When my wife and I moved into our new neighborhood last year, one of the first things we did was walk down its main commercial drag. We were happy to find a diverse hodgepodge of restaurants, coffee shops, independently owned clothing stores, and professional offices.
One business stood out in particular: a grocery cooperative (co-op), a member-owned food and grocery store that welcomes all shoppers while offering special benefits (such as discounts and voting rights regarding operations) to members who buy a share in the business. Like CSAs, co-ops offer access to local, organically grown meats and produce that might not be available at regular grocery stores or supermarkets.
Since this co-op is the closest full-service grocery store to our house, we’ve been shopping there quite a bit since we first found it. When it became clear that we’d be staying in this neighborhood for at least two years, we decided to become paying member-owners, purchasing a share at a one-time cost of $100.
If there’s a grocery co-op close to where you live or work, you might be considering shopping there regularly or even becoming a member. But would it be worth it?
What Is a Food or Grocery Co-op?
According to the Neighboring Food Co-op Association (NFCA), a New England co-op network, a co-op is “an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.” Though the structure and activities of specific co-ops may vary, most co-ops’ activities are governed by these guiding principles (per the International Cooperative Association, a global co-op trade organization):
- Open Membership. Co-op membership is open to “all persons able to use [co-op] services and willing to accept the responsibilities of membership.” Restrictions on the basis of religion, race, gender, or association with any other protected class are prohibited. One important exception: A co-op may restrict membership to residents of its home state. For example, the co-op I belong to only accepts Minnesota residents as members, though anyone may shop there.
- Member Ownership. Each member has an ownership stake, known as a share, in the co-op. Members typically need to buy their shares, though some co-ops may offer free shares to employees. Some co-ops only allow members to buy a single share, while others allow members to buy unlimited shares. Some co-ops offer financial benefits for owners, such as shopping discounts and patronage refunds (monthly or annual checks refunding a portion of your purchases during the period). Some may even offer dividends based on the number of shares owned, though this isn’t common among food cooperatives. And since state and federal laws prohibit co-ops from offering an annual return on investment of more than 8%, you shouldn’t expect your co-op membership to make you rich.
- Tax Considerations. According to the Small Business Administration, U.S.-based cooperatives are designated as pass-through organizations and aren’t subject to federal business taxes. However, members are liable for personal taxes on any profits or surpluses returned to them by the cooperative and not reinvested in the business.
- Member Control. A co-op share comes with the right to vote for the organization’s leaders, board members, and strategic initiatives undertaken by the leaders or the board. Every member has equal voting rights, even if their co-op allows individual members to purchase more than one share. This is known as “one member, one vote.” Any member can run for a seat on the co-op’s board. Co-op boards may also organize committees and subcommittees, staffed with volunteer members, to govern specific aspects of the co-op’s operations or advise on strategic initiatives. However, hired staff – a general manager, department managers, and hourly staffers – typically oversee grocery cooperatives’ day-to-day operations.
- Commitment to Education, Enrichment, and Community Development. Many co-ops devote significant time and resources to educational programming and community development and outreach initiatives. For instance, our co-op has weekly cooking classes where members can share their favorite recipes and techniques with others. It also sponsors dozens of local CSAs, nonprofit organizations (clinics, food banks, and shelters), neighborhood development corporations, and recurring events (such as National Night Out).
- Focus on Local, High-Quality Food and Products. Though every grocery cooperative is different, co-op members and boards generally seek out local, organic, high-quality foods and dry goods that may be available in limited quantities, or not at all, at traditional supermarkets. They may also establish close relationships with local producers that may not meet the rigorous sourcing standards of Whole Foods and other grocery chains specializing in healthy, high-quality foods.
Benefits of Shopping at a Co-op
You don’t have to be a member to shop at your local grocery cooperative, though members do typically enjoy additional benefits not available to occasional shoppers. Whether you regularly visit or just pop in occasionally for something you forgot (or can’t find) at the supermarket, the advantages of co-op shopping are numerous:
1. Access to Healthy, Fresh Produce
Though every co-op’s selection is different, grocery cooperatives typically have ample produce sections that focus on seasonal, high-quality ingredients. Co-op buyers work with suppliers that can consistently deliver fresh items. And because co-op patrons tend to value fresh produce over packaged or frozen varieties, co-ops’ produce sections enjoy high rates of turnover, keeping product fresh and crisp.
By contrast, budget supermarkets with huge produce sections, lower quality control standards, and less turnover are more likely to keep wilted lettuce, browning apples, and soft carrots on display.
2. Supporting Local, Small-Scale Agriculture
Though most co-ops work with national organic food distributors, they also forge relationships with local, small-scale producers to a greater extent than supermarkets or discount grocery stores. When you buy locally grown or produced items at your co-op, you’re supporting your area’s farmers and agricultural businesses. This is true regardless of the season – for example, on midwinter trips to our co-op, my wife and I are always delighted to run into a guy handing out samples of the delicious maple syrup he produces just outside the city.
3. Being Socially Responsible
While not perfect, co-ops value social responsibility more than larger supermarkets, which are often part of big chains driven mostly by the profit motive. In the context of co-op shopping, social responsibility can take many forms. For instance, co-ops tend to stock lots of fair trade products, such as coffee and chocolate. To earn the fair trade designation, buyers must pay fair prices to growers and suppliers, often in developing countries. In turn, these producers must adhere to high standards of worker treatment and pay fair wages.
By contrast, large-scale producers that supply big supermarket chains – including some who qualify for organic certification – may routinely mistreat their workers (such as workers in Mexico, reported by the LA Times), housing them in overcrowded, company-owned shacks and withholding pay until the end of the harvest season, effectively prohibiting them from seeking other employment.
4. Reducing Your Shopping Habits’ Environmental Footprint
Buying local farm products at your co-op isn’t just good for the agricultural economy in your area – it’s also good for the environment. Locally grown and sold food, which the USDA defines as farm products grown and sold within a 400-mile radius, requires less energy for shipping and storage over its life-cycle. The co-op I shop at defines “local” as coming from within a 250-mile radius, and works with producers that fit the bill wherever possible. By contrast, much of the produce available in the nearby budget supermarket, regardless of season, comes from places like Texas, Arizona, California, and Mexico – anywhere from 1,000 to more than 2,000 miles away.
Drawbacks of Shopping at a Co-op
1. Generally Not Ideal for Whole-House Shopping
Though some grocery cooperatives are sprawling, many have significantly smaller footprints than supermarkets (including national chains such as Whole Foods). That translates to less shelf space and, potentially, fewer available products. And that may make whole-house shopping unrealistic at your local co-op.
For instance, our neighborhood cooperative has only a cursory selection of personal care items, such as toothpaste and toilet paper, and common household items, such as laundry detergent and cleaners. None are available in bulk (no gallon-size detergent, for example). So if you like to shop for groceries, household goods, and personal care items in the same trip, a co-op might not be your best bet.
2. Seasonal Variations in Availability of Perishable Goods
Since co-ops source heavily from local suppliers, they may face shortages of fresh produce and other perishable goods at certain times of the year. These shortages vary between co-ops, largely depending on the co-op’s location, buying power, and geographical distribution of its suppliers.
For instance, on an early January trip to our co-op, my wife and I were frustrated to find a paltry selection of tomatoes – the only ones available were tough, expensive hothouse strains grown in local greenhouses. The same day, the closest supermarket had a half-dozen varieties of tender, affordable tomatoes, all presumably grown in the U.S. Southwest or Mexico. Of course, if you live in a warmer region, seasonal produce availability may be less of an issue.
3. Some Foods and Products May Be More Expensive Than Traditional Grocery Stores
Grocery co-ops tend to be smaller than national supermarket chains such as Kroger and Safeway, and even those that belong to regional co-op networks have less buying power. Coupled with co-ops’ high quality standards and focus on local, organic products, this leads to higher prices.
On the same early January co-op trip, we spent $5.99 for a bag of organic navel oranges, $6.99 per pound for organic Brussels sprouts, $4.99 for an eight-ounce box of organic oyster mushrooms, $3.99 for a gallon of milk, $12.99 per pound for fair trade coffee, and $3.98 for a four-pack of toilet paper rolls. We then headed to our local supermarket to buy a few items that weren’t available at the co-op. While there, we compared prices on what we’d just purchased. We found organic navel oranges for $4.99 per bag, organic Brussels sprouts for $4.99 per pound, an eight-ounce box of organic oyster mushrooms for $4.59, a hormone-free milk gallon for $3.49, the same brand of fair trade coffee for $9.99 per pound, and a toilet paper four-pack for $2.49.
4. Limited Hours
If you do your grocery shopping at odd hours due to a nontraditional work schedule, school obligations, or other reasons, you might have trouble catching your local co-op when it’s open. For instance, our neighborhood co-op is open from 8am to 9pm daily, while the big-name supermarket down the road stays open 24/7.
How to Become a Grocery Cooperative Member
Though the procedure varies by organization, joining a food or grocery co-op is usually a straightforward affair. My wife and I filled out the initial paperwork and paid for our share while in the checkout line, and the lady behind us didn’t even complain that we were holding her up.
To start, you fill out a form with some basic contact information, such as your address, phone number, and email. You then specify how you’ll be paying for your membership share – most co-ops accept cash, personal checks, and major credit cards (and ours let us add it to the cost of our order).
Next, you’re given a unique member number and possibly a member card with your name and number on it, though some co-ops mail these out a week or two after initial sign-up. You should also receive a welcome packet that details the co-op’s bylaws and regulations. And depending on your co-op, you may get canvas grocery bags, reusable produce bags, branded clothing or paraphernalia, coupon books, and various other items (we got two organic chocolate bars at sign-up).
Once you’re officially in the system, you immediately enjoy the benefits of membership. Just be sure to give the clerk your member number each time you check out – that’s how the co-op keeps track of your purchases and determines what, if any, financial benefits you’re entitled to.
Benefits of Co-op Membership
If you decide to take your co-op engagement to the next level and purchase a membership share, you can expect to enjoy all the benefits of co-op shopping, plus these membership benefits:
1. Being Part of a Like-Minded Community
When you buy a membership share in a grocery cooperative, you immediately become part of a like-minded group that cares about sustainable agriculture and supporting local food systems, as well as a business philosophy that values more than the bottom line. Co-ops are part of an economic network that prioritizes the fair treatment of workers at every step of the supply chain, from laborers who toil in the fields, to line workers who wash and process the harvest, to the truck drivers who deliver food throughout the country, to the employees you see at the co-op.
2. Shopping Discounts, Deals, and Patronage Refunds
Many grocery cooperatives reward members with such financial perks as shopping discounts (for instance, 2% off each shopping visit or 5% off one visit per month), members-only deals on individual items, and monthly or annual patronage refunds proportionate to the amount you spent during the covered period. Depending on how much you shop at your co-op, these benefits could soon offset the cost of your membership share.
3. Potential Access to a Larger Co-op Network
Many co-ops are part of larger co-op networks that offer perks, such as discounts at checkout and discounts on class fees, for members at all participating organizations. For instance, ours is part of a network that includes a half-dozen other grocery cooperatives in our city. If we’re cooking at our friends’ place across town, it’s nice to be able to pop into their local co-op for last-minute ingredients and save a few bucks in the process.
4. Influence Over the Co-Op’s Activities and Strategic Direction
As a co-op member, you’re free to run for a spot on the board or join a subcommittee that interests you. In these roles, you can help forge partnerships with community groups, find new products to sell at the co-op, and launch new classes or programs for members. If you don’t want to be an active participant, you can still exercise your voting rights to elevate people you respect – often your neighbors – to positions of power within the organization.
As a supermarket shopper, you certainly don’t have this type of influence. Even as a retail shareholder in a publicly traded supermarket company, your ability to influence the company’s direction is likely to be almost nil due to the “one share, one vote” rule of for-profit corporate governance.
5. Opportunities to Share and Absorb Knowledge
Most grocery cooperatives offer relevant educational programming, such as cooking and craft classes (for instance, our co-op recently sponsored a course on making your own essential oils), seminars on aspects of food production and distribution, and educational film nights. Depending on the co-op, these events may be free or come with a nominal fee, which is typically discounted or waived for co-op members. They’re generally led by co-op members, providing a platform for those with knowledge and skills to share.
Drawbacks of Co-Op Membership
1. Requires a Financial Investment or Employment Relationship
Unless you’re a co-op employee for whom membership is an employment perk, it costs money to join. My wife and I paid $100 for our share, but I’ve seen co-ops that charge as little as $35 and as much as $200. Some co-ops offer payment plans to soften the financial blow of membership.
For instance, ours lets new members pay $10 per month over 10 months. Still, you can’t join a co-op without opening your wallet or becoming an employee. It’s up to you to determine whether this investment of money or time is worth the benefits of membership.
2. No Guarantee of Discounts, Patronage Refunds, or Return on Investment
Though grocery co-ops have the ability to provide members with financial incentives such as shopping discounts and patronage refunds, there’s no guarantee that yours will. After all, financial perks may not be your co-op’s highest priority. Instead, it might choose to allocate its financial resources towards expanded product offerings, higher wages for employees, and more generous payments to suppliers. Also, since membership shares’ face values typically don’t fluctuate, you shouldn’t expect to earn a return on your investment by selling your share for more than its purchase price.
3. Could Be More Expensive Than a Supermarket
Though discounts, deals, and patronage refunds may eventually offset the cost of your membership share, shopping at your co-op may never be a better deal – in pure dollar terms – than shopping at a supermarket. For instance, if it costs an average of 20% more to buy your weekly groceries at your co-op versus the supermarket, even after member discounts and patronage refunds, your co-op membership will never make financial sense.
4. May Feel Obligated to Shop There Despite Better Options
Grocery cooperatives don’t require members to shop with a certain frequency or spend a certain amount. But you might still feel obligated to do so, whether to boost such potential financial incentives as patronage refunds and shopping discounts, or because you feel guilty about not supporting an organization that you belong to. This feeling of obligation could interfere with your household’s shopping or eating habits.
For instance, since joining, my wife and I have done most of our food shopping at our local co-op. There have been times when, unable to locate a particular ingredient (usually non-local produce or ethnic ingredients) at the co-op, we’ve omitted it from a dinner recipe rather than make another stop at the closest supermarket, where we’d be more likely to find it.
My wife and I were thrilled to find a member-owned food cooperative so close to our new home. But before we shelled out $100 and became members, we carefully evaluated the pros and cons of joining. Would we shop there consistently? Could we even afford to do most of our shopping there, given that prices were generally higher than at the supermarket? Would we take advantage of other benefits of membership, such as voting in board elections and joining advisory groups?
In the end, we decided to join because we wanted to feel invested in our new neighborhood and appreciated the close-knit nature of the co-op community. (We also ended up joining the cooperative brewery across the street – that decision wasn’t quite as hard to make.)
But our experience isn’t universal. Before you make the financial commitment to join your local grocery co-op, ask yourself whether it makes sense for your family. Even if you decide to pass on membership, your co-op’s door will still be open. If you can’t find that perfect pear or exotic root vegetable at the big-name supermarket, you can always peek into the cooperative.
Do you shop at or belong to a food or grocery co-op?