Food Co-ops: Grocery Shopping in Community

What Is a Food Co-op?

Food co-ops are non-profit, democratic, and member-owned businesses that provide low-cost organic or natural foods to members and, in some cases, non-members.

Since food co-ops are established and operated by members, each member has a voice regarding what types of foods will be sold, maintenance issues, and management of the stores. Food co-ops are democratically run, so each member has one vote in any type of election. Members generally elect a board of directors to oversee the everyday running of the co-op and to hire staff.

What Are the Different Types of Food Co-ops?

Typically, there are two types of food co-ops: the co-op grocery store and the buying club. Each is owned and run by members but they do vary in their structure and number of members.

Co-op Grocery Store

Co-op grocery stores are basically regular grocery stores that are member-owned and -operated and provide low cost, healthy foods to members and often to the public as well. There are around 500 co-op grocery stores in the United States alone.

Buying Club

A buying club consists of a small group of people (friends, neighbors, families, or colleagues) who get together and buy food in bulk from a co-op distributor (a co-op warehouse or natural foods distributor) or from local farms. By ordering in bulk, the members are able to save money on grocery items. The members of the buying club share the responsibilities of collecting money from the other members, placing orders with the distributor, picking up the orders from the drop-off site, and distributing the food to the individual members or families.

How Do You Become a Food Co-op Member?

In order to become a member of a food co-op, you must pay a small initial fee and then typically invest a certain amount of money into the co-op to purchase a share. Sometimes members can accumulate more shares (by paying an annual fee, for example). Members can also help run the co-op by volunteering their time. Members reap the benefits of their membership by having access to discounted prices on food products. However, if you decide not to become a member, some food co-ops still allow non-members to shop at their stores without the membership discount.

How Do You Become a Buying Club Member?

If you are looking to join a buying club in your area, it is best to contact your regional co-op distributor and ask them for information on local buying clubs. Check out the Web sites of local distributors to see if they have links to buying clubs near you. Or ask friends and neighbors if they’re aware of any buying clubs that are active in your area.

How Do You Start Your Own Food Co-op?

Here are some steps to follow in order to establish your own food co-op:

1. Invite potential members to meet and discuss the start-up of a food co-op. Identify how a food co-op may help the finances of the members.
2. Hold a meeting in which potential members vote to continue the process of forming a co-op and then select a committee for this purpose.
3. Determine how often the co-op will be used by the potential members.
4. Discuss the results of any surveys at another meeting and then vote to see if the plans should proceed.
5. Do a needs analysis (determine what the members will need in order to establish a food co-op).
6. Hold a meeting to discuss the outcome of the needs analysis and vote (anonymously) on whether or not to proceed with the co-op.
7. Develop a business plan for the co-op and decide the financial contribution needed to start the co-op.
8. At another meeting, have members vote on the business plan and if members want to continue, decide on whether or not to keep the committee members.
9. Prepare all legal documents and incorporate.
10. Hold a meeting for all potential members to review and accept the bylaws (terms of operation, responsibilities of members and board of directors). Hold an election for the board of directors.
11. At the first board of directors meeting, elect officers and assign them certain responsibilities in carrying out the business plan.
12. Hold a membership drive—try to recruit new members to the food co-op.
13. Pool monetary resources and create a loan application package.
14. Employ a manager for the co-op store.
15. Find a building or storefront to house the co-op.
16. Start your business!

Examples of bylaws for a food co-op:

• Establish membership requirements.
• Formulate the rights and responsibilities of all members and the board of directors.
• Stipulate the grounds for member expulsion.
• Establish rules for calling and implementing membership meetings.
• Establish how members will vote.
• Provide election procedures for board members and officers.
• Specify the number of board members and officers and how long their terms in office will be and what sort of compensation they will be awarded.
• Establish what time and where meetings will be held.
• Specify the co-op’s fiscal year dates.
• Provide information on the distribution of net earnings.
• Include any other rules of management for the co-op.

How Do You Start Your Own Buying Club?

To start your own buying club, you will need to collect a group of people (preferably more than five households). If no one in your new group has any experience with organizing a buying club, it may be beneficial for you to temporarily join a buying club to see how it works. Once you are confident in your understanding of a buying club, it’s time to begin!

1. Find a co-op distributor’s (wholesaler’s) pricing guide to share with the others in your buying club, so you all have an understanding of the products available and the savings from which you’ll benefit. If you’ll be buying from local farms, discuss pricing and bulk discounts with the farmers.
2. Have a meeting and invite all those who are interested in joining your buying club. Emphasize that a buying club requires its members to share in all responsibilities—from placing orders to picking up deliveries to collecting the money—and that they will all reap the benefits of obtaining great organic and natural foods at wholesale prices.
3. Establish an organizational committee. Discuss areas such as coordination, price guide distribution, orderings, potential delivery location, what supplies will be needed, bookkeeping, and how to orient new members.
4. Draw up any membership requirements you think necessary.
5. Brainstorm possible delivery sites, such as churches, firehouses, or other public buildings. Your optimal site should be able to accommodate a large truck and have long hours of operation. Make sure you will have enough space at the site to go through the products and distribute them accordingly.
6. Develop a name for your buying club and fill out a membership application with the co-op distributor of your choice. You should receive some sort of confirmation, complete with order deadlines, date of delivery, and a simple orientation to the buying club.
7. Start enjoying your healthy foods for lower prices!