“No margin, no mission.” To make an impact, you have to make money.

“In the late 1990s and early 2000s, the question was how do we make eating this way mainstream? Now we’re dealing with the repercussions of being successful in that.”

Ari Derfel has been advocating for natural and organic foods for the past few decades. He’s been translating his personal values of sustainability and food justice into business practices. As a new consultant at Columinate, Derfel wants co-ops to develop a different relationship with business.

“Pam Menhert [recently retired Outpost Natural Foods general manager and a new Columinate member] said, ‘No margin, no mission’. To make an impact, you have to make money. Values-based businesses have to be even more financially exceptional than conventional businesses.”

Derfel’s experience in natural foods is extensive and impressive. In 2001 he was a co-founder of the first organic catering and event company in North America, called Back to Earth Organic Catering. In 2009 he opened a sustainable restaurant in Berkeley, California, called Gather. “I’ve been eating this way since I was ten,” explains Derfel. “There is nothing more basic than food and agriculture; it’s the basis of our global economy.”

Co-ops were a natural attraction for Derfel given their shared values and the desire to make our food system better. He has visited a food co-op in all the lower-48 states in the U.S. and has been offering consulting services for a decade. Derfel sees in co-ops an opportunity to impart business and financial lessons based on his success as a consultant and advisor.

“It’s dangerous how much some co-ops don’t understand how much you have to have strong financial management. Many people enter the co-op world with an anti-capitalist viewpoint, maybe after being traumatized by the capitalist world. I tell people: you don’t need to be predatory. You don’t need to lie and manipulate, but you need to do it [finance] right.”

Derfel’s consulting led him to Kootenay Co-op in Nelson, British Columbia, in 2018. The co-op in this town of 10,000 had undertaken a large-scale development project, building a new store more than twice the size of its former location, with fifty residential units above and seven retail units on the block. Kootenay Co-op originally hired Derfel to write a strategic plan for the new, multi-faceted operation as a consultant, then wound up asking him to become their general manager to implement the plan.

“I implemented a new financial management program and got them on the right side of debt and cash.  We got a new management team in place and helped to make good on the effort to create a lasting co-op. The store is now doing $27 million in annual sales in a small, rural town.”

The path for long-term financial success

Derfel believes that cooperatives can be a viable alternative to the mainstream economy, and he has a track record of success to back it up. The basics of finance and business, however, are a key prerequisite to operating ethically. He stresses the importance of marketing, merchandising, and category management. Stores that lose sight of business fundamentals by chasing mission before having a strong financial footing are not establishing themselves to serve that mission long-term.

Setting co-ops on the path for long-term financial success and strong business practices is invigorating to Derfel, and his excitement at the prospect of helping co-ops thrive is palpable. “We have to be better at business than conventional businesses. I want people to realize they need to be incredible business people. I want to get co-ops excited about business and finance and then help them realize what they can do with the money they generate.”

“Co-ops have 700 different ways of doing category management. At Columinate, how do we put our heads together to identify best practices and utilize technology that is already available to help our stores?”

Derfel explained that co-ops are driven by the need to do better and that they bear the burden of the world on their shoulders. They don’t, however, need to shoulder that burden alone. Co-ops can work together and share it collectively. They can learn quickly about what works elsewhere on the continent through communities of practice. They can learn from case studies of other stores.

“When people hire me, they’re getting the value of all of that. You’re getting access to best practice info around the continent. I love teaching people how to fish. When people say they don’t know how to category manage, or they can’t get the data out of their POS, that’s a big opportunity. Let me teach you how to fish—then help you learn how to learn from each other.”

Derfel wants co-ops and independent grocers to stop guessing how their business is doing and learn how to access their data, analyze it, and be able to look at finance documents with confidence and understanding. He wants to help reestablish a positive relationship with money within a cooperative economy that can sometimes view it as the domain of the enemy.

People like Derfel helped to achieve an initial goal: to convince a large percentage of the public that eating natural and organic foods provides significant value to human and planetary health. Now the goal is to make sure there is a place within that market for the small stores and co-ops that helped to create that demand in the first place. Derfel is committed to making sure that happens. “Finance is not a pejorative. The numbers provide the resources for the human work to be done.”

Derfel is excited to join Columinate to bring his expertise to more co-ops but also to learn from others around him. He looks forward to joining other Columinate consultants providing new financial management services.