Case Study: Co-op Culture Transforms Peoples–Kalamazoo

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Peoples Food Co-op
Kalamazoo, Mich.
Year founded: 1970
Number of members: 1,980
Stock purchase:$250
Number of employees: 35
Retail square feet:3,100

The Peoples Food Co-op in Kalamazoo, Mich. was once a store that had lost its way. It operated on the fringes and had been stagnant for close to two decades. It was tiny, too, 740 square feet, and the diminutive size made those involved feel like the future didn’t hold much. It had so many problems—poor sales, little profitability, negative customer relations—it was hard to imagine how things could be different. Should it even remain open?

When the co-op reached out to the community seeking an answer to that question, the response was a resounding yes. In 2005, the co-op hired Chris Dilley and began the rebuilding process, starting first with the staff. In the past the co-op had gained a reputation as the food police, and Dilley’s first order of business was to focus on providing good customer service. “We’re trying to create a space where we may not always agree, but we can always respect other people, and to be grounded in the goals of a healthier community,” he said. By eliminating judgment and working toward the same goals, the staff was able to change the shopping atmosphere into something fun and welcoming.

The board and management also focused on changing the co-op’s culture by looking forward with optimism and planning for the future. They started by asking for member loans to help capitalize the business and in 2008 increased the member equity requirement to $250. All of these activities were in preparation for a $1 million expansion that brought them to their current space and double-digit growth.

Dilley describes their current co-op culture as “healthy, positive and trusting.” He attributes it to two things—being well capitalized and utilizing the power of intention. “There’s a lot to be said for a $250 stock purchase resulting in a good co-op culture. It’s a real investment for most people and it creates a stronger sense of ownership. Also when we’re doing well we have a culture of abundance. We’re not having to buckle up or nickel and dime people.”

Of course, there were times when the board and management were not totally sure their plans wouldn’t backfire, but once they made a decision, they committed to it. Even if at first it caused pain or controversy, like switching from a discount benefit program to an equity-based patronage-refund system, or bringing in meat after not selling it for 35 years, they decided to be proactive and solution-oriented for the good of the co-op. It has paid off in myriad ways.

Less than a decade later, the co-op is thriving as a leader in the local foods community, and was recently awarded a contract by the city to manage the Kalamazoo Farmers Market. Sales continue to climb and they plan to grow again. As Dilley reflected on all that’s happened to change the co-op’s culture, he said it came down to “being open to possibilities for the co-op and the community. We’re not creating culture in a box.”

 

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By |January 31st, 2013|Categories: Case Studies, Solutions|Tags: , |

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