This presentation explores the impact and potential of co-operative enterprise in our regional food system, from the producer to the consumer. This presentation reviews various co-op structures, including producer, consumer, worker, and multistakeholder models and provides guidance for people exploring a co-operative business start-up or conversion in their community.

1. Growing the
Co-operative Food System
Erbin Crowell, Executive Director NFCA
NOFA MASS Winter Conference
Worcester, MA // January 12th 2013
www.nfca.coop

2. Outline
1. Our Context
2. What is a Co-op?
3. Why Co-ops?
4. Where is the Potential?
5. Starting a Co-op
6. Questions, Feedback & Ideas

3. 1. Our Context
• Crisis of Global Economic System
• Unemployment
• Dramatic Shifts in Wealth
• Diminished Democracy
• Instability & Change
• Hunger for Alternatives

4. What If…?
There was a business model that...
• …was democratic.
• …was rooted in our local communities.
• …was part of a values based movement.
• …put common good before private gain.
• …delivered tangible benefits.
• …was flexible and innovative.
• …was successful and resilient.

5. England in the 1800s
• Dislocation of Local Economies
• Dramatic Shifts in Wealth
• Concentration of Economic Control
• Poor Working Conditions
• Limited Access to Healthy Food
• Birth of the Co-operative Movement

6. Rochdale Equitable Pioneers
• Founded 1844
• Weavers, Unionists,
Community Activists
• Member-Owned Store
• Principles for a
Movement

7. Beyond a Grocery Store
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

8. Co-ops Today…
Are more common than we think
• 1 billion members worldwide (1 in 4 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
Are resilient
• Survived and grew during the global recession

9. 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

10. The Basic Idea
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, or is reinvested in the business.

11. Values Based
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

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

13. “User” Focused
• User-Owned: People who use the co-op’s
services also own it.
• User-Controlled: People who use the co-op
control it on a democratic basis (one-member-
one-vote).
• User-Benefit: People who use the co-op
receive benefits such as patronage dividends,
improved price, goods and services, and
employment.

14. Flexibility: Member Type
• Community Co-ops: Owned and governed by
members of community.
• Consumer Co-ops: Owned by the people who
purchase goods or services.
• Producer Co-ops: Owned by producers who process
and market their products.
• Worker Co-ops: Owned and operated by the people
who contribute their labor to the business.
• Multistakeholder Co-ops: Owned and controlled by
combination of stakeholders.

15. Flexibility: Activity
• Purchase needed products or services as a
group.
• Produce a product or service together.
• Process and value to raw materials produced
by members.
• Market products produced by members or by
the co-op.
• Provide Employment and a livelihood.

16. Flexibility: Sector
• Food Co-ops • Housing Co-ops
• Agricultural Co-ops • Credit Unions
• Fishing Co-ops • Communications
• Worker Co-ops • Utilities Co-ops
• Artisan Co-ops • Health & Insurance

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

18. 3. Why Co-ops?
Co-ops & Economic Resilience:
• Community ownership & control
• Focus on service, meeting needs before profit
• Develop local skills & assets
• Ability to assemble 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…

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

20. The Result
More stable local food systems,
infrastructure, employment,
services, and economy.

21. 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.”
United Nations
Resolution 64/136

22. International Year of Co-ops
What the United Nations says:
• Community ownership
• Economic & Social Development
• Poverty reduction
• Employment generation
• Fairness in globalization
• Conflict resolution & reconstruction
• Food security
• Innovation & resilience

23. A Co-operative Decade?
“The real opportunity, of course, is to use
2012 to help achieve a longer-term vision.
ICA is committed to turning the International
Year of Co-operatives into A Co-operative
Decade, with the goal of the co-operative
being the fastest-growing model of
enterprise by 2020.”
Charles Gould, Secretary General
International Co-operative Alliance

24. 4. Where is the Potential?
The Neighboring Food Co-op Association
is a network of food co-ops committed to a
shared vision of a thriving regional economy,
rooted in a healthy, just and sustainable
food system, and a vibrant community
of co-operative enterprise.

25. Telling Our Story…
Neighboring Food Co-ops
• 34 Co-ops & Start-Ups
• 80,000 memberships
• 1,450 employees
• $28.6 million in wages
• $200 million revenue
• $30 million in local
purchases
http://nfca.coop/members

26. …Across the Economy
New England & New York
• 8,860 co-ops
• 9.5 million members
• Employ 55,000 people
• $2 billion in wages
• $100 billion in assets
• $14 billion in revenue
http://reic.uwcc.wisc.edu/
http://nfca.coop/co-opeconomy

27. Our Co-ops in the Food System
Leveraging the shared PRODUCTION PROCESSING
impact of food co-ops
in the food system…
WASTE & NUTRIENT DISTRIBUTION:
MANAGEMENT NFCA MARKETING
DISTRIBUTION:
CONSUMPTION
TRANSPORTATION
NFCA
Food Co-op
DISTRIBUTION:
Member-owners
SOURCING
NFCA Based on
Member Components of a Food System
Food Co-ops (Nickerson, 2008)

28. Opportunities for Development
PRODUCTION PROCESSING
WASTE & NUTRIENT DISTRIBUTION:
MANAGEMENT NFCA MARKETING
DISTRIBUTION:
CONSUMPTION
TRANSPORTATION
NFCA
Food Co-op
DISTRIBUTION:
Member-owners
SOURCING
NFCA Based on
Member Components of a Food System
Food Co-ops (Nickerson, 2008)

29. 286
F A R M E R S
(1,700 TOTAL)
•#Organic(Valley((
Co/op(Member(Farmers(
Connec0cut# 1#
Maine# 30#
Massachuse8s# 2#
New#Hampshire# 9#
New#York# 115#
Vermont# 129#
Our$co'ops:$Working$together$for$a$more$
33
FOOD CO-OPS
just,$sustainable$and$democratic$$ NFCA(Member(Food(Co/op((
regional$food$system.$ Loca:ons(&(Start/Ups(
AS#OF#12/31/2011#

30. Deep Root Organic Co-op
• Founded 1986
• 19 members in VT & Québec
• 84,095 cases of produce (2011)
• $2.2 million in revenue (2011)
• Revenue for first half of 2012 up 40%
• Customers across VT and New England
• Partner in NFCA Frozen Vegetable Project

31. Other Examples
• Production: Arethusa Farm, Diggers Mirth
• Purchasing: Greenfield Farmers Co-op, Intervale Farm
Co-op, Hardwick Farmers Co-op
• Aggregation: Deep Root, Agri-Mark (Cabot), Pioneer
Valley Growers Association, Organic Valley
• Processing: Organic Valley, Green Mountain Spinnery,
Real Pickles (Converting)
• Marketing: Equal Exchange
• Distribution: Valley Green Feast (Conversion), Mass
Local Food Co-op
• Retailing: Franklin Community Co-op, River Valley
Market, Leverett Village, Old Creamery (Conversion)

32. 5. Starting a Co-op
• Launch a new co-op
• Convert an existing business

33. Conversion
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 co-op community

34. 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

35. 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

36. 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

37. Legal Statutes
General Co-op Statutes
• MA, Title XXII, Ch. 157
• ME: Title 13, Chapter 85: Cooperatives
Worker Co-op Statutes
• VT: Title 11, Ch. 8: Worker Cooperative
Corporations
• MA: Title XXII, Ch. 157A. Employee Cooperative
Corporations
• CT: Ch. 599a Worker Cooperative Corporations
“C” Corp with Co-op Bylaws
LLC with Co-op Operating Agreement

38. 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 reputable co-op
developers and industry experts
 Seek out peer support from other co-ops

39. Some Guidelines for Success
 Businesslike meetings
 Sound co-op business practices
 Culture of appreciation, openness, & honesty
 An open hiring process
 Sufficient capital for launch
 Business scaled to market
 If possible, hire project staff

40. 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

41. Concerns for Co-operators
• Engagement of members
• Encourage and develop broad leadership
• Ongoing training in:
• Board leadership
• Fiscal oversight
• Project & strategic planning
• Communication, facilitation, conflict resolution

42. Why Go Co-op?
Co-operative enterprises:
• …put people before profit,
• …are community owned,
• …are accountable to members,
• …are successful businesses,
• …strengthen local economies,
• …are resilient,
• …build a better food system.

43. 6. Discussion
• Questions
• Feedback
• Ideas
• Opportunities

44. Erbin Crowell, Executive Director
Neighboring Food Co-op Association
erbin@nfca.coop // www.nfca.coop
www.facebook.com/neighboring