Food co-ops are booming

Published 12:00 am Wednesday, August 17, 2011

By Lisa Rathke
Associated Press
Cooperative grocery stores have been on a boom-then-bust cycle since they first emerged after the Great Depression.
And the cycle at the moment is back to boom. As more Americans look for more ways to control their spending — as well as where their food comes from — small grocers that are owned by their “member” shoppers and focus on local and natural foods are back in vogue.
Around the country roughly 300 cooperatives already run 330 stores, with at least another 250 under development, everywhere from New Orleans to Fairbanks, Alaska, according to Stuart Reid, executive director of Food Co-op Initiative, a nonprofit that provides resources and support for organizing groups.
During the past two to three years alone, 10 to 12 new stores have opened each year, according to Cooperative Grocer magazine, which keeps an online directory of food co-ops.
“The economy is certainly part of the reason, but another part of the reason is Americans are looking for ways to own and control the means of providing the services they want,” says Andrea Cumpston, a spokeswoman for the National Cooperative Business Association. “For example, in the food co-op industry they’re looking to be able to own the store that provides them with their local foods and to know and trust where those foods are coming from.”
That’s what keeps Nickie Dymon, 47, shopping for her family at City Market Onion River Co-op in Burlington, Vt. She also appreciates that she can save money — and lessen her ecological footprint — by buying in bulk, and filling her own recycled bottles and bags with coffee, laundry detergent, cooking oils, soy sauce and maple syrup.
“I buy all my fruits and vegetables here and a lot of my groceries here,” she said recently while shopping in the produce section, which this time of year offers locally grown fingerling potatoes, blueberries, green and yellow string beans, tomatoes, baby spinach, lettuce and radishes.
The first food co-ops grew out of the Great Depression, but most did not survive, says Reid. The next wave came during the 1970s, fueled largely by interest in natural foods otherwise unavailable at mainstream grocers. But Reid says many of those failed, too, in part because they lacked sophisticated business operations.
Those co-ops that did survive from the ’70s and ’80s have continued to evolve to meet the needs of their shoppers and compete with mainstream food outlets that have since begun selling the natural and organic products that co-ops once held near monopolies on.
The 32-year-old St. Peter Food Co-op in St. Peter, Minn., for example, this spring moved into a 10,000-square-foot former car dealership, nearly doubling its space. Since the move, membership has increased by 10 percent, said general manager Margo O’Brien.
Joining a food co-op generally entails paying a one-time fee that averages about $150, though payment plans are available with much lower fees, and some co-ops offer waivers for low-income shoppers. For that, members own a share of the co-op, might receive a share in the profits, and get to vote for things such as who sits on the store’s board of directors, and whether the store should expand or open a second site.
Most co-ops don’t require shoppers to be members, but the culture of the stores encourages it.
“It’s a very democratic type of organization. And then when the business is profitable the profits go back to those owners who are the people that shop in the store and it’s usually done based on how much they patronize the store,” Reid said.
Though not all cooperative markets specialize in natural and organic foods, most at least focus on local and bulk items, everything from laundry detergent to rice and nuts. And most of those products often come with higher prices.
“The perception of higher costs comes from the decisions about which products they sell,” Reid said. “The products themselves are not more expensive. The way that they’re grown and the way that the people who produce them are paid adds costs and … it’s not subsidized like commodity products are.”
The price and array of products aren’t for everyone. Even co-op members may do only a portion of their shopping there. When the city of Burlington opted to replace its old downtown grocery store with a co-op nearly a decade ago, some people in the community balked.
“‘You’re not going to take away my red meat and make me eat tofu,” Reid said was one fear he heard.
Co-ops typically start at the grassroots level with one or two people wanting to replicate another co-op. Startups can range from a few hundred members to a couple of thousand. Some of the more established co-ops are backed by tens of thousands of members.
For some consumers, another perk is the ability to get hands on to get a discount. Dymon works four hours a month at her store in exchange for a 12 percent discount on purchases.
As co-ops have evolved, they’ve shed some of their old image. A focus on local and artisanal goods — including locally raised or produced meats, cheeses, beers and wines — as well as the addition of delis and prepared foods have attracted a whole new food-centered generation of shoppers. This is a long way from the organic dried beans, granola and tempeh that once seemed to define these stores.
“They’re much more sophisticated and they have a broader mix of products,” Reid said.
Many co-ops also use the community-centric approach of their stores to give back to the community.
At City Market, which evolved from the Onion River Co-op that opened in the 1970s on a side street in a city neighborhood, members have a chance to volunteer at charitable groups within the community, such as the Committee on Temporary Shelter, to earn a store discount.
“One of the things that our board tells us what to do is to work toward having a healthy community. And I think that’s one of the real blessings of a co-op is that we’re not owned by some multinational corporation that is just trying to extract as much money as we can from the sites that we’re situated,” said Clem Nilan, the store’s general manager.
“This is something that really is based in our community, it’s owned by a community and it’s supposed to be nurturing in a real fundamental way,” he said.