Stays Local

By: Nate Furler, Marketing & Outreach ManagerStays Local Graphic for FB

There are several things that set the Co-op apart from larger chain grocery stores. One of the greater points is that we are a local, independent cooperative organization (business) that is owned by the people that shop here and utilize the services we provide. The Co-op exists, first and foremost, to meet the needs of its member/owners.

The Co-op has a board of directors composed of seven individuals from the member/owner community. These board members are elected democratically by the entire member/owner community of the Co-op that are up-to-date with their share payments or paid in full. (This is also what is meant when we talk about someone being “in good standing”.) All member/owners in good standing receive a ballot in the mail to be returned with their vote for the yearly election – and any other referenda that may be up for a vote.

In the grand scheme of things, the Oneota Co-op is small. We boast well over 4,000 member/owners, but we are a grain of sand in the world of natural foods. Our annual sales broke $5 million in 2014. This is a huge accomplishment considering our sales were around $2.03 million annually before we moved to our current location in January of 2008. As we zoom out from our tiny grain of sand, we see hundreds of other food co-ops across the nation. Some smaller in size than us, some larger – dramatically larger. PCC Natural Markets in Seattle, Washington has 10 locations (soon to be 11) with a total sales volume of over $229 million.

Oneota Co-op is fortunate to be a member of a larger cooperative grocers network – National Cooperative Grocers (NCG). This organization exists to serve the member/owners of their cooperative – just like Oneota exists to serve our member/owners. NCG is monumental from the standpoint of securing a steady flow of product from our distributors – the biggest of which is United Natural Foods Inc (UNFI). But, let’s be clear, the sales volume of all NCG member co-ops combined is still minute compared to the volume of an organization like Walmart, or even Hy-Vee.

Which brings me to the point of this article – price and what shopping at the Co-op brings to this community as an actual dollar figure on the shelves and signage in the store.

Through NCG, Oneota is able to achieve the combined buying power of not only our community, but the communities of all other NCG-member co-ops across the United States. As you may already be aware, in the supply world, ordering anything in larger quantities gives you more clout in negotiating the price you pay for those items – if negotiation is even possible. The bigger you get, the more room for negotiation exists.Print

For example, at our level, if we are looking at bringing in an entire pallet of fresh, organic, blueberries, we have some room to negotiate because we are ensuring the distributor will be able to sell an entire pallet of these little blue gems. They don’t have to find someone to buy that entire pallet of blueberries which they worked hard to grow, pick, pack and ship. What is that worth to them? Likely that is worth a few cents an ounce, maybe more or maybe less depending on the market. And that cheaper price is then graciously passed on to you, the member/owner, shopper, customer of the Co-op.

Zoom back out again – Oneota buys one pallet of blueberries annually – two if we are lucky. NCG co-ops as a whole likely secure upwards of 100 times that annually. Walmart? 1,000 times or more. In comparing the buying power of Oneota Co-op to Walmart, you are comparing the size of Decorah to the total size of the United States. We are dramatically smaller.

Every single store you will ever buy something from applies some sort of mark-up to their product. It is purchased at a wholesale price, and in order to stay in business the company must mark-up their product a certain amount to pay for things like staff wages, utilities, mortgages, building renovation and upkeep, equipment, etc. The figure you see on the shelf at Oneota is the absolute lowest price we can sell a product for in order to make sufficient financial income to stay in business. Because member/owners, shoppers, are our shareholders.

But, we are here. We have been here for over 40 years. We hope to be here indefinitely. And your shopping dollars keep us here. Without your dollars, we cease to exist. Just like every other local business in this town, or any other city across the world.

We thought it would be interesting to put a dollar figure on how local we are. To add up the total amount of money that the Co-op spends annually on things like staff wages and benefits, financial commitments paid to local vendors supplying product directly for sale at the Co-op, other expenses paid to local businesses and individuals for repairs or renovations, member/owner discounts and dividends, and charitable contributions to local organizations. All these forms of money that go right back into the pocket of the local community.

Though many people think of their local community as the town they live in, we continue to use the same definition of local that we apply to the labeling of product in the store – a 100-mile radius of the Co-op.

So, how local are we? In 2014 we were about $2.2 million local. What do I mean by that you might ask? I mean that roughly $2.2 million of the roughly $5 million the Co-op did in sales throughout the entirety of 2014, stayed in the local community. $2.2 million – or roughly 45%.

This number sounds great, but what does that mean for the bag of oranges, box of cereal, or loaf of bread that I buy every week at the Co-op?

We could simply leave it at the 45% mark and be done with it. However, we thought it would be even more telling to give you a dollar amount right on some of the store signage to let you know just how much your everyday spending dollars at the Co-op contribute directly to the greater local economy – beyond what simply goes in the till and the register.

The “stays local” dollar figure isn’t a mark-up we apply to our goods and services in order to be able to tout a big number. The fact that the number is so large is telling merely from the fact that we are a local business that puts a considerable amount of our resources back into the community that we call our home.

Our prices are what they are because our sources are smaller, our distributor pull is not as great as a multi-billion dollar company, and our number of retail stores is one. The Co-op gives precedence to our local vendors – keeping the mark-up of their product low so we can ensure greater sales volume for local products at a still-competitive price. We don’t sell organic and non-GMO product to make money. We have sold it since the beginning because we (the Oneota Co-op community as a whole) believe it is the right thing to promote – for reasons like fair labor practices, environmentally sustainable growing methods, and consumer health.

Each and every dollar you spend at a local business contributes to the economy of where you live. The Co-op is living proof of that. Keep it local for yourself, and for the next generation.

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