Pursuing a Co-op Controlled Label

I am passionate about natural foods. I am passionate about co-ops. And I am passionate about success.

My passion for success is not about my own personal success, although I like the fulfillment and comfort that personal success brings. My passion for success is about succeeding at doing the right thing and being a part of a community of success. The analogy I like to use centers around fishing (oh yes, I am passionate about fishing as well!). I don't have to be the one to catch the big fish. I'm just as happy to be one of the fisher folks in the boat that catches the big fish.

"A national brand owned and controlled by retail natural foods cooperatives will be the cornerstone of our face, our attitude and our spirit in the marketplace."

What does all this have to do with a national controlled label? I believe that a national controlled label is our "big fish." I envision a vibrant brand that effectively connects value and the values that resonate with natural foods consumers across our nation. I envision a brand that is owned and controlled by retail natural foods cooperatives. This brand will be the cornerstone of our face, our attitude, and our spirit in the marketplace. This brand will also give our cooperative businesses an opportunity to compete in a very challenging retail landscape.

Last December I introduced a discussion paper on this idea to a number of general managers from co-ops associated with five of the six Cooperative Grocers' Association (CGAs) then established across the country. The idea was thoroughly discussed at the national gathering of CGAs here in Seattle in January of this year. These discussions resulted in the national controlled label being a part of a business plan being drafted for the formation of the National Cooperative Grocers Associations.

The discussions also resulted in a final draft of a request for proposal to conduct a feasibility study on the implementation of a national controlled label program. This request was sent out to eight consulting firms. Three of these eight firms made proposals, of which one has been chosen: Mayes Consulting, Park Ridge, Illinois. Frank Mayes, the principal, has an excellent background, having served as the senior vice president of planning and development for Topco Associates, one of the nation's leading private label processors. The cost of the feasibility study will be approximately $30,000.

As of May of this year, the NCGA has become an incorporated entity. NCGA will fund half of the project costs ($15,000) from dues received by the participating CGAs. A number of CGAs and individual co-ops have generously stepped forward to complete the funding, which will be administered by the NCGA. I would like to take the opportunity to recognize and thank them. They are:

  • Blooming Prairie Cooperative Warehouse
  • Cooperative Grocers Association Midwest
  • Cooperative Grocers Association Southeast
  • Davis Food Co-op
  • Hyde Park Co-op
  • North Coast Cooperative
  • Northwest Cooperative Grocers Association
  • Sacramento Natural Foods Co-op
  • Twin Cities Natural Foods Co-ops

I would also like to recognize and thank the National Cooperative Bank Development Corporation for its funding and support of the NCGA. I will continue to be the project manager and support Mayes Consulting to complete the controlled label study. We will need a lot of help and support from all our co-ops to gather accurate data and input. I am depending on you all to be ready and helpful!

The feasibility study will begin in August and be completed by early October. If the results are positive, the next steps will be hire or contract for management of the enterprise, complete a business plan, seek more funding and financing, and begin to produce and roll out product.

These are competitive, challenging and exciting times. I look forward to having a nationally branded label controlled by retail co-ops. I believe that this will be key to our future success. Such a label and product will provide value to our members and shoppers and will also be a valuable competitive tool. Please join us in catching the "big fish."

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A 1950s Co-op Label Tale

I'm glad to see us making progress toward a controlled label all the stores can use.

Back in the mid-fifties, when I was Director of Advertising, Promotion and Education for Co-op Enterprises of Akron (Ohio), we made good use of the Co-op label items then available through National Cooperatives. I remember particularly how well we did with our laundry detergent, Co-op Breakwater. Consumer's Report gave it top ranking one year for best value, over all the national brands.

I made displays consisting of six-foot high replicas of the box it came in, with large arrows pointing through the boxes down to where we displayed the product on the shelves. We hung this from the ceiling of each of our five stores, where it could be seen throughout each store.

Then, I had envelopes printed, also replicating the design on the box, and I filled each one with a single cup of the detergent. We handed those out as samples.

Actually, the produce was Tide. But we were able to sell it at a price below what we had to charge for Tide, and still make a better margin on it. It didn't take long before Co-op Breakwater outsold every other detergent -- except Tide.

Having the name "Co-op" on a large number of our products helped build loyalty among members. They were reminded of the store where they bought these items every time they used them. And they had an owner's feeling for these products, just as they had for our stores themselves. They knew the product was a good quality and a good price, and they knew the co-op had got it for them. And we improved the co-op's margin.

I've been enthusiastic about Co-op label goods ever since. I'm glad to see us moving toward another good Co-op label program again.

--Joel Welty, Executive Director
Michigan Alliance of Cooperatives
See other articles from this issue: #084 September - October - 1999