This presentation from the Neighboring Food Co-op Association’s track of workshops “Co-operatives in the Food System” at the 44th Annual NOFA Summer Conference covers stories from the book "Building Co-operative Power" of the history and concept of worker co-operation including past and present examples of worker co-operatives, co-op collaboration in and across sectors, conversions, education and development in the Connecticut River Valley. Presenters: - Suzette Snow-Cobb: Sourcing Coordinator for the Neighboring Food Co-op Association stakeholder director for VAWC. - Adam Trott: Works at the Valley Alliance of Worker Co-operatives (VAWC) and Shared Capital Cooperative.

1. Economic Democracy:
Building Co-operative Power
Suzette Snow-Cobb, Neighboring Food Co-op Association (NFCA)
Adam Trott, Valley Alliance of Worker Co-operatives (VAWC)
Northeast Organic Faming Association (NOFA)
Summer Conference, 11th
August 2018
Hampshire College

2. Your Presenters
Suzette Snow-Cobb
• Sourcing Coordinator, NFCA
• Franklin Community Co-op/Green Fields
Market & McCusker’s Market, Co-op
Manager 1997-2017
• Stakeholder Director, VAWC Board of
Directors
• Board of Directors, Valley Co-operative
Business Association
• Master of Management, Co-operatives
& Credit Unions
Adam Trott
• Executive Director, VAWC
• Worker/Member, Collective Copies
• Board of Directors, Valley Co-
operative Business Association
• Vice President, Co-operative Capital
Fund (CFNE sister fund)
• Former Community and Political
Organizer
• Will receive Masters in
Management in Co-ops and Credit
Unions Summer, 2019
2

3. Outline
1.Thoughts on co-ops and the economy
2.What is a Co-op?
3.Co-ops & Economic Democracy
4.Conversions: Case Studies
5.Building Co-op Power: Examples from the field
6.Discussion, Questions, Ideas
3

4. 1. Traditional Economy Concepts
• An unaccountable food system & economy
• Crisis of global economy
• Unemployment
• Dramatic inequality in wealth
• Diminished democracy in political systems
• Hunger for alternatives
• Corporate consolidation of food system
• Relocalization & regional economies
4

5. The Challenge of Succession
• Sole proprietorships rarely pass to the next
generation
• Winding down of a business represents lost
community jobs and infrastructure
• Closures impacts the wider community (workers,
producers, local government, etc.)
• Conventional path for successful business is selling
off to a larger business or to investors
• Community investment in the success of these
local enterprises is unrecognized
5

6. What If…?
There was an alternative business model that...
• …was democratic?
• …was accountable to the people it served?
• …was rooted in our local communities?
• …was part of a values based movement?
• …put common good before private gain?
• …was flexible and innovative?
• …was successful and more sustainable?
• …was accessible for everyday people?
6

7. England in the 1800s
• Dislocation of local economies
• Dramatic shifts in wealth
• Concentration of economic
control
• Poor working conditions
• Contaminated, low quality food
• Birth of the Co-operative
Movement
7

8. Rochdale Society of Equitable
Pioneers
• Founded 1844,
Rochdale, England
• Weavers, Unionists,
Community Activists
• Member-Owned Grocery
Store
• Pure, Affordable Food
• Basic Co-op Principles
8

9. 2. What is a Co-operative?
A co-operative is an
autonomous association
of persons united
voluntarily to meet their
common economic, social,
and cultural needs and
aspirations through a
jointly-owned and
democratically-controlled
enterprise.
9

10. Co-operative Business Principles
1.Voluntary & Open Membership
2.Democratic Member Control
3.Member Economic Participation
4.Autonomy & Independence
5.Education, Training & Information
6.Co-operation among Co-operatives
7.Concern for Community
10

11. Values Based Business
“Co-operatives are based on
the values of self-help, self-
responsibility, democracy,
equality, equity and solidarity.
In the tradition of their
founders, co-operative
members believe in the ethical
values of honesty, openness,
social responsibility and caring
for others.”
11

12. A Flexible Business Model:
Stakeholders
•Worker Co-ops: Owned and operated by the people
who contribute their labor to the business.
•Consumer Co-ops: Owned by the people who
purchase goods or services.
•Producer Co-ops: Owned by producers who purchase
inputs, process and market their products.
•Community Co-ops: Owned and governed by
members of community.
•Multistakeholder Co-ops: Owned and controlled by
combination of member types.
12

13. Basic Co-op Structure
13
MEMBERS
BOARD OF DIRECTORS
EMPLOYEES
Elect
Hire
Hire
MANAGEMENT
Worker Co-op
CONSUMERS OR
PRODUCERS
Consumer or
Producer Co-op
Product or Service
A Multistakeholder Co-op
includes a combination of
member types in ownership
and governance.
Collectives
flatten organizational
layers, emphasizing consensus and
group decision-making.

14. 3. Co-ops & Economic Democracy
Co-operative Enterprises…
— are more common than we think
• 1 billion members worldwide (1 in 3 in the US)
• More people than own stock in multinationals
• Majority of US farmers are co-op members
— are innovative
• Healthy food, organic agriculture, Fair Trade,
relocalization, regional aggregation and distribution
— are successful
• 39,000 co-ops in all sectors of US economy
14

15. Co-operatives & the
Sustainable Development Goals
“Co-operatives can be
seen as an inherently
sustainable business
model, with their ‘triple
bottom line’ of social,
economic and
environmental
sustainability…”
International Labour Organization (2016)
15

16. Why Co-ops & Economic
Democracy?
• Community ownership & control
• Focus on service, meeting needs before profit
• Develop local skills & assets
• Ability to pool limited resources
• Build 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…
16

17. Co-operatives & Resilience
• Because they are
community owned, co-ops
root jobs, wealth and
infrastructure locally.
• Because they are more
resilient, co-ops contribute
to more stable local food
systems, infrastructure,
employment, services, and
economy over time.
17

18. An Inclusive Economy is…
•Equitable
– Upward mobility, reduction
of inequality, equal access
•Participatory
– Economic participation,
market transparency,
infrastructure benefits
everyone
•Growing
– Increased job
opportunities, improved
economic well-being that is
broadly shared
•Sustainable
– Well-being is sustained
over time, investment in
environmental health and
reduced natural resource
usage, long-term decision-
making
•Stable
– Confidence in the future,
people can plan for the
future, communities are
resilient to shocks and
stresses18

19. Conversions Case Study:
Real Pickles Co-op
•Founded as sole proprietorship in 2001
•Naturally fermented foods (pickles, sauerkraut, etc.)
•Incorporated as a worker co-op in 2014, with 5 founding members, including
original owners
•$500,000 outside investment raised to fund transition
•$700,000 revenue annually
•Core goals: Preservation of mission, local ownership and control, retention
of staff over time
19

20. Conversions Case Study:
Old Creamery Co-op
• Founded as dairy co-op, 1886; Rural
grocery since 1930s
• Recent owners operated for 12 yrs
• Converted to co-op in 2010, NFCA
food co-ops provide peer support
• 771 members
• 35 employees
• $1.8 million revenue
• $352,000 sales of local product
(2017)
20

21. 5. Building Co-op Power:
Examples from the field
Co-ops in New England:
• 1,400 businesses
• Food co-ops, farmer co-ops, worker co-ops, credit unions.
• Locally owned by 5 million members
• Earn $9 billion in annual revenue
• Employ 22,000 people
• Pay $1 billion in wages
Source: http://reic.uwcc.wisc.edu/ (2008)
21

22. International Example:
The Mondragón Co-operatives
•Located in Basque region,
Spain
•First co-op in 1956 (Started
with 5 employees, now has
8,000)
•$22 Billion in Sales (2009)
•103,700 Employees (2009)
•Premised on Import
substitution and social
entrepreneurship
•System includes agricultural
and retail grocery co-ops
22

23. 5. Building Co-op Power: Federations
Nurturing participation at grass-roots
level therefore strengthens the
legitimacy and authority both of
front-line co-operative organizations,
but also and particularly of their
representative bodies such as the
ICA.
- Blueprint for a Co-operative
Decade
23
Federations unite individual co-ops
to address larger issues and work
toward common goals:

Educational Programming

Addressing social, environmental
and economic issues

Unite to form a democratic, co-op
economy

Co-op development and support

24. Valley Alliance of Worker Co-ops
• 4 member worker co-ops in
Western MA & Southern VT
• Member Supported & Owned
Loan Fund
• Supported six conversions in seven
years
• Collaboration with other sectors –
co-founded VCBA.
• Co-founded UMass Co-op
Enterprise Collaborative
• Working for A Co-operative
Economy marketing campaign
24

25. • Social impact revolving loan fund
• Loans and assistance to cooperatively
owned businesses and affordable housing
• Certified Community Development
Financial Institution (CDFI)
Loan Fund

27. 2017 Impact
$ 3
million
723
jobs
95%
to women,
people of color,
and low-income
8 started
7expanded

28. Collective Copies
A worker co-op copy shop
Founded from a strike in 1983
13 worker members, union shop
3 locations in western MA
2:1 pay ratio highest to lowest
Health insurance, IRA, 2-4 wks
vacation, holidays, etc.
10% of gross profit to community
Stocks only recycled paper
Launching pubishing wing,
Levellers' Press
28

29. Neighboring Food Co-op
Association
•25 Co-ops across New
England and New York
– Majority in operation 30+ yrs
•11 Start-Ups
– New jobs, infrastructure
•Locally owned by 130,000
members
•Employing 2,150 people
•$49.5 million in wages
•$315 million revenue
•$60 million in local
purchases
29

30. Co-op Food Stores /
Hanover Consumer Co-op
•Member, Neighboring Food
Co-op Association
•Founded 1936
– Wholesale buying co-op
•22,575 members
•375 employees
•5 locations in NH & VT,
including buyout of closing
supermarket
•$72 million revenue
•$12.7 million in sales of local
product (2017)
$15.6 million in wages
30

31. Monadnock Food Co-op
•Start-up opened 2013
•2,600 members
•85 employees
•$9.8 million in revenue
•$1.7 mill in local purchases
•Sustainability initiatives:
Green Team, green building,
solar panels, composting,
reuse and recycling
•Keene, NH
(2016)
31

32. 5. Building Co-op Power: Go Co-op
For…
• Converting an existing business
– Existing customer base, systems
– Retain existing jobs, infrastructure
– Current owners’ skills and knowledge
• Launching a new co-op
– Can be a longer process
– More flexible in terms of mission and purpose
– New jobs and infrastructure
32

33. Converting an Existing Business
Basic Questions:
•Is there a willing seller?
•Who are the potential member owners?
•Will current owner(s) stay on as member(s)?
•Is the business viable and sustainable?
•What does the transaction look like?
•Is there a plan for ongoing investment in
education and training?
•Is there a support system among existing co-op
networks? 33

34. Potential Challenges
•Financing and capital: Is business sustainable over time?
What will the transaction look like?
•Is the current owner supportive? Will they stay involved or
will the business lose their experience and expertise?
•Shift from sole proprietor governance to a co-operative
culture.
•Lack of member financial literacy, governance experience
and management experience.
•Expensive, irregular and often bad advice from
professionals unfamiliar with co-operative model.
34

35. Launching a Co-operative
Activities:
•Define overall purpose or goal
•Create steering committee
•Raise pre-development funds
•Hire a coordinator, if possible/desired
•Conduct feasibility study & create marketing
plan
•Establish the founding board
•Incorporate as a co-op and adopt by-laws
35

36. Launching a Co-operative
Activities, continued:
• Develop a business plan
• Create membership agreements
• Recruit members and equity investment
• Access necessary debt financing
• Hire appropriate management
• Open for business
36

37. Basic Development Process
Timeline
•12-18 months to incorporate (varies widely)
•Open doors – 2 yrs, 4 yrs, 12 yrs
•Existing business can be faster!
Resources needed
•Committed, visionary leadership
•Co-op specific business, legal, and financial support
•Member equity investment
•Start-up financing
•Peer support & guidance
37

38. 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
38

39. Concerns for Co-operators
•Engagement of members
•Encourage and develop broad leadership
•Ongoing training in:
–Co-operative values & principles
–Board leadership and accountability to members
–Fiscal oversight
–Project & strategic planning
–Communication, facilitation, conflict resolution
39

40. 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 co-op networks and
reputable co-op developers
•Join regional co-op networks and seek out peer
support from other co-ops
40

41. Co-operative Statutes
CT: Conn. Gen. Stat. 33-183
•Co-operative Associations
•Co-operative Marketing
Associations
•Workers Co-operatives
ME: 13 M.R.S. 1501
•Consumer co-op
•Agricultural Marketing &
Bargaining Co-operative
•Employee Co-operative
Corporations
41

42. Co-operative Statutes
MA: ALM GL Ch. 157
•Co-operative Corporations
•Co-operatives without Stock
•Employee Co-operative
Corporations (157-A)
NH: RSA Title XXVII, Ch. 301
•Co-operative Marketing &
Rural Electrification Assocs
•Consumers Co-operative (Ch.
301-A)
NY: Consolidated Code
•Co-operative Corporations
42
RI: R.I. Gen Laws 7-7-1
•Producers Co-operative
•Consumers Co-operative
VT: 8 V.S.A. 31101
•Marketing Co-operative
•Consumers Co-operative
•Worker Co-operative (Title 11,
Ch. 8)
Other Options
•Incorporate in a neighboring
state using appropriate co-
operative statute

43. Why Go Co-op?
Co-operative Enterprises…
•…put people before profit,
•…are accountable to their
members and communities
•…retain local economic infrastructure,
•…are successful and resilient,
•…strengthen local economies,
•…build a better, more sustainable food system
and economy.
43

44. 6. Discussion
Your…
•Questions
•Feedback
•Ideas for Future Workshops
44

45. Contact
Suzette Snow-Cobb
suzette@nfca.coop
Adam Trott
adam@valleyworker.coop
Neighboring Food Co-op Association
www.nfca.coop
Valley Alliance of Worker Co-operatives
www.valleyworker.coop
45

46. Economic Inclusion
1. Voluntary & Open Membership
Co-operatives are voluntary organisations, open
to all persons able to use their services and
willing to accept the responsibilities of
membership, without gender, social, racial,
political or religious discrimination.
46

47. Economic Democracy
2. Democratic Member Control
Co-operatives are democratic organisations
controlled by their members, who actively
participate in setting their policies and making
decisions. Men and women serving as elected
representatives are accountable to the
membership…
47

48. Economic Participation
3. Member Economic Participation
Members contribute equitably to, and
democratically control, the capital of their co-
operative. At least part of that capital is usually
the common property of the co-operative...
Members allocate surpluses for any or all of the
following purposes: developing their co-
operative, possibly by setting up reserves, part
of which at least would be indivisible; benefiting
members in proportion to their transactions48