From The GM: Our Co-op, The Business Model of the Future?

From The GM: Our Co-op, The Business Model of the Future?

As our country struggles with our economic woes and our government wrestles with the best ways to address these difficult times, our Co-op keeps moving forward.  Last year, our Co-op saw a 10.4% increase in sales.  This year, we are seeing a 6.2% increase in sales through the end of September.  This is great news for our Co-op during a very difficult economy for many businesses.  This success got me thinking about our business model.  I began thinking more about what makes us successful and why co-ops are thriving, not just surviving in this climate.

During the recessionary period of 2008 and early 2009, co-ops outperformed corporate-owned Whole Foods in sales growth by a significant margin.  As the economy became more stable, corporations like Whole Foods began to outperform co-ops.  The point is that co-ops’ sales growth line does not tend to be as dramatic in good or bad economic times.  This kind of pattern indicates more stability for the co-op business model.   At our Co-op we place an emphasis on good quality, basic items that tend to be more locally sourced than our corporate competitors.

I believe people seek out the comfort of community when things get tough, and I think that is one of the explanations of our success.  This also explains the recent explosion in communities seeking to start a co-op like Dubuque and West Des Moines.  It is clear that investing in our community is a good thing and the cooperative business model is a sustainable one.

The co-op business model is fairly simple.  Individuals can become a member-owner of the Co-op by investing in a share.  A share in our Co-op is $140, payable over seven years. This money is invested and used to make improvements in the store and provide member-owners with a store that meets their needs and attracts more customers to become member-owners.  Our member-owners receive other benefits like monthly discounts, special member appreciation day sales, opportunities to participate as a working member, discounted classes, voting privileges for Board elections and other benefits.  Anyone can become a member-owner. This model gives a sense of ownership to a very diverse group of people in our community with the goal of supporting a locally-owned business.

We are fortunate to live in a community that values community-owned businesses and has a strong sense of place and taking care of our natural resources.  What would it be like if we could be producing more of our own vegetables, meats and other products within 100 miles of Decorah?  What would it be like to have more storage and processing capabilities to provide our local stores with products that we have to currently ship from hundreds, sometimes thousands of miles away?  Change is happening in our community and there are individuals and businesses stepping up their commitment to make this a reality.  I hope current member-owners of our Co-op engage in these new ventures and invite others to take the first step and become a member-owner as well.

Governor Branstad’s recent Healthiest State Initiative is challenging Iowa communities to help the state become the healthiest in the nation.  A key component to the program will include an incentive program for 10 communities in Iowa to become a “Blue Zone.”   These communities will be models for the rest of the state and would receive financial support from Blue Cross/Blue Shield to implement plans to improve the health of their community in various ways.  In my opinion, Decorah and Winneshiek County is off to a great start.  We have bike trails and a vast array of outdoor activities to choose from.  We have a downtown whose storefronts are full.  We have more individuals and families starting small farms. More businesses and residents are making their structures more energy efficient. Our local government is beginning to think about accommodating more than just cars on our streets.  These are just some of the exciting things we have going on in our community, but we can do better.  We can be the model.