Grocery Story: the Promise of Food Co-ops in the Age of Grocery Giants

review by Liz Henderson

Grocery Story coverGrocery Story is a good lively read as is appropriate for a book that the author intended as an organizing tool to boost public awareness of the benefits of food co-ops. I met Jon Steinman when he came to Rochester, NY to speak at the Abundance Co-op, his first appearance on a 300-stop tour of co-ops and bookstores around North America.  Together with Melinda, the Marketing Manager at Abundance, we appeared on Connections, the local public radio talk show. After spending a decade producing a show called “Deconstructing Dinner,” where he took viewers for a close look at all the ills of big food, Steinman wanted to imagine an alternative food system – he found his answer in the network of food co-ops.

The book opens with a concise history of how this country went from small local groceries to chains of groceries to the concentrated supermarket chains of today. Consumer weakness for convenience proved a useful tool in the hands of food industry titans. The first A & P opened in 1859, proliferating over the next decades till there were 16,000 stores in 1929, together with 70 factories assembling products and 100 warehouses.  Kroger was born in 1883; by 1927, its stores numbered 3,749. A Piggly Wiggly was the first self-service grocery, a model quickly taken up by competitors.  A favorite technique for driving out smaller stores was loss leading, until the practice was banned in 1933.  Steinman has an amazing quote from Huey Long, a powerful right wing demagogue: “I would rather have thieves and gangsters than chain stores in Louisiana!” With all his power, Long could not stem the relentless chain store tide that anti-trust actions held back for a while through the 1970’s until Reagonomics opened the flood gates to the mergers of the 80’s and 90’s and the advent of Walmart (1988).

Steinman makes a very good case that the more concentrated the market, the faster prices rise.  From 1983 to 94, overall food prices rose 45%, but breakfast cereal prices, where 4 companies produced 86%, rose 90%.  He also shows how this concentration put the squeeze on farmers to produce more for lower margins, also the more food is processed, the smaller percentage of its value goes to farmers.  By this logic, home cooking from scratch is an effective way to help farmers retain greater power in the marketplace. As retail grocers become more concentrated, they are able to increase their margins on farm products while the farmer’s share shrinks: since 1980, Steinman shows, “mark-ups have risen steadily, to 67% on average. That translate into growth in the consumer-price level relative the firms’ costs of about 1% per year.” (p. 58)

Through a plethora of pressure techniques like slotting fees to even get space on their shelves, corporate chains shape the supply of food available to most people selecting for what is most profitable, not the most nutritious. The grocery chains also suck money out of rural and urban areas – profits go to company headquarters instead of spreading through local economies the way the earnings of independent local businesses do.

The central focus of Grocery Story is the many reasons why food co-ops are such an important alternative to the grocery behemoths with profiles of outstanding co-ops in the US and Canada and stories of new co-op organizing.  Steinman himself is active with the co-op in his own home town of Nelson, located in the Kootenay region of British Columbia.  Having never heard of Nelson before, I now have it on my list of places to visit before I die! It sounds like a little gem of a community created by ecologists, layered over Vietnam War resisters layered over Dukhobors, religious fugitives from Tsarist Russia.

Steinman gives a clear and simple definition of a co-op –“…businesses or organizations founded and owned by the people who directly benefit from their products or services. Co-ops are created to meet member and community needs.” (p. 101)  He argues that co-ops represent a third way – neither capitalist nor communist – that nurtures voluntary action, democratic control and decentralization, spreading power and economic resilience. Decision making in co-ops is guided by shared values rather than by the quest for profit. The “Seven Principles of Cooperation” from the 19th century Rochdale co-ops still hold sway:

  1. Open and Voluntary Membership
  2. Democratic Member Control
  3. Members’ Economic Participation
  4. Autonomy and Independence
  5. Education, Training, and Information
  6. Cooperation among Cooperatives
  7. Concern for Community

With each major downturn in the economy, there has been an upsurge of co-ops of all kinds – credit unions, worker owned co-ops and community food stores – as people seek to wrest control from the failing for-profit market economy. Members invest their own capital in these ventures. Since the ‘70’s, food co-ops have provided an important market for family-scale organic farms. The most successful coops, like that in Viroqua, Wisconsin or the dense network in Minneapolis, become centers of food enterprise development fostering clusters of local farms and valued added food and other businesses.  In the decade from 2008 – 18, 134 new coop opened with a 74% rate of success, with 100 more in the works in 2019.

Food co-ops have a significant multiplier effect in their communities and pay better wages than private grocery chains. As a percentage of sales, co-ops spend 19% on wages compared to 13% for the chains.  Many co-ops put special effort into outreach to low-income people and offer discounts to make healthy food affordable.  GreenStar Co-op in Ithaca, NY, initiated the FLOWER program (Fresh, Local Organic Within Everybody’s Reach) that has been replicated by other stores.  Co-ops tend to locate on main streets increasing the walkability of their communities.  They do not charge slotting fees to suppliers and instead, encourage start-ups. They feature honesty in labeling and advertising.  As an example of that, the produce buyer at the Abundance Co-op does extra research on products in order to distinguish soil grown organic tomatoes from hydroponic. And they provide education about nutrition and the food system and programs for children.

Steinman has an interesting discussion of an issue that has proved a challenge for many co-ops – member labor.  The voluntary work of members has enabled many co-ops to get started and this participation helps to build member loyalty and sense of ownership. Under the Fair Labor Standards Act and many states’ law, however, voluntary work that displaces paid employees is illegal.  Steinman gives examples of co-ops that continue this practice anyway (p. 146) and of some creative work-arounds such as one co-op where the members do not work at the store, but get store credit for work at community projects instead.

Steinman emphasizes out how important coops have been to gaining equity for African American communities and gives many examples of co-ops that have brought relief to food deserts. W. E. B. DuBois was a big proponent of co-ops as a way to combat white supremacy:

“There exists today a chance for [Blacks] to organize a cooperative State within their own group. By letting Negro farmers feed Negro artisans, and Negro technicians guide [Black] home industries and [Black] thinkers plan this integration of cooperation, while [Black] artists dramatize and beautify the struggle, economic independence can be achieved. To doubt that this is possible is to doubt the essential humanity and the quality of brains of [Black people].”p. 292 — W.E.B. Du Bois, 1935

In the final chapters, Steinman takes on the competition from big box stores that has driven out some co-ops. Savvy chains like Wegman’s and Trader Joe’s use promotion language (buy local) and product display techniques (the bulk section) that they learned from co-ops.  Ultimately, though, the benefits leave town for corporate HQ or stockholder dividends, instead of being shared among employees and members. Big box shoppers can never be certain their own health and economic needs will outweigh the relentless drive for profit.

In conclusion, Steinman waxes poetic about the underlying values of co-operation and calls upon the reader to join him in a great flowering of co-ops: “Food co-ops empower us unlike any other space to nurture long-term healthy relationships to our food, communities and the earth. They make it possible to ‘be the change’ and not the sheep. They make it possible to invest our food dollars into the next seven generations. They make it possible to sanctify our supermarkets.” (p. 240) He expresses his hope that his book will inspire the reader to one of three actions:

  1. Convene your community’s first meeting of its first cooperative grocery store, or join up with a group already meeting.
  2. Become a member–owner of an already-established food co-op near you.
  3. Love, more deeply than ever before, the food co-op you already shop at (p. 241)

I must confess that Grocery Story has worked its magic on me!  I have loaded up my bag with Abundance brochures that I hand out at social events around Rochester and I have committed to limiting my diet to what I can buy at the co-op.  If the co-op doesn’t have it, I don’t eat it.  Since my partners and I retired as farmers, Peacework, our farm’s CSA, persists as a buying club that still has its pick-up at Abundance though loyalty has shifted to supporting another local farm – Mud Creek. Cooperation among co-ops lives on!