A Co-op Update

[Greg Fisk]

Hi All,

Time for an update on the co-oerative front. As you are all aware there has been no announcement of a commercial operator agreeing to take over the Foodland space. There has been interest, however. From a meeting with the owner and subsequently with the broker, John Williams, we know that an apparently quite capable investor from the Pacific Northwest was in Junea a couple of weeks ago to look at the store. All we know about this investor is that he is connected wit a major distributor, runs a number od stores himself, and also does general real estate investment. The fact that no announcement has been made yet is not significant, as these things certainly take time. At the same time, the fate of the downtown store is by no means certain. The fact is, we just don't know for sure what is happening. In this climate, it is definitely worth our while to push forward with the co-op option. So, what's happening with that?

Courtesy of Andrew Crow's Cooperative Development Program at the University, Evelyn Rousso and I recently had a chance to visit some co-ops in the Seattle area and then attend the Consumer Cooperative Management Association annual conference in Philadelphia. On June 13th we visited three co-ops...the newly opened Tacoma Co-op, Central Co-op on Madison St. in the "Pill Hill" area, and SnoIsle Co-op in Everett. Quite interesting. Tacoma is a smallish store opened last year, and already profitable. They have a very dynamic, dedicated and intelligent manager who was very forthcoming with us. Too me,an excellent example of the importance of good management. Henri Parren opened the store on a shoestring budget last August and has done a great job. My guess is that they will be "bursting and the Seams" in their present location - a former, small corner grocery - sooner rather than later. SnoIsle in Everett is more what many people associate with a co-op store. It was, well, nostalgic in look and feel, whereas the similar-sized Tacoma Co-op has a much more upscale modern feel. Central C-op in Seattle was really impressive. First and foremost a very, very nice grocery store...definitely a place wherew youd like to shop. Also, it was more "full service" than the others, with small, but very nice meat and seafood counters to complement great produce, general grocery, bulk foods and a very good wine selection. Business-wise they are doing very well. They are competing in a tough neighborhood that includes a Trader Joe's two blocks away, and coventional grocery stores and a Whole Foods nearby. They are more than holding their own, with turnover of close to $1,500 per retail sf / yr (generally accepted breakeven is about $500) and could clearly benefit from more space to handle the shopper load.

The day after the Seattle tour Evelyn and I flew to Philadelphia for the CCMA convention. It was a great learning and networking opportnunity. We divided up the various workshops over two days to get the most learning opportunity. This is a long  established annual conference, and there were many, many return attendees. There was a lot of discussion about co-op governance. The preach the concept of Policy Governance, developed by John Carver ( http://www.cooperativegrocer.coop/articles/2004-01-09/using-policy-governance-improve-board-leadership ). Policy Governance calls for outward looking boards, as opposed to an internal focs...in essence, keeping hands off day to day management issues.

We had an opportunity to meet the Fairbanks Co-operative group and get their take on things. They have made extensive use of co-op resources, most notably Cooperative Development Services ( http://www.cdsus.coop/ ). CDS did  a feasibility and marketing analysis for them, and has provided store design services. I expect we will follow their example.

The inspiring thing that I took away from the conference was that the co-operative model is really the best model for us in Juneau. Not only can we develop a top-flight grocery store, we can do it with local ownership. That's a double bottom line that really works.

So, where from here? The plan is to go ahead and incorporate a Juneau Food Cooperative. We will then be looking for a group of Founding Members to generate the funding neded to get a professional market & feasibility study done through CDS. We expect that to require arond $10,000. But, having that done is an essential step to a full membership drive and to being able to talk with bankers and deal with other entities on a true business-like basis. So, look for an announcement of a Founding Member drive soon. A small steering group is working on the details of that now. We are also working on a development timelime, and wil report that out to you soon.

Regards,

Greg Fisk