Our food budget (which in our case includes paper products, household cleaners, shampoo and soap - I'm just too lazy to break it out) for a family of 5 is now $700 a month. We tried $600 a month and were successful until the beginning of this year. We were constantly going over and started robbing from the gas budget. Thankfully, gas is cheaper than it has been otherwise we'd be in the red.
Here's how we manage:
Coupons - mostly at CVS. My wife has their coupon policy down to a science. We don't have a Harris Teeter local, so when they run their Super Doubles, and Triples, we have to plan a trip to Salisbury or Winston to shop and we make it our goal to save enough in the trip to not only have a "good" savings, but also negate the gas unless we can wrap it into a trip to those locations for something else that we needed anyway. Our pediatrician is in Salisbury and we go to Winston for eyeglasses, the mall, and some other stuff, so it's not hard to fit it into a trip. My wife isn't happy with a coupon trip unless she sees at LEAST 75% savings. It's pretty common for her to just pay sales tax or even get money back.
Buy in bulk - we have two chest freezers and two refrigerator/freezers. One chest freezer is just for meat and prepared meals, the other is for vegetables. We are now "down to" the two refrigerator/freezers as we had to give the third to my step-daughter when hers went out. The main fridge holds the everyday stuff, one each of milk, juice, lunch meat, pickles, etc. and the other is for stock up cold stuff like Lunchables, drinks, and school lunches for the week (we will now have three kids in grade school so we make lunches on Sunday for the week). We also buy 4 gallons of milk at a time from Costco and freeze them until needed.
Costco - but be smart about it. We buy 25 lb bags of bread flour there and bake our own bread. We buy big ticket items like our digital camera, electronics, etc there because of the extra warranty they provide. We get paper towels and toilet paper there unless we can get toilet paper on a coupon deal. We are pretty loyal to our toilet paper brand, so if the coupon deal gives us cheap-o toilet paper, we stash it back for when we go on vacation to the condo at the beach where we have to provide our own toilet paper. I don't really care to if I leave a pack of cheap-o toilet paper behind for the next person when I didn't spend anything on it in the first place...
Square Foot Gardening/ canning - we have a small garden in front of our house that has done well for us this year. Huge amounts of squash, tomatoes and cucumbers have forced us to get creative about how to keep it all. We made some awesome cucumber relish, , squash lasagna, dill pickles (like Clausen), dozens of packs of stewed tomatoes, we made our own spaghetti sauce, and a bunch of other stuff.
Zaycon Foods - we buy chicken breast in bulk - 40-80 lbs at a time. We bring it all home and process it into grill bags, crock-pot meals, cooked and shredded chicken, you name it. We do the same with ground beef. We process 100+ lbs of ground beef at a time. It's easy to make a Hamburger helper meal in a hurry if you have pre-cooked, pre-portioned 1 lb packs of ground beef in the freezer.