Seeking Cooperative Alignment and Identity

This mid-year edition is highlighted by annual reports on food co-op practice and prospects. Directors and managers from many of these co-ops recently met at their leading national training and networking conference, the Consumer Cooperative Management Association. CCMA is a key gathering for renewing friendships, reviewing professional challenges, and contemplating broader perspectives, and we bring you news of this annual event. We also offer a detailed report on food co-op performance in the past year, along with a summary of industry trends, giving depth to those professional challenges and larger messages.

As discussed in the Retail Operations Survey, most co-ops are maintaining good operating results, but larger grocery sector trends are disturbing. Food co-ops continue to record strong sales growth and consistent owner earnings, and their individual balance sheets carry relatively low levels of debt. However, co-ops often have a fragmented and conservative approach to development of new stores. In this regard their position in the natural/organic market is eroding, challenged by the entry of larger, more strongly leveraged chains: Whole Foods, Wal-Mart, and an array of other grocery competitors.

In response to growing market opportunities and threats, co-ops are building greater alignment and a common identity. Stronger co-op professional resources are carefully being built both locally and nationally—but perhaps too slowly.

While local co-ops are deepening their understanding of co-op mission, few of them have defined their mission in terms that explicitly align with other co-ops. Yet the notion of “neighboring” co-ops should really be understood as less a matter of geography than of mission. The national body, for its part, has only begun to achieve overall alignment and still has a great deal to accomplish in enacting programs that successfully address purchasing, training, branding, and other common needs.

Having pioneered much of the expanding natural and organic sector, today’s food co-ops must evolve more rapidly if they are to retain or regain leadership in their markets and communities. One manager’s recent listserve comment on a specific operations question actually describes an entire range of issues raised by the need to unify our co-ops: “Although many of us talk the talk, I don’t think there is yet enough alignment and willingness to change practices in our own stores to support a national agenda and be able to walk the walk.”

Thus, cooperative alignment and identity have emerged as key challenges. Greater commitment and clarity throughout—by members, management, and directors—will strengthen market position and the fulfillment of mission. Alignment is needed within each co-op by multiple stakeholders and within the food co-op sector by member businesses and its national leadership. This alignment needs to support a clearer common identity—one likely to be centered on local ownership and service to the community. Factors related to that identity are also discussed in this edition, including threats to the sustainable aspect of organic production as well as opportunities for local store branding supported by a strengthened national program.

These challenges echo some of consumer cooperatives’ historic resistance to transcending a strictly local identity through combination. Ninety years ago, Peter Warbasse and others founded our national association in the belief that cooperatives could play an essential role in civilizing capitalism, and that consumer co-ops could flourish and balance the more concentrated power of producer cooperatives. However, except in the impressive growth of credit unions, that vision for consumer cooperatives is largely unrealized in a culture of individualism (“We’re unique!”), where consumerism often trumps solidarity.

Nevertheless, food co-ops are increasingly realizing stronger alignment and a shared identity, and co-op leaders are increasingly aware of the centrality of these efforts to our future. Without greater unity and groundbreaking progress on establishing a common, branded identity, the present generation of consumer co-ops, like most of the previous generation, may lose rather than expand its base of member owners and stores. But if they do achieve stronger alignment and identity, today’s cooperatives will be much better positioned for the future—better prepared for tough market challenges as well as additional social and environmental disruptions.

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Dave Gutknecht is editor of Cooperative Grocer ([email protected]).

See other articles from this issue: #125 July - August - 2006