This presentation covers worker and food co-ops in the Northeast and internationally that foster economically and environmentally sustainable food systems. The presentation covers the process for cooperative business development, the advantages of the co-operative model, and steps for launching a new co-op or converting an existing business.

1. Co-ops in the Food System:
Conversions, Start-ups & Supply Chains
Erbin Crowell, Neighboring Food Co-op Association
Adam Trott, Valley Alliance of Worker Co-operatives
NOFA Summer Conference, 9th Aug 2014
University of Massachusetts, Amherst

2. Workshop Description
We will present worker and food co-ops in the
Northeast and internationally that foster
economically and environmentally
sustainable food systems. Participants will
learn the process for co-operative business
development, the advantages of the co-
operative model, and steps for launching a
new co-op or converting an existing business.

3. Outline
1. Our Context
2. What is a Co-op?
3. Why Co-ops Matter
4. Regional Impact & Potential
5. Case Studies: Co-ops in the Food System
6. Suggested Guidelines for Development
7. Discussion, Questions, Ideas
8. Resources

4. 1. Our Context
• A Broken (Unaccountable) Food System
• Crisis of Global Economic System
• Unemployment
• Dramatic Shifts in Wealth
• Diminished Democracy
• Hunger for Alternatives
• Relocalization & Regional Economies

5. What If…?
There was a 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?

6. 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. Rochdale Equitable Pioneers
• Founded 1844
• Weavers, Unionists,
Community Activists
• Member-Owned Store
• Pure, Affordable Food
• Basic Co-op Principles

8. Co-ops & Food Security
“What was the motivation of
the 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

9. Vision: A Co-operative Economy
“Co-operative housing, worker co-operatives,
even collective agricultural co-operatives, can all
look back to the original Rochdale plan for
inspiration. In 1844 these pieces were not
separate…
The Rochdale pioneers conceived in one
association of what would now make a
multisectoral co-operative movement.”
Brett Fairbairn, The Meaning of Rochdale • www.usaskstudies.coop

10. 2. What is a Co-op?
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.
International Co-operative Alliance • www.ica.coop

11. In Other Words…
A co-op is a business that is equitably 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 (profit) is distributed among members in
proportion to their use of the business
(purchases, labor, or supply), as a discount on
purchases, or is reinvested in the enterprise.

12. 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.
International Co-operative Alliance, 1995 • www.ica.coop

13. Co-operative Business Principles
• Voluntary & Open Membership
• Democratic Member Control
• Member Economic Participation
• Autonomy & Independence
• Education, Training & Information
• Co-operation among Co-operatives
• Concern for Community
International Co-operative Alliance, 1995 • www.ica.coop

14. A Flexible Business Model: Purpose
• Provide Employment and a livelihood.
• Purchase needed products or services as a
group.
• Produce a product or service together.
• Process and add value to raw materials
produced by members.
• Market products produced by members or by
the co-op.

15. A Flexible Business Model: Industry
• Food Co-ops
• Agricultural Co-ops
• Fishing Co-ops
• Worker Co-ops
• Artisan Co-ops
• Housing Co-ops
• Credit Unions
• Communications
• Utilities Co-ops
• Health & Insurance

16. 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 process
and market their products.
• Community Co-ops: Owned and governed by members
of community.
• Multistakeholder Co-ops: Owned and controlled by
combination of stakeholders.

17. Basic Co-op Structure
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.

18. 3. Why Co-ops Matter
Co-operatives
…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
• 30,000 co-ops in all sectors of US economy

19. 2012: UN International Year of Co-ops
Co-ops “in their various forms, promote the
fullest possible participation in the economic
and social development of all people, including
women, youth, older persons, persons with
disabilities and indigenous peoples, are becoming
a major factor of economic and social
development and contribute to the eradication of
poverty.”

20. 2014: UN International Year
of Family Farming
• Policies conducive to
family farming
• Increase knowledge,
communication, public
awareness
• Understand needs,
potential, constraints,
support
• Synergies for
sustainability -
particularly with UN
Year of Co-ops

21. 2014: UN International Year
of Family Farming
• Co-ops strengthen bargaining power and resource
sharing that lead to food security and poverty
reduction for millions of small producers…
• Offer men and women smallholders market
opportunities, and services such as training in
natural resource mgmt, and access to information,
technologies, innovations & extension services.
• “The importance of agricultural co-operatives
in improving the lives of millions of
smallholder farmers and their families cannot
be overstated.”

22. Co-ops & Local Economies
• Community ownership & control
• Focus on service, meeting needs before profit
• Develop local skills & assets
• Ability to pool 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…

23. 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.
Ontario Co-op Association // ontario.coop

24. 4. Regional Impact & Potential
The vision of the Neighboring Food Co-op
Association is of a thriving regional economy,
rooted in a healthy, just and sustainable
food system and a vibrant community of
co-operative enterprise.

25. Neighboring Food Co-op Association
• 35 Co-ops & Start-Ups
• 90,000+ memberships
• 1,700+ employees
• $42+ million in wages
• $240+ million revenue
• $30+ million in local
purchases
(Updated for 2013)

26. Opportunities for Collaboration &
Development
PROCESSING
DISTRIBUTION:
MARKETING
DISTRIBUTION:
TRANSPORTATION
DISTRIBUTION:
SOURCING
NFCA
Member
Food Co-ops
CONSUMPTION
NFCA
Food Co-op
Member-owners
PRODUCTION
WASTE & NUTRIENT
MANAGEMENT
Based on
Components of a Food System
(Nickerson, 2008)
Where are the key opportunities for
collaboration & co-op development?
NFCA

27. • VAWC: 8 member worker co-ops in
Western MA & Southern VT
• Tradition of collective management
• 70+ worker members
• $7.5 million revenue (2013)
• Linked to/founded from social justice
and/or environmental movements
• Advertises in co-op movement media
including food co-op and worker co-op
newsletters
• Filling needs and gaps in economy with
co-operative businesses
Valley Alliance of Worker Co-ops

28. Mondragón Co-operative Corporation
• 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

29. The Region of Emilia Romagna
• Italy: Most co-ops per capita
• 7,500+ co-ops in E.R.
• 30-40% of GDP
• 2 out 3 are members of co-ops
• 10% employed by co-ops
• Vibrant food culture, small family
farms, influential co-op retailer
• Cross-sector collaboration

30. 5. Case Studies
Co-ops in New England:
• 1,400 businesses
• Food co-ops, farmer co-
ops, worker co-ops, credit
unions, etc.
• 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/

31. 5. Case Studies in the
Co-operative Food System
Production & Aggregation
Processing & Marketing
Retailing & Consumption

33. Case Study:
Deep Root Organic Co-op
• Founded 1986
• 23 members in VT &
Québec
• 108,000 cases of
produce (2013)
• $2.8 mill revenue (‘13)
• Distribution across
Northeast US
• Collaboration with
NFCA on frozen
vegetables

34. Case Study:
North Country Farmers Co-op
• Began organizing 2008
• Over 20 members in
northern NH (farmers and
2 bakeries)
• Direct distribution to 15
patrons, including
restaurants, schools,
individuals, and a hospital
• Support local farms,
reduce competition,
increase collaboration in
reaching markets

35. Case Study:
Broadfork Permaculture Co-op
• Two potential worker/member joined current sole proprietor in
converting to worker co-operative.
• VAWC support centered on structure and governance; formulation
of marketing and advertising programming; facilitating purchase
from sole proprietor.
• Broadfork seeks to assemble permaculturists in a format of
collective co-operation over individual competition in their industry.
Long term support for business co-ownership and financial literacy
are important aspects to assert in the establishment of the co-op.
• 3 worker/members

36. Case Study:
Stone Soup Farm Co-op
• Previous part owner of LLC wanted clarity in roles, equal partnership,
focus on organic CSA
• Joined with three former workers from LLC joined Jarrett to form co-op
and buy-out equipment, CSA Members, leaseholdings, etc.
• Incorporated in Massachusetts as co-operative under M.G.L. 157A
• 2014 is first summer of co-op CSA shares, also offer fruit, egg and winter
shares at variety of pick up sites
• Shift to formal co-op structure addresses farm's succession,
• clarifies employment structures and member participation

37. 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 201, 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

38. Case Study:
Hunger Mountain Co-op
• Montpelier, VT
• Founded 1972
• 7,200 members
• 160 staff
• $20 million revenue
• $6.7 million local
purchases

39. Case Study:
Monadnock Food Co-op
• Began organizing in
2008
• Opened doors in 2013
• 1,900 members
• 57 employees
• $5.8 mill revenue (13)
• $500,000 in local
purchase in first year

40. 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
• 670 members
• 40 employees
• $1.5 mill revenue (‘13)
• $150,000 in local
purchases

41. 6. Suggested Guidelines…
For…
• Launching a new co-op
• Converting an existing business

42. Launching a New Co-op
Activities:
• 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

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

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

45. 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

46. 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

47. Conversions
Basic 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 existing co-op networks

48. Suggested 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

49. Legal Statutes
From “Growing a Food System for the Future”
New England Farmers Union (www.newenglandfarmersunion.org)
Connecticut: Conn. Gen. Stat. 33-183
• Co-operative Associations
• Co-operative Marketing Associations
• Workers Co-operatives
Maine: 13 M.R.S. 1501
• Consumer co-op
• Agricultural Marketing & Bargaining Co-operative
• Employee Co-operative Corporations

50. Legal Statutes
Massachusetts: ALM GL Ch. 157
• Co-operative Corporations
• Co-operatives without Stock
• Employee Co-operative Corporations (157-A)
New Hampshire: RSA Title XXVII, Ch. 301
• Co-operative Marketing & Rural Electrification
Associations
• Consumers Co-operative (Ch. 301-A)

51. Legal Statutes
Rhode Island: R.I. Gen Laws 7-7-1
• Producers Co-operative
• Consumers Co-operative
Vermont: 8 V.S.A. 31101
• Marketing Co-operative
• Consumers Co-operative
• Worker Co-operative (Title 11, Ch. 8)
Other Options
• Incorporate in neighboring state with appropriate
statute

52. Why a Co-operative Food System?
Co-operative enterprises:
…put people before profit,
…are community owned,
…are accountable to their members,
…are successful businesses,
…strengthen local economies,
…are more sustainable and resilient,
…build a better, more sustainable food system.

53. 7. Discussion
Your…
• Questions
• Feedback
• Ideas for Future Workshops

54. Basic Resources
Neighboring Food Co-op Association
www.nfca.coop
Valley Alliance of Worker Co-operatives
www.valleyworker.org
New England Farmers Union
www.newenglandfarmersunion.org
Erbin Crowell • erbin@nfca.coop
Adam Trott • adam@valleyworker.org