We have a family of 6, soon to be 7. Our budget is $475/month. We eat whole grains, but mostly conventional. We do eat meat most nights. We don't drink alcohol very often - it takes us about 8/9 months to go through a six-pack, and we don't like wine.
If you aren't consciously watching your purchasing, it is easy to spend a lot on groceries. Our grocery budget is that low because I am very aware and purposeful about shopping. Some things I do to keep costs down:
1. Buy whole foods, and use the whole thing. I buy a whole roasting chicken. It's dinner one night, and the leftovers are made into chicken noodle soup the next night. You have no idea of the wonderful plans I have for the 57 cents/lb turkeys I have in the freezer!
2. Stock up on good deals, even if I don't need the product right then. I know I'll need peanut butter eventually, so I'll buy it when I see a good price (on sale & with a coupon) and put it aside for when I run out. That way I have more control over the price I'll pay for things.
3. COUPONS! For Heaven's sake, don't pay for shampoo, razors, hair products, toothbrushes - all those toiletries can be had for FREE after coupons! Get as many as you can when those free deals roll around, and build thyself a stockpile! I also save a TON by using coupons on crackers, bread (we only eat whole wheat with no HFCS), cream cheese, shredded cheese, nuts, popcorn (not microwave - yuck!), pasta, etc. We're also on the mailing list for Earthbound Farms, so I do score great prices on organic produce now & then.
4. Compare unit prices. (The generic brand isn't always the cheapest, especially when you factor in coupons.)
5. Substitute cloth for paper products when possible. (That's everything in this house except TP.)
6. Reduce your trash (to save on trash bags.) We compost & recycle. We'd have to pay to have our recycling picked up, so we drop it off on Sundays on our way home from church.
That's all I can think of off the top of my head.