.

The grocery, founded in 1940, has become something of a cult favorite for its stock of local foods and knowledgeable employees. The grocery's owner, Sam Mogannam, is co-author of a book, "Eat Good Food," which was released in October.

Mr. Mogannam also opened Bi-Rite Creamery and Bakeshop across the street from his Mission District grocery store and runs it as a separate business with some shared resources. It too has become popular, offering unusual ice cream flavors like salted caramel and honey lavender.

Bi-Rite is preparing to open its second grocery store later this year or early next year in the city's "North-of-Panhandle," or "NoPa," neighborhood. The move will cost about $1.5 million, excluding equipment and inventory, and about 50 staffers will be added, bringing Bi-Rite's total employees at its two grocery stores to roughly 165.

The expansion won't be without its challenges, including formidable competition from Whole Foods Market, Falletti Foods and Trader Joe's nearby.

Bi-Rite Market in San Francisco's Mission District. Lori Eanes for The Wall Street Journal

Mr. Mogannam says he is expecting sales growth for the company to slow as customers who used to travel to the Mission from other parts of the city migrate to the new location.

The company has had a steady stream of annual double-digit sales growth, Mr. Mogannam says. The Bi-Rite Market's sales, excluding the creamery and bakeshop, have risen to about $15 million last year from $1.25 million in 1998, he says, adding that the company is profitable.

"A lot of people have been dying to have a Bi-Rite next to where they live," the 44-year old San Francisco native says.

Bi-Rite wasn't always a foodie haven. When it opened, the store was a standard corner shop catering to city-dwellers. Mr. Mogannam's father and uncle bought the store in 1964 and ran it for 25 years. The younger Mr. Mogannam began working there when he was about 6 years old.

Mr. Mogannam says that by the time he graduated from high school he knew he didn't want to be a grocer. So he attended City College of San Francisco's Hotel and Restaurant Management Program to become a chef, traveled to Switzerland for more culinary training, then returned to San Francisco and opened his own restaurant in 1991.

When he couldn't renew his lease for the restaurant in 1998, his father persuaded him to purchase Bi-Rite, which had been operating as a typical bodega since his father and uncle sold it in 1989.

Mr. Mogannam, who installed a kitchen in the center of the market, says his vision was for Bi-Rite "to be a place where a cook would want to shop."

In 2006, Mr. Mogannam opened the creamery and bakeshop as a place for his wife to make pastries. Since then, it has attracted a following of its own, with lines of patrons stretching around the corner waiting to buy its ice cream, which is made at the creamery.

Teaching employees is a priority for Mr. Mogannam. He set up a training program for each of his store's departments, with a list of items each employee must know. Employees are then tested on the material over a three-month period. Employees are also expected to read each relevant chapter of "Eat Good Food."

This love of food education extends to the community. Bi-Rite employees teach a program called "18 Reasons," holding classes, dinners and discussions about food with people from the neighborhood. Store staffers also meet with local groups to discuss ways to improve the community, and the grocery regularly sponsors events.

"They don't just represent a higher price point, they integrate themselves into the neighborhood," says Christina Olague, member of the San Francisco Board of Supervisors, who represents the NoPa neighborhood.

Jonathan "JJ" Strahle, a member of the NoPa Neighborhood Association, says, "Most of the people I talk to are excited about them coming in."

The market's impending arrival in NoPa is good news for Owen O'Donnell, 69, a member of the Alamo Square Neighborhood Association. He says he often shops at farmers' markets because he prefers to eat organic and higher-end food. Though he is concerned about Bi-Rite potentially contributing to rising prices in the neighborhood, he plans to shop there regularly.

"I'm sensitive about quality, not about price," he says. "I'll pay top dollar if I know it's good."

Write to Ian Sherr at