Most retail experts have predicted for years that grocery competition will only intensify in dynamic retail environments. What will your co-op do to stand out amongst the competition? In most cases rivals have already staked out or taken hold of “fresh,” “natural,” “organic,” and “local” in the marketplace. Co-op ownership is the one thing competitors can’t mimic, but do co-op members or the community really understand and support its value?
More and more co-ops around the country are looking to answer this question: who are we and why is it important that we continue to thrive?
Paul Hazen, president and CEO of the National Cooperative Business Association (NCBA), said that the question is immensely important. “The natural food co-ops are ahead of other co-ops in terms of promoting community-based agriculture and the health of people and the planet. Now it’s important to look for other ways to be differentiated from the competition,” he said.
Hazen thinks that the way to address “who are we and why does it matter” is to look first and foremost to the values inherent in the Co-op Principles. “It’s important for boards and managers to put resources into the co-op that put these values into practice,” he said. “Our economic and social goals are a real advantage to members in the marketplace.” Hazen cited research that specifies that when people understand the democratic and social goals of a co-op, two-thirds of consumers would rather do business with the co-op. “That’s a big advantage in the marketplace,” Hazen said. “But the challenge is not to confuse the consumer. We have to use the opportunities we have to educate our members to show how we’re different.”
Ann Hoyt, director of the University of Wisconsin Center for Cooperatives sees this question as a “life and death” issue for co-ops. “If we can’t communicate what we’re about we’ll never make headway.” Hoyt thinks that the board and management of co-ops need to think holistically about the whole business, what differentiates co-ops, and what can’t be copied by competitors. In the way that all roads lead to Rome, Hoyt thinks the answer to most questions of co-op identity hinge on articulating why ownership matters.
Hoyt points to Midcounties Cooperative, a large diversified consumer co-op based in Oxford, England, as an example of a cooperative that did the work of rethinking how ownership principles could expand the dynamic impact of their business. “They put those values at the center of the business and shifted all focus to those values,” Hoyt said. That endeavor changed the co-op’s relationships with staff and suppliers, led to branding all divisions as “the co-op,” and launched programs that truly support their community with their dividends and donations. “They got clear on their values and translated that into a consistent message throughout all their organizations,” she said.
Hoyt said Midcounties’ process could be a good approach for any co-op: first clarify values, determine how they inform business practices, and decide how to tell other people about them. It’s the last point that can be one of the biggest challenges. “Co-ops are often stuffy when it comes to teaching others about co-ops. Our message has become impossibly bland. If we really believe this is a superior way of doing business, every single message should be passionate,” Hoyt said.
In the food co-op sector, cooperators have also begun discussing how to best communicate co-op to consumers. Kelly Smith, director of marketing and communications for the National Co-op Grocers Association (NCGA), said the NCGA’s working in partnership with other co-op organizations on research that will help pinpoint how to promote co-op concepts in a way that isn’t daunting to people. As part of the project, the NCGA’s also looking at the gap or alignment between what consumers think of co-ops, and what co-ops think they’re projecting, in order to better understand what needs to be conveyed. Smith said of the project’s goals, “It’s about speaking more to what’s truly unique about a co-op.”
Wheatsville Food Co-op in Austin, Tex. is located in the same town as Whole Foods’ headquarters with its gorgeous flagship store nearby. General manager Dan Gillotte said the co-op isn’t trying to compete with Whole Foods on glitz, nor is that what the members want. Wheatsville members’ support paid off in a big way when the co-op sought to raise money for a renovation and expansion project last year. In two months time, the co-op garnered over $700,000 in investor shares from people who wanted to see their co-op continue to grow. “We really are the hometown, homegrown store that values what’s truly local and special about our community. Our members stepped up because they value Wheatsville and what it contributes to our city,” Gillotte said.
What co-ops do with their profits is also one of the most unique features of cooperation that cannot be duplicated by the competition. Wheatsville Food Co-op has drawn on patronage rebates as way to have discussions about membership and educate people about the role their patronage plays in strengthening the co-op they own. “They know they’ll never get a check back from Whole Foods,” Gillotte said.
In some cases, the answer to the question why does it matter co-ops thrive is as individual as the community they’re located in. However, universal themes emerge in terms of seeing cooperatives as critical institutions in communities. Co-ops provide access to resources and participation in the economy in ways that are equitable and democratic. They operate within a certain set of principles that ensure organizational transparency. Hazen points out anyone can sell a product. Yet there is a different relationship between consumers and a product versus the relationship between consumers and a co-op they own. “If we’re really thinking big, co-ops have the ability to change the world for the better.”