Growing the Co-operative Food System


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This presentation explores the impact and potential of co-operative enterprise in our regional food system, from the producer to the consumer. This presentation reviews various co-op structures, including producer, consumer, worker, and multistakeholder models and provides guidance for people exploring a co-operative business start-up or conversion in their community.

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Growing the Co-operative Food System

  1. 1. Growing theCo-operative Food System Erbin Crowell, Executive Director NFCA NOFA MASS Winter Conference Worcester, MA // January 12th 2013
  2. 2. Outline1.  Our Context2.  What is a Co-op?3.  Why Co-ops?4.  Where is the Potential?5.  Starting a Co-op6.  Questions, Feedback & Ideas
  3. 3. 1. Our Context•  Crisis of Global Economic System•  Unemployment•  Dramatic Shifts in Wealth•  Diminished Democracy•  Instability & Change•  Hunger for Alternatives
  4. 4. What If…?There was a business model that...•  …was democratic.•  …was rooted in our local communities.•  …was part of a values based movement.•  …put common good before private gain.•  …delivered tangible benefits.•  …was flexible and innovative.•  …was successful and resilient.
  5. 5. England in the 1800s•  Dislocation of Local Economies•  Dramatic Shifts in Wealth•  Concentration of Economic Control•  Poor Working Conditions•  Limited Access to Healthy Food•  Birth of the Co-operative Movement
  6. 6. Rochdale Equitable Pioneers •  Founded 1844 •  Weavers, Unionists, Community Activists •  Member-Owned Store •  Principles for a Movement
  7. 7. Beyond a Grocery Store What was the motivation ofthe Rochdale Pioneers, who codified the values and principles on which the co-operative movement has based since 1844? We know it today as food security. Dame Pauline Green, President, International Co-operative Alliance
  8. 8. Co-ops Today…Are more common than we think•  1 billion members worldwide (1 in 4 in the US)•  More people than own stock in multinationals•  Majority of US farmers are co-op membersAre innovative•  Healthy food, organic agriculture, Fair Trade, relocalization, regional aggregation and distributionAre successful•  30,000 co-ops in all sectors of US economyAre resilient•  Survived and grew during the global recession
  9. 9. 2. What is a Co-op? A co-operative is an autonomousassociation of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise. International Co-operative Alliance •
  10. 10. The Basic IdeaA business that is equitably owned anddemocratically controlled by its membersfor their common good, the good of thecommunity and to accomplish a shared goalor purpose.Any surplus (profit) is distributed amongmembers in proportion to their use of thebusiness, or is reinvested in the business.
  11. 11. Values BasedCo-operatives are based on the values ofself-help, self-responsibility, democracy,equality, equity and solidarity. In thetradition of their founders, co-operativemembers believe in the ethical values ofhonesty, openness, social responsibilityand caring for others.International Co-operative Alliance,
  12. 12. Principles•  Voluntary & Open Membership•  Democratic Member Control•  Member Economic Participation•  Autonomy & Independence•  Education, Training & Information•  Collaboration Among Co-operatives•  Concern for CommunityInternational Co-operative Alliance,
  13. 13. “User” Focused•  User-Owned: People who use the co-op’s services also own it.•  User-Controlled: People who use the co-op control it on a democratic basis (one-member- one-vote).•  User-Benefit: People who use the co-op receive benefits such as patronage dividends, improved price, goods and services, and employment.
  14. 14. Flexibility: Member Type•  Community Co-ops: Owned and governed by members of community.•  Consumer Co-ops: Owned by the people who purchase goods or services.•  Producer Co-ops: Owned by producers who process and market their products.•  Worker Co-ops: Owned and operated by the people who contribute their labor to the business.•  Multistakeholder Co-ops: Owned and controlled by combination of stakeholders.
  15. 15. Flexibility: Activity•  Purchase needed products or services as a group.•  Produce a product or service together.•  Process and value to raw materials produced by members.•  Market products produced by members or by the co-op.•  Provide Employment and a livelihood.
  16. 16. Flexibility: Sector•  Food Co-ops •  Housing Co-ops•  Agricultural Co-ops •  Credit Unions•  Fishing Co-ops •  Communications•  Worker Co-ops •  Utilities Co-ops•  Artisan Co-ops •  Health & Insurance
  17. 17. A Basic Co-op Structure MEMBERS Elect Worker Co-op BOARD OF DIRECTORS Hire Consumer or MANAGEMENT Producer Co-op Hire STAFF Product or ServiceA Multistakeholder Co-op CONSUMERS OR Collectivesincludes a combination of flatten organizational layers, PRODUCERSmember types. emphasizing consensus and group decision-making.
  18. 18. 3. Why Co-ops?Co-ops & Economic Resilience:•  Community ownership & control•  Focus on service, meeting needs before profit•  Develop local skills & assets•  Ability to assemble limited resources•  Regional economic efficiencies•  Difficult to move or buy-out•  Root wealth in community, not markets•  Member, customer loyalty•  Low business failure rate & are long-lived…
  19. 19. Ontario Co-op Association //
  20. 20. The ResultMore stable local food systems, infrastructure, employment, services, and economy.
  21. 21. International Year of Co-opsCo-ops “in their various forms, promote the fullestpossible participation in the economic andsocial development of all people, includingwomen, youth, older persons, persons withdisabilities and indigenous peoples, are becominga major factor of economic and socialdevelopment and contribute to the eradication ofpoverty.”United NationsResolution 64/136
  22. 22. International Year of Co-opsWhat the United Nations says:•  Community ownership•  Economic & Social Development•  Poverty reduction•  Employment generation•  Fairness in globalization•  Conflict resolution & reconstruction•  Food security•  Innovation & resilience
  23. 23. A Co-operative Decade?“The real opportunity, of course, is to use2012 to help achieve a longer-term vision.ICA is committed to turning the InternationalYear of Co-operatives into A Co-operativeDecade, with the goal of the co-operativebeing the fastest-growing model ofenterprise by 2020.”Charles Gould, Secretary GeneralInternational Co-operative Alliance
  24. 24. 4. Where is the Potential? The Neighboring Food Co-op Association is a network of food co-ops committed to ashared vision of a thriving regional economy, rooted in a healthy, just and sustainable food system, and a vibrant community of co-operative enterprise.
  25. 25. Telling Our Story…Neighboring Food Co-ops•  34 Co-ops & Start-Ups•  80,000 memberships•  1,450 employees•  $28.6 million in wages•  $200 million revenue•  $30 million in local purchases
  26. 26. …Across the EconomyNew England & New York•  8,860 co-ops•  9.5 million members•  Employ 55,000 people•  $2 billion in wages•  $100 billion in assets•  $14 billion in revenue
  27. 27. Our Co-ops in the Food SystemLeveraging the shared PRODUCTION PROCESSINGimpact of food co-opsin the food system… WASTE & NUTRIENT DISTRIBUTION: MANAGEMENT NFCA MARKETING DISTRIBUTION: CONSUMPTION TRANSPORTATION NFCA Food Co-op DISTRIBUTION: Member-owners SOURCING NFCA Based on Member Components of a Food System Food Co-ops (Nickerson, 2008)
  29. 29. 286 F A R M E R S (1,700 TOTAL) •#Organic(Valley(( Co/op(Member(Farmers( Connec0cut# 1# Maine# 30# Massachuse8s# 2# New#Hampshire# 9# New#York# 115# Vermont# 129#Our$coops:$Working$together$for$a$more$ 33 FOOD CO-OPSjust,$sustainable$and$democratic$$ NFCA(Member(Food(Co/op((regional$food$system.$ Loca:ons(&(Start/Ups( AS#OF#12/31/2011#
  30. 30. Deep Root Organic Co-op•  Founded 1986•  19 members in VT & Québec•  84,095 cases of produce (2011)•  $2.2 million in revenue (2011)•  Revenue for first half of 2012 up 40%•  Customers across VT and New England•  Partner in NFCA Frozen Vegetable Project
  31. 31. Other Examples•  Production: Arethusa Farm, Diggers Mirth•  Purchasing: Greenfield Farmers Co-op, Intervale Farm Co-op, Hardwick Farmers Co-op•  Aggregation: Deep Root, Agri-Mark (Cabot), Pioneer Valley Growers Association, Organic Valley•  Processing: Organic Valley, Green Mountain Spinnery, Real Pickles (Converting)•  Marketing: Equal Exchange•  Distribution: Valley Green Feast (Conversion), Mass Local Food Co-op•  Retailing: Franklin Community Co-op, River Valley Market, Leverett Village, Old Creamery (Conversion)
  32. 32. 5. Starting a Co-op•  Launch a new co-op•  Convert an existing business
  33. 33. ConversionBasic Questions:•  Is there a willing seller?•  Are there potential member owners?•  Is the business viable?•  Is there a support system?•  Designing the transaction•  Completing the transaction•  Ongoing investment in education and training•  Linkage with co-op community
  34. 34. Launching a New Co-opActivities:•  Define overall purpose or goal•  Create steering committee•  Raise pre-development funds•  Hire a coordinator, if possible•  Conduct feasibility study•  Establish the founding board•  Incorporate and adopt by-laws
  35. 35. Launching a New Co-opActivities, continued:•  Develop a business plan•  Create membership agreements•  Recruit members and equity investment•  Access necessary debt financing•  Hire appropriate management•  Open for business
  36. 36. Basic Development ProcessTimeline•  12-18 months to incorporate (varies widely!)•  Open doors – 2 yrs, 4 yrs, 12 yrs•  Existing facility or business can be fasterResources needed•  Committed, visionary leadership•  Co-op business, legal, and financial support•  Member equity investment•  Start-up financing•  Peer support & guidance
  37. 37. Legal StatutesGeneral Co-op Statutes •  MA, Title XXII, Ch. 157 •  ME: Title 13, Chapter 85: CooperativesWorker Co-op Statutes •  VT: Title 11, Ch. 8: Worker Cooperative Corporations •  MA: Title XXII, Ch. 157A. Employee Cooperative Corporations •  CT: Ch. 599a Worker Cooperative Corporations“C” Corp with Co-op BylawsLLC with Co-op Operating Agreement
  38. 38. Some Guidelines for Success  Strong, committed member leadership  Set realistic goals and focus on them  Base decisions on concrete market research and business planning  Invest in member education and keep members informed and involved  Use technical assistance from reputable co-op developers and industry experts  Seek out peer support from other co-ops
  39. 39. Some Guidelines for Success  Businesslike meetings  Sound co-op business practices  Culture of appreciation, openness, & honesty  An open hiring process  Sufficient capital for launch  Business scaled to market  If possible, hire project staff
  40. 40. Concerns for Co-operators•  Understanding group dynamics•  Facilitation of process, shared vision•  Defining roles and responsibilities early•  Professional standards•  Participatory but focused environment•  Recognizing strengths and weaknesses
  41. 41. Concerns for Co-operators•  Engagement of members•  Encourage and develop broad leadership•  Ongoing training in: •  Board leadership •  Fiscal oversight •  Project & strategic planning •  Communication, facilitation, conflict resolution
  42. 42. Why Go Co-op?Co-operative enterprises:•  …put people before profit,•  …are community owned,•  …are accountable to members,•  …are successful businesses,•  …strengthen local economies,•  …are resilient,•  …build a better food system.
  43. 43. 6. Discussion•  Questions•  Feedback•  Ideas•  Opportunities
  44. 44. Erbin Crowell, Executive DirectorNeighboring Food Co-op //