People’s Food Co-op
LaCrosse, WI and Rochester, MN
Year founded: 1973
Equity requirement: $100
Number of members: 8,700
Number of staff: 210
Locations: LaCrosse, WI founded 1973, 13,800 sq. feet retail
Rochester, MN founded 1975 (formerly Rochester Good Food Co-op), 15,000 sq. feet retail
In 2012 the merger of People’s Food Co-op in LaCrosse, Wisc. and Rochester Good Food Co-op in Rochester, Minn. was official and the two co-ops began the hard work of knitting the two organizations into a cohesive one.
The merger came about when Good Food (a small, struggling co-op) had been approached by a developer that wanted a good full-service grocery store near the Mayo Clinic in Rochester. Good Food didn’t have the financial resources and expertise to do it, and reached out the People’s Co-op because they’d expressed interest in being of assistance. It became clear immediately that a merger might create the best of both worlds, where a mature food co-op could boost its market share by merging with a co-op that needed leadership and capital to take advantage of an attractive development opportunity.
The co-op’s current general manager, Lizzy Haywood, is in the position (now that the dust has settled) to share important learnings and perspectives about the merger’s challenges and triumphs.
Haywood sees what the co-op has accomplished as an unequivocal win-win for members, staff and their respective communities. That’s because it developed a strong foundation of mutual collaboration, leadership and commitment as the organizations moved forward. Haywood said that the board’s leadership at both co-ops was absolutely necessary to setting the co-op up for success. “They had done well to initiate the merger talks at the board levels,” she said. Those boards also engaged their members on the topic of the merger (6 listening sessions each) and got members talking to each other. “The general managers also offered their support to the boards.”
One of their wisest decisions was to understand that merging two organizations necessitated being strategic about its evolution. It was very important to the leadership of both co-ops that merging together began with a plan implemented incrementally at both the governance and operational levels.
For the boards, they intentionally set up representation from each co-op (year one post-merger: 5 LaCrosse, 4 Rochester) with the goal of phasing out geographic representation (year two post-merger: 3 LaCrosse, 3 Rochester, 3 at-large) until year three when all board member seats would be at-large. After the merger was official, the board also worked on evaluating its Ends and vision, and used their CBLD consultant and CBLD templates to do the logistical work. They focused on the future, and didn’t get bogged down in operational details. “Clarity among both boards was very important,” Haywood said. “It was also important to represent members from each city as transparently as possible.” She said that it was an important move to assuage fears among members, and give each community a voice.
Operationally, the co-op carried out the plan with staff to best develop the co-ops systems, including HR, organizational structure, the POS system and marketing. They did a reset of the Rochester store right away to demonstrate to members the value they could bring to the shopping experience.
Despite all the planning, not everything went smoothly, and their capacity was tested as they worked to communicate changes with everyone involved. “We had our critics, internally and externally,” Haywood said. “If I had to do it again, I would definitely make communications planning even more of a priority.” She believes that over-communication at every level of the organization is the key to alignment and satisfaction during periods of change.
“What got us through it was that we were always very focused on the customer experience. It helped us make decisions every day for our members, and give us a means to talk with our detractors about the big picture,” Haywood said. They also kept data on co-op metrics that showed how the merged co-op was increasing its impact in two communities and making improvements for the local economy and staff, offering better pricing and access to healthy food, and demonstrating the co-op was making progress toward its Ends.
Haywood also offered a bit of experienced advice to those exploring mergers and acquisitions. Her co-op reached out to CDS CC, NCG and multi-location food co-ops for advice and support. “No co-op should feel like all of their capacity has to come from completely internal resources. You need to reach out to prepare your co-op to be ready. There’s so much that can be shared.”