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  • Oh, so natural

    Cooperative grocers on growing spree

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    18-month-old Sawyer was comfortably perched and playing on a stack of organic bananas in a grocery store he regularly visits – a cooperative grocer that carries 80 percent organic produce, as much locally grown as it can get.

    Sawyer comfortably perched and playing on a stack of organic bananas.

    Sawyer and his mom, Alto Pass residents, visit Carbondale’s Neighborhood Co-op Grocery every Wednesday. She said she started shopping at the store a couple years ago before Sawyer’s birth.

    “It’s important to us for environmental reasons. But once he was born, it was about providing him with healthy and safe food. We love the co-op,” she says of her family.

    Francis Murphy, General Manager of the store, is happy about her choice and says some 2,700 area residents have become owners in the co-op. Each pays $100 for one share to belong and shop at the store where as owners they receive regular discounts and quarterly specials. About 55 percent of the sales come through owners, another 45 percent are just people who choose to stop and shop.

    Murphy is well-versed in what he does. He’s been with the cooperative since its meager beginnings, which in turn resulted in its name. The co-op, like most, formed out of need. What wasn’t available to some area neighbors through conventional grocery stores, led them on a buying quest.

    It got its start in someone’s living room in 1980 as people began to change their diets. According to Murphy, a network of neighbors, of which he was one, would gather and look through a food catalog of bulk items. If for instance, something came in a 50 lb. bag, each of the neighbors would agree to take five or 10 pounds of it. In essence it was a buying club.

    Then once a month, utilizing the flatbed truck of then University Professor Lloyd Tucker, someone would make a trek to Wisconsin to pick up the goods. He says it was a relatively short trip there to get what was needed, but he jests about the return trip.

    “The truck would only go about 45 mph once it was loaded down,” Murphy laughs. Consequently it took about 12 hours to get back to Carbondale. The food would then be dropped off in bulk at various homes and they would each share in dividing it up and distributing it to the other neighbors.

    Eventually the buying club knew it was time to make the next step. So, they acquired a downtown location – “humble beginnings” as Murphy calls it. They built a counter out of available wood and had no cash register, unless you count Tucker. He was adept at adding up things in his head, so that sufficed. However, the store was only open when Tucker was available. The hours revolved around his teaching schedule.

    In 1990, the store took another leap when it incorporated as an Illinois not-for-profit entity, Murphy says.

    “We acted as a co-op, but instead of equity shares, we asked members for $3 to $5 a year to belong.” He says it wasn’t long before they knew the not-for-profit status was a mistake. So, in 2003, the owners voted to convert to a cooperative – an owner equity system.

    Francis Murphy, General Manager of Neighborhood Co-op Grocery, dips into the bulk foods section of the store in Carbondale.

    Murphy’s cooperative food experience sets him up as an expert of sorts. From his beginnings as a cashier and board member of this cooperative, he worked his way through the ranks to co-manager. He then left to be manager of a Greensborough, N.C. cooperative in 1994, but returned to Neighborhood Co-op Grocery as general manager in 1998. He and a team of department managers, including a specialty chef, report to a board that operates through “Policy Governance” a system established by John Carver specifically for non-profits. Murphy said it clearly defines where board management ends and management begins.

    In 2006, the grocery moved to its current location at 1815 W. Main Street, Carbondale, and made improvements to the tune of $1.5 million. Murphy walks the 7,300 square feet of retail space and points out the enhancements. There are 48 linear feet in the bulk department, and portions of the store are devoted to packaged groceries, dairy, meat, produce, supplements and body care. Then there’s the well-supported deli, cheese and bakery, which combined make up 17 percent of the sales. The unique foods are prepared in a full in-house kitchen by “a really capable chef” as Murphy says. The chef came to the cooperative from southern California where he served as chef for Ocean Beach People Organic Food Co-op.

    “He gives us a cuisine you wouldn’t normally find in the Midwest.” It’s easy to recognize when peering into the showcase. Some of the chilled staples include Scarlet Quinoa, Wild Rice Tofu Salad, Lebanese Salad, Nutty Raisin Millet Salad and probably a dozen more.

    Over in the ready-to-eat warm section, on this mid-winter Wednesday, the chef was serving up a tasty East Indian Chicken dish. Those stopping in for a quick bite can find readily-prepared sandwiches named for some of the top names in the music industry. Shoppers can grab a Mick Jagger, a Stevie Nicks or a Sam Bush and be on their way.

    The newest addition in the grocery is the 12-foot beer cooler and 24 linear feet of wine. The department, installed last October, offers a variety of craft beers. Murphy says the regional micro-breweries are seeing about 20 percent growth per year, compared to the national brands, which continue to experience decreases.

    “In relatively small batches, you can put a lot of quality and skill into the end product.” He also touts what he calls an “incredible” hotbed of southern Illinois winery growth. The whole department has been received well, he says.

    Part of Murphy’s job is determining what the store will carry. He says it’s a team effort on a regular basis, but that the National Cooperative Grocers Association (NCGA), of which the store is a member, is a great resource. And if it’s not on the shelves, members can request special orders at any time.

    While the Carbondale cooperative grocery is a model of sorts, it’s certainly not alone. In fact, several other established cooperative grocery stores exist and others are forming by the month. Urbana is home to Common Ground, a store managed by Jacqueline Hannah, who has been mentored by Murphy. She has served in that capacity for five years, starting out in natural foods as a teenager.

    “Their goals were so much higher than profit,” Hannah says of Common Ground. “I get to run a business and help people to see value of community.” Like Neighborhood, Common Ground is community owned, with owners paying a $60 one-time fee. Common Ground serves about 3,700 individual consumers annually. It was started in 1974 in a church basement. In 2006 it moved to its current location at 300 S. Broadway Suite 166, and is working on a major expansion.

    Common Ground is seeing financial gains, with sales up 34 percent in 2011, greater than the reported 8- to 12 percent national growth of food cooperatives, Hannah says.

    The overall growth of food cooperatives in the nation is picking up speed. Murphy says it’s the biggest boon since the ’70s when most food co-ops came into existence. He notes the growth of co-ops with a jest. He recalls in the 1990s when suddenly the stores got big enough to get the attention of the corporate grocers. Suddenly, he says, an industry where shorts and Birkenstocks were the most common attire, found itself in a sea of suits as the mainstream grocers started looking for ways to boost their sales of natural products.

    While there are more healthy options and corporate stores than their used to be, the co-ops are defining paths of their own.

    Both Hannah and Murphy are excited about the opportunities they have to work with local farmers, “locally” defined as producers within 100 miles. Hannah says her store is currently working with about 40 producers.

    Murphy says nearly 90 percent of fresh produce in markets comes from California. However, the summer offers the opportunity to connect with area farmers. Murphy says about this time of the year, the produce manager begins making contact with farmers to see what they’ll be growing and selling. Neighborhood works with 30 to 50 farmers annually, helping them coordinate what they grow, “so we can maximize what we buy from them.” He says they are trying to establish strategies to move produce farmers to grow organic.

    According to Murphy, the numbers of cooperative grocery stores opening in the United States is trending between 10 and 12 each year.

    “It’s quite an exciting time … a real resurgence.”

    The obvious concern might be competition from large chains and the survival rate of cooperative food grocers if the larger stores become more successful. Murphy, his board and others in the nation have calculated those risks.

    “The co-ops have done a nice job of repositioning themselves. As a group, we’ve been able to negotiate contracts,” he says.

    And 10 years down the road?

    “The existing co-ops are getting smarter and more sophisticated,” he says and then offers a comparison. “The grocery giants are not very nimble … they’re like giant ocean liners,” he says, noting that he doesn’t believe their level of commitment is quite as high. General demand and trends steer their choices, he suggests.

    At least at Neighborhood, the nine-member board is planning for 2014 and 2020. While in 2011, Neighborhood sold $300,000 in locally grown meat, produce and eggs, that number is expected to increase.

    Some short-term goals include establishing a satellite area at the university to give college students “better eating options,” he says. The feasibility for that to occur is taking shape. He says the co-op is also exploring something similar at the hospital.

    Longer-term, the Carbondale co-op would like to own an organic farm on which to grow more produce and also use as an education site.

    In the meantime, both Neighborhood and Common Ground offer up classes and are making their presence known in their respective communities.

    This year being the International Year of the Cooperative has both making public appearances – in some cases combining their efforts with rural electric cooperatives. Common Ground will have a presence this year at Eastern Illini’s Annual Meeting in Paxton. In Carbondale, Egyptian Electric Cooperative, along with the Credit Union and Neighborhood Co-op Grocery asked the City of Carbondale to distinguish the year with a proclamation for its city and it was granted.

    Trisha Wright, recent Board Member of Neighborhood, said she likes to see various cooperatives working together.

    “One of the main values (among cooperatives) is cooperatives helping cooperatives,” Wright says, noting she is “passionate about seeing a greater sense of teamwork between consumer, utility and farmer-owned cooperatives.”

    For additional information on either of these cooperatives:

    Common Ground
    Phone: 217-352-3347
    info@commonground.coop

    Neighborhood Co-op Grocery
    Phone: 618-529-3533
    info@neighborhood.coop


    Find the nearest food co-op

    Illinois cities, predominantly college towns, are in discussion to spearhead cooperative grocery stores. Several already exist, including but not limited to:

      • Duck Soup, DeKalb
      • West Central Illinois Food Cooperative, Galesburg

    Towns where groups are forming, including but not limited to:

    • Macomb
    • Bloomington
    • Peoria

    To learn more about statewide existing cooperatives and those forming, please check out the Illinois Country Living website for phone numbers and links.


    STATEWIDE FOOD COOPERATIVES

    In addition to the two food cooperatives featured in the cover feature, there are other food cooperative grocers in the state.

    Duck Soup, Dekalb

    Named for an old Marx Brothers Movie, Duck Soup in Dekalb has been around since the ’70s, incorporating in 1974 as a not-for-profit entity. Originally it was a member only, pre-order buying club, but eventually moved to a storefront with inventory. In 1990 it opened the store to the public as well as members.

    According to Loreen Stravers, Assistant Manager at the 129 East Hillcrest market, the 4,000 square foot facility has some of everything, although its meat section is small. She said the bulk section is the highlight of the facility.

    While business is stable, she said big markets are competing. She said the strength of the cooperative is its ability to special order foods for its shoppers and the knowledge of products the staff can share. While anyone can shop at the store, there is a cost of $25 for an equity share and a $20 annual fee.

    To contact Duck Soup, call 815-756-7044 or check out the website at www.ducksoupcoop.com.

    West Central Illinois Food Cooperative, Galesburg

    This co-op was organized in 1982 and serves as a buying club. Anyone interested can check out the organization’s Facebook page, the only means to contacting it. No phone number is given.

    According to its site, all meetings of West Central Illinois Food Cooperative are at 123 Cherry St., Galesburg. It is affiliated with United Natural Foods. United Natural Foods has a warehouse in Iowa City.

    Currently, WCIF has between 20 and 30 families participating and buys between $2,000 and $3,000 in bulk foods each month.

    All work to divide and distribute the goods is done by participating members. Working members pay a 1 percent markup from the wholesale price listed in the ordering catalog. Non-working members, according to its site, pay a 10 percent markup. All products are ordered through United Natural Foods.

    EARLY STAGE DEVELOPMENT

    Bloomington food cooperative?

    The first meeting to gauge interest in forming a Bloomington food cooperative was in March, according to Elaine Sebald, a community member interested in such a venture. Sebald, who has volunteered at farmers’ markets for a long time, is particularly interested in farmers having a more permanent venue in which they could sell their homegrown goods. She said while the markets are great, they are subject to weather conditions.

    “The farmers’ market is not enough. They need a more reliable outlet.”

    While a Common Ground grocery (not affiliated with the Common Ground food cooperative in Urbana) exists in Bloomington, Sebald believes a new cooperative venture working in conjunction with the owner of Common Ground would benefit the community.

    Other cooperatives

    While interviewing for the story, cooperative personnel said they are hearing rumors of possible cooperative grocers in early formation stages in Peoria and Macomb. Those could not be verified.

    *If you have a food cooperative in Illinois and we missed posting your information, please phone us and we will add you to the list.


    Co-ops: Don’t overlook rural development financial programs

    By Judith Canales, Administrator

    Rural Business-Cooperative Programs USDA Rural Development

    Regular readers of this publication are probably well aware of USDA Rural Development’s commitment to promoting co-op education, research and statistics via Rural Cooperatives magazine and the many other co-op reports we publish (see pages 22- 23 for some examples). But co-op leaders should also be aware that a number of USDA Rural Development loan and grant programs can help cooperatives.

    Cooperatives are an integral part of rural communities and economies; their socio-economic contributions have been documented many times over. Farm supply, marketing and service co-ops continue to be a part of the day-to-day lives of many rural producers, while housing, food, worker and utility co-ops provide needed services to rural communities.

    USDA’s portfolio of Rural Business-Cooperative Programs has had a tremendous impact on rural communities and the rural economy. Since 2009, these programs have been responsible for the investment of about $6.9 billion to support projects throughout rural America. While several of these programs are specifically targeted toward co-ops, cooperatives are eligible to participate in all of them.

    These programs assist businesses and cooperatives, create jobs and expand entrepreneurial opportunities in rural areas. They have advanced business development, local food and value-added agriculture, and renewable energy development.

    While many cooperatives across the country have taken advantage of these programs to grow their business, many more co-ops could be participating in them.

    Following are brief overviews of some of the USDA programs that every co-op should be aware of. To learn more, visit our website at: www.rurdev.usda.gov, or call your USDA Rural Development state office toll free at 1-800-670-6553 to talk to a business and co-op program specialist.

    Value-Added Producer Grants (VAPG) — This program provides competitive grants to farmer or rancher cooperatives, individual independent agricultural producers, groups of independent producers, producer-controlled entities and organizations representing agricultural producers to create or develop value-added producer-owned businesses.

    Agricultural producers include farmers, ranchers, loggers, agricultural harvesters and fishermen who engage in the production or harvesting of an agricultural commodity. These enterprises help increase farm income, create new jobs, contribute to community and rural economic development, and enhance food choices for consumers.

    Examples of funded projects include:

    • In 2009, the American Prawn Cooperative Inc., in North Carolina, received a $197,250 working-capital grant to market value-added, freshwater prawns.

    • The North American Bison Cooperative, based in North Dakota, received a $50,000 VAPG to support economic planning and research to identify new and existing markets for bison products.

    • Also in 2009, Six Rivers Producers Cooperative in Wisconsin received a $149,740 grant for working capital to facilitate a producer-to-restaurant infrastructure to support the marketing and sales of locally grown, valueadded produce, dairy and meat products.

    • Oregon Woodland Cooperative was awarded a $150,000 VAPG in 2009 to process members’ non-timber forest products (tree needles, bark, moss, etc.) into essential oils, dried chips and other projects.

    Business & Industry (B&I) Guaranteed Loans — This program helps to improve, develop or finance business, industry and employment in rural communities. It bolsters existing private credit by guaranteeing quality loans that show promise of creating lasting community benefits. The program typically guarantees losses of up to 80 percent on loans of up to $25 million, or up to $40 million for value-added ag processing plants in rural areas. “Rural” for this program is defined as communities (and their contiguous, adjacent areas) of less than 50,000 people. There is an exemption to this population limit for loans of up to $25 million when a co-op is engaged in value-added ag processing and all members’farms or ranches are within 80 miles of the processing facility. Inability to obtain other credit is not a requirement to participate.

    Rural Cooperative Development Grants (RCDG) — This program provides funds to cooperatives and development centers to assist individuals and business owners in rural communities who require startup, expansion and operational improvement assistance. The grant program also helps rural communities improve their economic conditions, create and retain jobs and develop new rural cooperatives and value-added processing. In fiscal 2011, 26 states and the District of Columbia received 36 RCDGs worth more than $7.9 million from Rural Development.

    Examples of funded projects include:

    • The Mississippi Association of Cooperatives used an RCDG to provide small and minority farmers with development assistance. The Center focuses the vast majority of its efforts on the most distressed rural areas of the state. The group also helps minority farmers establish financially sound businesses.

    • The California Center for Cooperative Development helps develop new cooperatives, promote community supported agriculture, strengthens the marketing of small farm production and develops systems to link growers with regional consumers. The Center also helps local farmers form cooperative corporations to enhance their marketplace position.

    Small Socially Disadvantaged Producer Grants (SSDPG) — This program awards grants to eligible cooperatives and associations of cooperatives that provide technical assistance to small, socially disadvantaged agricultural producers in rural communities. In fiscal 2011, USDA Rural Development awarded 19 SSDPG grants totaling more than $2.9 million to African-American-, Hispanic-, Native-American-, and women-owned cooperatives that will use the grants to assist 1,469 businesses. Examples of grant awardees include:

    • The Louisiana Association of Cooperatives will use a $200,000 SSDPG to provide technical assistance to small producers in 41 rural parishes throughout the state, including areas affected by Hurricane Gustav.

    • In South Carolina, the 31-member Piedmont Farmers Marketing Cooperative used a $43,600 SSDPG to complete seminars and workshops on animal husbandry, vaccination requirements and breeding and rearing techniques. The SSDPG will also allow co-op members to visit a facility that converts livestock waste into renewable energy. The energy produced will help reduce the facility’s operating costs.

    Rural Business Enterprise Grants (RBEG) — The RBEG program provides grants for rural projects that finance and facilitate development of small and emerging rural businesses and helps fund distance learning networks and employment related adult education programs. To assist with business development, RBEGs may fund a broad array of activities. An example is the Island Grown Farmers Cooperative (IGFC) in Bow, Wash., which operates a mobile processing unit that was the first USDA-inspected mobile slaughter facility for red meat in the nation. A $55,000 RBEG grant was used to provide technical assistance to develop the USDA-certified mobile meat processing facility to serve remote rural island farmers.

    The cooperative business model is a time-tested tool for rural producers and communities to use in filling a void in the marketplace and keeping resources in the community. Cooperatives can use USDA Rural Development programs to offer increased opportunities for long-term, sustainable economic gains for their member and for rural America.

    Source: Rural Cooperatives magazine; January/February 2012

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