Case Study: People’s Food Coop of Kalamazoo–Community Vision Propels Project Forward

PFCKzooFounded: 1970
Retail square feet:740
Number of members: 465
Equity investment:$250 per household
Staff: 13

The People’s Food Co-op of Kalamazoo is poised to begin a whole new existence as a vibrant community-owned food co-op. That might not sound like big news, but for a co-op hamstringed by a long-term scarcity mentality, People’s is experiencing a reinvigoration that speaks to everyone about the strength of good planning, membership investment, and a positive attitude during bleak times.

People’s Food Co-op of Kalamazoo spent most of its years on the fringes, scraping by year after year. The co-op had a reputation as a “radical” place in the community that actually served to alienate customers. It resulted in a hopeless feeling that the co-op would never be able to achieve anything more. When general manager Chris Dilley was hired at the co-op five years ago, he said he realized that he needed to challenge those attitudes and open up the co-op to the whole community. Yet he felt confounded by the co-op’s diminutive size.

However, it was when Dilley met Jan Rasikas, general manager of the Viroqua Food Co-op, at his first CCMA conference that big-time inspiration hit. “At the time she was doing $1.5 million in a store smaller than ours,” he said. Motivated by such expansive possibility, Dilley said he set out to bash the myth that his co-op couldn’t get more sales.

There were other wake-up calls along the way. Dilley approached a banker to find out what the co-op’s chances would be for getting financing for an expansion. “I asked her what she’d be looking for from the co-op regarding an expansion. When she saw the financial statements she’d said, ‘It can’t look like this.’ I felt deflated, but then we just got to work,” Dilley said. Since that meeting three years ago, the co-op has nearly doubled their sales and has achieved 20 percent growth rates every year, and most important, achieved profitability. Expansion planning for a 3,000 square foot $1 million project began in earnest last year.

Dilley knew that demonstrated member-owner investment would be key to the project’s success. Earlier this year they raised member equity to $250 per household, and have retained all of the co-op’s members through the process, bringing in more than $100,000 in new equity.

However, this fall, right after they launched their member loan drive, the economy went through a tailspin. “Everything hit the fan and I didn’t know what would happen,” Dilley said. “But we raised over $150,000 in member loans over the last six weeks toward our goal of $250,000. People are committing to the co-op in this crazy economic environment. It’s fantastic and really promising.” Like other cooperators around the country are discovering, food co-op owners have a higher level of trust in their local co-op, and a better sense of what their investment can do.

This doesn’t mean financing will be a walk in the park, but Dilley feels optimistic that financial institutions will see the co-op’s potential now that it has turned itself around and understand its real value to the community. He said, “The main thing I keep coming back to is that community-based enterprise is where our future is. We have to proceed because what we offer is valuable to the community. It’s what we’re here for.”

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By |November 30th, 2008|Categories: Case Studies, Solutions|Tags: |

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