From the Winter 2005: Volume 5, No. 1 issue.
When it comes to food co-ops, you could never say one size fits all. Consider the two small food co-op retails in this issue’s case study. One co-op is in a rural community of people where some pride themselves as living “off the grid,” and another is rooted in a mainstream “wired” exurb of a major metropolitan area. Both co-ops are a stone’s throw from a WalMart. How these two co-ops survive and thrive in their different areas, and how they define success in a David and Goliath economy, is a study in how food co-ops impact their respective communities.
Viroqua Food Co-op in Viroqua, Wisc. shows all the earmarks of an intense synergy with its community. Viroqua’s a town of 4,300 people. The beauty and fertility of the land, coupled with its decent proximity to the cities of Madison and LaCrosse, has drawn former city dwellers in search of a more tranquil lifestyle. These newcomers are used to shopping at co-ops and “shop us heavy,” said Jan Rasikas, general manager.
For quite awhile the co-op has been bursting at the seams, and the co-op is currently building a new store located on the main street through town, to open in June this year. Despite spending nine years practically hidden in a back alley behind a hardware store, Viroqua Food Co-op has played an enormous role in bringing the benefits of a natural food co-op to the whole county and beyond.
According to Rasikas, it was when WalMart came to town that Viroqua’s downtown community galvanized and became the type of economy that welcomes and supports all comers—from massage therapists to farmers. The co-op’s leaders worked with other downtown businesses to develop plans to keep the downtown vital. By using the Expansions and Relocations Toolbox written by Bill Gessner “as a Bible” Rasikas said the co-op’s board and management was able to follow its advice to position itself well for an expansion.
Yet Rasikas knows that there are still a lot of people who have not been to the co-op. Currently 82 percent of sales are with members. “If you’re looking for natural foods, you already know about us.” A recent market study confirmed that they could expand and expect sales to double in the first year. Rasikas is convinced that all the good relationships the co-op’s developed within Viroqua’s community will help make that possible.
MOMS Food Co-op in Cambridge, Minn. is “not bursting at the seams” according to General Manager Gayle Cupit, “but our location has become unsuitable and we need more room.” Cambridge is an hour from the Twin Cities metro area and is rapidly becoming suburbanized. Half of Cambridge’s population of 6,000 commute to jobs and shop in the city. The co-op’s shoppers are discerning and sophisticated and often compare the co-op’s product line to that available at other natural food stores and local big box retailers, like WalMart.
Good management has been key to the co-op’s success in a brutally competitive market. The co-op’s stable management and staff has enabled the co-op to grow sales at 10-19% annually for the last six years.
“ Residents have been very glad to have a co-op,” said Cupit, and like Viroqua Food
Co-op, customers familiar with co-op shopping comprise the bulk of regular patrons. “But people are really wowed by low cost convenience formats,” she said. Unlike Viroqua’s Main Street development approach, Cambridge’s current focus on big business has caused small local businesses to suffer. MOMS’ management has been active in working with other local businesses in Cambridge to point out the benefits of independent business among community leaders. WalMart certainly isn’t educating the consumer through hands-on service and cooking classes.
Ironically, it is their proximity to these retail behemoths that has been good for the co-op, bringing traffic and visibility. But now that area is experiencing another wave of development, a road expansion will eliminate those benefits. The co-op has a lot to consider in its next phase of development: location and identity being top concerns. They are working with Pete Davis of CDS on a market study, and are considering a name change. (MOMS stands for “Minnesota Organic Merchandise Store” but people often think the co-op is a daycare.) These potential changes will enable them to effectively find their proper niche in a rapidly changing community.