Making cooperation pay

What’s a true food cooperative — a place to buy natural foods and organically grown produce at reasonable prices? An empowering, humane place to work and find community? Or, maybe, a little bit of both?

The management, staff and member/owners of Asheville’s French Broad Food Co-op are locked in a thorny philosophical debate as they struggle to answer that question.

They’re not alone, however: Big changes are afoot in the organic-food industry, affecting cooperatives nationwide. Once upon a time, co-ops were just about the only place to buy natural foods, in many places. But by the late ’90s, a string of years of double-digit annual growth in sales had caught the eye of major grocery chains like Bi-Lo, which started offering some organic produce as well — sometimes at cheaper prices. Like many of its counterparts elsewhere, the French Broad Co-op’s management made changes, trying to stay competitive. Some of those changes have garnered mixed reviews from owners and staff, and non-management employees have used the opportunity to springboard a drive to unionize.

At the center of this brouhaha sits recently arrived General Manager Jim DeLuca. Some of his critics claim he just isn’t cooperative minded. Seven-year FBFC employee David Williams, who says he doesn’t want a union, believes a cooperative needs to be a community store first and a business second — the exact opposite, he says, of DeLuca’s philosophy.

For his part, DeLuca says his thinking changed when the industry did. When small cooperatives’ share of the organic-food market shrank from 70 percent to 6.8 percent, DeLuca decided it was time to get down to business. The member/owners still band together to get organic food at competitive prices, he explains, and that ownership guarantees that the Co-op will remain a community store.

Visionaries, says DeLuca, “believe the mission of a co-op is to transform society; but the reality is, we operate a grocery store.”

A democratic workplace?

When Mort Jonas first walked into the French Broad Food Co-op five years ago, he knew he’d found what he’d been missing. The Co-op, he says, offered its owners a lifestyle — in sharp contrast to Miami, his former home, where he knew of no place to buy natural foods and organically grown produce. Jonas felt he had to become an owner.

Now, however, Jonas says he feels the tensions building at the Co-op: “There is an increasing focus on making the business’s ends meet, which the Co-op has to do. I just hope it can be done, but I’m also concerned about my friends that work there — they don’t get paid enough.”

While wages are clearly a concern of workers, however — pay for non-management staff tops out at $7 per hour — most sides agree that money is not the biggest issue here. A national consultant on cooperatives, who’s familiar with Asheville’s co-op but declined to be identified, puts it this way: “It doesn’t have much to do with wages and benefits; it’s more about what everybody’s perception of a cooperative is. Many believe it’s a democratic workplace, a participatory work culture. Sometimes, people come into work at a co-op and think they’ll get to make every decision. It can be like that, but it doesn’t have to be. It’s more about serving members’ needs by providing natural foods and grocery products.”

Another consultant, the Seattle-based Carolee Colter, recalled the early history of food co-ops in a commentary in the June 1999 issue of Cooperative Grocer:

“For many members and employees of those co-ops, the concept of ‘democratic management’ was just as important as consumer ownership or natural foods. Over the years all but a handful of those co-ops have either converted to a more accountable management structure with a general manager or co-managers reporting to a board of directors, or they have gone out of business due to mismanagement, among other causes.”

But the ideal of the democratic workplace lives on, even among younger co-op employees, and Colter contends that there are sound business reasons for involving employees in co-op management. The best-run cooperatives, she writes, weave employee input and involvement into every aspect of decision making that affects working conditions and operations. The challenges, however, lie in finding workable ways to provide that forum for employee expression.

Growing pains

Over its 20-plus-year history, the French Broad Co-op has evolved from an informal “trading company” operating out of members’ homes, through a series of cramped rented spaces, into a 50-employee enterprise with more than $3 million in annual sales and its own premises at 91 Biltmore Ave., in the midst of a booming downtown commercial district. In addition, the Co-op now serves anyone in the community who cares to shop there (not just the 2,000 member/owners), and management is once again looking for more space, with a move almost certain in the near future.

Mary Ann Bowers has seen a lot of Co-op history — only one current staffer has worked there longer. She began her career washing floors and worked her way up to cashier; after eight years in that role, she crossed over to management, becoming human-resources manager last year. Bowers says it’s the Co-op’s member/owners who have instigated most of the organization’s growth.

“We were really limited with the products we sold, and we were really limited by the old location,” she says. “There will always be people who miss the small, cozy feeling, where everyone knows the names of the cashiers. At the same time, we were pushed to grow. People would ask: ‘Why don’t you carry this? Why don’t you carry that?’ They didn’t want to drive all over town to get what they needed.”

Three years ago, the Co-op’s board of directors began planning for a 600-square-foot expansion, completed in 1999. Part of that plan, according to former employee and board member Pattie Moore, was to bring in a new general manager to direct the expansion and boost slumping sales. Moore — who served as the Co-op’s finance director and interim general manager, as well as on the board, before jumping ship to become an accountant — says the Co-op’s “sales numbers sucked.” While industrywide sales were growing at 19 percent a year, the FBFC’s had slumped to 11 percent in 1998 and collapsed to 3 percent last year.

“[The Co-op] did kind of have a life of its own,” she says. “It grew really big, and it needed somebody who knows about the business and could help direct it. Jim DeLuca’s very qualified.”

DeLuca has worked in co-ops off and on since 1969, most recently at the Sevenanda Natural Foods Market in Atlanta, where he was the general manager for eight years. The sign on his office door reads, “Teamwork is the absence of whining, blaming, and personal agendas.” DeLuca says he shared his philosophy of how to run a co-op with the board of directors when he was interviewing for the job; when he was hired at the beginning of last year, he began by implementing a six-month plan. After that, he moved on to address other board suggestions. So far, he says, the feedback he’s gotten from the board about his performance has been positive.

To bolster sagging sales, DeLuca says he took advantage of the recent expansion to improve the “shopping experience” by widening the aisles and installing electronic scanners for the cashiers. In addition, when some products (such as certain bulk herbs) weren’t selling well, he opted to remove them and sell something else. “Management felt we were selling an inferior product,” he explains, based on inventory data obtained from the new scanners, “and, as a general grocery rule of thumb, you get rid of the lowest 10 percent [of] sales.”

DeLuca concedes that not everyone has praised these changes, but he maintains that they were necessary to ensure the Co-op’s viability. “There’s nothing about a co-op that guarantees … visionary thinking, nor are we limited by the product choices of what a minority of staff, owners or board members want,” he asserts.

Williams, however, calls DeLuca’s management style “intimidating” and says that when staff disagrees with DeLuca’s decisions, “he becomes more intimidating.” Several other employees interviewed echoed those charges.

Cutting back on bulk herbs has apparently caused the biggest flap. Employees who work in that section say that people would drive for several hours to buy rare herbs from the store’s extensive collection. Those staffers also note that many of the herbs were seasonal, which accounts for the poor sales when management looked at the products over a short time span. An herb that helps cure viruses, for example, will probably sell better during the winter cold season than in summer.

Strength in numbers?

At the beginning of January, disgruntled non-management staff launched a union campaign, under the direction of the Teamsters Local #61. The drive culminated on Feb. 17 when 25 employees filed a petition with the National Labor Relations Board, asking to be represented by the union in contract negotiations. The NLRB will sponsor a vote on the union by all non-management employees on March 28. In the meantime, however, the Co-op’s management could opt to allow a “card-count recognition” — a non-NLRB-sponsored (but still binding) vote that could take place almost immediately. The union is optimistic about its chances, representatives say, and would welcome a card count, but so far, management hasn’t been inclined to go that route.

“We’ll be addressing staff concerns such as worker safety, job security, staff benefits, fair wages, and a voice in decisions that affect the day-to-day working environment,” says Lola LaFey, a member of the union organizing team who has worked at the Co-op for three years. Then she uses the “V-word”: “creating a space for workers to talk about their vision for a community-based, diverse, co-operative business which is socially and environmentally conscious.”

Fellow organizing-team member Beth Trigg explains that workers feel the Co-op has drifted away from its original mission of providing community and customer service. The union, they hope, will enable staff to bargain collectively with management — without stepping on the toes of the member/owners, who meet once a year to vote and set a general direction for the business.

“We don’t want to take control away from the owners,” maintains Trigg, who’s worked at the FBFC only a short time but says she’s been involved with co-ops since she was 12. “We think the owners should have a strong and clear voice, and workers should have a different venue for expressing our voices. That will help the [Co-op]. The workers have the information and skills, because we are there every day: We know what sells.”

Clearly, not all Co-op employees support the union — and some say it’s mostly new arrivals who are behind the drive. Shelly Funk who’s been involved with the Co-op for seven years, puts it this way: “I think it’s fair to say that distinct lines can be drawn between new and veteran workers, so far as the union organizing goes. Most of the senior staff is not part of the organizing committee, or even involved in any pro-union activities. The main union organizer has not even worked here a full year, and most of the organizing committee have worked here less than five years — and many of them significantly less than that. One of the most vocal pro-union members has been here only three months.”

And some co-op member/owners have been dismayed that staff would choose to ally themselves with the Teamsters union. Trigg admits that “the early Teamsters were known as burly ass-kickers,” but says that they’re now more associated with police and nurses’ unions. The staff organizing team, she notes, feels that unions and co-ops are similar in that both represent the working class. “We see the co-op as a transformative force in the community, and we see the local organizers of the Teamsters — Johnny Sawyer and Laura Gordon — as doing just that,” Trigg explains, adding, “They care about empowering local people.”

Our previously quoted anonymous consultant, who has worked with about 150 cooperatives — roughly 5 percent of them unionized — argues that a union might accomplish the exact opposite of empowerment, however. “The unionizing does not necessarily give the workers greater opportunity, in the sense of … greater participation in the work force,” he asserts. “A union can codify and rigidify, and can often minimize opportunities for participation. With contracts comes legal advice about every move — and, all of a sudden, you are operating much more carefully.”

David Williams takes a dim view of the union drive for somewhat different reasons. Unions and cooperatives, he argues, function similarly, in that both provide opportunities for workers to express their opinions. “We are already a union. We don’t need anyone to bargain for us; we already have a voice. It’s been stupid — we’re spending hundreds and hundreds of dollars in legal fees, trying to figure this thing out,” he says, referring to the money Co-op management has spent hiring attorneys to negotiate with the union.

Instead of spending more Co-op money, Williams feels that management, staff and owners should simply get together and work things out, but he says he’s less than optimistic that this will happen. At the board of directors’ Feb. 16 meeting, Williams presented a petition signed by 78 member/owners, asking the board to call a special general-membership meeting (member/owners usually meet only once a year). The board, however, tabled the issue until its next meeting, in March.

“I could not believe it. I sat there for two hours, with no discussion on this urgent ownership petition,” Williams exclaimed, adding, “We need to keep our co-op alive in downtown.”

Williams also blames owner apathy for many of the Co-op’s current problems. He says he’s attended most of the general-membership meetings over the past seven years, and that fewer than 30 of the Co-op’s roughly 2,000 members have typically been on hand to elect board members and make product choices. The board of directors has scheduled a general-membership meeting — which had been planned for some time — for 6:30 p.m. on Friday, March 24, at Trinity Church. The meeting is supposed to address the overall vision for the Co-op, but Williams hopes that some of the other issues can be discussed there, as well.

Meanwhile, however, union-team organizer Catherine Shane was fired by the Co-op on Feb. 11. Teamsters Business Agent Johnny Sawyer says Shane was fired after a disagreement with another employer, and the union has filed an unfair-labor-practices charge with the NLRB. Sawyer said the timing of Shane’s termination is too much of a coincidence, noting that, in the past, the Co-op hasn’t fired employees involved in similar altercations. Asked about the firing, DeLuca would say only, “We followed the appropriate procedure with that staff person.” Williams, however, says Shane’s temper got her fired. “She had expressed that a few times in the store, inappropriately,” he revealed.

LaFey, who wouldn’t comment on the circumstances surrounding Shane’s dismissal, says the incident is part of a pattern of poor communication between staff and the general manager. DeLuca counters that one of the first things he did when he came to the Co-op was make one staff person in each department a floor manager, “so there’s only one step between me and the employees in the communication process.”

Making a living

No one disputes that the Co-op’s low wages (most people start at $6 per hour) are hard to live on.

On the other hand, even part-time Co-op employees working 12 hours a week receive benefits — a perk none of the five other cooperatives in the Southeast Cooperative Grocery Association offers. Employees also get a 20 percent discount on groceries, plus another 5 percent if they’re member/owners.

Other benefits, notes Bowers, include two weeks’ paid vacation (after one year), and an insurance plan that covers things like homeopathy, chiropractors and alternative medicine (after three months). And those low wages don’t appear to deter potential employees, she adds, because people are always coming into the Co-op looking for work.

But DeLuca says management has been crunching the numbers, anyway, with an eye toward upping wages to $8 per hour, across the board. Trigg, meanwhile, counters that a “livable wage” would be more like $10 per hour. And with better pay, she argues, there’d be less employee turnover — and, thus, a more experienced staff that would better serve customers. One of the union’s main goals, Trigg observes, is getting access to the Co-op’s financial records. “The union would accept no raises if it determines there’s no money,” she says, adding that the union would, however, push to set a date for a raise in the future.

The upcoming vote may decide whether workers get a union, but the philosophical differences about the Co-op’s mission seem unlikely to be resolved anytime soon. And, if you believe a cooperative should be a working democracy, it may be worth noting that the entire Co-op staff of 50 (including both management and non-management) plus the 78 owners who signed David Williams’ petition constitute, at best, a mere 6.4 percent of the 2,000 member/owners. How do the other 93.6 percent see things? Are they visionaries or practical business owners? Or maybe they’re just trying to get their shopping done.