Why did food co-ops go out of business? There are several possible reasons, according to Stuart Reid, founder of the national Food Co-op Initiative. In the 1930s, when job opportunities were scarce and prices were rising, food co-ops sprang up in northern states. The population in Finland had a tradition of cooperating with other people. As such, they quickly embraced the co-op model and encouraged others to do the same.
Problems with management
While the founding ethos of a food co-op was to be democratic, the era of the 1980s brought a new type of controversy. The focus was on organic and natural foods rather than capitalist products. Members voted on store policies and boycotted nonunion-picked lettuce. Members found the process to be too time-consuming, and co-ops rarely made money. In the 1970s, as supermarket competitors began selling organic and natural food, co-ops’ customers turned away. Moreover, co-op meetings became so grueling that many members simply turned away.
The concept of food co-ops has received a great deal of attention in recent years, particularly among academics and activists. The idea is to involve people in shaping the food system, while also balancing social equity with commercial success and environmental sustainability. This vision has inspired a diverse set of social movement organizations, and many small food co-ops have risen to meet the challenge. But there is a long road ahead for them.
The most significant obstacle to co-ops’ expansion is an insatiable thirst for growth. The lack of stable management, constant turnover, and lack of focus are all signs of trouble. Despite the positive impact that co-ops have had on communities, they have continued to struggle. The lack of a stable leader and the failure of management is a leading contributor to financial instability. It is important for food co-ops to be representative of the community where they are located, as well as an anchor for vendors.
Lack of competition from conventional grocers
Although the food co-ops may have started out small, today, they are now a global force, with nearly 14,000 stores in 50 countries. But with the growing popularity of natural and organic foods, they are finding it increasingly difficult to compete against the big grocery chains. And some co-ops are taking proactive steps to distinguish themselves from the big guys. In fact, the nation’s largest natural food retail cooperative, PCC Community Markets, has been introducing new private label lines and value-priced Field Day lines. Other co-ops are launching innovative new services, such as a produce butcher and private label meal kits.
According to Stewart A. Kohl, executive vice president of the Cooperative League, there are now over 5,000 food co-ops in the United States. The co-ops range in size from tiny buying clubs to large conventional grocery stores. In Berkeley, for example, the co-op now has two full-time employees and is planning to open a third conventional grocery store. The decline of conventional grocers has led to a change in the nature of food distribution and the development of cooperative retailing.
In spite of the increased competition, co-ops remain committed to their communities and customers. Despite their higher prices, they are able to attract socially conscious shoppers who might otherwise not have shopped at a conventional grocery store. A socially conscious consumer’s satisfaction acts as a “hidden discount” for them. But in order to stay competitive in the long run, the profits of the co-op have to outweigh the cost of the loss of business.
Lack of access to organic and local foods
As a social movement, the food co-ops and natural/organic foods converged in the 1970s. In the 1970s, common wisdom held that the corporate food establishment could not assimilate natural and organic foods. But as time passed and the consumer’s awareness evolved, both types of markets failed to reach their full potential. While the food co-ops are an innovative approach to local and organic food distribution, their future in the face of corporate-controlled food supply chains remains largely unknown.
Although many early food co-ops failed, a few survived and eventually became profitable businesses. Some became closer to consumer co-ops, while others remained worker-owned and relied on volunteer work. A large number of these businesses have remained open for decades, though the majority are consumer-owned. Lack of access to organic and local foods is one of the most significant reasons they failed.
Despite the economic impact of the recession, the food co-ops’ continued existence is a laudable example of a model for community-owned grocery stores. In the 1990s, organic and local foods gained in popularity, resulting in increased demand and a surge in cooperative-owned grocery stores. By contrast, the number of conventional grocery stores decreased, while the total volume of sales remained steady.