The Rise of Food Cooperatives and Food Buying Groups; Consumer Power and Sustainable Living

by HollieT

Exploring food cooperatives and food buying groups; defining food cooperatives, how they can create employment and why they may be a desirable alternative to supermarkets.

Food cooperatives and food buying groups are not a new phenomena, in fact, the first recognised food cooperative was established in the 19th century by a group of industrial weavers in Rochdale, England. By the 1970's, however, food cooperatives became much more organised and placed greater emphasis on ethical food production and resisting the ever increasing corporate monopoly over the supply and distribution of food.

Nevertheless, since the 1970's, the numbers of food coops and buying groups have fluctuated enormously. Notably, during periods of economic stagnation and social uncertainty, food buying groups and coops tend to increase, as discussed by Hoyt (1982)

" Consumers’ interest and participation in retail food cooperatives tends to increase in periods of social, political, and economic turmoil. Although their secondary needs may vary considerably, cooperative members consistently want their cooperatives to provide price, quality, and selection advantages. Growth periods also occur when large numbers of consumers experience economic difficulties and develop an interest in ownership and control of their retail food sources when they become concerned for food safety and when they experience a strong desire for an ethical society."

So, what exactly are food cooperatives and how they organised?

Cooperatives are often established by a group of volunteers who provide goods and services to their local community, for the benefit of their local community.

In many respects ideologically driven, cooperatives aim to enhance and improve the social, economic and cultural aspects of life for their members and users.

The overriding principle of food cooperatives, however, is to provide high quality, affordable, locally produced, food to their users.

Food Cooperatives can take many forms; from market stalls and stores to mobile units.
Food Cooperatives can take many forms; from market stalls and stores to mobile units.
Hotblack, Morguefile

Food cooperatives can take the form of not for profit organisations which are manned by volunteers, consumer cooperatives which are owned and run by the people who use the service, or a workers cooperative which is owned and operated by employees.

Not for profit food cooperatives are able to provide affordable food to their users by:

  • Pooling together their resources (money) and buying directly from the supplier, therefore, cutting out the middle man (supermarket) and the additional cost.
  • Smaller operations, who may only have a few members, will pool their orders together and order as one customer. Bulk buying in this way reduces costs significantly.
  • As not for profit food coops do not employ their members and are not accountable to share holders, wages and profits do not figure into the equation.

 

Consumer cooperatives are able to provide affordable food to their users by:

  • Aiming to provide the highest quality goods (food) for the lowest possible price. Unlike the business model adopted by the major supermarkets (to sell goods at the highest price that the consumer is willing to pay in pursuit of high profits for share holders) A consumer cooperative will either; re-invest any accumulated capital into the business to meet the needs of the local community/consumer/owner, or, distribute the capital to consumer/owners as an over payment.

 

Workers cooperatives are able to provide affordable food to their users by:

  • As the mission of a workers cooperative is to maintain or create employment locally, the community as a whole benefits economically. Having said that, the Rochdale principles, also underpin the ethos of workers cooperatives, which means they are ideologically driven to work for the benefit of others in their community.

In addition to providing the users/local community with affordable food, many coops are also committed to finding and supplying ethically sourced food. For example, organic and fair trade products.

Every food cooperative is unique, some operate from market stalls, stores and warehouses, whilst others operate on a mobile basis from the back of a van. Having said that, a good majority of food cooperatives were established from an individual's sitting room, initially they were food buying groups, which later expanded and evolved to become food coops. Even though some food cooperatives are manned by volunteers, they also have the potential to create jobs in the area in which they have been established.

Are supermarkets really that Cheap?

But I can buy cheap food at the supermarket, and supermarkets create jobs for the community, right?

Wrong. According to Corporatewatch, The British Retail Planning Forum (1998) concluded that 276 local jobs are lost every time a new supermarket opens its doors for the first time. That's a worrying statistic, and one wonders how the opening of new a supermarket could have such a negative impact locally. The reasons are varied and diverse, however cumulatively, supermarket practices often lead to economic stagnation in local communities in three distinct ways.

Price wars between supermarkets, particularly when a new supermarket opens, leaves smaller independent retailers unable to compete when the large supermarkets, not only have the advantage of buying power, but are also able to sell goods below cost. This can be devastating for local enterprise, putting some out of business altogether, or ensuring that they have to lay off employees in order to stay afloat.

In the UK alone, the four monopolistic supermarkets control no less than 80% of the food market. And yet, they only deal with a very small number of suppliers. In reality, this means that whenever a new supermarket opens it's doors and starts to compete and take business from smaller retailers, local producers and suppliers (including farmers) are unable to tender for contracts that they once held with the smaller retailer, often resulting in substantial losses and even liquidation.

Many new supermarkets are built on the edge of town and offer free parking for their customers. This initiative alone dramatically reduces footfall in the local towns, affecting all retailers negatively, not just grocery retailers. Thus, leading to the emergence of empty retail units and ghost towns.

 

For each business that fails because it is unable to compete with, or supply to, the large supermarkets, a domino effect is created. The presence of a new large supermarket is felt throughout the supply chain, resulting in further redundancies and/or commercial liquidations. From window cleaners to transport companies, small stationers to local cleaning contractors, the effects are reverberated throughout the local business community.

Moreover, at the time of writing, many local authorities are having to reduce the number of staff due to Government cuts. Empty retail units and loss of revenue from town centre car parks only serve to exacerbate economic decline in the area.

According to the Competition Commission, supermarkets raise their prices to pre-price war levels when they have eliminated all competition, or when strong competition has been eliminated. And that's not all, the Citizens' Organising Foundation also found that supermarkets charge higher prices in poorer areas than they do in more affluent towns. Individuals from lower socio-economic groups are less likely to have transport, which means they are less able to go in search of cheaper foods, hence they become 'captive' shoppers, enabling the large supermarkets to charge as they wish.

What are the advantages of using a food cooperative?

The Economic benefits of using a food coop.

  • Food cooperatives offer high quality, locally produced food at very affordable prices.
  • You will be supporting local businesses by buying their produce directly from them.

The social benefits of using a food coop.

  • Increasing the awareness of the benefits of a healthy diet within the community.
  • Food coops provide a community meeting point for local people, but are also vitally important for those who may otherwise be socially isolated, such as elderly people or single parents
  • Food coops promote cooperation between suppliers, users and other community groups.
  • Food is ethically sourced which means people are not exploited in order to make profits for shareholders.

The Environmental benefits of using a food cooperative.

  • Locally sourced food spends less time in transit, which is better for the environment.
  • When food is bought directly from the supplier, less packaging is used which is also better for the environment.
  • Ethically sourced food places greater emphasis on animal welfare and best practices.

How do food cooperatives create jobs?

Food cooperatives can help to create employment within a variety of sectors, not just within agriculture.

Sustainable food organisations have a significant impact on local economies. When money from a community food chain circulates throughout the local economy, a number of sustainable jobs are created throughout a variety of sectors, such as tool manufacture, composting, food production, catering, retail and food processing to name but a few.

In fact, a study by the New Economics Foundation found that for every £1 spent on an organic box scheme, £2.40 was channeled back into the local economy, compared to just £1.20 when £1 was spent at the local supermarket. Furthermore, as farmers and suppliers are able to take a greater share of revenue compared to the amount received when dealing with supermarkets, manual workers such as farm labourers also see a rise in their earnings.

Moreover, farms which are involved in the local food sector create more employment than those who are involved in the conventional agriculture sector. Just like the opening of a new supermarket can create a ripple amongst local enterprise, so can food cooperatives, only in the case of the latter the ripple is beneficial for everyone.

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Acknowledgements.

Every Little Hurts: Why Tesco needs to be tamed. Friends of the Earth. (2004)

Sweatshop Salads. Felicity Lawrence (The Ecologist)

Supermarkets, a report on the supply of groceries from multiple stores in the united Kingdom, Volume 1. The Competition Commission (2000)

Supermarket sweep- how retail giants are creaming off high street profits'. The Guardian (2004)

Captive state. George Mombiot (2000)

Ghost Town Britain 11, Death on the High Street. New Economics Foundation. (2003)

Wikipedia.org

Corporatewatch.org

University of Wisconsin Center for Cooperatives, research on the economics of cooperatives.

Updated: on 01/28/2013, HollieT
 
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HollieT on 05/24/2013

Thank you, Mike.

I agree and I can see food cooperatives growing rapidly in the future.

Thanks for commenting.

MikeRobbers on 05/24/2013

Food cooperatives is such an interesting concept. Apart from products being fresh or cost reducing it is also important since you can control the quality of the products you consume making sure they are chemical free and so on. Great page that brings into our attention this significant issue.

HollieT on 02/02/2013

Hi Poutine,

I think people long for the days when we could buy fruit and vegetables that really were fresh and hadn't been transported for hundreds of miles before they reached us. I think, amongst other things, that that's why food coops are increasing in many areas. Fresh food grown locally seems to be what people really want. Thanks for stopping by. :)

poutine on 02/01/2013

My dad used to have a huge garden and people loved to buy his vegetables because they knew they were the freshest they could be.

HollieT on 12/03/2012

Hi Mira,

That's really encouraging, and it's obviously better for local food producers when it's their products which are being promoted, providing of course the supermarkets pay a fair price for the food. Also better for consumers, the food is fresher and hasn't spent days on end in transit.

Mira on 12/03/2012

Here in Romania something akin to food coops are both regulated and encouraged by the state. There are smaller and larger farmers' markets everywhere. Even some supermarkets buy from local producers. I see this trend and it's encouraging. It's rather new. I mean, there have always been farmers' markets but supermarkets started promoting Romanian produce and dairy products only recently. And as far as dairy products go, there's great variety too!

HollieT on 10/27/2012

Thanks, Arlene!

I think farmers markets are excellent, there's four different markets on consecutive Sundays in the areas surrounding where I live (although not in my town, unfortunately) I'd definitely check out the food coops if I were you, Arlene. You'll find more varied products, not just the major brands like you find in supermarkets, and you'll be supporting local enterprise.

Guest on 10/27/2012

So much to think about, and many good points made here, Hollie. My sister-in-law works for a big supermarket chain here in the U.S., and I have slowly been learning a few secrets about supermarkets. You have given me some inspiration to check out the nearest food cooperative here in Sacramento. As a farm girl, I've been checking out the farmers markets for years. Congratulations on your EC!

HollieT on 10/25/2012

Hi Katie,

I also love the community minded approach and the concept of helping each other at a local level. Just the fact that there are so many volunteers who sacrifice their spare time for the benefit of their neighbours says quite a lot about the ethos behind food coops.

HollieT on 10/25/2012

Hi Dustytoes,

I agree that people who are struggling financially have fewer options, and they are also the people who later become captive shoppers, paying even more for groceries than people who are better off. I was also reading that there has been a number of food coops which have been established on council estates and in more deprived areas, apparently, and due to their success, they are growing in number and starting to take increasing amounts of business from the supermarkets. Quite encouraging!




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