Many co-ops start small, with a primary focus on providing goods and services to their member-owners. But that doesn’t mean you have to be a member-owner at all co-ops. Nearly all grocery co-ops, for example, welcome members and non-members alike.
A co-op is a business model that allows a group of people to combine their resources to meet their common needs. Grocery co-ops are one such kind of co-op. They are the true pioneers of the natural and organic food industry and they’re deeply committed to providing delicious, high quality, healthy food; supporting local, sustainable agriculture; and strengthening their communities. Cooperatives, including grocery co-ops, are much more than bricks and mortar stores. Cooperatives are built on the idea that local owners, not far-away investors, gain the benefits of business success. Simply put, cooperation is for everyone.
FREQUENTLY ASKED QUESTIONS
For you: For Co-ops that have made this change, owners are experiencing more savings under the new benefits program (including dividends and owner-only specials) than they did with discounts at the register.
For the Co-op: It’s a more sustainable method of distributing profits. All Co-ops return profits to owners based on how much they use the services. The discount program returned these profits before we made them. The dividend program allows the board to decide how much profit (if one is made) to return after the books are closed. Patronage dividends allow the Co-op to realize significant tax savings. The dollars that we allocate as patronage stay here in the community. The retained portion of patronage dividends builds financial stability.
Co-op owners that have kept their stock current can bring in original stock certificates to be converted into a payment towards the new Co-op stock. Which means those owners will already have a $25 credit applied to the new stock value of $200.
Yes! In fact, please do. We would love to convert all stock- holders over to our new structure.
Your Co-op ownership is valid for the full year you paid for when you renewed, however your owner benefits will be as stated under the new system; meaning, you will no longer receive a 5% discount, but will get all the other owner benefits. On the one-year anniversary you will be asked to upgrade to the new ownership stock price of $200 and will be able to trade in your $25 stock at that time. You can certainly upgrade your stock at any time during the year, as well; your ownership benefits will remain the same.
No, the discount at the register approach has placed a significant financial burden on the Co-op in many ways. As of October 1st, 2017, the Co-op will no longer o er a 5% everyday owner discount at the register. You WILL however receive significant owner benefits that have been structured in a way that reduces the uncontrollable burden on the Co-op, while still giving you many fantastic reasons to continue your ownership as well. Please see the handout titled “What’s In It For Me?” for more details on Co-op ownership benefits.
Not necessarily. Patronage will only be paid out in years when the Co-op is profitable.
No, patronage rebates in the form of store credit and are not subject to taxes. However, if you use the Co-op to make purchases for a business you should consult your tax accountant.
Just about all Co-ops, grocery or otherwise, use this form. In fact, of the 151 grocery Co-ops that are part of our national Co-op organization, we are one of the last to make this change. Nearly all Co-ops in other sectors use them.
The board voted unanimously on August 9th, 2017 to approve this new system.
We reached the decision to set the stock price at $200 after several months of research that included consultation from an accounting firm specializing in cooperatives who looked at our financial picture as well as our growth plans to determine what an individual investment in the Co-op should be. Next we looked at peer co-ops across the country. Grocery co-ops vary vastly in size, ownership base, revenue and owner participation. Next, we took a long look at what in investment in the Co-op means, as well as how meaningful a $25 investment is compared to $200 in the hopes of inspiring a much higher level of owner engagement. The final step was to set our strategic goals for the next five years and examine the kind of capital requirements it would take to start trying to meet the myriad of needs and requests of our owners.
There are so many things that differentiate us from a conventional store. Here are five ways the Co-op is still different from other stores:
- You own the Co-op.
- The Co-op can only be owned by the people who use it. Publicly traded corporations can be owned by anyone.
- The Co-op exists to provide a service, while publicly traded corporations exist to make a profit for their shareholders.
- Our Co-op will return profits based on how much our owners use the service, not how much stock they own.
- Our Co-op is democratically owned by community residents, lending accountability and oversight to store operations.