Not Too Late To Integrate

One co-op begins and another closes. One door opens and another shuts. The recent fates of retail as well as wholesale food cooperatives reflect common lessons.

New co-ops include not only the one in New Hampshire reported in these pages but also startup efforts in Minneapolis, Boulder, and other cities. The present impulse toward community-based retail outlets remains similar to the 1970s history that drove the formation of most of today's food co-ops. Unfortunately, while an enormous amount of professional experience has been gained since those earlier years, altered market conditions have made success in these new ventures more difficult, and the structural limitations of the subject co-ops have changed little.

FREE ENCYCLOPEDIA!

An encyclopedia of cooperative and retail analysis and information -- the first seventeen years of Cooperative Grocer -- is now accessible to anyone visiting www.cooperativegrocer.com. The completion of posting all useful back issue material to the website was achieved just in time for the current edition.

Recently we have received a number of comments on the usefulness and ease of navigation at www.cooperativegrocer.com. The site has contemporary reports dating back to 1985 as well as timely professional advice and viewpoints. Look under the Topic Index or the Index of Back Issues for the best of Cooperative Grocer.

The online food co-op directory also has been enhanced, thanks to collaboration with folks at LocalHarvest.org, an organization dedicated to helping local farmers. The co-op directory now is linked to the LocalHarvest site and an interactive map that locates any food co-op by region or by name. Another link provides sources of locally produced food: farmers markets, community supported agriculture (CSA), and other farmers.

In addition, the directory is interactive, allowing each food co-op to add to its listing: just click on "add information" at the bottom of the directory page. The directory at www.cooperativegrocer.com -- the most complete listing available -- has been made better.

Thanks to LocalHarvest and especially to Cooperative Grocer webmaster Jerry Rockwell for his lead role in creating an attractive and useful website.

FREE DIRECTORY!

 

Closed community natural food co-ops include the one in Omaha, NE, which recently shut its doors after 18 years in business after a bigger, better store (name begins with "W") moved in nearby, assuring the demise of a declining cooperative. Said former manager Kathy Uhlenbrock, "We were too strapped to move and too strapped to stay."

Reviewing the early years of this publication (see sidebar) and its predecessor Moving Food, I am struck by the continuity of themes among our food co-ops: managing growth in a booming natural/organic niche; the drive for professionalism in operations and also on the board of directors; projects designed to learn from other co-ops and to network for mutual improvement; warnings that all of these efforts must be intensified before market circumstances leave us behind.

Reports and statements familiar to me that urge consumer food cooperatives to integrate their separate businesses date to 1948, 1981, 1987, and each year since then. We're all in this together. Practice cooperation among co-ops. The market is changing and will not be so forgiving of loose store operations. Join or die. Become a virtual chain.

This outline analysis certainly applies to the wholesale co-ops as well. During my brief thirty years in this movement I have seen consumer co-op distributor numbers reduced from 25 to 4. The structural limitations of a fragmented network of undercapitalized local co-ops created distributors that were themselves fragmented and undercapitalized. See, for example, my lengthy CG report in 1988 on the demise of Berkeley/Associated Co-ops and of the Minneapolis co-op distributor bought by Blooming Prairie. Its summary lesson: The whole is greater than the sum of its parts.

Co-op distributors were driven to realize greater economies of scale but have been unable to do so via a mutual plan with their member-owner co-ops. The consequences are now before us. However, while it's too late for the co-op natural/organic distributors to integrate their operations, it's not too late for many of the retails. Yet market changes are accelerating, and only the recent period of activity among the Cooperative Grocers Associations gives much indication that our retail co-ops are capable of keeping up with the pace.

"We're unique" is perhaps the co-op statement I have come to trust the least. No matter what your co-op's location or size, the need for more professional depth, the need for stronger capitalization and lower operating margins, the need to join with other co-ops for greater economies and impact -- these are likely to apply to your business. Even at one of the largest, most successful consumer food co-ops in the country, Hanover Co-op, manager Terry Appleby recently put the co-op's members on notice:

"The immense capital resources of the market could [harm] cooperatives if they are not able to adapt and change....Many cooperatives...are asking questions about the key issues they will need to face to ensure their survival. Certainly, national cooperative food wholesalers and retailers are taking up these issues. Central to the discussions is how they may join together to form entities that will meet their members' needs in ways other businesses cannot. For retail food cooperatives, that means we will need to find ways to be competitive in our businesses while remaining close to the values of democratic member control....In a market where size is of such importance, cooperatives need to find ways to cooperate together in better ways. They (we!) need to find the means of sharing resources for more efficiency and to better advantage."

Are you preparing your cooperative for the future? One door opens and another shuts.

See other articles from this issue: #103 November - December - 2002