Case Study: Aligning Member Equity to Meet Future

fort-collinsFt. Collins Food Co-op
Year founded: 1972
Number of members: 2,000
Number of employees: 13
Retail square feet:1,700
Equity investment:$160 per household

On the edge of the Rocky Mountains one hour north of Denver, Colorado you’ll find beautiful Ft. Collins, a lovely mid-sized town with a pleasant mountain climate. It’s got a population of about 100,000 people and is consistently named one of the best places to live in the U.S. Nestled in Old Town, a vibrant and well-kept area of the city, you’ll find the Ft. Collins Food Co-op.

Despite the allure and sophistication of the area, in recent years the co-op had found itself in a time warp. It was doing pretty well until 2002 when a Whole Foods store established itself in the marketplace and a whole slew of competition followed. The co-op was unprepared for it after spending three decades as the town’s sole purveyor of natural foods.

Eventually, sales dropped and the co-op started losing money, and did so year after year. In April, the board hired Lynn Chriestenson as general manager to help the co-op turnaround.
It didn’t take too long to figure out the co-op had some major issues. Not the least of which was that their equity structure was outdated.

After evaluating their goals—to be part of a new development in Old Town, and to bring systems up to date in order to join the National Cooperative Grocers Association (NCGA) as a member—they knew that their fee-based and floating-discount policies had to change. Even before Chriestenson arrived, the board had begun a discussion with members about the issue. In June, the board formalized its plans to propose a vote to change to an equity structure and began the process of educating the members through letters, staff education, signage, forums and informational brochures.

Chriestenson and the board knew that going from a $20 fee to $160 in equity stock, as well as changing the discount structure, would be a big leap for members. They put lots of resources into educating people, emphasizing the benefits of investment and the fairness of patronage dividends over discounts, and with each meeting got better at conveying the importance of investing in the co-op. On Sept. 1 the membership voted overwhelmingly in favor of changing to an equity ownership structure.

Chriestenson also felt that in addition to their co-op education efforts, the local food movement’s emphasis on the economic importance of buying local resonated with co-op shoppers. “We could ride on the wings of that and show people that we are a business owned by the people who live here. It was perfect timing.”

Member equity and member benefits are just one part of the entire plan to bring the co-op around. As they have raised their profile among members and shoppers in Ft. Collins, they also want to participate in the food co-op sector. “For so many years people didn’t know about us and we’d not been a part of the sector. We just kind of sat here and did our own thing, but that’s not working for us now,” she said.

Along with their outreach efforts, they will also be focusing on operational improvements that will help them secure NCGA membership. It’s especially important because they can get better pricing on products. “It’s all part of adding everything together to be there for our members,” she said.

Soon, a construction project that has limited access to the co-op’s entrance all summer will be finished. When the scaffolding is gone, Ft. Collins Food Co-op will have a brand new way of showing the community what it means to be a food co-op.

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By |September 30th, 2009|Categories: Case Studies, Solutions|Tags: |

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