Bonnie Hudspeth, Membership & Outreach Manager for Neighboring Food Co-op Association and Michael Faber, General Manager of Monadnock Food Co-op in Keene, NH share their experience organizing a member-owned food co-operative, Monadnock Food Co-op, in their community. In its first year, the Monadnock Food Co-op in Keene, NH sold products from 177 local farmers & producers. This presentation reviews resources available to guide the start-up process of a food co-op, shares examples of how food co-ops serve local farmers and producers, and presents lessons learned from the organizing and recent opening of Monadnock Food Co-op.

1. How to Start a Food Co-op
in Your Community
Bonnie Hudspeth & Michael Faber
NOFA Summer Conference
August 14, 2015

2. Overview
• Intro
• What is a Co-op?
• Basic Steps to Start a Co-op
• Co-op Impact
• Lessons Learned
• Resources
• Questions

3. What is a (Food) Co-op?
A food co-op is a grocery store that is owned
and democratically controlled by its members
for their common good, the good of the
community, and to accomplish a shared goal or
purpose.
Any surplus (or profit) is distributed as a
patronage rebate in proportion to use of the
business, as a discount at the register, or is
reinvested in the business.

4. What is a (Food) Co-op?
Group of
People
(human
association)
Business
(enterprise)
Market
Democratic
Control
Primarily Benefits
Members
(Producers,
Workers &/or
Consumers)
Joint Ownership
*Micha Josephy
Cooperative Fund of New England

5. What Makes Co-ops Different?
• User-Owned: The people who use the co-op’s
services also own it.
• User-Controlled: The people who use the co-op
control it on a democratic basis (one-member,
one-vote).
• User-Benefit: The people who use the co-op
receive benefits based on their use: i.e. access to
goods and services, better pricing, employment,
and/or a share of year-end surplus (patronage).

6. How We Started a Co-op
in Our Community
1. Gather Information
2. Assess Community Interest
3. Formally Set up the Co-op
4. Organize
5. Research Feasibility
6. Review Findings
7. Recruit Members
8. Create a Business Plan
9. Secure Financing
10. Site Selection
11. Prepare for Opening
*Steps from “How to Start a Food Co-op” Manual

7. 1. Gather Information
1. Gather basic information about co-ops and how to
organize a food co-op.
2. Gather information about misconceptions about co-ops
3. Discuss how a co-op could meet your community’s
needs
4. Hold meetings to assess interest in the idea of a new
food co-op
5. Gather info about local and regional resources that may
help your group, especially people: COFFEE DATES
6. Contact food co-ops in your area or region. See what
help they may be able to provide to your group.

8. 2. Assess Community Interest
• Hold an informational meeting
• Invite guests who can provide public support or more
detailed background information, and directors/managers
of other area co-ops
• Allow plenty of discussion time, so people can ask
questions and express their views
• Ask for participants to indicate their interest in the co-op
• If there is interest, elect a steering committee to follow up.
• SIGN UP SHEETS! Build up your contact base

9. 3. Formally Set up the Co-op
BUILD & TRAIN YOUR TEAMS
• Articles and Bylaws
• Create Founding Board
• Volunteer teams
• Responsibility?

10. 4. Organize
• Create structure for your Steering Committee
• Choose a decision-making model for your organizing
group (i.e. Robert’s Rules of Order)
• Establish committees (community outreach, finance, and
membership)
• Establish goals for committees. Review and revise them
as necessary.
• Gather names of people who may become members or
co-op leaders.

11. Leadership Renewal
Biggest hurdle?
Between Major Events
REFRESH Your Team

12. 5. Research Feasibility
• Survey the community and potential co-op members
• Collect & compile information. Learn about other
co-ops in your area or region. Learn about similar
businesses and how they operate.
• ID possible sources of funding
• Get help from outside experts and consultants with
experience in starting businesses and co-ops
• Conduct a feasibility study and prepare a feasibility
report

13. 6. Review Findings
1. Analyze results
2. Decide whether to
move forward…
…or not

14. 7. Recruit Members
Create an Epidemic: Leverage Your Members
1. Research food co-op
membership structure
2. Create a system
3. Make a brochure &
Website
4. Launch your campaign!
– Have you Heard?
– Co-op Potlucks
– Word of Mouth
– Advertising

15. 8. Create a Business Plan
• Outline all aspects of the co-op’s operations: who is
involved, who the customers will be, what the co-op will
sell, how it will operate, and how it will be capitalized.
• Determine the cost of operations.
• Include findings from professional market study.
• Hire consultants and experts with experience in business
start-ups and preparing business plans and project work
plans.
• Locate economic development programs and grants for
start-up funding.

16. 9. Secure Financing
1. Secure Outside Financing
• Begin with member capital (membership)
• Create a proforma and Sources & Uses development budget with key
assumptions for the business.
• Contact local business or economic development agencies about their
services for new businesses.
• Designate one/two people to negotiate with commercial lenders &
make sure potential lenders understand co-op ownership structure
2. Create a Member Loan/Preferred Share Program

17. 10. Site Selection
• Hire a professional site analyst
• Use feasibility & market study to learn about needs and
shopping patterns of your prospective members/customers.
• Choose one/two people to handle site search and real
estate negotiations.
• Explore options: leasing/owning/building new/remodeling
• Negotiate a lease or purchase agreement.
• Hire a store designer to create an initial site plan and
store design.

18. 11. Prepare to Open
• Hire a General Manager
• Transition the Board of Directors

19. Impact of a New Food Co-op
• Monadnock Food Co-op carries products from over 175
local farms and producers located within 100 miles
• Recently awarded “Local Food Champion” by Cheshire
County Conservation District.
• Employ 75 staff and paid out almost $2 million in wages
and benefits in the last fiscal year.
• Adopted livable wage $11.55 for all FT staff after 1 year
• Doubled the efficiency of our building during
construction, recently hired a sustainability coordinator –
installing solar on our roof

20. “Local Food Champion!”

21. Shared Success

22. Lessons Learned
• Get the Right People on the Bus
• Use Co-op Resources & Hire Experts
(co-ops, webinars, newsletters)
• Leverage Members to get Members
• Be strategic re: Events (EVERYTHING!)
• Avoid Costly Distractions
• Focus on Organization vs. Operations
• Structure & Systems (of support, etc.)
• Have FUN!

23. Two Different Projects
1. Organizing the structure for a democratic
Association
2. Setting up a
grocery store

24. No Longer ___ing in Isolation
• Peer Support
• Find expertise
• Learn

25. Regional Impact of
Food Co-ops
Neighboring Food Co-ops*:
• 35 Co-ops & Start-Ups
• 90,000 memberships
• 1,700 employees
• $28.6 million in wages
• $255 million revenue
• $50 million in local
purchases
www.nfca.coop/members
*2013 statistics

26. You are Creating
a Business That:
• Is owned and controlled by the community
• Focuses on service, meeting needs before profit
• Develops local skills & assets
• Empowers people with the ability to assemble limited
resources
• Regional economic efficiencies
• Low business failure rate & are long-lived
• Difficult to move or buy-out
• Separate community wealth from speculative markets
• Mobilize member, customer and supplier loyalty…

27. Resources

28. Support Systems
Co-op Consultants/Support Organizations
• Food Co-op Initiative
• Cooperative Development Services Consulting Co-op
• NCGA Development Co-op
• Neighboring Food Co-op Association
Find Other Co-ops: NFCA.COOP/MEMBERS
• Start-ups
• Best practices from Established Co-ops
Community Partners
• Local developer
• Supportive Businesses

29. Books & Websites
Books
• Building Powerful Community Organizations
• Good to Great (Jim Collins)
• Humanizing the Economy: Cooperatives in the Age of
Capitalism (John Restakis)
Websites/Webinars
• How to Start a Co-op Manual
• Food Co-op Initiative: www.foodcoopinitiative.coop
• CDS Consulting Co-op: www.cdsconsulting.coop/start_coop
• NFCA Resources for Start-ups: www.nfca.coop/startup

30. Questions?

31. Bonnie Hudspeth
Neighboring Food Co-op Association
bonnie@nfca.coop
www.nfca.coop
IYOur Co-ops!The Neighboring Food Co-op Association // www.nfca.coop
Michael Faber
Monadnock Food Co-op
gm@monadnockfood.coop
www.monadnockfood.coop