Small Co-op, Big Leap!

After 28 years in the same location, Bluff Country Co-op's members made a large leap. The results: a beautiful new store and renewed belief in how a small co-op can do big things through the power of cooperation.

Located in Winona, Minnesota, in the Mississippi River Valley, Bluff Country started in 1972 as a small buying club named Famine Foods Co-op. The name Bluff Country Co-op was adopted in 1989 in conjunction with a renovation project and image "facelift."

Heated by a large wood stove that had to be stoked by volunteers on winter nights, the original store had a funky charm that was a magnet for area residents with common interests in food, politics, and culture. Periodic store renovations produced spikes in the sales but also exposed the limitations of the aging store, with its 1100 square feet of retail space and cramped quarters. Annual sales were about $300,000. Profitability was modest even in the best years.

Fiscal year 1998-99 fundraising projects brought in about $35,000 in capital. An improvement that set the stage for relocation was the installation in March 1999 of a point-of-sale computer system. The event was a technological quantum leap for the one-register store, instantly transforming pricing, ordering, accounting, and inventory tracking procedures.

The search for a new storefront continued through 1999. Directors and members visited other co-ops, gathering ideas from other expansion projects. While board members crafted a business plan and a member-loan program, a resourceful co-op member was hired as relocation project manager, and the woman who had served as the store's manager ten years earlier signed on as his assistant.

The big break came in the spring of 2000, when we found space available to lease in an unassuming one-story brick building just off Main Street, three blocks west of the original store. The 5600-square-foot space had housed a small supermarket and then a dance hall, but had been empty for several months. Despite its dark ambiance and the proximity of a lively college bar next door, consultants and contractors who toured the site rated it highly and gave glowing assessments of its potential.

After several changes in design, in July we signed a ten-year lease that provided for landlord participation in the renovation. Improvements provided by the landlord included large display windows, upgrading of bathrooms and HVAC systems, and installation of vinyl tile flooring and lighting fixtures.

P.J. Hoffman of Blooming Prairie Natural Foods visited and conferred often, offering invaluable guidance. And a supportive local archtect provided the construction blueprint for a fee that was less than one-tenth of the quote from another architect we consulted.

Armed with a solid business plan, a signed lease, and attractive floor plans, the finance committee launched an earnest capital campaign. Member loans totaling $244,000 were secured on a deferred-payback basis, with no interest payments due for the first three years. Northcountry Cooperative Development Fund provided financial advice and a five-year note of $37,000. A very supportive local bank lent $60,000.

The site was abuzz with construction for several months. Staff, members, sales reps, and volunteer vendors worked almost around the clock in the final week. The new co-op opened on October 27, right on schedule. Opening weekend was festive, with live music, free samples, storewide discounts, and scores of smiling faces celebrating the accomplishment.

Bluff Country's business plan projected sales increases of 60% in the first year, but by February sales were 75% higher than the same period of the previous year. The co-op may generate a profit sooner than the year-five mark predicted by the business plan.

The new store, with its greater inventory, wider aisles, brighter lights, three checkouts, and deli seating, has been a big hit with customers. In the first month of operation, households became members at the rate of nearly one a day.

The staff enjoys better working conditions with more spacious offices, displays, and backstock areas, plus greatly improved equipment and store systems. The produce department has more than doubled in size. Freezer space has increased about sixfold. The tiny walk-in has been replaced by a large walk-in produce and bulk dooler, a back-loading dairy cooler, and a walk-in freezer.

The employee roster has grown from one full-time manager and six part-time staff to a general manager with three full-time and seventeen part-time staff. Our new store is the center of a growing co-op community, one that includes individuals newly awakened to food and health issues as well as volunteers from the second and third generations of the founders' families. Bluff Country Co-op has a bright new face and outlook -- and room to grow.

 

Bluff Country Cooperative: Winona, Minnesota

[old location / new location]

Size (retail):  1,100 sq. ft. / 3,500 sq. ft.

Size (total):  1,700 sq. ft. / 5,600 sq. ft.

Annual sales:  $458,000 / $385,000 (six months)

Average transaction:  $12.65 / $15.41

Staff:  8 / 20

Member owners:  400 (9/2000) / 475 (2/2001)

Relocation project costs:  $302,000

 

Bob Copeland is Bluff Country's manager.

See other articles from this issue: #094 May - June - 2001