There are many reasons to celebrate all kinds of co-ops everyday, but Co-op Month celebrations have been around since 1930, when the first unofficial event happened. The state of Minnesota was the first to declare an official proclamation in 1948 and in 1964 the U.S. Secretary of Agriculture designated October as National Co-op Month. This is a time for co-ops and their members to celebrate the unique qualities that set co-ops apart from other business models.

What are cooperatives?

Cooperatives are organizations that are owned and controlled by their members. Most of us have heard of farmers co-ops, but cooperatives can be any kind of business or service from food stores to transportation providers, childcare, healthcare, banking, utility companies and more. Some, like housing co-ops, operate on a very personal level, others are wholesale businesses, and many are retail stores like Willy Street Co-op. You can buy insurance through a cooperative or plan a funeral or memorial. Worker-owned cooperatives are owned and operated by their employees. There are even co-ops that offer services like banking or consulting solely to other co-ops.

The most recent statistics show that as of March 2005, 130 million Americans belonged to a co-op and those co-ops had combined annual revenues of over $230 billion and employee payrolls of more than $15 billion a year. Almost one-third of farm harvests are marketed through cooperatives and half the electrical transmission lines in the country are owned and serviced by rural electric co-ops. And co-ops can be big business; that same 2005 survey showed 29 cooperatives—including Land O’ Lakes and Ace Hardware—with annual revenues over $1 billion.

To join a cooperative you usually need to have a financial stake—that might be called membership dues, equity or a share. In return, owners of all kinds of co-ops get some say in how the business is run; you can vote in Board of Director elections; you may be asked to approve budgets, purchases or policy changes. Some co-ops return patronage dividends to their owners and some require participation in the form of work hours. Co-ops usually reward their members with lower fees or prices than a typical business; for example a credit union often charges lower interest on loans or pays slightly higher interest on savings compared to a bank; retail cooperatives might offer a member discount or have a surcharge for non-members; members of childcare cooperatives usually exchange time with others in the group, saving on daycare costs.

The first co-op

The first successful consumer co-op was organized in 1844 in Rochdale, England. Twenty-eight working weavers, who called their group the Rochdale Equitable Pioneers Society, scraped together funds to open a shop that sold pure, safe food at a fair and reasonable price. At that time, much of the food sold in shops was adulterated with all sorts of materials to increase profits or mask spoilage; food adulteration was so common that some early co-op customers complained about the taste of Rochdale’s clean food. It was also not unusual for scales to be weighted in favor of merchants and the Rochdale store became known for “honest weight” as well. By the 1870s, the Rochdale Pioneers were also in the business of cooperative housing, and banking, fulfilling their promise of service to the community. The Rochdale cooperative was the first to work under the ideal of “one member, one vote”; they returned patronage dividends early on, maintained a free library for members, and hosted discussions, lectures and other educational events.

Co-op principles

Co-ops around the world still employ the principles instituted by the Rochdale Pioneers. These principles are one of the most important things that separate cooperative businesses from corporations. Here is the definition of a cooperative and the governing principles as they appear on our website:

Definition:

A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.

Principles:

Cooperatives operate according to seven basic principles. Six were drafted by the International Cooperative Alliance (ICA) in 1966, based on guidelines written by the founders of the modern cooperative movement in England in 1844. In 1995, the ICA restated, expanded and adopted the 1966 principles to guide cooperative organizations into the 21st Century.

  1. Voluntary, Open Membership: Open to all without gender, social, racial, political, or religious discrimination.
  2. Democratic Member Control: One member, one vote.
  3. Member Economic Participation: Members contribute equitably to, and democratically control, the capital of the cooperative. The economic benefits of a cooperative operation are returned to the members, reinvested in the co-op, or used to provide member services.
  4. Autonomy and Independence: Cooperatives are autonomous, self-help organizations controlled by their members.
  5. Education, Training And Information: Cooperatives provide education and training for members so they can contribute effectively to the development of their cooperatives. They inform the general public about the nature and benefits of cooperation.
  6. Cooperation Among Cooperatives: Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, regional, national and international structures.
  7. Concern for the Community: While focusing on member needs, cooperatives work for the sustainable development of their communities through policies accepted by their members.

The differences between co-ops and mainstream supermarkets

Most of the food cooperatives around the country came into being as food-buying clubs. A few were formed during the Depression years as a means for families to purchase food at reduced prices. Most of the co-ops existing today were formed during the 1970s in an effort to buy whole, natural foods at lower prices. Some of the buying groups were trying to avoid the corporate “establishment” and have more control over their food supply, and some were just people interested in eating well at a reasonable cost. Many started in empty store fronts, small basement spaces, or sometimes even in a member’s home, and grew into the bright, convenient stores we enjoy today.

The true differences between co-ops and mainstream supermarkets extend beyond the type of goods stocked or the prices charged. Co-ops have obligations to their members—their owners—that supermarkets do not. While profit margins have never been very high for any type of food store, cooperatives turn those profits back into the business, the community and, often, to the employees and members. Supermarket profits are returned to corporate shareholders, executives and owners.

Unions represent workers at some grocery stores, but many stores are not unionized, and those workers often receive low wages and few benefits. A few food co-ops around the country, including Regent Market Co-op here in Madison and Outpost Natural Foods in Milwaukee, are unionized, but most cooperatives have other structures including worker collectives and our style of participatory management. Many co-ops include staff members in policy-making decisions, have living wage and benefit models in place as well as other employment policies that make co-ops great places to work.

Staff satisfaction

Our Human Resources Manager, Sarah Dahl, reports that according to a 2007 survey of the Willy Street Co-op staff, the people, benefits and philosophy or mission of the Co-op were cited most often as being the top three things we like about our place of employment. In exit interviews, departing staff almost always say they would recommend the Co-op as a good place to work; a few of the things most often heard: “Good community, good values, makes you feel comfortable;” “It’s a great place to work, you get treated with respect;” “... I’m so proud of the activism—the fundraisers for the Atwood Center, all the community outreach donations, the CHIP program;” “It’s an ethically sound business, and contributes to a better world in a gentle way.” It is apparent that most Co-op staff members feel this business model works well for them.

Supporting local economy

Organic food used to be available almost exclusively at co-ops, but today almost every supermarket offers organics—often under a private house label—and their selection is growing all the time. Most food manufacturers have organic or “natural” versions of many of their products or have bought out independent organic producers. This all adds up to a production scale that can make supermarket pricing of organic or whole foods look attractive at times, but cooperatives stand out when it comes to supporting local and independent producers working within the local economy. Most co-ops carry a wide range of products that are made within a short drive. Because we are smaller, human-scaled businesses, we are better able negotiate prices with our producers that are fair for both sides. Co-ops don’t have to follow policies that are determined by a home office that might be hundreds of miles away, giving us the flexibility to make purchasing decisions that are right for our members. For example, if the only tomatoes available in January are tasteless, pale and hard we can make the choice not to sell them if our members don’t want them; we can take a product off the shelves if a company’s business practices are inhumane or unsustainable. Most important is our ability to respond to members’ requests for products—when you ask for something new, we really try to find that item if it fits our product selection criteria. Many products are only available in limited areas so if you are new to the Madison area, or just returning from a visit elsewhere, you may ask for something that we just don’t have access to, but if an item is available we will special order it for you and if it fits the mix, and there is enough demand, and we have room, it just might be added to the shelves. In the store and the newsletter, as well as on our website you can find products and ideas that are labeled “Own It”—these are all things that members have suggested.

Communicating with member/owners

Cooperatives wouldn’t exist without their members and so we often look for ways to increase communication with our member/owners. Here at Willy Street Co-op, we hear from you in many ways. Our Customer Service staff meets many members every day, face-to-face and on the phone; staff members on the sales floor help customers find items and answer many questions about products; every shopper talks to at least one cashier. We receive email from our owners, but old-fashioned Customer Comment forms remain a popular style of communication for members—we average between 70 and 80 each month. Willy Street Co-op is committed to sharing important news and then asking for your input in a number of ways. There are opportunities to vote on everything from electing Board members to choosing the next Co-op t-shirt design. When it is time to amend the bylaws or approve expansion plans, we need to hear from you. We ask you to return surveys that give us specific information about your opinions of the Co-op.

Last spring, we held a series of focus group discussions to get an even better sense of how we can improve service to our members. Those meetings resulted in many suggestions ranging from requests for more locally produced items, to more classes, contests and fun events, to kudos for our excellent Produce department, meat case and the fresh sushi. Every department in the store has been working to implement as many of your requests as possible and the results are showing up throughout the Co-op.

Giving back

Your Co-op gives back to the community in many ways, but especially through grants funded by the Community Reinvestment Fund (CRF). This money comes from abandoned member equity. Each year local non-profit groups are invited to apply for funding for projects that involve sustainable agriculture, healthy eating, social change or other topics that reflect our goals—last May the CRF award distributions amounted to $13,500. We support the Community CHIP fundraising program; sponsor numerous community events and offer classes and tours that are open to the public.

Local food co-ops

At this time last year the Co-op had negotiated and signed the lease for a second retail site and the plan called for that store to be up and running by now. While events beyond our control changed those plans, other co-ops in the area have started up. At the time of this writing, Yahara River Grocery Cooperative in Stoughton has almost a year of operation under its belt; the Prairie Harvest Market Co-op in Sun Prairie is still signing up members to form a solid base before locating a retail site; the Wisconsin Grass-Fed Beef Cooperative officially incorporated in June and was one of the recipients of grant money from the state’s first “Buy Local, Buy Wisconsin” fund. The Madison Cooperative Network was formed about a year ago and incorporated as a cooperative in August.

Madison Cooperative Network

The Madison Cooperative Network (MCN) is a democratic organization made up of worker-owned cooperatives from Madison and Dane County. The focus thus far has been on “organizing worker collectives, housing co-ops and consumer cooperatives into one movement,” according to Jeff Bessmer, one of our employees and a new Willy Street Co-op Board member. Jeff works with housing co-ops in his position with MCN; some of the projects he is involved with include city zoning updates, procurement and distribution of natural foods, and eventually making health insurance available to co-op members. He said, “The Cooperative Network will bring together co-op members to embark on projects to grow and strengthen the communities and cooperative movement in Dane County.”

In addition to all those housing co-ops—and there are 19 here—Madison is home to several other long-standing co-ops including Nature’s Bakery, Union Cab, Rainbow Bookstore, Community Pharmacy, Lakeside Press, Regent Market Co-op, Madison Hours, Prairie Fire BioFuels, Tenney Nursery & Parent Center, and many others.

Shared recipes

The sixth Cooperative Principle is “Cooperation Among Cooperatives.” This is embodied in many ways, but this month I chose to express it in food terms—that is, after all, what we do best. In that spirit, I asked several food co-ops around the country to share a recipe for this issue of the Reader; you will find their delicious contributions on the Recipe page—enjoy!