By Gabrielle Costley
On May 25th, the Food and Health Network hosted the first part of its four-part webinar series on rural food retail. The webinar, called “A Fresh Outlook for Rural Food Retail,” aims to keep rural retail alive by offering the input of speakers and representatives who work in the field of food retail. The first part was focused on retail business transitions and cooperative ownership. This article aims to reflect and provide a brief overview of what was learned from the webinar and highlight key points made by its speakers.
Four speakers presented, Stuart Reid, Danielle Delaine, Amy Wyant, and Dan Sullivan.
Stuart Reid , Executive Director, Food Co-Op Initiative
Stuart Reid is the Food Co-op Initiative executive director and spoke on what the FCI offers and the benefits of starting a food co-op. To start, Reid went over several types of grocery ownership models: corporate giants, independent chains, local retailers, community-owned stores, and cooperatives. Outside of corporate giants, the other ownership models have far more to offer regarding the community’s needs and the capital recycled within the community. In addition, cooperatives offer benefits by providing a long-term commitment that big box stores cannot fulfill and supporting farmers and businesses. Cooperatives also commit to education and are community-owned and controlled.
When starting a cooperative, there are some challenges to be aware of outside of the benefits. The cooperative way of business is far different from private ownership in accountability, structure, and transparency to the community it serves. Roadblocks also occur with a lack of guidance and education on what to expect from the conversion process. Relevantly those looking to make operational transitions should be fully aware that they will need extensive planning for their transition to go smoothly. Finally, cooperatives are not eligible for NCG membership, providing lower goods and operational support costs.
To answer further questions on how to tackle these issues and educate those on how to get started, the Food Co-Op Initiative offers a comprehensive resource library on its website. The FCI also offers training events, technical assistance, and collaboration, and professional development. Finally, they also have opportunities for networking, mentoring, and sharing. The organization is an excellent place for those trying to start a food co-op and advice on improving the success and sustainability of newer food co-ops.
Danielle Delaine, Business Transition Program Coordinator, ANCA
Next in the line of speakers was Danielle Delaine. Danielle works as the Business Transition Program Coordinator for Adirondack North Country Association. ANCA focuses on increasing the demand for local products and renewable resources and helps expand the capacity of the region’s producers. ANCA staff has done what it can over the past year to interview economic development organizations throughout the area to find solutions to the “Silver Tsunami” expected to occur in the next few years. This event refers to the mass retirement of baby boomers, many of which are small business owners. Across the nation, baby boomers own over half of all privately owned businesses. If they are to retire, a transition needs to be in place to keep many important local businesses alive. Unfortunately, studies show only 15% of businesses successfully transition to the next generation. With no transition plan in place and owners retiring, the default option becomes liquidation and closure. Chances of this occurring increase with smaller and more rural businesses.
While this is a national issue, it needs a regional and combative approach. ANCA has tackled this by providing matchmaking services with potential buyers, access to planning tools, and connection with existing services. These options are available for not only retiring business owners but entrepreneurs as well. Overall, these two groups of people are provided answers on how to transition a business to a different owner. While ANCA does not offer business evaluations or build business plans but it does help people make a team and provide resources and templates before individuals meet with other professionals. The center has even published a guidebook for transitioning business owners. Workshops are also available online from the Adirondack North Country Center for Businesses in Transition (CBIT). They have presentations on various topics to answer questions for those looking to transition business ownership.
Amy Wyant and Dan Sullivan, Richfield Springs Community Food Cooperative
The final joint speakers were Amy Wyant and Dan Sullivan, co-founders of the Richfield Springs Community Food Cooperative. They spoke on what it took to build the cooperative in the small community of Richfield Springs and how they have sustained their business. At this point, they now have over 70 vendors, and everything they sell within the co-op can be defined as local. Sullivan noted that sustainability is a challenge for businesses like this, and covid has created significant roadblocks. Grants and loans are vital and come in and help when the Cooperative comes short. Through micro-enterprise funding from Otsego County, the industrial development agency, the community foundation of Otsego County, and its members, the cooperative has been able to stay open. The community also has a great attachment to the organization and has worked to help support it. Once they meet their three-year mark in staying open, the cooperative expects to meet greater profitability and consistent sustainability. If they could start building their cooperative, they stated that they would have organized a succession plan for board members to avoid burnout. They also offered the advice that they would understand the timeframe to build their business more and take more time to get everything sorted at the start. An essential part of their business model and why they don’t meet their mark every month is turning 80% of the money back to the vendors and back to the community. Sullivan stated that it is a short-term issue that they don’t charge a higher commission, but in the long term, it will be viable as they continue to grow and meet their expenses. The Richfield Springs Community Food Cooperative is a case study of the benefit to the community that a cooperative can provide. It brings capital to the region and takes planning and dedication to build one and make it sustainable.
The speakers offered a great deal of insight and advice on the transition of business ownership and the benefits and challenges of cooperative ownership. Overall, it had over 50 people in attendance and could answer questions and concerns people may have about the cooperative business model and how to transition businesses instead of leaving them to close their doors.
Thomas Lewis, who devised the series, later offered his comment on the purpose of this first part and where it is expected to go in the future,
“Connecting local leaders in community and economic development to national experts is a main goal of our webinar series. Understanding alternative forms of ownership, such as cooperatives, and how they can benefit rural communities is key to unleashing rural wealth creation. Moving forward we will continue examining innovative ideas about community development and rural food retail during the series.”
The second installment of the webinar series intends to focus on methods for financing retail food stores. While it does not have a set date yet, planners are looking to host it before the end of August 2021.