Startup Co-ops in Urban, Rural Areas Advance the Co-op Sector

Startup Co-ops in Urban, Rural Areas Advance the Co-op Sector

Columinate | 09-01-2004

Two new food co-op startups that have emerged in two radically different markets illustrate how the development process could be refined and advanced in the food co-op sector. Eastside Food Co-op in Minneapolis, Minn. is a natural food co-op in the city’s urban core, founded by a group of neighbors who had envisioned a store back in the late 1990s. Harvest Market, a conventional grocey in Barneveld, Wisc., formed after CDS approached the community in 2002 about pursing a cooperatively owned grocery store for their town.

Eastside Food Co-op

There was once a food co-op in Minneapolis’ Northeast neighborhood, and the cooperative idea lingered long after it closed. In 1996, a group of neighborhood people got together to create a new one. That group signed up 135 members, but eventually burned out when they couldn’t find a workable location. Three years later, another group took up where they left off.

After receiving a grant from the neighborhood, the group hired a project manager to help find financing and a location. The Eastside Food Co-op building was purchased in March 2003. The co-op was able to entice an experienced general manager to lead the final push to opening (Amy Fields relocated from Kansas and is a former general manager of Community Mercantile in Lawrence, Kan.).

Eastside Co-op had benefit from professional support from consultants, local organizations and food co-op peers. However, the co-op experienced many critical delays as it found funding and a location.

Fields said she hopes “we’re the last food co-op that should have to do this. You can’t expect volunteers to spend eight years throwing spaghetti dinners” in order to get a co-op going.

Harvest Market

Barneveld is small community in an agricultural area in Wisconsin, and its development represents tremendous opportunity for food co-ops. In May 2002 CDS Executive Director Kevin Edberg submitted a funding request for federal funds of $54,000 (and an equal amount of local cash and in-kind matches) to the UDSACommunity Food Security Grant program for the venture. TheUSDA approved the grant in September that year.

While there was excitement at the prospect of having a grocery store in Barneveld, there was also concern about how the co-op would be successful when the privately owned store had closed (more than once). A survey revealed what the community wanted in a grocery store and what they didn’t like about the previous store that probably contributed to its lack of success.

The community used CDS for technical assistance along the way: market feasibility study, pro forma, survey, business plan, etc. The total store project cost $300,000 and came in under budget. There were a number of areas where members pitched in and saved the co-op money. It was truly a community effort.

In March this year, the co-op was also able to hire an experienced general manager. Terry Putnam brought with him many years of experience in the grocery industry, including in rural areas.

Harvest Market represents a new approach to food co-op development by following an organized, systemic way of doing things that values and respects what local people bring to the table.

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