NCGA Development Advisors Help Co-ops Prepare for Growth

In late 2012, National Cooperative Grocers Association (NCGA) launched a new service designed to assist its member and associate co-ops in preparing for growth. Two development advisor positions were created and filled by veteran cooperators at NCGA, Peg Nolan and Paula Gilbertson.

Program background

NCGA development advisors provide member co-ops with individualized business-development planning and implementation assistance. Services are designed to support and strengthen NCGA co-ops’ ability to aggressively accelerate their sales growth. Development advisors work with individual co-ops to assess and build strengths, identify and address challenges, facilitate access to needed resources, and assist in the creation of a multiyear business-development plan.

This customized business-development plan helps the local co-op build sales growth and readiness for expansion. The plan can include work on co-op structure, board alignment and governance systems, board/management relationships, management team capacity, staff engagement and alignment, membership engagement and alignment, membership growth, and financial systems and reporting.

The work generally takes place over the course of several months and involves sharing and transparency between the development advisor and the co-op, on-site visits and recommendations, and development of a plan.

Early data suggests the program is an effective resource for NCGA co-ops. By tracking key metrics for participating stores—total sales, sales growth percentages, margin minus labor (MML), and earnings
(EBITDAP)*—before and after a development advisor’s services, evidence of improvement in one or more areas is beginning to emerge within three to six months of services. In some cases, the improvements in these areas are immediate and remarkable; in other cases, conclusions can only be made with the fullness of time.

What we’ve learned

GreenTree Community Co-op in Mt. Pleasant, Mich., contracted with a development advisor in December 2012 to improve MML percentages and prepare the store to open a second location. “The program brought value to our co-op in hundreds of immeasurable ways, but in measurable ones, too,” says General Manager Sarah Christenson. “We achieved 16 percent sales growth, hit a new tier with UNFI pricing, and strengthened our leadership team.” GreenTree is now on track for working with the NCGA Development Cooperative on expansion. “It was nice to have someone know your challenges and recommend ways to address them,” says Christenson.

In addition to achieving specific, measurable goals, stores have reported improved access to resources and shared practices from other NCGA co-ops, as well as increased confidence for management. The Great Basin Community Food Co-op in Reno, Nev., recently contracted with a development advisor to increase profitability and develop a structure of accountability. “We’re small and pretty new, so we were able to get financial tools that showed us we don’t need more people to be successful, just better systems,” says General Manager Jolene Cook. “I was able to narrow in on three priorities and take those to my management team. I think and talk about those three things all the time now!”

 “We are constantly learning and sharing,” says Gilbertson, the development advisor based in NCGA’s St. Paul, Minn., office. “We’ve been in a lot of operations and seen what’s going on, but it’s always up to the individual co-op leadership to apply the resources you bring, and it’s great when you see that happen.”

The greatest strength of this program so far has been its ability to produce results for co-ops of varied sizes and experience levels. “If your store is on the fence, go for it,” Christenson says. “The services aren’t cookie-cutter, and Paula and Peg can customize the plan to address your specific needs.” 

Adds Cook, “Paula has our best interests at heart and is able to act as a conduit for our vision. She really just wants you to do a good job and end up on top. It works.”

* EBITDAP: The standard accounting term for Earnings Before Interest, Taxes, Depreciation, Amortization, and Pension Income (altered in co-op usage by replacing Pension Income with Patronage Refund).