The Little Co-op That Could—With a Little Cooperation
You stroll through the sliding glass doors and fumble for the grocery list at the bottom of your reusable bag. Immediately, you have the sense that something’s different in this store. Friends told you that would be the case. You can’t put a finger on it, but, yeah, something is definitely different here.
You push your shopping cart through the produce aisles. There are the usual price tags on the potatoes and tomatoes and corn and apples and all the other fruits and veggies. Next to a lot of the tags are small signs with photos and descriptions of actual farms and farmers. You look around and realize that these farms and farmers are located pretty close to here and they produce much of the delicious food surrounding you.
In the bulk section, you find recipes for how to prepare stuff you’ve never had the nerve to try—bulgur wheat, mung beans, hominy, quinoa. And you never knew so many cheese and dairy products were produced in these parts; but there they are, displayed on the dairy section’s shelves.
You wend your way through the frozen-food section, past the bakery (with locally baked sticky buns) and the butchery (you sample the locally made sausage) and through the health and beauty section.
On your way to the checkout stand, you notice what’s really different in here is the lighting. The lighting and the smiling faces it illuminates around you make you feel comfortable here. And here comes a smiling face now. A store employee sees you staring up at the lighting fixtures and says, “Welcome to the co-op! Can I help you find something?”
In 47 of the 50 United States—and no, Utah is not among them—there are stores like this. They are called cooperative markets. They are member-owned and democratically controlled, meaning their customers are also their investors, and each investor wields a vote in the organization, each investor receives some manner of return on their investment in a profitable year at the store, and each investor gets to walk into their grocery store and say, “I own a piece of this.”
Along with farmers markets, cooperative grocery markets are the ideal business model for the current foodie movement. They have regular grocery store hours, a friendly “corner-store” vibe, well-paid, well-benefited and often happy employees, and they focus on selling high-quality, natural, healthy, sustainable foods, goods and merchandise, with a strong emphasis on locally produced items. An average co-op market buys goods from roughly 150 local producers; conventional stores contract with fewer than half that number.
Unlike nearly all other business models, structured as they are around one essentially vapid “philosophy”—maximizing profit for shareholders —classic co-ops are defined by their adherence to seven guiding principles: voluntary and open membership; democratic member control; member economic participation; autonomy and independence; education, training and information; cooperation among cooperatives; and concern for community. They have the interests of the environment and community at heart. They also serve as incubators for local farmers and added-value food producers: think salsa makers, cookie bakers and hummus gurus.
According to one count, there are approximately 325 cooperative grocery stores in the US, with another 200 in development. Even Wyoming, with a population half as large as Salt Lake City’s, has a co-op—in Laramie, population 31,000.
An effort is currently underway to get Utah off the list of the three states—Oklahoma and Alaska, included—that currently don’t boast a true cooperative market. The Wasatch Cooperative Market doesn’t yet have a storefront or employees or food to sell, but since the co-op was founded in 2009, 200 Utahns, from Draper to Logan, have recognized the need for a cooperative grocery store in the capital city and they’ve made the one-time $300 investment necessary to become a founding member-owner.
The Co-op’s board members have set a goal of bringing onboard 400 member-owners by July 2013. The group received a much-needed boost from two recent $10,000 grants awarded to it by the Utah State Legislature and an independent consulting group, but it has struggled to find the necessary number of investors to complete its initial development and move on to choosing a store location.
The idea of co-op markets may be foreign to many Utahns, but the concept is nothing new across much of the western world. Indeed, they’ve became so influential in the global economy that the U.N. declared 2012 the International Year of Cooperatives. That’s big pretty big billing for a business model that traces its humble roots back to the year 1844, when a small group of impoverished weavers and other works in Rochdale, England, decided they’d had enough with the encroaching poverty foisted upon them by the encroachment of the Industrial Revolution.
Barely able to afford the staple food items they needed to survive, the 30 tradesmen banded together as the Rochdale Society of Equitable Pioneers to open their own store where they could sell foodstuffs at reasonable prices and pay workers a reasonable wage. The Rochdale Pioneers laid out the seven principles that guide successful cooperative businesses to this day. Within three months, they had made enough profit to expand their selection and were soon known for providing goods of the highest quality. What began as a humble community store in north-central England has burgeoned into more than 5,000 storefronts selling everything from food to insurance, electricity, legal services, even funeral care.
The cooperative movement thrived in Europe, and was injected with new life in the United States in the 1970s when the “second wave” cooperatives were formed by people who, faced with the growth of commercially manufactured foods and diminishing local crops, wanted access to natural and organic foods outside of the national grocery chain stores. From 1969 to 1979, 10,000 new food co-ops were established in this country.
At first glance, Utah may appear bereft of co-ops. But have you ever shopped at an Ace Hardware store? Or bought gear at REI? Have you ever spread Land ‘O Lakes butter on your toast or poured yourself a glass of Sunkist orange juice or tossed a handful of Blue Diamond Almonds into your mouth? Is your car or house covered by Nationwide Insurance? Yep, they’re all co-ops, member-owned and operated. And did you ever shop at ZCMI, the Zions Cooperative Mercantile Institution, Utah’s first co-op? Faced with the imminent completion of the Transcontinental Railroad, Brigham Young rounded up community and business leaders to organize a community-owned department store dedicated to supporting local manufacturing and sharing profits with the Mormon community.
Alan Stutz, currently acting chair of the Wasatch Cooperative Market’s board, has been involved with the organization since its inception five years ago. He came to Salt Lake City from California in 2007, and one of his first upon arriving was, “Where’s the grocery co-op?” Two years later, he and Salt Lake native Ben Gaddis jump-started the Wasatch Community Co-op, hoping to catch a spark with Wasatch Front residents. Member-ownership in the Co-op carries a one-time $300 price tag, although the group stresses that money is an investment, not a fee. It is technically a for-profit organization, and in a profitable year the by-laws require it to disburse a minimum of 20% of its profits to member-owners as dividends. How large a dividend a given member-owner receives depends on how much they shop at the market.
Being member-owned, co-ops can be slow in developing, especially in areas unfamiliar with the concept of a co-op grocery market. It takes time to disseminate the idea and to convince people that it is indeed a good idea, even in tough economic times, to invest several hundred dollars in a market that can’t put food on your table today. And a co-op can’t exist without the financial support of visionary founding member-owners. It takes at least five years, on average, for a co-op to get from the development phases to its grand opening.
“You get out what you put in,” Stutz says of the group’s development efforts. He and a handful of new and potential member-owners were at a potluck dinner held by the Co-op. While the group can’t currently offer food on store shelves to its member-owners, it strives to cultivate community around food and local businesses: member-owners can show their Co-op member cards at several area storefronts and restaurants to receive a discount. Stutz and member-owner Alison Riley were seated at a kitchen table in the home of Barbara Pioli, the Co-op’s development coordinator. Riley, who’s never stepped foot in a co-op grocery store, listened intently as Stutz explained that “non-member-owners will get the same off-the-shelf price as members, but the co-op will only pay out profits to member-owners. So there’s a direct incentive for co-op members to shop at the market.”
Perhaps it would be more accurate to say there will be an incentive when there’s a physical market to shop at. “That’s the number one question we’re asked: Where’s the store?” Stutz said, with a note of frustration. “I get the feeling from a lot of people that they’ll invest once the doors open.”
The Co-op’s board members calculate they need to bring on 400 founding member-owners to complete a feasibility study that will help pinpoint potential locations for the 10,000-square foot market they currently envision. They arrived at that store size on the advice of a consultant who emphasized that any smaller, and the store wouldn’t be able to service a community as large as Salt Lake’s.
It’s understandably difficult for some new investors to put money into a store that doesn’t even exist, but at which they’ll be expecting to shop. Once a suitable location for the store has been pinpointed, board members expect the response will be, “That’s the perfect location,” or maybe, “It’s a little out of the way, but we could make it work.”
Food-buying clubs, run cooperatively, have been around Salt Lake City for decades. In the January 2004 CATALYST, we noted that there was a moratorium on forming new buying clubs in the valley because the distributor that supplied local co-ops also supplied Wild Oats (since purchased by Whole Foods) and did not wish to further impinge on the retailer’s market.
Several food-related organizations in the Salt Lake Valley have “co-op” in their names. While these businesses may provide valuable services to the community and the producers they contract with, they do not adhere to the seven guiding principles that define a cooperative. Community supported agriculture (CSA) associations are sometimes mistaken for cooperatives, to, but they are not.
Classic co-op grocery stores, such as the Boise Co-op, the Community Food Co-op in Bozeman, Montana, or the very successful Wheatsville Co-op in Austin, Texas, keep regular grocery store hours and offer a dependable year-round market for local goods and produce.
Stutz said he had expected the Wasatch Cooperative Market would have signed up enough member-owners to afford the feasibility study by now, four years into the group’s development phase. The good majority of the Co-op’s founding members reside in and around downtown Salt Lake, which is where Stutz says the market will in all likelihood be located.
“People need to see a business plan,” argued Denise, another Co-op member-owner at the potluck dinner. She said there’s a vast influx of new Salt Lake residents who relocated to the area from more progressive regional cities—like Boise, Eugene and the Bay Area—where co-ops are a way of life for many socially conscious city dwellers. “There are a lot of people who moved here from out of town and they belonged to co-ops where they were before, and they want one here. They have the money and they want to do this,” she said, “but they need to understand why this one will work.”
If all goes as planned, the Co-op’s business plan might be drawn up and that feasibility study could be conducted sooner rather than later. The $20,000 grants it has recently received will help pay for both those projects and cover the wage of a paid communications intern. The only catch is that same niggly one the group has contended with for years: They need more member-owners. They need investment money from people eager for Utah to finally terraform its co-op desert.
As Stutz put it, the co-op is past the point of no return, and it will happen in one form or another. He laid it out plainly for Riley as they sat at the kitchen table. “We may not get the store size we want, and I don’t know if we’re going to open next year or in five years. It totally depends on growing member-ownership. We’re not dragging our feet, but people keep asking us when we’re going to open, and we tell them: when you become a member-owner.”
Utahns are no strangers to cooperative organization. We are, after all, the Beehive State, and the dominant Mormon culture puts a premium on volunteerism and community building, and the larger social framework is shot through with a thorough understanding of the importance of working together. If Stutz is right and the Co-op’s doors do in fact open sometime in the future, it will provide Utahns with a living link to the legacy of the Rochdale weavers, the heritage of ZCMI, and a deeper connection good, honest, naturally produced and local food. And when its doors finally open, its founding member-owners will be able to proudly proclaim, “I helped build that.”
Classic co-ops are defined by their adherence to seven guiding principles:
• voluntary and open membership
• democratic member control
• member economic participation
• autonomy and independence
• education, training and information
• cooperation among cooperatives
• concern for community