Northeast: Cooperatives Seek Integration

Cooperative Grocers of the Northeast (CGANE or "see-gain") is now in the midst of its second major transformation since the group formed a bit over two years ago. We were initially conceived as a networking and self-help group of store managers and Northeast Cooperatives warehouse personnel. Current participants:

• Green Fields Market -- Greenfield, MA
• Hanover Co-op -- Hanover, NH
• Wild Oats Co-op -- Williamstown, MA
• Brattleboro Co-op -- Brattleboro, VT
• Upper Valley Food Co-op -- White River Junction, VT
• Northeast Cooperatives -- Brattleboro, VT

The late 1993 group tour of Co-op Atlantic inspired some fundamental changes in our vision and purpose. While operational projects such as store audits and the development of a comprehensive board of directors evaluation system for common use continued to take most of our time, integration became the focus of our discussions.

But as we began working towards this past winter's strategic planning retreat, we came to the recognition that while all of our projects and plans were useful, and we had gained a great deal by working together, all of our work was an extra layer on top of our normal responsibilities. Almost none of it was building what we saw as our primary need: a structure to support an integrated system. Now we were craving a re-definition of the relationships between the retail co-ops and between the retails and theirwarehouse.

We recognized that if we were going to make changes along the lines we were envisioning, we were going beyond the boundaries of operations, and we therefore needed to bring members of the boards of directors more actively into the process. A preliminary meeting of representatives from the boards of the CGANE members was held in January 1995, and one board member from each of the coops was included in our March planning day.

The consensus gained through this process lays the groundwork for some major potential changes for cooperatives in the Northeast. Clearly we all recognized the trends in the natural foods industry: supermarket format stores are where most of the growth is, and use of sophisticated technology is critical to effectively competing as well as offering higher levels of customer service.

Small to medium size and eventually even large independent retails will find it increasingly difficult to survive in this changing marketplace. At the same time, however, cooperatives have a great deal going for them if they are able to more effectively use the cooperative structure. To begin with, co-ops already enjoy an inherent but under-utilized vertical integration with the cooperative warehouses they own. In addition, co-ops local boards and member ownership give them the potential for unmatched commumty involvement and responsiveness. The structure is there, but the nature of cooperatives in the United States has evolved to one of rigid independence -- to a fault.

We envision a new Cooperative Grocers Association and are developing a model for a formal agreement between the regional warehouse and retails which choose to participate. The agreement will likely include a host of centrally developed programs and services which local boards will have the option to buy into. Examples include centralized data management and financial services; training programs for staff, management, and boards of directors; a management contract system similar to the one which has been so successful at Co-op Atlantic; a host of customer service materials and membership supports; and of course the benefits of combined purchasing and marketing programs.

While some in cooperatives seem to assume that bigger is badder, we are excited by the prospect of gaining most of the advantages of our bigger brothers while maintaining the essential benefits of cooperatives' consumer ownership, control, and responsiveness.