A Co-Op Comeback

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Article contributed by Joy Pouros, Culinary Software Services

Some trends come and go, and never come again. (Good riddance, tuna fish gelatin molds!) Others may fade a bit, but keep coming back. That’s the case for food cooperatives. Co-ops have had several resurgences over the decades, but none like today! While they can be difficult to grow and manage, thus their small numbers compared to traditional grocery stores, it’s their core principles that have kept them relevant after so many years. Their mission keeps people interested and willing to do the work to make them happen.

The National Co-op Grocers, an association of food cooperatives that buy collectively, has seen its membership rise from 106 to 151 since 2006, and natural foods co-ops that have been in business for 40 years have added third, fourth, even a sixth location. There are now more than 300 co-ops in the US, which means it’s likely one is near you, even if you aren’t aware of it.

Before we can talk about how they’ve changed and why they are growing in numbers, we need to understand what makes them unique.

What is a co-op?

Co-ops are businesses that are owned, controlled, and used by its members. They are founded out of a mutual need for a product or service, and are mission driven rather than profit driven. Some of the most popular co-ops include credit unions, farmers, and daycares. You are very likely to use a co-op service or product without realizing it! The more than 29,000 in the USA exist in virtually every sector of the economy, providing more than 850 thousand jobs (paying more than $74 billion in annual wages), and contributing nearly $500 billion to the economy.

Unlike traditional companies, where decisions more or less revolve around profit, co-ops abide by seven principles; meaning money isn’t the only consideration. Of course, they need capital to survive, but they won’t put finances ahead of these tenants:   

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Voluntary and open membership.

Anyone willing to accept the responsibilities of membership may become members. They do not operate with any discrimination.

Democratic member control.

Members actively set the policies and make the decisions for the co-op. Depending on the size of the co-op, each member may have equal voting rights, or there may be elected representatives who are accountable to the members.

Member economic participation.

Members contribute to the capital of the co-op in an equitable manner. As with all other decisions, economic decisions are made through a democratic process.

Autonomy and independence.

Members control the co-op, never other entities or organizations. All contracts with other parties must ensure the autonomy of the co-op it upheld.

Education, training and information.

Cooperatives aim to inform the general public about the benefits of the co-op and its purpose in their community. In addition to educating the public, members are trained in relevant areas so they can contribute effectively to the co-op.

Cooperation among cooperatives.

Co-ops work together through local, national, and international organizations to strengthen the co-op movement and better serve their members.

Concern for community.

Co-ops work to benefit their communities by ways of sustainable development.

Running a co-op requires a dedicated belief in their mission. The members are often regular, albeit particularly passionate, people with limited expertise in the grocery business, which is the root of many common barriers co-ops face. Co-ops struggle to manage their growth and to turn a profit. It can take several years for a co-op to form, and that requires a great deal of patience and continued effort before seeing real reward. Which leads us to…

Why do people create food co-ops?

In the early 1900s, food and general store co-ops were created primarily in rural areas, allowing towns with small populations to gain access to goods they needed at decent prices. In their height, there were more than 2600 operating nationally. When the Great Depression swept through the nation, food co-ops became necessary in some areas as local grocery stores went out of business and residents had to pool their resources to get necessities.

Over the years, the specifics on why people gravitate towards co-ops have shifted. When processed foods became prevalent, it was less about distinct need and more focused on increasing the amount of unprocessed goods. As people became more aware of where their food was coming from, some responded by taking to co-ops to ensure their food was locally sourced when possible. The emphasis on the community that all co-ops have in common lends itself easily to all of these causes. Additionally, co-ops were original leaders of the natural food movement that is so prevalent today. Organic, fair trade, and non-GMO foods are now commonplace in grocery stores and restaurants across the country, but they got their start in co-ops. Of course, co-ops chose to include those foods based on the wants and needs of their members, not based on profit margins – a key difference between co-ops and traditional business models.

Some of the initial motivators of co-ops remain. Despite the number of grocery stores in the USA, there are still food deserts. Some co-ops form to help address the need for fresh food in those areas. Others spring up in areas with plenty of options, but allow members to have access to specialty items that are difficult to find in traditional stores. Co-ops also form communities’ desires to have more control in the development of their neighborhoods. The cultural contexts in which co-ops have flourished have changed over the decades, but they continue to abide by the same seven principles that have attracted members for over 150 years.

Why the comeback?

We’ve explored some of the historical reasons co-ops formed, but why are they making a comeback now? There are several factors at play. In many ways, we’re experiencing a perfect storm of reasons that have led to an increased interest in co-ops.

Many features that co-ops have always offered are now very popular to the general population. Even tangential issues, such as how much employees are paid, have become bigger issues nationally; with more and more citizens taking a stance that co-ops have held for years. Co-ops have consistently paid better than minimum wage, which makes them more attractive in the “Fight for 15” zeitgeist of today.

“Authenticity” is in, and co-ops excel in that regard. Consumers want to shop at businesses that align with their personal beliefs. Look at natural foods to illustrate this point. Natural foods have gone mainstream. They aren’t just for the extremely health-conscious. The general population has embraced the benefits that natural foods offer. While traditional grocery stores have come on board and begun offering wider varieties of natural foods, co-ops have been doing this for years, and it’s an integral part of their mission.

Shopping local has increased in popularity in recent years. Small businesses in retail have certainly seen the benefits, as have local farmers. Farmers Markets have grown significantly in recent years, with more than 8,700 currently registered with the USDA. Co-ops are a natural extension of this mindset. When “local” isn’t possible, sustainability and supporting ethical practices are high priorities for many consumers today, and coincidentally have been a focus of co-ops for years.

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The rise of Internet capabilities and social media also works in favor of co-ops. Outreach is more easily achieved, even with limited manpower or capital, through social media. It’s easier than ever to create a website, and even sell online and offer delivery, like Wheatsville Co-op does in Texas. This also enables co-ops to more easily seek out and secure hard-to-find products, thus better serving their members.

With our ever-evolving social climate, there is every indication that cooperatives will continue to increase in popularity. According to the Edelman Trust Barometer, the public’s trust of businesses has fallen significantly in recent years. The general population doesn’t trust businesses to do what is right or good for the community. With that in mind, the idea of a democratically run cooperative that highly values the community is appealing.

There’s been an influx in concern for the local community, which co-ops naturally address in their daily operations as part of their seven principles. In addition to supporting local vendors, they are active participants in local government and policy. In a cultural climate where it’s common to not know your neighbors, many people miss the sense of community and seek out other places that offer that kind of kinship. In addition to serving as a grocery store, many co-ops, like City Market Onion River Co-op, offer classes, volunteer opportunities, or other ways members can engage with each other.

Their emphasis on creating a sustainable community resonates well with the general population in a way it didn’t use to. The idea that your community is not reliant on a large company that may decide to close its doors one day when your neighborhood doesn’t meet their revenue goals is comforting when the economy fluctuates.

Large chains unquestionably dwarf food cooperatives. Co-ops typically can’t beat the prices of national chains. However, because the members are mission driven, co-ops are an undeniably vibrant, beloved presence in their communities and will certainly continue to be so. Their impact has even been felt at the level of the large chains, where large chains are now offering organic and local produce in efforts to maintain customers.

Joy Pouros works as the authority writer in the Training department at Culinary Software Services, where she writes on topics as diverse as human resource issues to increasing profits. Joy entered the industry working as a Nutritional Aide in the Chicagoland area before moving into writing and consulting. She now specializes in marketing and public relations and writes for a variety of industries.