Cooperative grocery stores have been on a boom-then-bust cycle since they first emerged after the Great Depression.
The cycle at the moment is back to boom. As more Americans look for ways to control spending — as well as their food sources — small grocers that are owned by their “member” shoppers and focus on local and natural foods are back in vogue.
Across the country, roughly 300 cooperatives run 330 stores. At least another 250 are under development, said Stuart Reid, executive director of Food Co-op Initiative, a nonprofit that provides resources and support for organizing groups.
Ten to 12 stores have opened in each of the past two to three years alone, according to Cooperative Grocer magazine, which keeps an online directory of food co-ops.
“The economy is certainly part of the reason, but another part of the reason is Americans are looking for ways to own and control the means of providing the services they want,” said Andrea Cumpston, a spokeswoman for the National Cooperative Business Association. “For example, in the food co-op industry, they’re looking to be able to own the store that provides them with their local foods and to know and trust where those foods are coming from.”
That is what keeps Nickie Dymon, 47, shopping for her family at City Market Onion River Co-op in Burlington, Vt. She also appreciates that she can save money — and lessen her ecological footprint — by buying in bulk and filling her own recycled bottles and bags with coffee, laundry detergent, cooking oils, soy sauce and maple syrup.
“I buy all my fruits and vegetables here and a lot of my groceries here,” she said recently while shopping in the produce section, which this time of year offers locally grown fingerling potatoes, blueberries, green and yellow string beans, tomatoes, baby spinach, lettuce and radishes.
The first food co-ops grew out of the Great Depression, but most did not survive, Mr. Reid said. The next wave came during the 1970s, fueled largely by interest in natural foods that were unavailable at mainstream grocers. Mr. Reid said many of those failed, too, in part because they lacked sophisticated business operations.
Co-ops that did survive from the ‘70s and ‘80s have continued to evolve to meet the needs of their shoppers and compete with mainstream food outlets that have since begun selling the natural and organic products that once gave co-ops a near monopoly.
The 32-year-old St. Peter Food Co-op in St. Peter, Minn., for example, this spring moved into a 10,000-square-foot former car dealership, nearly doubling its space. Since the move, membership has increased by 10 percent, said General Manager Margo O’Brien.
Joining a food co-op generally entails paying a one-time fee that averages about $150, though payment plans are available with much lower fees, and some co-ops offer waivers for low-income shoppers. For the fee, members own a share of the co-op, might receive a share in the profits and are allowed to cast votes for board of director seats and proposals such as store expansions.
Most co-ops don’t require shoppers to be members, but the culture of the stores encourages it.
“It’s a very democratic type of organization. And then when the business is profitable the profits go back to those owners who are the people that shop in the store and it’s usually done based on how much they patronize the store,” Mr. Reid said.
Though not all cooperative markets specialize in natural and organic foods, most at least focus on local and bulk items such as laundry detergent, rice and nuts. Most of those products often come with higher prices.
“The perception of higher costs comes from the decisions about which products they sell,” Mr. Reid said. “The products themselves are not more expensive. The way that they’re grown and the way that the people who produce them are paid adds costs and … it’s not subsidized like commodity products are.”
Co-ops typically start at the grass-roots level with one or two people wanting to replicate other co-ops. Startups can range from a few hundred members to a couple of thousand. Some of the more established co-ops are backed by tens of thousands of members.
“They’re much more sophisticated, and they have a broader mix of products,” Mr. Reid said.
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