French Broad Food Co+Op

Who Owns Your Grocery Store?

By JON STEINMAN is the author of “Grocery Story: The Promise of Food Co-ops in the Age of Grocery Giants” (New Society Publishers, 2019).

“Who owns your grocery store?”

It’s the question emblazoned on the back of a van that has ferried me across 34 states to visit 128 consumer-owned grocery stores (food co-ops) and another 20 in development.

I spent 13 years investigating every facet of the food supply. It led me to the conclusion that the grocery store is, hands down, the most influential force shaping food, the planet, and our health. So I wrote a book about it, bought a tour van, and took the book on the road. The message I’m sharing is that it’s time to pay a lot more attention to who owns the grocery stores we shop at and what those answers mean to the future of food and the future of our communities.

We have invested considerable energy over the past decade into deepening our understanding of how and where food is grown and who grows it. Organic food has exploded into a $50 billion industry in the United States. Farm-to-table restaurants are plentiful. Farmers markets are thriving and community supported agriculture models are enabling new generations of farmers to usher in a new food paradigm. But there remains a cavernous gap in the effort—where we buy our groceries. If 10% of our weekly food budget is at a farmers market, what about the other 90%? It’s almost certainly being invested in a grocery store. So what are we investing in?

If it’s The Fresh Market, you’re investing in Apollo Global Management—a firm that includes the former Blackwater in its portfolio. If it’s Trader Joe’s, you’re investing in Aldi Norda German multinational grocer. If it’s Whole Foods, you’re investing in Amazon and lining the pockets of the wealthiest person on the planet. And what of the smaller chains? The trajectory of grocery consolidation suggests you’re investing in what will likely become an acquisition by one of a handful of hungry grocery giants.

Look at Canada and the U.K., where market concentration in grocery retail is remarkably high. In Canada, two companies alone receive over half of Canadians’ grocery dollars. Combined with the next three largest grocers, those five companies command 80% of the market. The numbers are similar in the U.K.

What happens when a market becomes this concentrated? Take Loblaw Co. Ltd., the largest of Canada’s grocers commanding 30% of the market. December 14, 2017: Loblaw admits to the Canadian public that they’ve been cheating their customers for 14 years – alleging they had colluded with four of their most notable competitors to fix the price of bread. It’s understood Canadians were spending $1 more per loaf of bread than general rates of food inflation would have predicted. Back in 2007, over in the highly concentrated U.K. grocery market, Asda and Sainsbury’s admitted to fixing the price of dairy between 2002 and 2003. The scheme was said to have cost consumers the equivalent today of $438 million.
If 10% of our weekly food budget is at a farmers market, what about the other 90%? It’s almost certainly being invested in a grocery store. So what are we investing in?

As a Canadian, I’m particularly interested in what will come of the investigation into bread price fixing, but despite the ongoing investigation it appears we have already moved on.  On April 9, 2019, Canada’s Environment and Climate Change Minister announced Loblaw would receive a $12 million subsidy to upgrade refrigeration units at 370 of their stores. Company admits to cheating Canadians. Canadians gift them $12 million. Incredible.

Are Canadians outraged? Are they switching grocery stores? Absolutely not. Loblaw is doing just fine.  Granted, there aren’t a whole lot of alternatives. Four other grocery giants are alleged to have participated in the scheme. In many areas of the country, those five grocers are the only options available.

Similar levels of market concentration are also emerging across the United States. After Walmart’s explosion into grocery in the late 1990s and early 2000s, waves of grocery mergers and acquisitions followed, leaving only a handful of grocery giants operating in any one geographic area. As I traveled through the eastern states this past spring, it became clear how few people are aware of the companies behind the banners. The once regional chains are no longer so regional. Hannaford, Food Lion, Giant, Stop & Shop, all are now subsidiaries of Ahold Delhaize (Netherlands.) Fred Meyer, Harris Teeter, Ralphs—now Kroger banners. Safeway, Shaw’s, Star Market and Vons—all now part of Albertsons.

With the exception of some areas of the country where fierce grocery store battles are playing out, we eaters are generally at the mercy of one of a few giants. In rural communities and many urban neighborhoods, there might be just one single option available—textbook monopolies.

“Well, that’s capitalism for ya,” some will say. No doubt. But this is different. This is about food. Grocery stores are not, in any way, just some other “business.” These buildings operating in our neighborhoods bear tremendous social and economic responsibilities.

Take human health. The connection between food and health is now well understood. Studies show that the common cold, diabetes, and heart disease can be prevented, curtailed, or managed through the foods we eat. Food is medicine. So what responsibilities have we placed upon these grocers that are proportional to the vital health services they’re providing? What have we done to ensure all people, regardless of income, race or geography, are provided access to healthy, wholesome, and risk-free food at the grocery stores in their neighborhoods? Not much. We’ve left the health implications of our grocery stores entirely in the hands of market forces.

A grocer’s economic role is also deserving of scrutiny. Ten years ago, it was nearly impossible for local/regional food producers to get their products on the shelves of a major national chain operating nearby. Whereas some progress has been made in this regard, there remain many producers who continue to come up against substantial barriers when trying to access the shelves of their local/regional grocers. These barriers effectively throttle local economic development and diminish the wider social benefits that extend from the presence and growth of a diversity of local businesses.

For the past 100 years, grocers have also been shaping the entirety of the food system. With only a handful of grocers dominating any one region or nation, they have effectively acted as bottlenecks within the system—gatekeepers to the foods that will and won’t make it to market. It’s the grocers who are determining the how, where, and who of food production both locally and globally. Grocers are determining the future of food.

As there is no regulatory oversight of grocery store behaviors and practices in these three key areas of influence, where can we eaters find modest assurance that grocers have our interests at heart? And how might a grocer’s commitment to our community be sustained for generations to come? I believe it comes down to who owns your grocery store. It should come as no surprise that the most locally owned grocer is most likely to be the most accountable and responsive to the community it serves. After all, the owner(s) and senior management are often residents of the town/city/neighborhood in which the store is located.  As long as our neighborhood grocer is privately owned, any assurances of long-term commitment are precarious. No question there are many independent grocers out there who are in it for the long haul and dedicating themselves to their customers, but it’s risky for any of us to place the future of our neighborhood grocer entirely in the hands of a single individual or family. Just as closures of chain stores are commonplace, so too are closures of independent locally owned grocers, particularly in today’s hyper-challenging climate of grocery retail. Acquisitions are also a risk to the future of the grocery stores in our neighborhoods. In both cases, community consultations are not required despite the enormous repercussions a closure or acquisition may have on food access, health, community and economy. If it’s merely a change in ownership, the unique characteristics that may have set a store or chain apart often erode into the culture of the acquiring chain. The accountability and commitment to the community often goes with it.

What defines a consumer food co-op? Rather than any one individual or company owning the grocery store, consumer food co-ops spread ownership out to however many people want to become a shareholder.

In August 2019, Musser’s Markets, with three locations in Lancaster County, Pennsylvania, was acquired by Giant (a subsidiary of the Dutch multinational Ahold Delhaize.) This followed Giant’s single store acquisition in May of Ferguson & Hassler in Quarryville and prior to that, Darrenkamp’s in Willow Valley in September 2018.

In January 2019, the Long Island-based King Kullen (c. 1930) with 32 locations and its independent subsidiary Wild by Nature with five locations were acquired by Stop & Shop (also a subsidiary of Ahold Delhaize.)

In 2015, Chicago’s Mariano’s, with 44 locations, was acquired by Kroger. The culture change at Mariano’s is not going unnoticed. An August 2019 article in Crain’s Chicago Business magazine reads, “Is Kroger ruining Mariano’s?”

So where can eaters find greater assurance in the future of their grocery stores? My research and experience within the food system leads me to only one model. That is the consumer cooperative—food co-ops—full-service grocery stores collectively owned by their customers.

Here’s why:

There have been zero instances of a food co-op in America being acquired by a chain grocer. Why not? It would first require a vote by the co-op’s thousands of shareholders who would be asked to decide on whether or not to sell the store. It’s true that there are examples of food co-ops closing, but any decision to change the ownership of a cooperatively owned grocery store is a democratic one, made by the people who would be most affected by the decision: eaters and workers—us! Community consultations on the future of neighborhood grocery stores are built directly into the cooperative model of ownership.

What defines a consumer food co-op? Rather than any one individual or company owning the grocery store, consumer food co-ops spread ownership out to however many people want to become a shareholder. There are no limits to who can become a shareholder nor how many shareholders can co-own the store. Better yet, no one shareholder has any more voting power than another. Each share in the co-op is equal to one vote and each shareholder is limited to one voting share. Once a year, shareholders in a food co-op will vote for their board of directors to govern the co-op. Co-ops democratize the economy.

We’ve generally placed any business or service that a community deems ‘essential’ into an entirely different category of oversight, scrutiny and expectations. Public transit, public libraries, community centers, drinking water, roads and first responders are generally stewarded by public agencies and institutions. They’re simply far too important to leave entirely in the hands of the private sector. Is food deserving of the same attention? Co-ops, particularly consumer co-ops, are effectively public institutions. They build accountability to the community directly into the ownership model. They allow the public to steward the food system from the primary point of convergence between eaters and the system—at the grocery store.

While a food co-op may in practice be a for-profit business, by virtue of their ownership model, they operate far more along the lines of a nonprofit businesses. Every dollar of profit generated at a co-op is channeled into one of two directions—back into improving the business or returned to shareholders in the form of dividends proportional to the level of purchases a shareholder made over the previous year. As a shareholder of a food co-op, I’ve received checks as low as $10 to as high as $50 at the end of the year. These dividends are essentially the grocer saying to its customers, “sorry, we charged you too much this year, here’s how much we overcharged you.”

The recirculating effect of a food dollar spent at a food co-op doesn’t end with the distribution of profits. At a cooperatively owned grocer, the head office is not only in the community served by the co-op, it’s almost always located directly inside the store itself. With the head office located inside the store, the co-op grocery store becomes home to more jobs, including more full-time positions. Marketing managers, human resources, finance, outreach, any positions that would otherwise be located at a distant head office are instead located within the community. Over 180 people are employed at my food co-op, almost 100 of them full time. The largest chain grocer operating in my city claims 150 employees. Then there are the third-party services a cooperatively owned grocer will utilize. This translates into more of our grocery dollars circulating into local businesses that in turn re-circulate those dollars locally.

Today, 230 co-ops operate over 300 locations in the United States. Another 100 are in various stages of development. The food co-op movement is expanding and evolving. Of the 144 new food co-ops that have opened in the past 11 years, 72% of them have weathered the challenging grocery retail climate and have remained open.  Nationwide, interest in food co-ops is spreading beyond consumers of organic and local foods. All types of communities, including those in designated food deserts, are turning to this model of grocery store ownership to secure a more promising future for their communities.

source: https://www.yesmagazine.org/opinion/2019/12/06/grocery-store-own/

Asheville’s French Broad Co-Op expands, stays rooted

Focusing on natural foods was seen as alternative — even a little weird — around the time a small group of people who took eating right seriously hatched the idea that became French Broad Food Co-Op.

The food-buying club started on a few front porches in the mid-1970s, made its first expansion by moving into a potter’s shed and then found some elbow room

in a previously abandoned building on Carolina Lane.

With a prime downtown spot today — and a payroll nearing $1 million — the co-op is planning to triple its size, add a parking garage and go toe-to-toe with bigger stores also emphasizing natural foods. The groundbreaking for an expansion has a loose target of late 2016.

“We really need a full-service meat counter, a full-service deli, all that stuff,” said Bobby Sullivan, the store’s general manager. “It’s nice that we have all of these examples of stores in Asheville that we can look at and say ‘Hey, let’s do this.'”

The growth marks French Broad Food Co-Op’s largest expansion since it opened a storefront in downtown Asheville in 1996.

In those intervening years, natural food stores have flooded the area. Even so, the co-op holds to its original, nonprofit model, one intended to put community over profit.

That’s still what separates the store from others in a competitive market, Sullivan said.

Owned by dues-paying customers, French Broad Food Co-Op was launched in 1974. Founding member Ellie Warden still works in the store’s deli.

“Asheville was pretty depressed during those days,” she said. “It’s hard to believe when you go downtown. Lexington Avenue was moldy rummage sale stores and men-only bars and lots of boarded up buildings.”

The farmers market, then in what’s now a Lexington Avenue parking lot, offered Asheville some of its only access to fresh, seasonal food, Warden said.

“When we moved here, you couldn’t even find whole-wheat bread in the grocery stores,” she said. “There was nothing available, so we basically had to come up with our own way.”

Now that buying club has moved from people in living rooms trying to get permits to buy bulk to a full-fledged co-op on prime downtown real estate. “We have a real store now,” Warden said. “We’re basically bursting. That building is so small and crammed, but it’s nothing like a potters shed. It’s amazing how we’ve grown.”

Staying competitive

It used to be that a co-op was the only place to get natural foods, said Sullivan, who’s been with French Broad since 2011. “Really, when you were at a co-op, you met like-minded people because they were going out of their way to get a certain type of food.”

Sullivan worked in French Broad’s produce department for three months in 1997 before leaving to become the produce director for Earth Fare, a grocery store that now has more than 30 locations and continues to grow.

He returned to the co-op in 2011. Now Earth Fare, along with Whole Foods and other larger natural grocery stores form a genre Sullivan calls the “super-naturals.”

Even though natural foods have gone mainstream and the driving principals behind French Broad seem a touch starry-eyed, the super-naturals aren’t taking a big bite out of the co-op’s business.

“Co-ops, I think, hold kind of a unique place in the minds of some consumers because they are cooperatively owned,” said David Fowle, Eastern Corridor adviser for the National Cooperative Grocers Association.

“As opposed to profit being the primary motivation, it’s service, community, supporting local agriculture, being environmentally conscious, a lot of those things natural foods people are interested in,” he said.

The super-naturals play to that, to some extent, Fowle said. “But Whole Foods Market is required by law to maximize the profit of the shareholders. That’s why they’re there. Co-Ops are here to provide service.”

Core co-op shoppers tend to stay committed to stores that provide that service. “That’s a big difference that a lot of people value,” Fowle said. “There some co-ops that have done well — and some that haven’t.”

In 2014, French Broad is one that’s done well. It’s essentially debt-free. Its owners — a group of Asheville-dwelling stakeholders 1,600 people strong — own outright the increasingly crowded swath of downtown land where the store is located.

That property starts in the corner parking lot across the street from The Orange Peel and stretches to the edge of the co-op’s parking lot.

French Broad also has a perpetual lease at 76 Biltmore Ave., which it rents to Build It Naturally. The only interruption in the property is the Grey Rock Inn, a boardinghouse just south of the store.

A planned parking garage will open up to South Market Street behind the store, enabling easier access.

“So that people don’t even have to deal with Biltmore, because it’s just becoming prohibitive,” Sullivan said.

A crowded market

French Broad didn’t have much in the way of competition until John Swann’s Greenlife Grocery opened in 2004.

“Then (business) just started in this downward trajectory,” said Sullivan. “And that’s a testament to John Swann and the type of business that he opened up. It really was community-oriented, even though it had private ownership. The co-op just started to lose its relevancy.”

Now Swann owns Katuah Market in Biltmore Village and Whole Foods owns Greenlife Grocery, recently also opening a 35,000-square-foot store in East Asheville.

But Sullivan said Whole Foods’ seizing of more territory in the grocery business turf war has had a marginal effect on the co-op.

In the past few years, the store has stayed competitive by making a number of cosmetic changes, including re-figuring the internal layout. Business moves have included extensive internal training.

“When I got here, we didn’t have any money, and we worked with the resources we had inside the store to improve,” Sullivan said.

That included using the might of the National Cooperative Grocers Association, which French Broad joined in 2004.

Sullivan is active in the association, which helps the co-op cluster negotiate as one large buying entity, with the power of a 165-store chain.

Additionally, said Clare Schwartz, outreach coordinator for French Broad, the political climate has been ripe for a small store like the co-op to grow.

In 2011, the Occupy Wall Street movement occupied media attention, and the co-op’s sales surged, experiencing two consecutive years of almost 20 percent growth.

“It went right along with the Main Street versus Wall Street movement, where people really started thinking about where they wanted to put their money,” Schwartz said.

“I think that whole movement reminded them that, oh yeah, the co-op’s been here for almost 40 years now — that’s my store,” she said.

The role of a co-op

The nonprofit business model sets French Broad apart in a world where natural is mainstream. The people who work and shop in the store are stakeholders after paying an initiation fee.

A lifetime membership costs $250, a sum that can be paid in installments. Owners get a rebate at the end of the year based on how much they shopped and how much the store made.

Additionally, owners can work in the co-op to get a feel for how it operates as well as deeper discounts on groceries.

The worker-owners, however, can’t do what the paid staff does.

“We have a clear distinction, because our staff is organized in the Teamsters union, so that means that worker-owners can’t do the tasks that are essential in running the store,” said Sullivan. “Those are protected by the union.”

French Broad has an 11-member board of directors, elected into an up to seven-year term by co-op members. One member was once a disgruntled customer.

When customers become stakeholders, there’s a built-in system of checks and balances, said Sullivan.

“There always going to be enough dynamic on that board that I’ll continue to get challenged as a general manager,” he said. “The customers are owners. Think about that.”

French Broad’s board has the financial health of the store in mind, but not to the exclusion of its other business goals, which include consumer education, community and supporting local.

“Everyone else is pretending that their relationships are authentic, but their relationships are based around the dollar,” he said. “Our relationships are based around community, and building community.”

HOW IT WORKS

• French Broad Food Co-Op is owned by 1,600 shareholders who buy into the company with a $250 lifetime membership, which can be paid in installments.

• Worker-owners work in the store for deeper discounts on groceries.

• The store has a staff of 34 full-time and part-time workers. All nonmanagement workers are members of a Teamsters union. They’re all paid at least a Living Wage as certified by Just Economics.

• Overall personnel payroll expense, including taxes, benefits and discounts, is almost $1 million year.

• The co-op holds a space upstairs for community events and education, fulfilling two of its operating principles, which include carrying healthy products, providing education, supporting community and staff, environment and financial health.

• Local producers get preferential treatment with prime shelf space, no UPC codes necessary, and are provided sales data and consulting to help with business development.

• The co-op operates one of the oldest tailgate markets in Asheville in Wednesdays.

FRENCH BROAD FOOD CO-OP TIMELINE

1974:French Broad Food Co-Op starts as a food-buying club, one which met on various Asheville residents’ porches. One of those porches belonged to Ellie Warden, who still works in the store’s deli.

1975:French Broad becomes incorporated as a cooperative association, operated exclusively on a mutual and nonprofit basis.

1996:The co-op moves into its fourth and current location at 90 Biltmore Ave. Previously, the co-op operated in a potter’s shed on the corner of Broadway and Hillside streets, then a warehouse space on Carolina Lane, then in the Chesterfield Mill, which burned down a year after the co-op moved out.

2004:Greenlife opens creating financial challenges, according to French Broad. The co-op that year joined the National Cooperative Grocers Association, a national network of co-ops, pulling together to increase buying power.

2011: French Broad experiences rapid sales growth for three years in a row, filling cash reserves for the first time since Greenlife opened.

2014: The co-op, basically debt-free, becomes Living Wage-certified by Just Economics. The store begins planning expansion in earnest with the goal to create wider product selection, more parking, community space and better access.

Source: https://www.citizen-times.com/story/news/local/2014/09/09/ashevilles-french-broad-co-op-expands-stays-rooted/15345481/

French Broad Food Co-op Review from stuhelmfoodfan

FRENCH BROAD FOOD CO-OP – Biltmore Ave, Downtown Asheville

I love the French Broad Food Co-op.

I’ll admit that it took me a while to get used to the limited selection there, especially after living so close to the sprawling and expansive Greenlife/Wholefoods/Trader Ho’s/Harris Teets food compound up there in North Asheville for so long.

As you may know, I find the grocery store sitch in my new hood of the SFB/RAD/SoSlo area to be lacking, but I have come to count on, appreciate, and even love the good ol’ FBFC.

I used to be kind of aggro when I went in there. Grumbling to myself that they didn’t have this-or-that other thing or whatever-the-fuck specific product I was fixated on.

“WHY NO CHEESE POPCORN?!?”

Now I look forward to stopping in, and I shop with a smile as get my FBFC staples: Fresh ground peanut butter, a piece of fruit, something bready. Bulk nuts. I frickin’ love it!

My change in attitude is just that: A change in my mental attitude towards the FBFC. I’ve stopped thinking of it as an inadequate alternative to the big, fancy grocery stores, and have instead started thinking of it as Asheville’s best, healthiest, friendliest, and most thoughtfully well-stocked convenient store.

Ever since I lived in Chicago, I’ve believed that healthy convenient stores could be a positive element in neighborhoods with no grocery stores. Instead, most convenient stores are the opposite: greedy purveyors of junk food, soda pop, alcohol, cigarettes, and lottery tickets. They are, in many ways, a huge detriment to any neighborhood they occupy. (#hotspot)

When I lived in NAVL, I realized one day that I hadn’t been inside of the closest convenient store for months and months on end. As I searched their shelves for the thing I needed that they didn’t have (AAA Batteries) it dawned on me that the reason I hadn’t been inside for so long was simple: I’d quit drinking.

I also don’t smoke cig, or blunts, or gamble, and since most of the junk food I eat is organic, I hadn’t had cause to visit my local death and vice merchant for ages. Yay! Fuck them.

FBFC is the antidote to all of that bullshit. They sell every genre of junk food that I love: chips, ice cream, candy, and pastries, all made from healthy, quality, usually organic ingreeds. Plus, they sell fresh, often locally grown, fruit & veggies, great health-care products, oils & incense & other hippie-stuff, great bulk goods, and they even have a hot bar, a salad bar, and a small amount of fresh, local meat available in a cooler.

I’ve tried various things from the hot bar, all good, no clunkers so far! The produce gets two thumbs up from me, and extra points for teaching me about Surround, a white powder made from Kaolin clay that protects apples from bugs and rot all-natch style. Look it up. It’s neato! The meat in the cooler is from Hickory Nut Gap and Apple Brandy Farms, both of which I love! I was also highly amused when one of the cashiers held my ground beef purchase between her thumb and forefinger, at the very tippity-tip of the corner of the plastic packaging, like one might hold a dirty diaper. I’m guessing she was vegan. Ha ha! I loved it. Sorry! I eat animals. I know I’m gross.

One of the things I really love about the Co-op is the extreme, unapologetic hippie vibe that it’s got going on. It’s as if olde-school Asheville still lives within it’s walls. It looks, smells, and feels like the kind of hippie health food store I started shopping at way back in the 1980’s. Mmmmm… I frickin’ LOVE that smell.

Gosh, I’ve used the word “love” in this review a lot so far… the truth is, I think I’m falling in love with the French Broad Food Co-op. And you know what? I think it loves me too. Squeeee!

I genuinely feel like The Food Co-op gives an actual shit about my health and well-being. Shopping there has even helped me to clean-up my diet a little bit. Offering fewer, healthier choices has forced me to eat crazy things like apples, pears, and even a pomegranate. Whoa. Come to find out, I love these teeny-tiny miniature pears they had there for a while. They were locally grown, but seemed exotic at the same time! And I nearly forgot how much I love fresh cilantro. Ooh! And you can buy asparagus by the spear! I love that!

Love love love! I love love!

Thanks FBFC for restoring my faith in humanity and filling my heart with the purest, glowing, white, hippie love light every time I stop in to buy a giant-sized thing of organic 1/2 and 1/2 and some fresh ground fair trade coffee.

You = the best.

Source: https://ashvegas.com/stu-helm-food-critic-on-bomba-bens-penny-mart-french-broad-food-co-op-in-asheville