Cooperative Grocers Associations

Chart by Walden Swanson

Building a Thriving Food Cooperative System

By Robynn Shrader

The National Cooperative Grocers Association board of directors held a planning session last fall to further refine the vision for the organization and for food cooperatives currently and potentially served. Following is the board's Ends statement, framed by the adoption of the policy governance model:

A thriving food cooperative system with:

• Resources optimized system wide
• An enhanced sense of community, based in social justice and environmental stewardship, that builds social capital
• A dynamic system, inspired by vision, innovation and creative chaos

With this articulation of the board's vision, we can look at progress we've made as well as anticipate the programs and activities that will make manifest those ends. In March, nearly 300,000 consumers will receive Co-op Advantage Flyers representing national and regional product promotions. The coordination of this effort by our member Cooperative Grocers Association and their staff is a prime example of what can be accomplished when we pool our resources both regionally and nationally. This program rewards our consumer owners as well as our CGAs and individual stores in cost savings and revenues to further market our businesses.

We are gaining more standardization of our financial information through CoCoFiSt and using this comparative data in more sophisticated ways to improve operations. The number of CoCoFiSt workshops and participants continues to grow, and we are getting better at measuring the results from this analysis and training.

NCGA is currently looking at how best to build a Co-op brand of products. Our rich history in the promotion of organic agriculture and sustainability gives us a branding opportunity within the evolving natural products marketplace. The values that food co-ops have long stood for, articulated in the NCGA Ends statement, are values that resonate with more and more consumers. We are working closely with The Hartman Group to evaluate the consumer testing done specifically for NCGA last fall and other research that Hartman conducts in the wellness industry. We have the potential to build a brand that puts a face on the core concepts that our owners expect from us and to extend our appeal to the growing number of wellness consumers. A destination Co-op brand that embodies a sense of local community and social values could strengthen our position in the marketplace and bring us new customers in a changing society.

We are making solid progress on developing a POS system specifically for food co-ops, and the CoCoITT project is an example of innovative and creative collaboration. This "distributed development" taps into the talent within our sector while yielding a coordinated outcome and shared results.

We are still finding our way in how best to work together on all levels and how to maximize our impac in the short and long term. The NCGA board has worked hard to define a vision that encompasses the needs and desires of our individual businesses, while recognizing that execution of collaborative work with accountability to each other is something of a cultural shift. We should be proud of our accomplishments thus far and inspired by imagining what can still be achieved.

Robynn Shrader, executive director of NCGA, may be reached at 319/466-9029 or [email protected].

Pace Quickens in the Northeast

The CGANE membership grew to 18 organizations in 2001, representing sales of over $100 million annually. Capitalizing on the organizational development of the past year and our "best practice" of "copying good ideas," Cooperative Grocers Association Northeast initiated a number of important steps and programs during the year to bring value to its members and to enhance the ways in which we can work together.

The group met four times during the year at various sites around the region, conducted store audits of the Takoma Park Silver Spring and Middlebury co-ops, held a training session on CoCoFist, and began discussion of how CGANE could support and enhance the future of the Manager On Contract program. In addition, the board and various committees of members met more regularly which definitely enhanced our ability to accomplish a great deal this year.

This past year we:

• Revised our membership criteria to include provisions for participation and "teeth" to enforce them
• Agreed to move all members to a common fiscal year, with the goal of standardization by June 30, 2003
• Committed to a data collection process on a common form for exit interviews, as part of a project on hiring and retaining great staff
• Continued an active program of peer support, including work on board-manager relations, business planning, and active support of members in financial difficulty
• Approved and funded a Northeast region CAP program, and hired Bini Reilly as our CAP coordinator
• Hired Marilyn Scholl to conduct a feasibility study for an Executive Director for CGANE
• Agreed to hire an Executive Director with a target of late spring, 2002
• Initiated the first steps toward policy governance policies around our values and objectives to guide our Executive Director. This process, in turn, has prompted us to look at our organizational structure and how to structure investment and returns on projects of various natures in the future.

Finally, following longstanding co-op tradition, we again made a minor modification in our Mission/Vision/Strategies:

Mission: To ensure growth, sustainability, and excellence of food co-ops in our region.

Vision: A unified, vibrant cooperative identity and stronger cooperatives understood and used by more and more people.

CGANE Strategies:
* Strategic alignment of co-ops
* Peer support for managers
* Best practices
* Collaboration (Work together on common issues.
* Joint planning. Use resources effectively.)

David Fowle is general manager at Wild Oats Co-op and is staff for CGANE: [email protected].

Working a Plan, Maximizing Opportunity

Working a plan and maximizing the use of opportunities were the benchmarks of 2001 for the Southeast Cooperative Grocers Association (SECGA).

In October of 2000 the SECGA approved a plan for 2001 that outlined 3 goals: 1) hire a half-time executive director; 2) continue individual store improvement plans, manager development and current programs, 3) Actively participate in and support the National CGA efforts. This set the stage for a very active and productive year.

Highlights from 2001:

• CoCoFiSt workshop with Walden Swanson in April
• Implementation of the Rapid Improvement Program (RIP) with Mel Braverman in two SECGA stores (Sevananda and Life Grocery)
• 2 store audits (Hendersonville, Weaver Street Market)
• Workshop on sales growth factors and store plans, with the general managers
• Agreement to operate with board policy governance (April) and subsequent work with Linda Stier to develop SECGA board policies; nearly nine months from the day we agreed to use Policy Governance, we adopted a set of board policies
• CAP: the SECGA adopted and implemented the Cooperative Advantage Program (CAP). In September we held a meeting in Atlanta with CAP buyers from every SECGA store. David Butterfield attended to inform and prepare us for the CAP launch; on schedule, all CAP buyers submitted their previews and orders electronically!
• Primary distributor agreement: in the process of negotiating CAP details with our primary distributor, UNFI, it was mutually decided that we would also re-negotiate our contract for services with them. This was successfully completed in January 2002 and includes incentives for group purchasing growth.
• Increased membership: we increased our membership to nine with the acceptance of Knoxville Community Food Co-op and Good Foods Co-op in September
• Hired an executive director: we hired Peg Nolan through CDS to assist in our efforts to establish the executive director position and to find ways to further strengthen and build the SECGA as an organization
• Joint meeting with CGANE: last fall David Fowle of CGANE contacted the us to express that group's interest in meeting with SECGA. Both groups scheduled January 2002 meetings in Carrboro, NC, and the two CGAs met jointly for an afternoon and evening. Joint meeting activities included: (a) a lively discussion/debate about the ability of food co-ops to survive in a competitive market environment (where our gross margins decreased for the first time in 2001) and still be co-ops with our values and market niche intact; (b) Introductions and an informative exchange on CGA histories, structures, projects and accomplishments; (c) a delightful evening for 39 of us at Weaver Street Market's restaurant, Panzanella, and (d) a breakfast meeting where our CGA board chairs (Patrice of Greenstar and James of Weaver Street) determined to stay more closely informed of each another's CGA activities and opportunities.

Plans for 2002:

• Policy Governance (next steps): year one implementation and a board task force to research options for transitioning to a SECGA board that does not have every member on it; consideration of a business plan based on our newly adopted Ends statement: "The Mission of the SECGA is fearless, exuberant, forward thinking leadership in the expansion of cooperative commerce."
• CAP Launch: on target for March of 2002
• Co-op expansions: five of our nine stores are planning physical expansions in 2002. Life Grocery is opening a café in their recently acquired additional space. Weaver Street Market is opening a co-op retail store in a community 3 miles from their first store and restaurant. Tidal Creek is relocating and expanding their co-op later this year. Good Foods and Knoxville also have expansion plans.
• Continued management development and store improvement: this work is scheduled for our meetings and through a strategic plan to be developed by our executive director that interprets our Ends statement.
• Organizational development and CGA shared risk: we are actively seeking to establish a SECGA contingency fund, a form of venture capital. Our intention is to assist our member co-ops in securing financing for expansion efforts that have been carefully considered by the SECGA.
• Expanding SECGA: there are several co-ops in our region that have expressed interest in the SECGA. We will establish and implement a formal application and approval process.
• Active participation in working with Regional CGAs and the NCGA: We will be looking for other opportunities to enhance the benefits of working together and to drive costs out of the system.

James Watts is board chair ([email protected]) and Peg Nolan is executive director of SECGA ([email protected]).

Building Capacity, Profitability, and Market

Cooperative Grocers Association Midwest had another great year in 2001. We had our first full year with an executive director; welcomed Whole Foods Co-op, (Duluth, MN); welcomed a new general manager, Michelle Schry (People's Food Co-op); expanded our use of CoCoFiSt; and continued to expand our combined programs and projects with the Twin Cities Natural Foods Co-ops (TCNFC).

Our overall goals remain the same: build capacity, build profitability, and build market.

In 2001 CGAMW's capacity increased as we worked to define clearly the roles of the board and the executive director. We revisited our committee structure and the use of committee time, given the changes that occur when you have staff. Our current board roles include: executive, membership, and success committee; CAP oversight committee; representation on the NCGA board; and a strong commitment to the "buddy system." By assuring that we have clear direction, measures and support for the all of CGAMW activities, we are able to build a level of trust that allows us to take additional risks.

One area where we are looking to take more risks is in the use of CoCoFiSt as a tool both at the individual stores and for peer support and accountability. CGAMW recognizes the need to insure the well being of all of its member stores, especially as we expand the areas where we collaborate. To this end the group has spent considerable time using CoCoGAP at its quarterly meetings. Each member identifies a department that demonstrates a large gap. General managers set goals and benchmarks to close the gap, reports to the whole group their plans, and then are required to do follow up reporting at each quarterly meeting.

In addition, we set overall store goals and benchmarks for the "chain" to achieve; each quarter the Success Committee updates the full group on the "chain's" progress. We are in the process of expanding our benchmarks and will be setting them by department. Another desired outcome of setting department benchmarks is to create a clear monitoring and evaluation tool for department managers, trainings, and CoCoWorks sessions.

To support this direction in 2001, we sponsored three CoCoWorks sessions, with one of these sessions labeled "train the trainer." The concept was that each store would send two people who could be internal trainers for CoCoFiSt. The trainers then spend time with the department managers before they attend a CoCoWorks session so that those attending will have a stronger working knowledge of CoCoFiSt before they arrive. This is working well, and it allows for further "drilling down" of the numbers and really using the time for peer problem solving instead of learning mere basics of reading the data. We are looking forward to expanding on this in 2002 and sharing with other CGAs the process and tools we create to make full use of CoCoFiSt This focus is where we truly feel we can build profitability, our second goal.

Regarding our goal to build market, we are achieving this through the use of time and resources to expand the CAP program nationally, through our participation in NCGA, and by utilizing our combined volume to leverage in many areas, both with and without TCNFC.

CGAMW goals will remain the same for 2002. We are excited about the growth not only of our own CGA, but also of the CGAs across the country. We have not exhausted the possibilities that can be achieved when we have capacity, profitability, and market. The opportunities for us to collaborate continue to be more diverse and sometimes more risky, so working together and building trust and commitment is an important component to a successful Cooperative Grocers Association.

Corinne Shindelar is executive director of CGA Midwest: [email protected].

New Ground Requires Growth, Flexibility

Twin Cities Natural Food Co-ops continued to grow in 2001. We started the year in agreement that we would refine our current programs, ensuring that all of our systems were in place. The goal for us was to make sure that our programs -- CAP, Leadership Development Training, the Mix (our bi-monthly educational newsletter), and our joint marketing projects -- were having desired outcomes.

But, indicative of the industry that we operate in, TCNFC also retained its flexibility as an organization and grew despite our intentions not to. Not only did we continue to improve our existing programs and measures of financial stability, we added a few programs as well and added St. Peter Co-op to our group.

We began 2001 with a less than full time executive director (Corinne Shindelar) and a part time assistant director (Patricia Cumbie). We finished the year with a total of six staff, several of whom are shared with CGA Midwest.

Our latest programs include a joint purchasing department and a prepared foods department. Dave Schermerhorn, who staffs our purchasing department, is implementing a purchasing program focused on reducing costs in operational services and supplies. We are purchasing inventory services jointly at a combined savings of $2,000 to our members. We have front-end supplies and merchant credit card processing services proposals ready to launch. In process are negotiations for deli supplies. Next we hope to tackle areas such as cleaning and courier services. The purchasing arm of TCNFC will help stores reduce operating and labor costs while allowing stores to maintain autonomy.

Dave also manages to help me with coordinating our Leadership Development Training program and TCNFC sponsored events.

Shared staffing helps TCNFC and CGAMW work closely together where possible. Dave always negotiates with vendors who can serve all of the Midwest stores. While some of our projects are easier to launch in the Twin Cities initially, we work to ensure that these services not only are available to the Midwest but possibly to other co-ops across the country when they are ready. We are finding that almost all service suppliers belong to associations (much like our CGAs) and they can network and connect us to allow for an economy of scale in almost all regions.

Prepared Foods Coordinator Christopher Ryding comes to the TCNFC with long-term professional food service experience. He was the owner and chef of the award-winning restaurant Cosmic Cafe in Detroit, MI. He joined Whole Foods Market in 1996 overseeing and troubleshooting operational and profitability issues specific to deli departments at 15 locations, a central kitchen facility and an upscale café. He also created six new department designs and five startups. He joined the staff of the TCNFC as a resource to help identify deli-specific issues surrounding operations, marketing, image. and purchasing opportunities.

Thanksgiving 2001 marked our first joint deli marketing effort. The TCNFC provided full color posters for the stores and delis promoting our all-natural holiday dishes, complete with a matching menu to provide a consistent message. Department managers created their own store specific menu offerings and simply had to print them inside the menu sleeves.

The option to purchase already prepared foods from the deli was also highlighted in the Nov/Dec issue of the Mix newspaper, along with our first joint deli sale item, which focused on cheeses for holiday entertaining and complemented with a story on fondue. These efforts afforded us the opportunity to have a consistent, professionally designed and formatted menu, supported with printed articles and ads, to enhance our individual and collective image.

All of this takes support, and if you add the CAP program on top of it, it could not be completed without the help of our administrative/CAP assistant Joan Guettler. Joan manages the books for TCNFC and does most of the administrative and time-consuming coordination of the CAP marketing materials.

TCNFC and CGAMW continued to grow and refine the CAP program in the Midwest. In addition they fully supported the launch of the CAP nationally and in other regions by providing the resources of time and expertise to each region and the NCGA for this program.

TCNFC is planning for 2002 once again to ensure that all of its projects and programs are effective. We are working at improving and building our capacity as an organization and defining roles for board and staff.

We continue to support organizational depth through regular department managers meetings and our board presidents continue to meet bi- monthly to share governance issues. We are proud of what TCNFC has accomplishing and is accomplishing. But we are still feeling like adolescents at times as we tread new ground, try to remain flexible, and strive for very effective programs that fulfill our mission.

Corinne Shindelar is executive director of TCNFC: [email protected].

Ch-ch-ch-changes in the Northwest

Perhaps no year in the life of a Cooperative Grocers Association is predictable and stable. However, this past year the Northwest CGA encountered more bumps than even a group of seasoned co-op managers could reasonably expect. As a result, our group is smaller and wiser, all the more ready for what the next year might bring.

Highlights of 2001:

A fair bit of our work continues to revolve around the group contract with our primary supplier, Mountain People's Warehouse. For two years now, this agreement has lowered cost of goods for each member. By the time this is published, three members that joined after this contract began will have been added to this program.

Coordinating monthly specials has always been a requirement of this agreement. We set up simple systems to meet this requirement, but these methods didn't allow us to tap into the full potential of the program. Our deep appreciation goes to Food Front Co-op Grocery for interim program support and leadership during 2001 while we built the foundation for a more comprehensive system.

After reviewing a number of proposals, we decided to participate in the new nationwide "Co-op Advantage Program" (CAP). We are calling our version "CAPWEST" and appreciate the support and generosity of the Midwest CGAs in helping us get our program up and running. CAPWEST is also our first joint project with the Pacific Cooperative Grocers' Association (PCGA). Through the year, we worked together with them to establish contracts and communication systems, hire a top-notch coordinator (Rick Sheller), and make sure that all of our stores are poised and ready to support the program from the beginning. Our group's first monthly specials will appear in March. We're really pleased to have this new program in place and excited about its potential.

The NWCGA continues to meet on a quarterly basis, and we try to share good ideas and provide professional development opportunities for participating managers at each meeting. Our meetings are characterized by open, frank discussions about hard and sometimes complex issues as well as a good amount of fun. We anchor our meetings in the daily reality of our member co-ops by doing store audits. We have developed a number of different formats for these audits to keep them interesting and to address different needs among our members. Each meeting also features a "pretty good practices" presentation by the host manager.

Expansion and contraction:

The NWCGA has seen an astounding level of store expansion projects among its members. By the end of 2002, nine of our 11 members will have completed major expansions since late 1999. Sales growth trends have remained strong for most of our members. Fortunately, in the past year, we haven't had the high turnover in top management that we experienced in 2000.

In 2001, for the first time since its founding in 1997, the NWCGA experienced a loss of membership. Puget Consumers Co-op (PCC), decided that it would better serve them and the group if they no longer participate in the NWCGA, at least through 2002. While this was disappointing to everyone involved, there is complete agreement that working together is only effective if it benefits all parties. To date, PCC and the NWCGA member stores remain interested in finding new and mutually beneficial ways to collaborate.

Moving forward:

Our new values statements say a lot about how we hope to work together as a group: While we recognize that every member co-op has an overarching duty to the board and members of its organization to protect members' assets and achieve the co-op's goals, as NWCGA members we place a high value on

• working together to maximize the benefits of functioning as a chain, while preserving individual co-op identities
• honesty, full disclosure, confidentiality, and good communication among all members to facilitate inclusive sharing of information and development of mutual support
• well designed systems and tools that help successfully implement programs and measure performance
• acting out of a sense of accountability to the group as a whole
• implementing programs and activities that provide benefits to members and to the co-op system while minimizing potential negative impacts on individual member co-ops.

We scaled back our goals for the year to focus attention on two items: implementing the CAPWEST program successfully and re-negotiating our contract with Mountain Peoples Warehouse. Now that we can see the beginnings of progress in these areas, we're thinking about new ways that we can bring benefits to our stores and members by working together.

Karen Zimbelman is on contract to the NWCGA to coordinate its work: 707/445-4849 or [email protected].

Getting Results From Cooperation

Two years after we started, the Pacific Cooperative Grocers' Association (PCGA) is starting to show great results. As the group stands poised to begin seeing even more benefits from its work together, PCGA is also taking some time to consider how best to leverage its group power for the future.

The results:

By far the biggest achievement for the group has been getting member stores into a single joint purchasing contract with their primary supplier, Mountain People's Warehouse. During 2001 we completed negotiations and set up systems to meet our contractual requirements for this program. Participating co-ops are now starting to see the results. Eight of our ten members have lower cost of goods thanks to our combined efforts.

As part of the joint purchasing contract, PCGA stores are required to coordinate monthly promotions. In order to meet this obligation, the group has been working together with our colleagues in the Northwest Cooperative Grocers' Association to establish a West Coast version of the Co-op Advantage Program (CAP). CAPWEST, as we are calling it, will negotiate monthly specials on behalf of twenty participating West Coast co-ops. In addition, we will work with the Midwest and East Coast programs on a number of national deals each month. We're pleased to have hired Rick Sheller as the program's coordinator and excited about the launch of this for new venture in March. Our thanks to TCNFC and CGA Midwest for their willingness to share this program and their experiences in helping us replicate their visionary and dynamic program.

Grocery bags aren't a particularly glamorous item, but they are something that we all need in daily operations. Last October, the PCGA grocery bag began showing up in stores. By working together, all members are able to receive bags at a significantly lowered cost while at the same time reinforcing a message that promotes shopping in co-ops.

Other accomplishments for the year include:

• getting an opinion from an attorney about how to handle abandoned member equity, a problem shared by all PCGA member stores
• joining the National Cooperative Grocers' Association
• negotiating a group discount for all members with one of our largest secondary suppliers
• sponsoring a Rising Stars workshop for managers and supervisors from member stores.

The future:

We expect to begin considering applications from prospective members in mid-2002, and we've approved a procedure for that. While our members are currently all located in California, our region includes all neighboring states as well.

The PCGA stands at a bit of a crossroads. Having accomplished the goal that was foremost in members' minds when the group was started, PCGA is now considering how to best use the group's combined power in the future. We have spent several meetings discussing possible projects, but we need to take a step back and consider the larger questions of why we are working together and what we are trying to accomplish in our collaborative efforts.

To consider these questions, the group will be holding its first planning session to formulate a strategic direction for the future. We expect that process to help us identify specific goals and hope to be able to jump into those areas during the year.

Karen Zimbelman is on contract to the NWCGA to coordinate its work: 707/445-4849 or [email protected].

Nine Co-ops Join Great Lakes CGA In Its First Year

On a snowy December day in 2000 the general managers of three Michigan co-ops met to discuss forming a regional Cooperative Grocers Association. Such an alliance would allow the co-ops involved to share resources, ideas, best practices, training, and purchasing power. Our members are asking for the same or similar products, our staffs are dealing with the same vendors and product issues; our staffing and customer service needs are basically the same. This initial meeting left everyone with a good feeling about further cooperation among cooperatives.

A founding meeting for Great Lakes CGA was held in June 2001 at the CCMA conference in Chicago.  As a followup, the group met again in September 2001, at which point the membership in the GLCGA grew to nine co-ops.  The fall meeting was of a formative nature, dealing with future meetings, dues, and structure, as well as discussion of goals, tasks, and projects.

In January of 2002 the GLCGA met at Greentree in Mt. Pleasant.  CAP program participation, staffing, personnel and training issues were discussed.  Our next meeting will be in May at Maple City Market in Goshen, Indiana.

Bob Struthers is general manager at Oryana Food Co-op in Traverse City, Michigan.