National and Local Co-ops Provide Startup Funds

In the past year, we in the startup food co-op community experienced a moment that worried us. While we saw interest in starting food co-ops continue to grow, our major grant funding was coming to an end, and another major grant was not funded. We wondered: will there be enough money to continue this work?

Our staff and board, along with existing food co-ops, development partners, and 120 startups who needed our services, went to work. National Cooperative Bank (NCB) was the first to step up. A founder of Food Co-op Initiative (FCI) and longtime supporter of food co-op development, NCB committed $50,000 to FCI for five years at the CCMA 2013 awards dinner. NCB CEO Chuck Snyder challenged the food co-op community to support its hub of grassroots development, FCI.

FCI spent one summer and fall writing grants and contacting food co-op leaders. Thirty-four food co-ops rose to the occasion by donating $75,000 to FCI last year, plus an additional $35,000 was promised in pledges for 2014. National Cooperative Grocers Association (NCGA) committed funding to FCI at $50,000 per year through 2016. In a letter of support to FCI, C.E. Pugh, NCGA chief of operations, agrees, “We want to leverage the strengths of each organization and eliminate redundancies in order to better support new food co-op development…. We are grateful to FCI for their work in support of new co-ops. Their programs are helping more new co-ops open successfully!”

Pleased with the support of our industry partners and success of our co-op development program, The Cooperative Foundation awarded FCI a $6,500 grant this past July. Together, by funding FCI’s core work—developing new natural and local-foods grocery co-ops—all of these organizations are strengthening our best programs that allow us grow more co-ops, owners, and local economies across the U.S. We are so grateful for all this support!

We are fortunate to have the leadership of NCGA, NCGA Development Cooperative, CDS Consulting Co-op, and FCI working together on the development and support of natural foods co-ops across the country.

Startup support: continuum of care

As the first stop in the development of new food co-ops, FCI has been uniquely positioned to provide early-stage services. Free support at inception is critical to grassroots development, says FCI Executive Director Stuart Reid, “When organizers first call, they are not even sure they want to start a co-op. Some want to return a grocery store to their towns. Others want to increase access to local, fresh foods. We’re able to explain how the food co-op model meets their goals and uniquely benefits local economies.”

From there, FCI introduces organizers to the tested development model, 4 Cornerstones in 3 Stages, as well as legal and business plan resources, member and capital development tools, and the greater co-op support network. Reid insists, “If we charged for those first conversations, we’d have a lot fewer successful startups open today and in the pipeline towards NCGA membership.”

We believe that for the majority of communities starting food co-ops, the support of FCI’s organizing and membership programs—along with CDS Consulting Co-op’s feasibility studies; board support and business development services; and NCGA’s buying power as well as operational and marketing support—are critical factors leading to overall success. Starting with FCI, community leaders are developed and walked through the food co-op development process. We teach them how to form a steering committee, navigate incorporation, access legal services, develop a business plan, and create a membership recruitment campaign, plus we help them fund their first market studies and pro formas through our Seed Grant Program. CDS Consulting Co-op helps guide startups in planning a successful business enterprise and governance board, and NCGA membership not only allows startups to be price-competitive, but also prepares staff to operate a successful grocery.

Startup impact and the road ahead

Food Co-op Initiative’s vision is to strengthen communities through cooperation, and we do this by enabling a faster and more efficient startup process for new retail food co-ops that go on to provide healthy food options, good jobs, and stronger local economies. After eight years of providing free consultation, tools, and grants to communities across the U.S., our impact is notable. Over 70 new co-ops have opened retail stores, and today 15 of NCGA’s members are startups. Together these new coops have contributed over $150 million to the cooperative economy, created over 1,000 new jobs, and brought over 100,000 new memberowners to our food co-op community.

Presently, there are 117 new groups actively organizing startups in their communities, with new inquiries coming in weekly. If current trends hold, in the next five years we expect to see 60 new retail groceries open their doors, contributing over $500 million in cooperative sales.

In addition to the educational resources FCI develops and offers at no cost, we have awarded $450,000 in Seed Fund grants to 57 startups to help fund market studies, pro formas, and professional consulting. Each startup community then matched their grant, providing nearly $1 million in startup capital. One 2013 Seed Grant recipient, Manchester Food Co-op of New Hampshire, sees the grant package as critical to its development. “The timing was perfect—we funded our market study, and your advice allowed us to more clearly see those steps that are truly priorities right now. [FCI] helped us build our strategy, resources, and accountability, boosting our confidence to blaze through a transitional period.”

We invite you to act with us

Because FCI is structured as a 501(c)3 nonprofit, we depend on donations from individuals, grantors, and our co-op community. Because we never want to experience the worry we had last year, FCI is moving to diversify its funding sources. We need the support of the change agents in our food co-op world who believe in the work we do and want to commit to a bright future together.

We are grateful to the 34 food co-ops who supported FCI in 2013 and to the 15 co-ops who have already gifted or pledged their support for 2014. We need to raise an additional $75,000 from food co-ops this year. If you are already a generous donor, thank you! We welcome you to encourage your fellow cooperators to support co-op development.

Thank you for allowing FCI to be just one part of a robust and missiondriven cooperative industry that is making a difference in the lives of thousands of people. We’re grateful to do this meaningful work with smart and visionary individuals who believe that cooperatives strengthen local communities and connect us to a more sustainable global economy. We help bring more co-ops to more people in more communities. Will your co-op help?

To learn more about FCI’s work or how you can support us, please visit foodcoopinititiatve.coop/support or contact Suzi Carter at [email protected] or 540-216-4667.  

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Startup Supporters

On behalf of our board and staff, FCI would like to thank the following food co-ops for their donations to FCI’s startup support programs in the past year:

Bloomingfoods Market & Deli

City Center Market

Co-op Market Grocery & Deli*

Common Ground Food Co-op

Company Shops Market*

Eastside Food Co-op*

Flatbush Food Cooperative

Harvest Co-op Markets

Honest Weight Food Co-op

Just Food Co-op*

Lexington Co-operative Market

Menomonie Market Food Co-op

Monadnock Community Market*

Neighborhood Co-op Grocery

Ocean Beach People’s Organic

Food Co-op

Onion River Co-op, City Market

People’s Food Co-op—La Crosse/

Rochester

River Market Community Co-op

River Valley Market*

Sacramento Natural Foods Co-op

Seward Cooperative Grocery & Deli

The Common Market

The Food Co-op

Ukiah Natural Foods

Viroqua Food Cooperative

Weavers Way Co-op

Wedge Community Co-op

Wheatsville Food Co-op

Whole Foods Co-op

Willy Street Co-op

Willimantic Food Cooperative

Moon Food Co-op*

Placerville Natural Foods Co-op*

Rutland Area Food Cooperative

*indicates a startup