Case Study: Syracuse Real Food Co-op: Working Toward Expansion

Case Study: Syracuse Real Food Co-op: Working Toward Expansion

Columinate | 30-09-2010

srfc-logoSyracuse Real Food Co-op: Syracuse, N.Y.
Year founded: 1972
Number of members: 3,100
Equity investment:$100 per household
Number of staff: 18
Retail square feet:1,200

The Syracuse Real Food Co-op is poised to make a huge impact on its community and one that’s been a long time coming. For many years, the co-op had been underachieving compared to its potential. Then four years ago a CDS food co-op development consultant challenged their assumptions, shook them awake, and gave them tools for taking control of their future.

Now they have approached their co-op’s place in the community with renewed purpose and vigor. Syracuse, a city of 150,000 people, is located in the heart of New York state, and was named one of the best places to live by MONEY magazine. It’s a place where people appreciate a good quality of life and there are lots of opportunities to be involved. Likewise the community is excited about the co-op’s plans for further development.

The co-op’s development story starts a decade ago when the board realized it had to do something to grow. The co-op is situated in a residential neighborhood in a really weak site—no visibility, with limited parking. The board of directors had committed to a relocation process in the year 2000, but it stalled because the co-op was just not ready. It had no capacity for it financially or operationally. The co-op continued to stagnate. A new general manager was hired who started to make changes to the operational sluggishness that had afflicted the co-op. She built annual sales from $200,000 to $1 million in four years. After she left, the current general manager, Travis Hance, understood the value of getting outside support, and continued to use CDS CC’s services to follow through on what his predecessor started, as well as build his management team’s capacity to handle a larger operation.

Hance recollects Bill Gessners’s simple but profound message at the time. “We’d been blaming the co-op’s location for all our problems, but Bill told us that we had to work with what we had to dedicate ourselves to success. We had to grow our sales and revenue, and we had to focus on profitability and continued improvement. It was a wake up call for management.”
With Gessner’s coaching, Hance was able to build the management team’s capacity and, with Mel Braverman’s assistance, create better systems. “Our work with CDS has been invaluable,” Hance said.

Joining the NCGA has had a profound impact on the co-op’s ongoing profitability as well. Through NCGA’s programs and their loan to carry them through term changes with their supplier, the co-op was able to achieve the all-important consecutive profitable quarters necessary to attract financing for an expansion and relocation. Now the co-op is contracted with the NCGA DC to carry out their expansion plans, and is planning to jump exponentially to a 10,000-square-foot store. NCGA DC has been assisting the co-op with negotiations with real estate agents, bankers and contractors. Once the co-op is built, NCGA will also work with the co-op to ensure that sales and financial targets are being realized and to address problems before they mushroom into a crisis.

“I feel out of my element for some of this expansion work and want to be sure I am having the correct conversations,” Hance said. Working with both CDS CC and NCGA throughout the development process at different stages has kept the co-op on target. He thinks it’s more important than ever to have this support, given that the preferred site in Syracuse didn’t go through because the city would not change its zoning to accommodate the co-op relocation. The upside is that the community rallied behind the co-op, sending over a hundred letters of support to the city. Momentum is on their side.
“My advice to anyone doing this would be to bring in outside experts early and often. You need this as a retail manager. It’s absolutely essential,” Hance said.

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