MINNEAPOLIS -- Seventy natural food co-operatives coast to coast have united to increase their buying power to get better prices on groceries for their customers, and to set the stage for future activities in concert.
The co-ops retain their independent ownership. Eighteen members are in the Northeast, 10 are in the Southeast, 21 are in the West and 16 are in the Midwest, and some own more than one store.
The monthly program enlists rotating participation by 30 natural food manufacturers, offering up to 500 products per month with discounts to shoppers of 30% to 40%.
Most of the products are packaged or frozen. The rest are wellness products, like supplements and health and beauty aids, explained Corinne Shindelar, executive director of Twin Cities Natural Food Co-Ops here. Twin Cities established the prototype of this "virtual chain" with the Midwest Co-Op Grocers Association in 1999. It went national in March, with encouraging results so far, she told SN.
"We look at co-ops in a similar light as independent grocers. It is important that they pool their resources and work together when they can. It is a trend with independents, and I am not surprised to see it with co-ops," said Ernie Monschein, executive director of the Washington-based Food Marketing Institute's independent operator division. "It gives them more clout and credibility, and it gives consumers more choices."
Each of the four regions in the "virtual chain" has promotional product, and there is national promotional product, too.
"We are trying to give ourselves a competitive advantage. I don't know if Whole Foods Markets or Wild Oats sees us as a threat, but it is more competition among manufacturers' programs," Shindelar said. In each region, the group has a relationship with a distributor, such as Blooming Prairie in the Midwest, Northeast Co-Ops or Cornucopia in the Northeast, and Mountain Peoples Warehouse in the Pacific Northwest. It took a strong partnership with each distributor to make this happen, she said.
The Co-Op Advantage Program, as the virtual chain is called, has been operating for less than one business quarter, but from all reports so far, it has been successful, Shindelar said. "We are moving the kind of volume we said we could, and making consumers happy by the price point and the image. I was thrilled last month when I walked into Food Front in Portland, Ore., and saw the same items on sale, the same signage, and the same flier as in Mississippi Market and Seward Co-Op Grocery and Deli," she said.
The co-op directors hope to use this as a model for other kinds of activity besides the promotional program, she said, "from employee health insurance to community messaging."