Why go co-op? How do co-ops strengthen our regional food system and economy? Co-ops are an effective model for business succession, retaining jobs, and rooting businesses in communities. Learn about the process of start-up, conversion and operation, and share your ideas for a co-op in your community. Presenters: Adam Trott, Valley Alliance of Worker Co-operatives and Erbin Crowell, Neighboring Food Co-op Association.

1. Co-­‐opera(ve
Enterprise
&
Sustainability:
Why
Go
Co-­‐op?
Erbin
Crowell,
Neighboring
Food
Co-­‐op
Associa(on
(NFCA)
Adam
TroG,
Valley
Alliance
of
Worker
Co-­‐opera(ves
(VAWC)
Northeast
Organic
Faming
Associa2on
(NOFA)
Summer
Conference,
13th
August
2016
University
of
MassachuseCs,
Amherst

2. Co-­‐opera(ve
Enterprise
&
Sustainability
Why
go
co-­‐op?
How
do
co-­‐ops
strengthen
our
regional
food
system
and
economy?
Co-­‐ops
are
an
effec2ve
model
for
business
succession,
retaining
jobs,
and
roo2ng
businesses
in
communi2es.
Learn
about
the
process
of
start-­‐up,
conversion
and
opera2on,
and
share
your
ideas
for
a
co-­‐op
in
your
community.
2

3. Your
Presenters
Erbin
Crowell
• Execu2ve
Director,
NFCA
• Equal
Exchange,
Co-­‐op
Fund
of
New
England,
Co-­‐opera2ve
Development
Ins2tute,
VAWC
• Vice
President,
New
England
Farmers
Union
• Board
of
Directors,
Na2onal
Co-­‐opera2ve
Business
Associa2on
• Master
of
Management,
Co-­‐
opera2ves
&
Credit
Unions
Adam
TroG
• Execu2ve
Director,
VAWC
• Worker/Member,
Collec2ve
Copies
• Board
of
Directors,
Valley
Co-­‐
opera2ve
Business
Associa2on
• Vice
President,
Co-­‐opera2ve
Capital
Fund
(CFNE
sister
fund)
• Former
Community
and
Poli2cal
Organizer
3

4. Outline
1. Our
Context
2. What
is
a
Co-­‐op?
3. Co-­‐ops
&
Sustainability
4. Case
Studies
5. Suggested
Guidelines
6. Discussion,
Ques(ons,
Ideas
4

5. 1.
Our
Context
• A
Broken
(Unaccountable)
Food
System
• Crisis
of
Global
Economy
• Unemployment
• Drama2c
Inequality
in
Wealth
• Diminished
Democracy
in
Poli2cal
Systems
• Hunger
for
Alterna2ves
• Corporate
consolida2on
of
food
system
• Relocaliza2on
&
Regional
Economies
5

6. The
Challenge
of
Succession
• Sole
proprietorships
rarely
pass
to
the
next
genera2on
• Winding
down
of
a
business
represents
lost
community
social
and
financial
capital
• Closures
impacts
the
wider
community
(workers,
producers,
local
government,
etc.)
• Conven2onal
path
for
successful
business
is
selling
off
to
a
larger
business
or
to
investors
• Community
investment
in
the
success
of
these
local
enterprises
is
unrecognized
6

7. What
If…?
• There
was
a
business
model
that...
• …was
democra2c?
• …was
accountable
to
the
people
it
served?
• …was
rooted
in
our
local
communi2es?
• …was
part
of
a
values
based
movement?
• …put
common
good
before
private
gain?
• …was
flexible
and
innova2ve?
• …was
successful
and
more
sustainable?
7

8. England
in
the
1800s
• Disloca2on
of
local
economies
• Drama2c
shifs
in
wealth
• Concentra2on
of
economic
control
• Poor
working
condi2ons
• Contaminated,
low
quality
food
• Birth
of
the
Co-­‐opera2ve
Movement
8

9. Rochdale
Society
of
Equitable
Pioneers
• Founded
1844,
Rochdale,
England
• Weavers,
Unionists,
Community
Ac2vists
• Member-­‐Owned
Store
• Pure,
Affordable
Food
• Basic
Co-­‐op
Principles
9

10. 2.
What
is
a
Co-­‐opera(ve?
A
co-­‐opera2ve
is
an
autonomous
associa2on
of
persons
united
voluntarily
to
meet
their
common
economic,
social,
and
cultural
needs
and
aspira2ons
through
a
jointly-­‐owned
and
democra2cally-­‐controlled
enterprise.
10

11. In
Other
Words…
A
co-­‐op
is
a
legal
business
that
is
equitably
owned
and
democra(cally
controlled
by
its
members
for
their
common
good,
the
good
of
the
community
and
to
accomplish
a
shared
goal
or
purpose.
Any
surplus
(usually
called
profit
in
private
firms)
is
distributed
among
members
in
propor2on
to
their
use
of
the
business
(purchases,
labor,
or
supply),
as
a
discount
on
purchases,
or
is
reinvested
in
the
enterprise
for
the
mutual
benefit
of
members.
11

12. Co-­‐opera(ve
Business
Principles
1. Voluntary
&
Open
Membership
2. Democra2c
Member
Control
3. Member
Economic
Par2cipa2on
4. Autonomy
&
Independence
5. Educa2on,
Training
&
Informa2on
6. Co-­‐opera2on
among
Co-­‐opera2ves
7. Concern
for
Community
12

13. “Concern
for
Community”
• Co-­‐opera2ves
work
for
the
sustainable
development
of
their
communi2es
through
policies
approved
by
their
members.
13

14. Values
Based
Business
“Co-­‐opera2ves
are
based
on
the
values
of
self-­‐
help,
self-­‐responsibility,
democracy,
equality,
equity
and
solidarity.
In
the
tradi2on
of
their
founders,
co-­‐opera2ve
members
believe
in
the
ethical
values
of
honesty,
openness,
social
responsibility
and
caring
for
others.”
14

15. A
Flexible
Business
Model:
Purpose
• Provide
Employment
and
a
livelihood.
• Purchase
needed
products
or
services
as
a
group.
• Produce
a
product
or
service
together.
• Process
and
add
value
to
raw
materials
produced
by
members.
• Market
products
produced
by
members
or
by
the
co-­‐op.
15

16. A
Flexible
Business
Model:
Industry
• Agricultural
Co-­‐ops
• Fishing
Co-­‐ops
• Worker
Co-­‐ops
• Food
Co-­‐ops
• Ar2san
Co-­‐ops
• Housing
Co-­‐ops
• Credit
Unions
• Communica2ons
• U2li2es
Co-­‐ops
• Health
&
Insurance
16

17. A
Flexible
Business
Model:
Stakeholders
• Worker
Co-­‐ops:
Owned
and
operated
by
the
people
who
contribute
their
labor
to
the
business.
• Consumer
Co-­‐ops:
Owned
by
the
people
who
purchase
goods
or
services.
• Producer
Co-­‐ops:
Owned
by
producers
who
purchase
inputs,
process
and
market
their
products.
• Community
Co-­‐ops:
Owned
and
governed
by
members
of
community.
• Mul(stakeholder
Co-­‐ops:
Owned
and
controlled
by
combina2on
of
member
types.
17

18. Basic
Co-­‐op
Structure
18
MEMBERS
BOARD OF DIRECTORS
EMPLOYEES
Elect
Hire
Hire
MANAGEMENT
Worker
Co-­‐op
CONSUMERS OR
PRODUCERS
Consumer
or
Producer
Co-­‐op
Product or Service
A
Mul(stakeholder
Co-­‐op
includes
a
combina2on
of
member
types
in
ownership
and
governance.
Collec(ves
flaCen
organiza2onal
layers,
emphasizing
consensus
and
group
decision-­‐making.

19. 3.
Co-­‐ops
&
Sustainability
…are
more
common
than
we
think
•
1
billion
members
worldwide
(1
in
3
in
the
US)
•
More
people
than
own
stock
in
mul2na2onals
•
Majority
of
US
farmers
are
co-­‐op
members
…are
innova(ve
•
Healthy
food,
organic
agriculture,
Fair
Trade,
relocaliza2on,
regional
aggrega2on
and
distribu2on
…are
successful
•
30,000
co-­‐ops
in
all
sectors
of
US
economy
19

20. 2012:
UN
Interna(onal
Year
of
Co-­‐ops
Co-­‐ops
“in
their
various
forms,
promote
the
fullest
possible
par2cipa2on
in
the
economic
and
social
development
of
all
people,
including
women,
youth,
older
persons,
persons
with
disabili2es
and
indigenous
peoples,
are
becoming
a
major
factor
of
economic
and
social
development
and
contribute
to
the
eradica2on
of
poverty.”
20

21. UN
Sustainable
Development
Goals
for
2030
1. No
Poverty
2. Zero
Hunger
3. Good
Health
&
Well
Being
4. Quality
Educa2on
5. Gender
Equality
6. Clean
Water
&
Sanita2on
7. Affordable
&
Clean
Energy
8. Decent
Work
&
Economic
Growth
9. Industry,
Innova2on,
Infrastructure
10. Reduced
Inequali2es
11. Sustainable
Ci2es
&
Communi2es
12. Responsible
Consump2on
&
Produc2on
13. Climate
Ac2on
14. Life
Below
Water
15. Life
on
Land
16. Peace,
Jus2ce
&
Strong
Ins2tu2ons
17. Partnerships
for
the
Goals
21

22. Co-­‐opera(ves
&
the
Sustainable
Development
Goals
“Co-­‐opera2ves
can
be
seen
as
an
inherently
sustainable
business
model,
with
their
‘triple
boCom
line’
of
social,
economic
and
environmental
sustainability…”
Interna2onal
Labour
Organiza2on
(2016)
22

23. Why
Co-­‐ops
&
Sustainability?
• Community
ownership
&
control
• Focus
on
service,
mee2ng
needs
before
profit
• Develop
local
skills
&
assets
• Ability
to
pool
limited
resources
• Build
regional
economic
efficiencies
• Difficult
to
move
or
buy-­‐out
• Root
wealth
in
community,
not
markets
• Member,
customer
loyalty
• Low
business
failure
rate
&
are
long-­‐lived…
23

24. Co-­‐opera(ves
&
Resilience
• Because
they
are
community
owned,
co-­‐
ops
root
jobs,
wealth
and
infrastructure
locally.
• Because
they
are
more
resilient,
co-­‐ops
contribute
to
more
stable
local
food
systems,
infrastructure,
employment,
services,
and
economy
over
2me.
24

25. 4.
Case
Studies
Co-­‐ops
in
New
England:
•
1,400
businesses
• Food
co-­‐ops,
farmer
co-­‐ops,
worker
co-­‐ops,
credit
unions,
etc.
•
Locally
owned
by
5
million
members
•
Earn
$9
billion
in
annual
revenue
•
Employ
22,000
people
•
Pay
$1
billion
in
wages
Source:
hCp://reic.uwcc.wisc.edu/
(2008)
25

26. The
Mondragón
Co-­‐opera(ves
• Located
in
Basque
region,
Spain
• First
co-­‐op
in
1956
(Started
with
5
employees,
now
has
8,000)
• $22
Billion
in
Sales
(2009)
• 103,700
Employees
(2009)
• Premised
on
Import
subs2tu2on
and
social
entrepreneurship
• System
includes
agricultural
and
retail
grocery
co-­‐ops
26

27. Case
Study:
BraGleboro
Holis(c
Health
Co-­‐op
• Holis2c
health
business
owner
moving
on
• Six
current
tenants
organize
to
form
a
co-­‐op
and
take
on
business
• VAWC
support
includes
assembling
financial
resources;
facilita2ng
loan
applica2on;
mee2ng
support;
Member
rights
and
responsibili2es;
benefits
development;
Ar2cles
of
Incorpora2on
and
Bylaws.
• Massage,
chiroprac2c,
acupuncture
and
herbalist
services
along
with
an
apothecary.
• 6
worker
members
• Currently
entertaining
expansion
27

28. Case
Study:
Broadfork
Permaculture
Co-­‐op
• Two
poten2al
worker/member
joined
current
sole
proprietor
in
conver2ng
to
worker
co-­‐opera2ve.
• Structure
and
governance;
formula2on
of
marke2ng
and
adver2sing
programming;
co-­‐op
movement
history
and
connec2on;
facilita2ng
purchase
from
sole
proprietor.
• Seeks
to
assemble
permaculturists
in
collec2ve
over
individual
compe22on
in
their
industry.
• Long
term
support
for
business
co-­‐ownership
and
financial
literacy
are
important
aspects
to
assert
in
the
establishment
of
the
co-­‐op.
• 3
worker/members
28

29. Case
Study:
Real
Pickles
Co-­‐op
• Founded
as
sole
proprietorship
in
2001
• Naturally
fermented
foods
(pickles,
sauerkraut,
etc.)
• Incorporated
as
a
worker
co-­‐op
in
2014,
with
5
founding
members,
including
original
owners
• $500,000
outside
investment
raised
to
fund
transi2on
• $700,000
revenue
annually
• Core
goals:
Preserva2on
of
mission,
local
ownership
and
control,
reten2on
of
staff
over
2me
29

30. Valley
Alliance
of
Worker
Co-­‐ops
• 8
member
worker
co-­‐ops
in
Western
MA
&
Southern
VT
• 70+
worker
members
• $10+
million
revenue
(2015)
• Member
Supported
&
Owned
Loan
Fund
• Supported
six
conversions
in
seven
years
• Collabora2on
with
other
sectors
–
co-­‐founded
VCBA.
• UMass
Co-­‐op
Enterprise
Collabora2ve
30

31. Co-­‐op
Food
Stores
/
Hanover
Consumer
Co-­‐op
• Founded
1936
– Wholesale
buying
co-­‐op
• 30,000
members
• 400
employees
• 4
loca2ons
in
NH
&
VT,
including
buyout
of
closing
supermarket
• $70
million
revenue
• $14
million
local
purchases
(2015)
31

32. Conversion
Case
Study:
Old
Creamery
Co-­‐op
• Founded
as
dairy
co-­‐op,
1886;
Rural
grocery
since
1930s
• Recent
owners
operated
for
12
yrs
• Converted
to
co-­‐op
in
2010,
NFCA
food
co-­‐ops
provide
peer
support
• 670
members
• 40
employees
• $1.5
mill
revenue
• $150,000
in
local
purchases
(2015)
32

33. Monadnock
Food
Co-­‐op
• Keene,
NH
• Opened
2013
• 2,370
members
• 67
employees
• $8.5
million
in
revenue
• $1
million
in
local
purchases
• Sustainability
ini2a2ves:
Green
Team,
green
building,
solar
panels,
compos2ng,
reuse
and
recycling
(2015)
33

34. Neighboring
Food
Co-­‐op
Associa(on
• 25
Co-­‐ops
– Majority
in
opera2on
30+
yrs
• 11
Start-­‐Ups
– New
jobs,
infrastructure
for
local
suppliers
• Locally
owned
by
107,000+
members
• Employing
1,800+
people
• $42+
million
in
wages
• $260+
million
revenue
• $50+
million
in
local
purchases
34

35. 5.
Suggested
Guidelines…
For…
•
Conver2ng
an
exis2ng
business
•
Launching
a
new
co-­‐op
35

36. Conver(ng
an
Exis(ng
Business
Basic
Ques(ons:
• Is
there
a
willing
seller?
• Who
are
the
poten2al
member
owners?
• Will
current
owner(s)
stay
on
as
member(s)?
• Is
the
business
viable
and
sustainable?
• What
does
the
transac2on
look
like?
• Is
there
a
plan
for
ongoing
investment
in
educa2on
and
training?
• Is
there
a
support
system
among
exis2ng
co-­‐op
networks?
36

37. Poten(al
Challenges
• Financing
and
capital:
Is
business
sustainable
over
2me?
What
will
the
transac2on
look
like?
• Is
the
current
owner
suppor2ve?
Will
they
stay
involved
or
will
the
business
lose
their
experience
and
exper2se?
• Shif
from
sole
proprietor
governance
to
a
co-­‐
opera2ve
culture.
• Lack
of
member
financial
literacy,
governance
experience
and
management
experience.
• Expensive,
irregular
and
ofen
bad
advice
from
professionals
unfamiliar
with
co-­‐opera2ve
model.
37

38. Launching
a
Co-­‐opera(ve
Ac(vi(es:
• Define
overall
purpose
or
goal
• Create
steering
commiCee
• Raise
pre-­‐development
funds
• Hire
a
coordinator,
if
possible/desired
• Conduct
feasibility
study
and
create
marke2ng
plan
• Establish
the
founding
board
• Incorporate
and
adopt
by-­‐laws
38

39. Launching
a
Co-­‐opera(ve
Ac(vi(es:
• Define
overall
purpose
or
goal
• Create
steering
commiCee
• Raise
pre-­‐development
funds
• Hire
a
coordinator,
if
possible/desired
• Conduct
feasibility
study
&
create
marke2ng
plan
• Establish
the
founding
board
• Incorporate
and
adopt
by-­‐laws
39

40. Launching
a
Co-­‐opera(ve
Ac(vi(es,
con(nued:
• Develop
a
business
plan
• Create
membership
agreements
• Recruit
members
and
equity
investment
• Access
necessary
debt
financing
• Hire
appropriate
management
• Open
for
business
40

41. Basic
Development
Process
Timeline
• 12-­‐18
months
to
incorporate
(varies
widely)
• Open
doors
–
2
yrs,
4
yrs,
12
yrs
• Exis2ng
business
can
be
faster!
Resources
needed
• CommiCed,
visionary
leadership
• Co-­‐op
specific
business,
legal,
and
financial
support
• Member
equity
investment
• Start-­‐up
financing
• Peer
support
&
guidance
41

42. Concerns
for
Co-­‐operators
• Understanding
group
dynamics
• Facilita2on
of
process,
shared
vision
• Defining
roles
and
responsibili2es
early
• Professional
standards
• Par2cipatory
but
focused
environment
• Recognizing
strengths
and
weaknesses
42

43. Concerns
for
Co-­‐operators
• Engagement
of
members
• Encourage
and
develop
broad
leadership
• Ongoing
training
in:
– Co-­‐opera2ve
values
&
principles
– Board
leadership
and
accountability
to
members
– Fiscal
oversight
– Project
&
strategic
planning
– Communica2on,
facilita2on,
conflict
resolu2on
43

44. Some
Guidelines
for
Success
• Strong,
commiCed
member
leadership
• Set
realis2c
goals
and
focus
on
them
• Base
decisions
on
concrete
market
research
and
business
planning
• Invest
in
member
educa2on
and
keep
members
informed
and
involved
• Use
technical
assistance
from
co-­‐op
networks
and
reputable
co-­‐op
developers
• Join
regional
co-­‐op
networks
and
seek
out
peer
support
from
other
co-­‐ops
44

45. Co-­‐opera(ve
Statutes
CT:
Conn.
Gen.
Stat.
33-­‐183
• Co-­‐opera2ve
Associa2ons
• Co-­‐opera2ve
Marke2ng
Associa2ons
• Workers
Co-­‐opera2ves
ME:
13
M.R.S.
1501
• Consumer
co-­‐op
• Agricultural
Marke2ng
&
Bargaining
Co-­‐opera2ve
• Employee
Co-­‐opera2ve
Corpora2ons
45
Growing a Food System
for the Future:
a manual for co-operative
enterprise development
Six States with One Voice at the National Table

46. Co-­‐opera(ve
Statutes
MA:
ALM
GL
Ch.
157
• Co-­‐opera2ve
Corpora2ons
• Co-­‐opera2ves
without
Stock
• Employee
Co-­‐opera2ve
Corpora2ons
(157-­‐A)
NH:
RSA
Title
XXVII,
Ch.
301
• Co-­‐opera2ve
Marke2ng
&
Rural
Electrifica2on
Associa2ons
• Consumers
Co-­‐opera2ve
(Ch.
301-­‐A)
46
RI:
R.I.
Gen
Laws
7-­‐7-­‐1
• Producers
Co-­‐opera2ve
• Consumers
Co-­‐opera2ve
VT:
8
V.S.A.
31101
• Marke2ng
Co-­‐opera2ve
• Consumers
Co-­‐opera2ve
• Worker
Co-­‐opera2ve
(Title
11,
Ch.
8)
Other
Op(ons
• Incorporate
in
a
neighboring
state
using
appropriate
co-­‐
opera2ve
statute

47. Why
Go
Co-­‐op?
Co-­‐opera(ve
Enterprises…
• …put
people
before
profit,
• …are
accountable
to
their
members
and
communi2es
• …retain
local
economic
infrastructure,
• …are
successful
and
resilient,
• …strengthen
local
economies,
• …build
a
beCer,
more
sustainable
food
system
and
economy.
47

48. 6.
Discussion
Your…
• Ques2ons
• Feedback
• Ideas
for
Future
Workshops
48

49. Contact
Erbin
Crowell
erbin@nfca.coop
Adam
TroG
adam@valleyworker.coop
Neighboring
Food
Co-­‐op
Associa(on
www.nfca.coop
Valley
Alliance
of
Worker
Co-­‐opera(ves
www.valleyworker.coop
49