Big Times for B.C. Food Co-ops

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Marty Frost, FWC Development Cooperative | BCBusiness
Image by: Peter Holst
Marty Frost, director of FWC Development Cooperative, at Vancouver's East End Co-op on Commercial Drive.

Co-op grocery stores,
long a staple of backroads B.C.
communities, are finding new life in the eat-local movement, just in time for the International Year of Cooperatives.

A produce section piled high with vibrant greens, yellows and reds greets shoppers stepping through the automatic sliding doors of the Kootenay Co-op Country Store in Nelson, B.C. Local organic apples are prominently displayed across the aisle from a mound of imported fair-trade organic bananas. Automated misters gently spray neatly stacked piles of local organic lettuce, chard, collards and other greens. Walking through the produce and past the deli counter leads to a wall of coolers stocked with dairy and other perishables and shelves full of bread and baked goods supplied by a half-dozen or so local bakeries. A quick left leads to stand-up freezers with meat, frozen berries and organic ice-cream. The rest of the store contains all of the essentials, from snack foods and shampoos to coffee, peanut butter and nutritional supplements. A visitor from Vancouver might think that they’ve stumbled upon the small-town cousin of the Whole Foods chain of upscale, urban natural-food stores.


But the big difference between the Kootenay Co-op and its big-city counterparts is that it is a co-operative, owned collectively by its member-customers. “We are independent,” says general manager Deirdrie Lang proudly. ”We don’t report to a head office. We are our own.” 


Co-ops would seem to be an anachronism today. Born when workers banded together in 19th-century England, brought to B.C. by fishers, farmers and loggers seeking to pool resources and revived by ’70s hippies, what place could co-ops possibly have in today’s world of multinational retailers and global finance? Well, anyone who travels the back roads of B.C. can’t help but notice that co-ops are alive and well in this province, offering vibrant examples of the model touted by the United Nations as one answer to poverty and unemployment in this, the International Year of Cooperatives.


What makes a co-op?

Collective independence is what makes co-ops unique. “The ownership of the co-op is everything,” says Marty Frost, who has advised startups as well as established co-ops in his role as director of FWC Development Cooperative (DevCo). Co-ops come in a variety of shapes and sizes and management styles, he says, pointing to the examples of the East End Food Co-op on Vancouver’s Commercial Drive and the Otter Co-op in Aldergrove. “If you look at the way the East End [Food Co-op] is managed and run and directed by the board of directors and then you look at some place that would be equally successful, Otter Co-op for example, you wouldn’t think they are in the same world,” he says. 



Image: Bobbi Barbarich
The Kootenay Co-op Country Store in Nelson, B.C.

 

Co-ops are always formed to meet the common needs of the members rather than to maximize shareholder profits. They have a policy of one vote per member, as opposed to one vote per share, ensuring that all members have an equal say in the business. Profits are shared among members, with allotments based not on how many shares are owned, but on how much the member uses the co-op. In the case of grocery co-ops, profit-sharing generally comes in the form of patronage returns: typically a certain percentage of yearly profits is divided among members based on how much that member bought throughout the year. The form this benefit takes differs from store to store: sometimes it will be a discount at checkout for members, and sometimes members will receive a cheque after the year-end financial statements are complete. The remaining profits are kept within the co-op to either grow the organization or maintain the current infrastructure. 


B.C. has 29 food stores incorporated as co-ops, the third-largest total among Canadian provinces behind Quebec (116) and Ontario (36). Of those 29 stores, 18 responded to the federal government’s Rural and Co-Operatives Secretariat annual voluntary survey, and in 2008 (the most recent year for which statistics are available), those 18 stores recorded 51,342 members, 461 employees, more than $42 million in assets and $96 million in sales.


In order to compete with conventional businesses some B.C. co-ops have chosen to join the largest non-financial co-operative in Canada, Federated Co-operatives Ltd. (FCL). Travellers throughout B.C. will recognize the red and white FCL logo that adorns many co-op stores throughout the province. Founded in 1955 and headquartered in Saskatoon, FCL is a ­second-tier co-op whose membership is made up of other co-ops. FCL brought in over $7 billion in revenue in 2010 supplying its 265 member co-ops with wholesale goods and services. Like many of its member co-ops, food is a significant part FCL’s business, with distribution warehouses across Western Canada. But only 24 per cent of its revenue came from food in 2010, while nearly 65 per cent came from petroleum products. 



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