Cathy-SmallMeet Cathy, the Cooperative Development Institute’s new answerwoman! She can take on any co-op questions you might have, big or small. Today we ask: are all food co-ops consumer owned? See all of Cathy’s answers and ask your own on her home page.

In the United States, when you think of food cooperatives, you most likely think of grocery stores that are democratically-owned and governed by the consumers who shop there. This makes them consumer cooperatives.

There are many reasons consumers would want to own and run their grocery store as a community. To name just a few: democratic control over the business, keeping money in the community, access to healthy and nutritious foods, a say over what’s stocked on the shelves, member discounts, bringing food access to areas where there might be little or none, patronage dividends at the end of the year for the consumer members. In fact, many of these reasons are why the consumer grocery co-op movement is seeing a resurgence today.

So are all grocery co-ops consumer-owned, then? Well, the answer is most – but not all. Below are three examples of grocery store co-ops that use different ownership and governance models.

Rainbow Grocery: Worker-Owned

Rainbow Workers in Action, via Rainbow's Website:
Rainbow Workers in Action, via Rainbow’s Website.

Rainbow Grocery has been serving San Francisco and the Bay Area since 1975. They are a cooperative, but a different kind – a worker-owned cooperative. This means that the workers are the owners (the membership), and they govern the co-op, have one equal “share” of the business, share in its profits, must equally share its burdens, and so forth.

According to Rainbow’s Website:

“As a worker-owned cooperative, those of us who work here are more than simply the labor-force of this business, we are the business. And while we have come to work here for many different reasons, we all share the common desire to work in a non-hierarchical, democratic workplace where everyone’s opinion matters. Not only do we hope to make a difference by providing healthy food and products to everyone who shops with us, we believe that through our successful business model for cooperative work we are also putting the ideals of sustainable living into practice.

Since we moved from 15th and Mission to our building at 13th and Folsom, we have more than doubled our workforce from about 85 people to over 220. While we add new worker/owners every year, some of us are celebrating our 20th, 25th, even 30 year anniversaries!”

Like many of the grocery cooperatives that began in the 1970’s, Rainbow Grocery started as an all-volunteer, collectively run store. During that wave of grocery co-ops, roughly 800 launched around the US – of which only about 200 of those still exist today. Many of the ones that survived this era did so by eventually shedding their volunteer, collective management structure and becoming more “official” in their operations. This was achieved by hiring a general manager to run the store and the workforce, consolidating the ownership under the consumer members and the primary governance under the board of directors the members elected, and so on. Rainbow Grocery, however, followed a different trajectory.

“Rainbow opened with exclusively volunteer labor. After the first few months, there was enough income to pay the project’s two most active workers (its de facto coordinators) something approximating minimum wage. As the store became increasingly successful, it was able to bring more workers on paid staff, although people were generally not brought on to payroll until after several months of consistent volunteering. As the staff at Rainbow grew larger, the need for more defined organizational relationships increased.”

Through trial and error, Rainbow continued to grow and increase their success. But, because they did not have many examples to pull from in terms of a food co-op that was owned and run by the workers, they had to come up with a unique model. This came to a particular head when Rainbow was moving to a new, larger location on Folsom Street.

“In order to carry off the planning and growth involved in this move, Rainbow undertook further organizational refinement. As part of the move, the Grocery and General Store divisions were dissolved and Rainbow divided into Departments as its basic units; Joint Meetings between the divisions were replaced by Membership Meetings for all worker/owners. The Membership Meeting created an elected Storewide Steering Committee to help coordinate the Departments and overall day-to-day operations hoping to free the Board of Directors to focus on the larger financial/legal issues and long-term planning.

All the planning and hard work came to fruition with our opening at Folsom Street on April 25, 1996. As with the previous move, sales skyrocketed (this time 55% in one year).  The financial success allowed an increase in wages and benefits as well as “patronage” distributions in keeping with our new cooperative legal structure. The work force, hovering around 80-100 workers in the final years at Mission Street, doubled in the years following the move.”

As we can see here, workers can do a great job of owning and running a very successful, and important to the community, cooperative grocery store.

Weaver Street Market: A Hybrid Cooperative Model

One model that has slowly been gaining traction in the co-op movement as a whole, and also specifically in the food co-op movement, is the idea of a hybrid cooperative model. (Or, more precisely, a multi-stakeholder cooperative.) In this model, there are more than one cooperative ownership classes – meaning the membership isn’t just workers or producers or consumers, etc.

In the food co-op movement, this has primarily (but not exclusively) centered around having both consumers and workers as the owners (another growing trend is producers teaming up with consumers, as in the Marsh River Co-op in Brooks, ME). While both the consumers and the workers are the owners of the co-op, they also elect different members to the board in order to represent their specific interests. Perhaps one of the most well known hybrid food co-ops in the US is the Weaver Street Market co-op in North Carolina.

According to their website:

“A seven-member Board of Directors governs Weaver Street Market. Four of the directors are directly elected by the two owner classes, workers and consumers (2 positions each), and two positions are appointed by the board itself to fill the need for particular skills or knowledge. The General Manager holds the seventh position.

The board is directly accountable to the consumer and worker owners for the activities and accomplishments of the store…  all owners of the Co-op are welcome to attend as observers.”

One important thing to note is that while the workers are owners and have governance rights at Weaver Street, their management structure often mirrors the typical consumer co-op model.

Since 1988, Weaver Street has grown to three store fronts. Now that’s successful democracy in action!

Amherst Community Co-op: A Start-Up Hybrid With Another Idea

Signs for people interested in becoming founding members of the Amherst Community Co-op, via ACC's website.
Signs for people interested in becoming founding members of the Amherst Community Co-op, via ACC’s facebook.

But wait, there’s more! One start-up co-op in the college town of Amherst, MA is looking to blend the Rainbow and Weaver Street models. Co-op organizers have been rallying the town behind the idea of the Amherst Community Co-op for years, and they are currently in the midst of a campaign to get 150 – 300 founding members.  According to their website:

“A worker-consumer hybrid co-op is one example of a multi-stakeholder co-op. In this model, workers at the co-op and consumer patrons of the co-op share ownership of the enterprise. For Amherst Community Co-op, this will mean that worker-members and consumer-members will share representation on the Board of Directors, which ensures that the cooperative is staying in line with its mission statement and guiding principles. All members of the Amherst Community Co-op will have the power to elect workers and consumers to the Board of Directors.”

So far, this sounds similar to Weaver Street Market’s model. But what sets them apart is their approach to the workers’ management:*

“The workers of the co-op will operate under a collective management structure, meaning there will be no bosses or hierarchy. For anyone who is familiar with the collective management model, it is well known how challenging this can be, but above all how rewarding and fulfilling it can be. It is true democracy in the workplace.”

In fact, Amherst Community specifically references Rainbow’s model as their inspiration for this structure:

“Rainbow Grocery’s collective management structure can be applied to our own co-op’s governance. Each department of the co-op will act as its own collective, setting and enforcing its own policy. For example, the produce department could have 5-8 collective workers, sharing the responsibilities of ordering and stocking the produce, along with the various other day-to-day tasks of running the produce department. The produce collective would be responsible for the hiring, training and evaluation of its worker-owners, as well as their discipline and potential termination. This would be the case across the board for the co-op’s other various departments- the cashiers, the dairy, bulk, and meat departments, as well as the office. The office collective would be responsible for the bookkeeping and various other clerical co-op tasks.

Each department’s collective would meet once every two to three weeks, and the whole co-op staff would meet once a month. As with traditional consumer-owned co-ops, there would be a board of directors, however it would be made up of both workers and consumers. The board would be responsible for things like establishing and approving the co-op’s budget, implementing new projects and goals, acting as the legal representation for the co-op, and making sure the co-op remains true to its mission and vision. The members of the board would be elected by and from the workers and consumers respectively, with a one year term.”

*As of August, 2016, Amherst Community Co-op has decided to not pursue this approach during their start-up phase.

As we can see from these three examples, food cooperatives can come in all kinds of flavors. And they can change over time (for example, the worker-owned Just Local Food of Eau Claire, WI, changed its structure to invite consumers to become member-owners a year ago). Different communities have different needs, interests, and goals. That means that different cooperative models will best suit their specific efforts and missions.

And really, that’s the beauty of cooperation – there’s no one right way to do it!

So – what do you think? Share your thoughts about the subject in the comments below, or ask your own question for Cathy!

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