Harvest Moonrise

Five years of hard work and a million dollars in owner investment have resulted in the store the community dreamed of.

The story of the Harvest Moon Co-op (Long Lake, Minn.) proves once again that it takes a lot of cooperation to start a cooperative. I am also reminded how much all co-op startups have in common, while retaining their own unique personalities—no matter how big the store or where it is located.

Success comes from building a vision, creating effective and accountable leadership teams, getting the right help when you need it, keeping the community involved and informed, and finding the right site and enough capital. Let’s not forget that new co-ops are almost always organized by volunteers who have never done it before and must depend on outside expertise to guide them. 

Many resources are now available to support new co-ops, but not all co-ops take advantage of them as effectively as Harvest Moon has.

A brief history

Harvest Moon was incorporated in May of 2006. The board of directors consulted with the Food Co-op 500 program for advice in starting a new food co-op. Food Co-op 500 provided a $10,000 grant, and a market feasibility study was conducted in June of 2006. The board hosted a number of awareness and fund-raising events throughout 2006 and 2007, and it began a capital campaign in early 2008. The capital campaign has generated commitments of over $900,000 in the form of loans and Class C shares. 

During 2009, Harvest Moon updated the market feasibility study, negotiated a lease for the property, completed a store layout and fixture plan, and selected Gordon James Construction in Maple Plain, Minn., to complete the build-out. Harvest Moon also contracted with the National Cooperative Grocers Association’s Development Cooperative for assistance in completing the project and both pre- and post-opening operational support.

The local community

The Long Lake/Orono community lies just outside the Minneapolis metropolitan area and has been surprisingly underserved in grocery options for an affluent and growing community. With the wealth of consumer co-ops in the Minneapolis/St. Paul area, residents knew what they were missing and were willing to work for it. A committed and skilled group of volunteers came together and led the project through years of bumps and starts. Using newsletters, open meetings, local cable TV programs, fund-raisers and “The Big Bag,” the founding team kept community interest high. When the time came for members to step up and invest, they answered loudly and clearly, contributing over $900,000.

How it came together

Food Co-op 500 (FC500—now Food Co-op Initiative): Harvest Moon was one of the first recipients of a Food Co-op 500 seed grant. Along with the grant, FC500 set up a mentoring/monitoring group of co-op managers and consultants who met by phone every month with the founding team. Harvest Moon benefited from the insights, support, and perspective of these mentors and always had a place to turn for advice. As the FC500 development specialist, I continued this support relationship throughout the entire project, getting to know the organizers, speaking to the community at their annual meeting, and providing encouragement. 

CDS Consulting Cooperative: There are many aspects of creating a new business that require highly specialized skills and experience. Co-ops are no exception, and they may be even more complicated than other businesses because of their broad and democratic ownership structure. Volunteer organizations tend to avoid spending any unnecessary money and are often very resistant to the idea that they cannot do it all themselves. 

Harvest Moon realized that hiring experts would pay for itself by speeding up the development process and saving them the costs of learning through experience. There are many areas where consultants are helpful and others where they are nearly essential. Among the members of CDS Consulting Co-op, Bill Gessner provided general organizing, planning and structural consulting throughout the project; he also worked with the Harvest Moon board to create development and pro-forma budgets. Pete Davis conducted the
co-op’s market study and P.J. Hoffman drew floor plans. Mark Goehring is now providing board training through the Cooperative Board Leadership Development program.

Project managers: Another expense that sometimes seems hard to justify is hiring a paid project manager. However, this is another opportunity to bring professional skills to a volunteer effort that can pay for themselves through more efficiency, faster progress, better coordination, and higher accountability. 

Harvest Moon hired Mary Moulton, an experienced food co-op membership manager, in March of 2007. She helped guide the project forward over the next year until a family emergency took her out of Minnesota. In November of 2008, Paula Gilbertson became the project manager until being offered the Central Corridor development director position with NCGA. She continued to support Harvest Moon as an advisor.

NCGA Development Cooperative: The NCGA Development Cooperative (DC) was engaged by Harvest Moon for support in August 2009, as the co-op moved forward into its implementation stage. The DC assisted Harvest Moon with site selection, fixture planning, equipment selection, contractor selection, financial projections, financing, staffing, and more. 

The co-op community: The project benefited greatly from the support of several other co-ops in the Twin Cities. Six regional co-ops supported the financing with loan guarantees for a portion of the Northcountry Cooperative Development Fund debt, and the store opening was also supported by several staff members from co-ops in the region. Other co-op managers volunteered to serve on the early mentoring group, and several key employees had developed their expertise at other local food co-ops. 

The board, management and staff of Harvest Moon worked hard to achieve a smooth opening within the forecast timeline and budget. The opportunity to support the opening of this beautiful new co-op resulted from several years of strong board leadership and impressive financial support from the community. Staff from Food Co-op 500, CDS Consulting Co-op, NCGA and its Development Cooperative all worked to help the Harvest Moon membership realize its vision of a community-owned natural food store in Long Lake.

While this accomplishment is worthy of celebration, equally important is the profitable operation of Harvest Moon. The NCGA Development Cooperative continues to assist Harvest Moon management and staff in their journey along this often-steep learning curve. In many respects, the most important aspect of DC support begins now. 

By the Numbers

Gross Square Feet 9,450

Retail Square Feet 6,400

Projected Sales, Year 1 $70,000/week
(pre-opening estimate) ($3.5 million)

Projected Sales, Year 1 $61,500/week
(adjusted to reflect early trends) ($3.2 million)

Project Sources and Uses

SOURCES  /  Budget  /  Actual

Membership Shares  $150,000  /  $185,000

Donations and Grants  $20,000  /  $11,000

Class C Stock  $500,000  /  $516,000

Member Loans  $500,000  / $473,000

Vendor Credit  $100,000  /  $100,000

Secured Bank Loan  $800,000  /  $1,000,000

Bank Line of Credit  $200,000  /  0

Total Sources  $2,270,000  /  $2,285,000

USES

Leasehold Improvements  $600,000  /  $702,000

Equipment  $700,000  /  $622,000

Inventory  $200,000  /  $159,000

Fees -- Various  $40,000  /  $25,000

Site Holding Costs  $50,000  /  $62,000

Pre-Opening Interest  $20,000  /  $14,000

Pre-Opening Staffing  $60,000  /  $67,000

Pre-Opening Admin. Costs  $170,000  /  $136,000

Contingency  $130,000  /  $85,000

Working Capital  $300,000  /  $413,000

Total Uses  $2,270,000  /  $2,285,000