I was standing in the Produce Department the other day, admiring the start of the season’s local bounty when a customer flagged me over for some assistance. “What’s the deal with all of these ‘lo-cal’ signs on everything? Why is it so important that produce be low in calories?”
“Oh that’s not ‘lo-cal,’ as in low calorie,” I said, “it means ‘local,’ as in it was grown, or produced nearby.” Looking satisfied, the customer selected some delicious looking vegetables and moved on to the local, but decidedly not ‘lo-cal’ pastries near the Juice Bar. I, meanwhile, was left standing in front of the sign wondering what local really means for the products in our store, for our business practices in the community, for the people like me who work here, and for the shoppers who support the unique focus on local sourcing of the products we use and enjoy each day.
In truth, I’ve read plenty of articles and publications, heard numerous radio shows, and I’ve even seen a television program or two on the subject of local sustainability. I’ll freely admit, however, to a lack of understanding of just what effect our focus on buying local has for those who shop at the Co-op, those who work here, and those who provide the products we sell. While some of the effects are clear—the food is made here, not there; we can interact with the actual people who produce the food; the food is often fresher and tastier; our vendors are often more responsive to our requests as well as those of our customers—each of these effects is very straightforward, with a clear cause and effect...and is also fairly superficial. I wondered what impact buying local has on the less obvious. How much money does the Co-op spend locally on products? How much money is spent on its employees in salaries that support the families of those who work here? How do these initiatives fit in with the larger economic statistics in Madison and the state, the city’s plan for a sustainable future, and the general feasibility of a focus on local products in a tough economic environment?
To answer some of these questions, I talked with a number of managers at the Co-op, requested a whole lot of numbers from “behind the scenes,” and read up on the economic statistics of our city and state. What I found was, at times, fascinating, surprising, but always informative. In fact, it has changed how I think about buying local food, as well as my efforts to do so. Indeed, as it turns out, buying local products is about more than the delicious taste of the food in your mouth. It’s about supporting your friends and neighbors in a complex set of relationships that transcends a little grocery store and resonates out into our community at large.
But talking about local vendors also forces a definition of both local and vendor. Traditionally, our definition of “local” has been that the product is produced within 150 miles of the Capitol building in Madison, or anywhere within the state of Wisconsin. For the purposes of this article, a vendor is solely a food provider (although in reality, like food products, we make every effort to purchase supplies, packaging, etc. from local sources as well).
Before getting into any hard data or numbers, however, I must offer a mild disclaimer: all dollar amounts used in this article are either taken directly from financial reports and rounded down for simplicity, or they are conservative estimates, again rounded down.
LOCAL PRODUCTS/LOCAL VENDORS
To begin this exploration, I procured Willy Street Co-op data on just who our local vendors are and how much we spend to buy their products. For the data in this article, I used 36 local vendors who supply us with a significant quantity of product each month. These include some larger notable companies (in regards to the amount of money we pay them each year) such as Nature’s Bakery (breads, veggie/tofu burgers), Tipi Produce (vegetables, especially the famous juice carrot), Black Earth Meats (organic and grass-fed beef, and pork and sausage products), New Century Farm (eggs), RP’s Pasta Company (fresh pastas, sauces, frozen entrees), Willow Creek Farms (pasture-raised Berkshire pork and processed pork and ham products), Harmony Valley Farm (vegetables and fruit—including my favorite, Romanesco broccoli), and Shickert Distributing (mushrooms). Each of these companies receives between $50,000 and $125,000 from us per year in return for the high quality food products that our Owners enjoy. In fact, most of these companies provide us with well over $100,000 worth of product each year, and customer demand often drives us to pay individual vendors as much as $17,000 in one month!
In our medium tier of local companies (again in regards to what we pay them each year), we have some great companies and farms such as: Igl Farms (potatoes), JenEhr Family Farm (broccoli, bulk basil, cauliflower, and Brussels sprouts), Keewaydin Organics (chard, greens, as well as produce distribution for Amish family farms), Kamm’s Farm Bakery (delightful whole grain breads), Troy Community Gardens (herbs, cat grass, and sprouts), Don’s Produce (delicious tomatoes), and Vermont Valley Community Farm (bulk potatoes and garlic). These local vendors receive between $25,000 and $50,000 a year from the Co-op and supply us with between $3,000 and $4,000 worth of product each month.
Finally, we also buy numerous products from local companies that receive less than $25,000 a year from us. Some of these great local producers include: Some Honey (honey obviously), Cedar Crest (ice cream), Future Fruit Farm (apples, pears, etc.), Gotham New York Bagels (bagels), NessAlla (healthy, refreshing kombucha), Sugar River Dairy (yogurts, cheeses), Bagels Forever (bagels), and Nikki’s Cookies (cookies), among others. Recalling Producer Profiles from past issues of the Reader, many smaller local companies have been able to grow into vibrant, successful companies in part due to the support of Co-op customers who demand the best products, and demand that they be produced locally. This network of small producers—and the enthusiastic customers who support them—is facilitated and moderated by the Co-op through its deliberate focus on local products, and is ultimately a win-win situation for everyone involved.
Backing out with our perspective a bit, during each month we spent between $63,000 and $127,000 paying these local companies and farms for the products we sell—adding up to a grand total of $1.08 million for the entire year! (For the data purists out there, these figures include only the 36 vendors described above. The effect of this limitation, of course, is that the totals would be significantly higher if they included all of the hundreds of vendors who sell to us that qualify as local producers.) That’s over a million dollars that stay right here in Wisconsin, within an hour or two of the Co-op. That money helps to pay for those companies’ operations, their salaries, their retirements and their healthcare. It puts food on their family tables, clothes their children and supports the local tax base...all while also providing our customers with access to high quality, nutritious, and more sustainable food than other available options. And, since the farmers and producers are regularly in the store to deliver their goods, I can personally attest that they often shop alongside our other customers. In a very real way, it completes the circle of the local economy.
Remember, though, that that $1.08 million figure is just what we pay these vendors. It is a figure that reflects our baseline cost for the products that we sell to Owners and customers. Before being sold, however, they may need to be processed or prepared, stored, stocked, or otherwise labored upon by our workers. They are also, obviously, sold for more than we bought them for, and that margin covers the above mentioned labor costs while assuring the Co-op a small profit. Unfortunately, due to the diversity represented within our local vendors, it is not feasible to explore the specific margins of the products as they vary considerably and reflect availability, demand, and season. Rest assured, though, that the price paid at the register represents the best possible price to support this overall system. It purchases a high quality product from a local vendor, and supports the costs associated with keeping the Co-op in operation while focusing on local sourcing.
Let’s go a bit further into the numbers. Let’s take the example of Schickert Distributing. The Co-op paid them just under $70,000 last year for mushrooms. According to their online company profile, their company does roughly $180,000 a year in business, so the mushrooms that Co-op customers purchase all year long make up approximately 39% of their business. In addition, their profile indicates that they have three employees. Exactly how they divide up that $70,000 (or the $180,000) is, quite literally, their business, but seeing these numbers as well as how they relate to one another begins to tell an informative story.
The state of Wisconsin (according to the last census) has a median household income of $50,578, and a per capita income of $25,993. Given this additional context, one could make a quick, back-of-the-envelope calculation that the Co-op’s yearly mushroom sales alone come close to supplying the median per capita income for the three Schickert Distributing employees that produce this local product. Of course it is unclear how Schickert Distributing runs their company or what kinds of labor and operational costs are a part of their business, but by following the money, so to speak, we can begin to get a much more holistic picture of how “local” actually works in practice.
Now let’s be honest here. The picture is much more complicated than unveiled here, but beginning to tease apart the economics of buying locally in as simplistic a way as this shows us the relationships between Co-op purchasing and the livelihood of local producers in a way that can often get lost in a grocery store. The truth is, for many of the locally produced products that we carry, the transaction is much more like shopping at the farmers’ market than at a grocery store. It’s just that, in the building, with all the registers and fluorescent lights, and display cases, and the nice neat rows of products...something of the direct 1:1 relationship between producer and consumer is diluted or lost. Hopefully this kind of crude analysis can help to recapture some of that connection and remind us that when we buy mushrooms, chard, crackers, cookies, ice cream, or a juicy steak...and we choose the local option—we’re doing more than receiving a quality product at a fair price—we’re helping support individuals who make it their life’s work to make the food you enjoy while also keeping the system going.
LOCAL CO-OP/LOCAL WORKERS
As I mentioned earlier in the article, quite a bit can go on between the farm and the plate in regards to the preparation of the foods that Co-op customers purchase. At the Co-op, we’re fortunate to have a talented, friendly, and knowledgeable staff that can help bring those local choices the last few yards in the journey towards your enjoyment. And buying local products at your local grocery co-op helps keep money and resources in the community as well. Buying local food isn’t just about the products that make it into the cart; it is also about the system that enables that access. In a perfect world, perhaps, we would all be able to shop directly from the producers themselves in constant and ubiquitous farmers’ markets. Alas, that perfect world is yet to be obtained, so in the meantime, we’ll have to settle for the Co-op as middleperson.
Actually, the Co-op has 169 middlepersons who work hard every day to keep us up and running, and their labor has a significant impact on the local economy as well. In fact, in 2009, $4,171,000 was paid out by the Co-op in the form of salary and benefit renumeration, with the benefits portion of that figure reaching 25%. And talk about local, the majority of the Co-op’s employees walk, bike, or bus to work, so they can’t be coming from too far off! But, healthcare benefits aside, salaries at the Co-op account for something close to $3.4 million, and that’s money that is filtered through the Madison economy in the form of purchases, rents, mortgages, taxes, etc. It probably goes without saying, as well, that most workers at the Co-op do their shopping “in house,” thus (again) completing the cycle.
Again, we can see the very tangible effect of the local system that the Co-op supports, but in this corner of the larger picture we can see behind the superficial to the effects that Co-op salaries have in the local economy. The full story goes something like this: customers purchase delicious, high quality products in support of local producers and farmers. We pay those vendors a significant amount of money each year. In order to support the pipeline between the producers and the customers, the Co-op employs a vibrant and friendly staff at a living wage with significant and competitive benefits, both of which filter back into the community.
In fact, speaking of benefits, of the Co-op’s 169 employees, roughly 125 of them work hours that are equivalent to those of a full time worker and 135 (80%) receive health benefits of some kind. Of those currently signed up for insurance through the Co-op, 25 employees are taking advantage of group, family, or spousal coverage as well—another example of how the system supports strong community values. In addition, the Co-op has also made a very deliberate decision to use a local healthcare provider, GHC, to further our efforts to keep our economic impact local. While it might not be practical for all business to work in this fashion, imagine the economic impact on Madison, and Wisconsin in general, if a majority of businesses were to doggedly pursue local options for all of their purchases.
THE BIG PICTURE
After my interaction with that customer in Produce, I realized that my knowledge of how a local economy works with respect to a place like the Co-op was (and still is) quite unsophisticated. Advanced knowledge and special training, however, are not needed to look slightly below the surface to tease out a few of the relationships that make up the complex local economy and holistic local food environment in which we all participate. Indeed, all it takes are a few numbers, some knowledge of the relationships that exist, and thoughtful reflection and understanding. It is fairly easy to see the financial impact that the Co-op has on the community through the money it pays out to local farmers and producers, to its employees and their families through salaries and benefits, and how these monetary resources are injected into the community only to make it back to the Co-op in one way or another.
What strikes me as important in this analysis and storyline is the impressive effect this focus on local resources, local economics, local outcomes, and local values can have on a community. Tied to that effect is the ability for this kind of system to be implemented intentionally and effectively. In fact, given the simplicity of the concept, as well as its obvious common sense, there is no reason that we should not continue our efforts, expand them where possible, and encourage other businesses to follow suit. Happily, the spread and implementation of a focus on local can be done incrementally, and can easily succeed with the help and support of conscientious and informed citizens like the Co-op’s customers, many of whom own or work in small businesses in the community. Looking beyond the surface into the relationships displayed above—both monetary and otherwise—has certainly changed my outlook, and, speaking for myself, I can definitely say that I won’t look at my piece of local fruit again in the same way. I know that I will make even more efforts to buy the local option with the knowledge that I will be supporting this intentional system of economics, local values, and community at the Co-op, and here in Madison.