Los Alamos Cooperative Market
Los Alamos, New Mexico
When the community of Los Alamos wanted a food co-op, they first turned to LaMontañita in Albuquerque to build one for them. When it wasn’t feasible for LaMontañita to do so, a core group took out an ad in the paper and formed a board to begin the process of building their own co-op. In March 2011 the co-op opened a 7,000-square-foot store that is already exceeding its first year sales projections of $2.5 million. It took the co-op four years from initial organizing to opening, with a lot of help from LaMontañita and others in the co-op sector.
According to past board president Nancy Savoia, part of their challenge was finding the right location. Time and again real estate deals would fall through, and members who had invested money were getting anxious. Once they found a location, banks were still reticent to loan to the co-op because of the economy, so the co-op’s membership stepped up and raised $1 million for the project. With the members’ capital they were able to hire a project manager and convince lenders of the project’s efficacy.
Before all that happened, the co-op had some tough times. “We talked about quitting. We have our own lives. It’s so much work,” she said. But with a viable location and capital, they were able to hire people to reduce their burden and keep going.
They hired Steve Watt as their general manager. He had worked as a manager at French Broad Food Co-op in North Carolina, and they are beyond thrilled with his work. “It’s hard to hand over your ‘baby’ but we knew we couldn’t micromanage. It’s very important for us to focus on our board job,” Savoia said. Since they’ve opened, membership has doubled, and the beautiful light-filled store is a jewel of the community. “Steve and his team know what they are doing. Now our board meetings are once a month instead of once a week, and we are not scrambling to do things.”
Monadnock Community Market Co-op
Keene, New Hampshire
The Monadnock Community Market Co-op startup has been active for three years and is expecting to open a 13,000-square-foot operation with projected opening sales of $7 million next year. Joe Marks is president of the co-op’s board, and he mentioned that one of the challenges to startup groups is how many people you need to reach to generate support for the project. “You need hundreds of people,” Marks said. In the first year of the co-op’s organizing process, Marks said they began to hire consultants and made plans to hire staff because they knew they couldn’t do it all themselves. In addition to recruiting members, every startup needs to raise capital and find a location. “A project of our size can’t be done exclusively with volunteers,” he said.
“The key thing we did, once we created memberships, was to spend a percent of that equity on hiring people to help us reach our goals,” Marks said. With the money they raised, the co-op hired CDS CC consultants (a “critical decision” Marks said) to help their board with planning and development. In addition, they hired a project manager (“an absolute life saver” according to Marks). Among the project manager’s many tasks was to apply for grants to pay for their feasibility study, which helped them further along in their goals. “We needed a project manager because there was too much activity to be handled by the board alone. We’ve been fortunate because our project manager has spearheaded initiatives from day one.” He also said that having a project manager who is knowledgeable about the project helps with not only community organizing, but gathering information and reports invaluable to the co-op owners and bankers willing to invest in the project.
Marks also said the decision wasn’t easy—should they be conservative or take the risks with the money? Ultimately, they decided that their co-op wouldn’t happen without taking the risk. To minimize risk, they spent one-third of their equity until they reached a goal of recruiting 500 members. After reaching 500 members they were comfortable spending half of the equity they raised. “The risk goes down when you hit your membership goals,” he said.
Because of their investment in expertise, their co-op is poised to open next year. They recently hired a general manager to run their operation. They have also contracted with the National Co-op Grocers Association’s Development Co-op (NCGA DC) to get assistance for the retail operation.
Marks has specific advice for startup co-ops. “There’s no point in trying to start a co-op if you are trying to save your members’ money. You need those visionary members who are not worried about getting their money back.” He also felt like the money they spent helped them realize their dreams. “I would not be as positive about these decisions if we didn’t have good results. We have so much confidence in the CDS CC and the NCGA’s expertise.”