What Is a Food or Grocery Co-op?
A co-op 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.” Though the structure and activities of specific co-ops may vary, most co-ops’ activities are governed by these guiding principles.
- Open Membership. Co-op membership is open to “all persons able to use [co-op] services and willing to accept the responsibilities of membership.” Restrictions on the basis of religion, race, gender, or association with any other protected class are prohibited. One important exception: A co-op may restrict membership to residents of its home state. For example, the co-op I belong to only accepts Minnesota residents as members, though anyone may shop there.
- Member Ownership. Each member has an ownership stake, known as a share, in the co-op. Members typically need to buy their shares, though some co-ops may offer free shares to employees. Some co-ops only allow members to buy a single share, while others allow members to buy unlimited shares. Some co-ops offer financial benefits for owners, such as shopping discounts and patronage refunds (monthly or annual checks refunding a portion of your purchases during the period). Some may even offer dividends based on the number of shares owned, though this isn’t common among food cooperatives. And since state and federal laws prohibit co-ops from offering an annual return on investment of more than 8%, you shouldn’t expect your co-op membership to make you rich.
- Tax Considerations. According to the Small Business Administration, U.S.-based cooperatives are designated as pass-through organizations and aren’t subject to federal business taxes. However, members are liable for personal taxes on any profits or surpluses returned to them by the cooperative and not reinvested in the business.
- Member Control. A co-op share comes with the right to vote for the organization’s leaders, board members, and strategic initiatives undertaken by the leaders or the board. Every member has equal voting rights, even if their co-op allows individual members to purchase more than one share. This is known as “one member, one vote.” Any member can run for a seat on the co-op’s board. Co-op boards may also organize committees and subcommittees, staffed with volunteer members, to govern specific aspects of the co-op’s operations or advise on strategic initiatives. However, hired staff – a general manager, department managers, and hourly staffers – typically oversee grocery cooperatives’ day-to-day operations.
- Commitment to Education, Enrichment, and Community Development. Many co-ops devote significant time and resources to educational programming and community development and outreach initiatives. For instance, our co-op has weekly cooking classes where members can share their favorite recipes and techniques with others. It also sponsors dozens of local CSAs, nonprofit organizations (clinics, food banks, and shelters), neighborhood development corporations, and recurring events (such as National Night Out).
- Focus on Local, High-Quality Food and Products. Though every grocery cooperative is different, co-op members and boards generally seek out local, organic, high-quality foods and dry goods that may be available in limited quantities, or not at all, at traditional supermarkets. They may also establish close relationships with local producers that may not meet the rigorous sourcing standards of Whole Foods and other grocery chains specializing in healthy, high-quality foods.
Benefits of Shopping at a Co-op
You don’t have to be a member to shop at your local grocery cooperative, though members do typically enjoy additional benefits not available to occasional shoppers. Whether you regularly visit or just pop in occasionally for something you forgot (or can’t find) at the supermarket, the advantages of co-op shopping are numerous:
1. Access to Healthy, Fresh Produce
Though every co-op’s selection is different, grocery cooperatives typically have ample produce sections that focus on seasonal, high-quality ingredients. Co-op buyers work with suppliers that can consistently deliver fresh items. And because co-op patrons tend to value fresh produce over packaged or frozen varieties, co-ops’ produce sections enjoy high rates of turnover, keeping product fresh and crisp.
By contrast, budget supermarkets with huge produce sections, lower quality control standards, and less turnover are more likely to keep wilted lettuce, browning apples, and soft carrots on display.
2. Supporting Local, Small-Scale Agriculture
Though most co-ops work with national organic food distributors, they also forge relationships with local, small-scale producers to a greater extent than supermarkets or discount grocery stores. When you buy locally grown or produced items at your co-op, you’re supporting your area’s farmers and agricultural businesses. This is true regardless of the season – for example, on midwinter trips to our co-op, my wife and I are always delighted to run into a guy handing out samples of the delicious maple syrup he produces just outside the city.
3. Being Socially Responsible
While not perfect, co-ops value social responsibility more than larger supermarkets, which are often part of big chains driven mostly by the profit motive. In the context of co-op shopping, social responsibility can take many forms. For instance, co-ops tend to stock lots of fair trade products, such as coffee and chocolate. To earn the fair trade designation, buyers must pay fair prices to growers and suppliers, often in developing countries. In turn, these producers must adhere to high standards of worker treatment and pay fair wages.
By contrast, large-scale producers that supply big supermarket chains – including some who qualify for organic certification – may routinely mistreat their workers (such as workers in Mexico, reported by the LA Times), housing them in overcrowded, company-owned shacks and withholding pay until the end of the harvest season, effectively prohibiting them from seeking other employment.
4. Reducing Your Shopping Habits’ Environmental Footprint
Buying local farm products at your co-op isn’t just good for the agricultural economy in your area – it’s also good for the environment. Locally grown and sold food, which the USDA defines as farm products grown and sold within a 400-mile radius, requires less energy for shipping and storage over its life-cycle. The co-op I shop at defines “local” as coming from within a 250-mile radius, and works with producers that fit the bill wherever possible. By contrast, much of the produce available in the nearby budget supermarket, regardless of season, comes from places like Texas, Arizona, California, and Mexico – anywhere from 1,000 to more than 2,000 miles away.
Benefits of Co-op Membership
If you decide to take your co-op engagement to the next level and purchase a membership share, you can expect to enjoy all the benefits of co-op shopping, plus these membership benefits:
1. Being Part of a Like-Minded Community
When you buy a membership share in a grocery cooperative, you immediately become part of a like-minded group that cares about sustainable agriculture and supporting local food systems, as well as a business philosophy that values more than the bottom line. Co-ops are part of an economic network that prioritizes the fair treatment of workers at every step of the supply chain, from laborers who toil in the fields, to line workers who wash and process the harvest, to the truck drivers who deliver food throughout the country, to the employees you see at the co-op.
2. Shopping Discounts, Deals, and Patronage Refunds
Many grocery cooperatives reward members with such financial perks as shopping discounts (for instance, 2% off each shopping visit or 5% off one visit per month), members-only deals on individual items, and monthly or annual patronage refunds proportionate to the amount you spent during the covered period. Depending on how much you shop at your co-op, these benefits could soon offset the cost of your membership share.
3. Potential Access to a Larger Co-op Network
Many co-ops are part of larger co-op networks that offer perks, such as discounts at checkout and discounts on class fees, for members at all participating organizations. For instance, ours is part of a network that includes a half-dozen other grocery cooperatives in our city. If we’re cooking at our friends’ place across town, it’s nice to be able to pop into their local co-op for last-minute ingredients and save a few bucks in the process.
4. Influence Over the Co-Op’s Activities and Strategic Direction
As a co-op member, you’re free to run for a spot on the board or join a subcommittee that interests you. In these roles, you can help forge partnerships with community groups, find new products to sell at the co-op, and launch new classes or programs for members. If you don’t want to be an active participant, you can still exercise your voting rights to elevate people you respect – often your neighbors – to positions of power within the organization.
As a supermarket shopper, you certainly don’t have this type of influence. Even as a retail shareholder in a publicly traded supermarket company, your ability to influence the company’s direction is likely to be almost nil due to the “one share, one vote” rule of for-profit corporate governance.
5. Opportunities to Share and Absorb Knowledge
Most grocery cooperatives offer relevant educational programming, such as cooking and craft classes (for instance, our co-op recently sponsored a course on making your own essential oils), seminars on aspects of food production and distribution, and educational film nights. Depending on the co-op, these events may be free or come with a nominal fee, which is typically discounted or waived for co-op members. They’re generally led by co-op members, providing a platform for those with knowledge and skills to share.