Blooming Prairie Proposal Offers Opportunity to Strengthen Our Retailer Network

News of the proposed acquisition of Blooming Prairie Cooperative Warehouse by United Natural Foods, Inc. has evoked many different reactions throughout the food co-op community. It is natural to have an emotional response to such news and to feel a sense of grief at the possible loss of another cooperative business.

If the members of Blooming Prairie decide to sell their warehouse, the implications for our collaborative network are immense. I listened as Michael Funk, CEO of United Natural Foods (UNFI), described at the Blooming Prairie membership meeting how important size and strength are to the purchasing, efficient operating costs, and other pragmatic concerns in the business of selling food. He cited these and their impact on the ability to compete effectively as the reasons that he merged his northern California distribution business with others across the country in recent years to form UNFI. The same reasons apply directly to our National Cooperative Grocers Association (NCGA) network, and this situation serves to further illustrate how important it is that we work closely together.

Thirty years ago, a need for foods outside the mainstream launched tens of dozens of natural food co-ops and lots of small producers and manufacturers of natural products. Today, many of these manufacturers have been swallowed up by bigger companies, and the products once so hard to find are in just about every distribution channel and retail environment. What was not even a real "industry" is now completely changed and represents an attractive market for Wall Street. The environment in which we operate is nothing like the past, and we must view our options and decisions within the framework of today's reality. These are some lessons that I take from the proposed merger of Blooming Prairie with UNFI.

Food co-ops have the responsibility to provide their owners with the best possible services and can only do so by seeking out the best operational partners to rely on.

The cooperative wholesale network failed years ago to take the necessary steps to integrate themselves, merge, or otherwise combine their strengths for the viability of the whole. Now, when a mere handful of co-op warehouses are left, the lesson for food co-op retailers is quite simple: do not let this happen at the retail level. We cannot afford to let blind independence, politics, personalities, preferences or other myopic concerns about how we run our individual businesses keep us from making the overtures, sacrifices, and compromises that will earn us our long term viability in banding together. I view this situation with Blooming Prairie as a significant wake up call, and hope that others feel as compelled to action by the implications.

During the Blooming Prairie membership meeting I heard people voice concern about abandoning the cooperative model of doing business. Yet to uphold this particular ideology means that we have to put our money where our mouth is.

In the case of Blooming Prairie, the board cites a vulnerability to losing large retail store accounts as a significant threat to continued success. If BP's retail owners are not willing to pay either higher prices and/or accept less competitive service from their underdog wholesaler, then they are right to sell now while they can maximize their investment. If the owners of BP are willing to fully support their cooperative warehouse with the majority of their purchases, continue to provide the capital necessary for a distribution business, and turn a blind eye to any better deals available, then they might hang onto their cooperative. How likely is that? Consumer- owned food co-ops have the responsibility to provide their owners with the best possible products and services and can only do so by seeking out the best operational partners to rely on.

Should the owners of Blooming Prairie decide to take this course, there will be opportunities that must be pursued with UNFI to strengthen our retailer network and challenge them to partner with us in more significant ways. They openly state their understanding of the need for combined size and strength, and they have access to resources that surpass what Blooming Prairie has worked hard to provide. We must make sure that the loss of another cooperative warehouse results in our maximizing the resources of a billion dollar entity, and we must assert our position as a significant national customer.

Within NCGA we talk a great deal about leadership in the food co-op sector and the future of the food co-op movement. The board of Blooming Prairie has made the difficult decision to bring a controversial proposal to their membership after a full examination of the known facts and an educated hypothesis about the future. They have not shirked their responsibility for leadership, and now the members must make their decision.

On behalf of the board and membership of NCGA, I'd like to express sincere thanks to the board and management of Blooming Prairie for their exclusion of the Co-op Label from this proposed transaction. We appreciate their protection of this important piece of food co-op history and their support of its preservation for the benefit of food co-ops in the future.

In the interesting times ahead, we must be willing to act quickly, insightfully, and decisively -- more than ever before.

See other articles from this issue: #102 September - October - 2002