During times of transition, Columinate’s interim General Managers (IGMs) have helped co-ops stabilize and implement lasting change. (See our recent library article, “Return on Investment of Columinate’s Management on Contract Services”.) IGM and Columinate consultant Scot Destasio had a transformative impact at the Old Creamery Cooperative, located in a traditional “Hilltown” in Western Massachusetts.

During his recently completed engagement there, Scot utilized his rich and varied operations background to help the small retailer find opportunities for fostering sales growth, creating stability, and shifting a mindset based on struggle. As a result of his engagement, the co-op has now found solid footing and will have a new GM in place in spring 2021.

An Agile and Informed Approach

The Old Creamery Cooperative has had a relationship with Columinate for several years, drawing on our team of member-consultants for short-term advisory engagements and assessments. Scot started his engagement in October 2020.

“In the fall of 2020, the Creamery faced a combination of challenges that called for more intensive and longer term support: in the context of the long term trends challenging the business model of small, rural cooperative groceries, and the uncertainties and multiple pressures posed by COVID, the General Manager resigned,” says Board President Katy Eiseman. “Columinate sent us Scot DeStasio, a consultant with in-depth grocery and turn-around experience, who served as interim GM, building upon the Creamery’s successful management of COVID and making longer term adjustments in the business model to put the store on a more stable trajectory.”

Shortly after Scot arrived, his game plan was to evaluate the existing business model to see if it was viable. “After three weeks on-site, I presented to the board that it was in fact viable to operate a co-op in the Hilltowns, and offered some suggestions for redoing the organizational structure, store layout, and programming in departments. We started seeing immediate success.”

 Scot implemented a full store reset that included:

• Identifying key efficiencies and removing walls to improve customer flow

• Adding linear footage into the store, revamping the perishable departments to offer better access to fresh food

• Implementing a new pricing strategy to make the co-op accessible to more people in the community

• Negotiating stronger purchasing agreements with distributors, decreasing the cost of goods by 12%.

• Creating a five year budget for the Board’s approval

The co-op quickly started to see a positive impact in sales as a result. Scot says he was able to make such swift, impactful changes so quickly because of his deep operational expertise in the grocery industry around the country. “Co-ops need someone who can understand what a community needs and align that with what the store needs to succeed and serve customers.”

Center Store Lead Buyer Jeremiah Reagan says he was happy to say yes when Scot asked him to take on more responsibilities . “Even though I was doing five times the work, it was ten times easier. Scot’s helped us put in systems that have made everything more efficient and productive.”

Culture Change and Team Development

The work of IGMs extends beyond just the financial aspect. One of the biggest challenges and successes during Scot’s engagement was creating a shift away from a mindset based on struggle. “There was previously a culture of losing at the co-op. They were used to struggling. Turning that mindset around was key to creating a path forward to long-term success.”

Scot says team building was a key part of creating that culture change, but the COVID-19 pandemic presented some challenges. “The one thing about the work of IGMs is we have to build a solid foundation based on trust. I’m used to having regular team meetings to foster that communication and community, but there was definitely a time where I was afraid to bring my team in a room together.”

When the weather permitted it, the staff had outdoor meetings. They later moved those sessions to Zoom. Safely hosting those regular meetings was crucial to helping to change the mindset and workplace culture at the co-op.

Scot’s Successes

Shorty into Scot’s contract, the co-op was running out of the cash infusion provided by their PPP loan. “I asked Scot if we should start slowing down how many bills we paid each week and how he’d like to handle that,” says Finance Manager Sandra Segatti. “He reassured me, ‘No, it will be fine,’ and it was!  Slowly, but surely, our bank account started recovering and I have had enough to comfortably pay our bills every week since then.”

Some highlights of where the Creamery Co-op stands thanks to Scot’s engagement are bulleted below:

• Operating cash on hand went from roughly $18K in October to $166,000 today

  • Q4 of 2020 showed an operating improvement of $87,000 vs 2019

    • Sales increase of 20% vs 2019

      • October +7%

      • November + 21%

      • December +38%

    • Labor decreased by 14% vs 2019

  • Period 1 of 2021 (January) was strong with an operating improvement of $32,275 vs 2019

    • Sales increased by 50% vs 2020

    • Exceeded Newly created sales budget by $15,000

    • Reduced labor by 18% vs 2020

  • Period 2 of 2021 (February) is currently on track to exceed budgeted results

    • February Sales are up 43% with three days left in the period

    • More adjustments to labor have been made during the period

    • On track to exceed newly created budget

A Steady Hand during Trying Times

“Scot implemented a series of changes to layout, product mix, suppliers, and staffing, which together have resulted in substantial sales momentum and improved pricing,” adds Board President Katy Eiseman. “Scot and others on the Columinate team also supported a successful search for a new permanent GM and a smooth transition.  Scot’s engagement has put the Creamery Co-op on a solid footing to re-engage with its member-owners and the broader community as a grocery, deli and community hub.”

Scot says that hiring an IGM can be an ideal way to ease the chaos and tension that comes when a store is struggling. “When I arrived, the situation was unstable, and there was a lot of stress among the staff. Having someone with the background of an IGM puts a calming effect over the whole store and lets the team get back to focusing on the work that needs to be done. Having someone in your corner — you can’t put a price tag on that.”

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To learn more about Columinate’s IGM services, contact Mark Goehring at markgoehring@columinate.coop.