Author: Hannah Scott

Join Peer Learning Sessions to Grow the Cooperative Ecosystem in Appalachia

Each month the CFAES Center for Cooperatives team hosts Zoom “peer networking calls” as part of the Appalachia Cooperates Initiative. If you’re a community, business, or economic developer, or simply have an interest in supporting cooperative development, you’re invited to join the sessions. Read on to learn more about the Appalachia Cooperates Initiative and peer networking calls and register for calls on Friday, August 19, 2022 from 1 p.m.- 2 p.m. Eastern and Friday, September 16, 2022 from 1 p.m.- 2 p.m. Eastern.

A view of mountains and blue sky backdrop of a green meadow in Moorfield, West Virginia area.

Appalachia has a diverse and long-established cooperative community. For example, Casa Nueva, has been operating as worker-owned cooperative restaurant in uptown Athens since the mid-1980’s (check out this ‘virtual tour’ of Casa Nueva as part of the Youth Cooperative Leadership Experience online platform) while Unity Café is a newer worker-owned café and eatery in Parkersburg, West Virginia. Cooperatives are providing vital services to their communities across Appalachia. Buckeye Rural Electric Cooperative provides electricity to over 18,000 consumer member-owners in Southeast Ohio and has since the late 1930’s. Today, some communities in Appalachia are leveraging the cooperative model to bring broadband to their rural areas – a topic we explored in the 2021 webinar, “Cooperating for Connectivity: An Appalachian Broadband Webinar” hosted by the CFAES Center for Cooperatives. To learn more about Central Appalachia’s cooperative community, check out “Exploring Appalachia’s Cooperative Economy,” a webinar where experts from our Center explored the region’s cooperative foundations and modern co-op efforts.

An Ecosystem Approach to Co-op Development

Since 2019, the CFAES Center for Cooperatives has led the Appalachia Cooperates Initiative (ACI), a learning network connecting cooperative, community, business, and economic developers and advocates in Central Appalachia. The goal of the ACI is to contribute to the development of a thriving co-op ecosystem in Central Appalachia by building awareness of the co-op model, equipping practitioners with knowledge and skills, and facilitating a connected network of co-op and community developers. The initiative was born out of collaborative dialogue of partners in Ohio, West Virginia, and Pennsylvania.

In a 2016 report, lead authors Hillary Abell and Melissa Hoover advocated for an ecosystem approach to building worker cooperative communities, pointing out elements in thriving cooperative ecosystems like access to quality and affordable technical assistance providers and cooperative developers, business advisory services and industry peer networks, cooperative awareness, and integration of cooperatives into entrepreneurship education. Learn more in the report, “The Cooperative Growth Ecosystem: Inclusive Economic Development in Action.”

Learning and Peer Networking Opportunities

As part of the ACI, our team at the CFAES Center for Cooperatives has hosted learning sessions like community workshops, film screenings, and educational webinars where experts and developers from across the region have shared their knowledge on topics like the Mondragon cooperative model, conversion of existing businesses to cooperatives, and more. You can find recordings of selected past ACI learning sessions and learn how to sign up for emails to receive details about future events on our Center’s website.

Graphics of people connected in network graph styleIn 2020, we started hosting monthly Zoom sessions for community, business, economic and other developers interested in the co-op business model. The idea was to build connections among people spread across a wide geography, and potentially working in distinct spaces. Each month, our team hosts a Zoom meeting where practitioners from across the region gather as their schedules allow in an informal but dedicated space.

All participants are encouraged to share updates, ask questions, and engage with the group. Peers can meet one another, share their current projects or expertise, ask for resources, or best practices, and identify opportunities for potential collaboration.

Those who are interested can register for sessions as their schedules allow. Registration details for upcoming calls in August and September 2022 are below. To receive emails with details of future ACI events and peer networking calls, sign up for the Center’s email list here. There is no cost to attend, and sessions will NOT be recorded.

Upcoming ACI Peer Learning Calls

Friday, August 19, 2022, 1-2 p.m. (EST)

To register for this event, click here.

Friday, September 16, 2022, 1-2 p.m. (EST)

To register for this event, click here.

Cooperative Learning Opportunity: Join the Mid America Cooperative Council 2022 Annual Meeting

Cooperatives, like all businesses and organizations, are facing a unique time of change. A 2021 report exploring the impact of the COVID-19 pandemic on a segment of cooperatives in Ohio highlighted supply chain challenges, changes in governance, and accelerated adoption of digital technologies as some of the impacts of the pandemic. On April 28th, the Mid America Cooperative Council (MACC), in partnership with the CFAES Center for Cooperatives, will host three nationally recognized speakers who will examine current trends in the cooperative community and “ways to implement small practical disciplines to improve your work life,” as part of MACC’s 2022 Annual Meeting.

Meet the Speakers

The National Council of Farmer Cooperatives (NCFC) works to advance the “interests of America’s cooperatives and other farmer-owned enterprises.” President and CEO Chuck Connor has led the organization since 2009. With members across the United States, Mr. Connor will share current trends in the farmer cooperative landscape from a national perspective. Learn more about NCFC here.

Financial planning is an important part of the way cooperatives plan for their future. Dr. Phil Kenkel will share current trends in cooperative equity management at MACC’s upcoming annual meeting. Dr. Kenkel is Regents Professor of Agricultural Economics at Oklahoma State University and an expert in the cooperative business model, having taught courses in agricultural cooperatives, published scholarly works on cooperative finance, risk analysis, strategic planning, and more, and conducted trainings for producer-owned businesses across the globe. Learn more about Dr. Kenkel and his work here.

As businesses and organizations experience the impacts of the “Great Resignation” and think about and craft post-pandemic workplaces, it seems like changes in the workplace are top of mind across the economy. Dr. Theresa Glomb is a professor in the Carlson School of Management at the University of Minnesota. Her research, which has included field research in dozens of companies and been published in top psychology and management journals, focuses on worker well-being. Dr. Glomb will present, “Let’s Make Work Better: Evidence Based Practices for Improving Your Work Life,” where she will share “ways to implement small, practical disciplines to improve your work life.” Learn more about Dr. Glomb and her work here.

Register for the Learning Opportunity

The MACC Annual Meeting will take place via Zoom on April 28, 2022 from 9 a.m. – 12 p.m. Eastern. There is no cost to participate, and non-members of MACC are welcome to engage in the learning opportunity. The 2022 MACC Annual Business Meeting will begin at approximately 11:30 a.m. Eastern; only MACC members are eligible to vote during the annual meeting.

Register at go.osu.edu/maccmeeting.

 

What is the Mid America Cooperative Council?

The College of Food, Agricultural, and Environmental Sciences Center for Cooperatives at Ohio State provides management services to the Mid America Cooperative Council, a non-profit association of cooperatives, co-op support organizations, and individuals supportive of MACC’s mission to promote, foster, and enhance the values of cooperatives! Learn more at macc.coop.

Building a Community Economy: Exploring Worker Co-ops as a Succession Strategy

Four workers "bump fists" over an office table with various notebooks, tablets, calculators, and other items.Generational changes are often a topic in popular culture. Think about the many popular press articles about changes in home buying, workplace culture, and more. Another important generational change is happening in the small business world. Baby boomers are estimated to own almost half of privately held businesses in the United States.[1] An article from the U.S. Small Business Administration cites that about 70% of privately owned businesses are expected to change ownership in the next 10-15 years, a change that “will represent the largest intergenerational transfer of wealth in U.S. history.”[2] In Ohio, 54% of private businesses, an estimated 94,000 firms employing approximately 2.6 million people, are owned by baby boomers[3], generally defined as those born between 1946 and 1964 who are currently reaching retirement age[4].

Business Succession Strategies and Worker Co-ops

As small business owners plan for retirement or other transition scenarios, they might consider passing the business to a family member, selling to a co-owner or key employee, selling to an outside buyer, or other options.[5] The cooperative model may be able to play a role in these transitions. Worker cooperatives are businesses where worker-members own most of the equity and control the voting shares of the business, while participating in profit sharing, oversight, and sometimes, management, using democratic practices.[6]

A 2021 report authored by experts at the Ohio Employee Ownership Center at Kent State University discussed the potential for worker cooperatives and other employee-owned structures to be viable options for business transitions while helping to retain jobs, build worker wealth, and reduce economic inequality.[7] Watch a recording of a webinar hosted by the CFAES Center for Cooperatives with report co-author Michael Palmieri about the research on the potential benefits of employee ownership.

Worker Co-ops Across the Country and in Ohio

In a 2022 report, the Democracy at Work Institute estimated that there are 612 worker cooperatives or similar democratic workplaces employing just under 6,000 workers across the United States. Ohio has an estimated 20 worker co-op firms, ranking it 9th among U.S. states and territories. These businesses tend to be small, with a median firm size of six workers. Approximately 12% of these businesses originated as ownership transitions.[8]

What Makes A Business a Good Candidate for Potential Transition to a Worker Cooperative?

After studying 12 cases of existing businesses converting to worker cooperatives, authors Alison Lingane and Shannon Rieger[9] identified common motivators for business conversions to worker co-ops. Succession for an exiting owner was one motivator, in addition to goals of building wealth for employees, supporting the business’ mission, and as a way to tap into the strengths of employee-owned models. Based on real-world cases, Lingane and Rieger developed a set of business “readiness factors” for conversion to worker-ownership, including:

  • A commitment to the worker co-op model by the transitioning owner and employees
  • The business being in a strong and sustainable financial position
  • A culture of participation and transparency within the business
  • A program or emphasis on training, advising, and support for both employees and transitioning owners
  • Financing strategies that create a viable path for the conversion
  • Engagement by the transitioning owner throughout the conversion process
  • Phasing the conversion process in stages to lower risk and decrease the cost of capital
  • Securing a third-party financial valuation for the business before agreeing on a price

Some of these factors were identified as “prerequisites” to worker cooperative conversions, while others were identified as important for developing during the conversation process or even simply as helpful for the success of the conversion.

Learn More at Upcoming Free Webinar on March 30

Join the CFAES Center for Cooperatives and guest speaker, Ellen Vera, Director of Development and Co-op Organizing for Co-op Cincy, for a free online webinar on Wednesday, March 30, 2022 from 3-4 p.m. Eastern to learn more about worker and community owned cooperative models, including learning from Co-op Cincy’s decade of experience organizing worker co-ops, including a recent focus on conversions from existing businesses to worker co-ops.

Register by visiting: go.osu.edu/BCE

 

This event will be presented with automated closed captions. If you wish to request traditional CART services or other accommodations, please contact Hannah Scott at scott.1220@osu.edu or 740-289-2071. Requests made by March 20, 2022 will generally allow us to provide seamless access, but the university will make every effort to meet requests made after this date.

 

References

[1] Palmieri, M. & Cooper, C. (2021). Building Legacies: Retaining Jobs and Creating Wealth Through Worker Ownership. Ohio Employee Ownership Center at Kent State University. Retrieved from https://www.oeockent.org/the-ohio-worker-ownership-network

[2] Giltner, E. (n.d.). Business Succession Planning. U.S. Small Business Administration. Retrieved from https://www.sba.gov/content/business-succession-planning

[3] Palmieri, M. & Cooper, C. (2021).

[4] “Baby Boomer,” (2021). Investopedia. Retrieved from https://www.investopedia.com/terms/b/baby_boomer.asp

[5] Newcomer-Dyer, R. (2019). “Business Succession Planning: 5 Ways to Transfer Ownership Of Your Business.” Fit Small Business. Retrieved from https://fitsmallbusiness.com/business-succession-planning/

[6] Hoover, M. & Abell, H. (2016) “The Cooperative Growth Ecosysem: Inclusive Economic Development in Action.” Project Equity & Democracy at Work Institute. Retrieved from https://institute.coop/resources/cooperative-growth-ecosystem-inclusive-economic-development-action

[7] Palmieri, M. & Cooper, C. (2021).

[8] “2021 State of the Sector: Worker Cooperatives in the U.S.” (2022). Democracy at Work Institute. Retrieved from https://institute.coop/resources/2021-worker-cooperative-state-sector-report.

[9] Lingane, A. & Rieger, S. (2015). “Case Studies: Business Conversions to Worker Cooperatives: Insights and Readiness Factors for Owners and Employees.” Project Equity. Retrieved from https://www.project-equity.org/wp-content/uploads/2017/02/Case-Studies_Business-Conversions-to-Worker-Cooperatives_ProjectEquity.pdf

Resilience, Cooperatives, and COVID-19

Seedling sprouting in the palm of a person's hand.

 

As 2021 ends, I’ve been thinking about the word “resilience.” Resilience is the “ability to become strong, healthy, or successful again after something bad happens,” according to Merriam-Webster. After 20-months of unprecedented shifts in our society, economy, and daily lives brought about by the pandemic, as well as social grappling with institutional and structural racism, concerns about climate change, and more, perhaps we are all thinking about resilience now more than ever.

Cooperative businesses are built around the globally-recognized principles of concern for community, cooperation among cooperatives, and democratic member control, based on values of self-help and solidarity, among others. As the COVID-19 pandemic impacted cooperative members, communities, and businesses, cooperatives have responded in unique ways that highlight the spirit of cooperation and the resilience of the cooperative community.

Globally, cooperatives have responded to the pandemic by adapting in their businesses and by supporting their members and communities with examples including enhancing home delivery of food, grants for cooperatives to purchase agricultural products, and donations of medical products. In the U.S., cooperatives set up community internet hot spots for their members learning and working from home without stable internet access. Really, the examples are too many to capture in one place.

Like many businesses, cooperatives have also faced challenges from the pandemic. The World Cooperative Monitor’s 2020 report, “Exploring the Cooperative Economy” highlighted that some cooperatives saw major declines in revenues, faced cash flow issues, and had to implement temporary unemployment measures – with impacts varying widely by sector. A recent analysis by researchers at Cleveland State University, in collaboration with the CFAES Center for Cooperatives at The Ohio State University, explored how food, agriculture, and rural electric cooperatives in Ohio were impacted by the pandemic. Interviews with cooperative leaders illuminated both positive and negative impacts from COVID-19. Some co-ops saw accelerated implementation of digital technologies. Others experienced serious negative impacts from supply chain disruptions, with one leader sharing that uncertainty has made it “impossible to make decisions on expanding or improving operations.” Importantly, the analysis showed that rural electric, food, and agriculture cooperatives in Ohio employed roughly the same number of people in 2021 as they did pre-pandemic and did not have to lay off workers during the pandemic. Read the full report, “Cooperatives and Ohio’s Economy: Their Contribution and the Impact of Covid-19” here.

Join the CFAES Center for Cooperatives on December 15, 2021 at 1:00pm Eastern for a free webinar discussing the economic contribution of Ohio’s food, agriculture, and rural electric cooperatives and the impact of the COVID-19 pandemic on this cooperative community. Register for the webinar here.

Across the United States, the pandemic was particularly challenging for the restaurant and food service industry. In Los Angeles, a growing community of worker-owned cooperative restaurant and food businesses is building workplace democracy and spaces for community building post-pandemic. As communities consider how to build more resilient businesses in the wake of the pandemic, worker-owned cooperatives and other employee-owned business models may be uniquely positioned to address income and wealth inequality as well as a looming business succession challenges. In Ohio, an estimated 54% of businesses, representing $118 billion in payroll and $690 billion in sales, are owned by baby boomers who are at or nearing retirement age. A recent report, Building Legacies: Retaining Jobs and Creating Wealth Through Worker Ownership, released by the Ohio Worker Ownership Network highlights the potential impact of worker owned enterprises to build wealth, provide stable employment, reduce economic inequality, and provide a viable path for business continuity.

Co-op Month Podcast Playlist

Headphones October is National Co-op Month in the United States! The annual celebration is an opportunity to lift up the values and impact of the cooperative community. To celebrate this year, our team at the CFAES Center for Cooperatives is sharing resources for learning about the co-op model. This focus is fitting given that Co-op Principle 5: Education, Training and Information highlights the importance of life-long learning across the global co-op community.

The cooperative community’s diversity and innovation create seemingly endless opportunities to learn about how member-owned enterprises are solving problems and “building back better” in their communities.

Whether you’re new to cooperatives or a seasoned co-op developer, you’ll find unique stories about the cooperative business model in the co-op podcast playlist below!

Exploring Cooperative Leadership

Cooperatives, as member-owned and controlled enterprises, are led by a board of directors who are integral to the operation’s success. If you’re considering joining your co-op’s board of directors – or even if you have served as a director for many years – it is important to recognize the responsibilities inherent in board leadership.

Basic Responsibilities of Co-op Directors

A cooperative board of directors is generally responsible for the affairs of the co-op. For example, under Ohio’s cooperative business statute, “all of the authority of an association shall be exercised by or under the direction of the board.” In a cooperative, the board is generally elected from and by the membership, meaning that directors are also co-op members although some cooperatives may have non-member directors.

A specialist from the U.S. Department of Agriculture conceptualized the responsibilities of cooperative directors as “seven circles,” including:

  1. Representing members, including understanding members’ needs and assessing whether the cooperative is meeting those needs.
  2. Establishing policies that guide the operation of the co-op, including both long-range and specific policies.
  3. Hiring and supervising management, often with direct involvement in hiring and supervising top management such as a general manager or chief executive officer.
  4. Acquiring and preserving assets, including establishing policies relating to assets such as oversight and accounting systems as well as monitoring financial performance.
  5. Preserving cooperative character by ensuring the fundamental character of the enterprise follows co-op principles.
  6. Assessing the cooperative’s performance, including financial performance, but also performance related to fundamental objectives like member benefit.
  7. Informing members with a recognition that members are the owners of the cooperative and accurate and complete information helps ensure they make informed decisions.

As directors carry out these important functions, or delegate responsibility to the co-op’s officers and managers, they are expected to uphold basic legal standards because they are considered fiduciaries who have legal duties to the cooperative, the co-op’s members, and the co-op’s other directors. While the concept of fiduciary duties is broad, at the most basic these duties generally require that directors act in good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances, and in a manner they reasonably believe is in the best interests of the co-op. As two co-op attorneys summarized, these duties require that directors:

  • show up,
  • be prepared,
  • protect the board’s process,
  • disclose conflicts,
  • don’t compete with the cooperative, and
  • don’t breach confidentiality.

Exploring Board Leadership Opportunities  

If you are contemplating joining a co-op board, whether through the encouragement of a neighbor, an invitation from a colleague, or after exploring ways to give back to your community, you likely have multiple questions.

As we learned above, directors play a vital role in leading their cooperatives, taking on various legal duties and other responsibilities. As you explore the opportunity to serve on a co-op board, it is important to consider whether you can effectively uphold these duties and responsibilities.

The following questions, based on recommendations for individuals considering corporate board leadership from the American Bar Association’s Corporate Director’s Guidebook, may help as you think about the opportunity.

  • Do I have sufficient time to diligently perform the duties required of a director? For example, do I have scheduling conflicts with the board’s regular meeting schedule? Do I have sufficient scheduling flexibility to respond to unexpected needs?
  • Do I have skills and experiences that allow me to meaningfully participate as a board member?  Are there special skills I should develop to participate in board activities more fully?
  • Do I have a sufficient understanding of the cooperative’s business to be effective as a director? How can I further develop this understanding?
  • Do I have confidence in the cooperative’s current senior management and directors?
  • Do I have a compelling interest in engaging in board leadership?

The Importance of Co-op Principle 5: Education and Training in Co-op Governance

Co-op members exploring future board leadership, and directors who have led their board for many years, can benefit from ongoing education and skill-building. In fact, as cooperative directors face increasing public and legal scrutiny, there is an increasing awareness of the important role of ongoing education and training for directors. Two legal scholars explained, “Directors are now expected to have more than a passing understanding of financial statements, their fiduciary responsibilities to the cooperative, and other essential items.”[1]

Whether you prefer to learn through reading, in-person teaching, or connecting with peers, there are many resources for co-op members and directors to build their governance knowledge and skills. You can ask your co-op leadership what type of training programs they provide for directors, whether they are members of organizations that provide cooperative education, or whether they partner with co-op educators. You can also explore publicly available resources on your own. Below are a few great places to start!

Join the CFAES Center for Cooperatives and Mid America Cooperative Council for the online training, “Welcome to the Board” on Thursday, September 30 from 10a-12p Eastern time. The interactive training will introduce participants to the roles and responsibilities of cooperative directors and the crucial skills directors use in leading cooperatives. Registration for the training is available at https://go.osu.edu/maccwelcometotheboard.

Explore Co-op Mastery: Beyond Cooperatives 101 online at your own pace. The self-directed platform helps learners explore cooperative governance, taxation, finances, and more using videos, narrated presentations, infographics and more! Explore the platform at https://go.osu.edu/coopmastery

Read Navigating Your Legal Duties: A Guide for Agricultural Cooperative Directors from the National Agricultural Law Center. The guide includes five chapters and reviews topics like fiduciary duties, antitrust laws, securities issues, and risk management tools. Chapters are written to stand alone so readers who want to explore a single topic can skip to the chapter or section of interest. Use the self-assessment at the end of each chapter to explore how the concepts apply in your own cooperative.

 

References

Charles T. Autry & Roland F. Hall, American Bar Association Business Law Section, The Law of Cooperatives 60 (2009).

Corporate Laws Committee, American Bar Association Business Law Section, Corporate Director’s Guidebook 5-6 (6th ed. 2011).

James Baarda, U.S. Dep’t of Agric. Rural Bus. Coop. Serv. Cooperative Information Report 61, The Circle of Responsibilities for Co-op Boards 3-5 (2014).

Hannah Scott & Michael E. Traxinger, National Agricultural Law Center, Navigating Your Legal Duties: A Guide for Agricultural Cooperative Directors 11-26 (2021 https://nationalaglawcenter.org/center-publications/busorg/).

Michael W. Droke, Dorsey & Whitney LLP, Cooperative Business Law A Practical Guide to the Special Laws Governing Cooperatives 57-28 (3d. ed. 2020).

Thane Joyal & Dave Swanson, Precautions and Protections: Summarizing legal responsibilities of cooperative boards, Cooperative Grocer (Mar. – Apr. 2011 https://www.grocer.coop/system/files/legacy_files/precautions.pdf)  

[1] Charles T. Autry & Roland F. Hall, American Bar Association Business Law Section, The Law of Cooperatives 60 (2009).

Cooperating for Connectivity: Cooperative Approaches to Rural Broadband

Almost one year ago, as we were still in the early phases of the COVID-19 pandemic and the many changes the public health emergency created in our work, home, and social lives, I wrote an article highlighting the cooperative community’s attention to the lack of reliable broadband in rural America. In that article, “Broad Thinking: Why the co-op model could be a key to closing the broadband gap,” I highlighted the work of rural electric cooperatives who are expanding their services to include broadband. These same co-ops were vital to bringing electricity to rural Americans in the 1930’s. I also highlighted new, grassroots community groups who are pooling their resources and time to bring broadband access to their community, like the Southeast Ohio Broadband Cooperative in Washington County, Ohio.

Recently, the College of Food, Agricultural, and Environmental Sciences Center for Cooperatives hosted a webinar with guests Mike Keyser, CEO of BARC Electric Cooperative, and David Brown, co-founder of Southeast Ohio Broadband Cooperative, who shared their experiences bringing connectivity to rural, Appalachian communities using cooperative approaches. Although the two are approaching broadband access using different infrastructure, at different scales, and with different histories, their mutual-ownership, cooperative model is similar. Brown shared, “The dedication of a cooperative to the community, rather than to making a profit and that representation of the membership in the decision-making process – those were all elements that led us to adopting a cooperative model.” Southeast Ohio Broadband Cooperative formed in response to the COVID-19 pandemic after realizing that many community members could not effectively participate in remote schooling, work, and other opportunities and has since started providing broadband to members using a mixed-technology approach.

While BARC Electric Cooperative has a longer history – the co-op formed to provide electricity services in the 1930’s – and connects over 12,500 meters to the electric grid, the co-op model is also vital to their efforts to bring broadband services to their community.  Keyser shared, “We’re all about service to the membership, and as long as we’re recovering our cost of services, we don’t have shareholders that have to have a return [so] we can live with a longer payback on this investment…” The co-op has installed almost 800 miles of fiber in a project that will eventually bring broadband access to their entire customer-membership base.

To learn more about these cooperative approaches to building rural broadband access, you can watch a recording of the webinar, “Cooperating for Connectivity” here.

Center for Co-ops Collaborating to Assess the Impact of COVID-19 on Ohio’s Ag Co-ops

The Center for Cooperatives in the College of Food, Agricultural, and Environmental Sciences (CFAES) at The Ohio State University is collaborating with the Center for Economic Development in the Maxine Goodman Levin College of Urban Affairs at Cleveland State University to understand the economic impacts of COVID-19 on the state’s agricultural co-ops and to estimate the economic contribution of cooperatives to Ohio’s economy. The project will gather data from public sources and interviews of agricultural co-op leaders.

Hannah Scott, Program Manager of the CFAES Center for Cooperatives, explained the goals for the project. “The COVID-19 public health emergency has had far-reaching impacts across so many aspects of our economy. We’re looking forward to better understanding how the state’s cooperatives have weathered the changes brought about by the pandemic — from temporary closures to supply chain shifts. At the same time, we’re collecting information to reliably estimate the economic contribution of co-ops to our state’s overall economy. Ohio is home to some of the largest co-ops in the country and while we know that co-ops are important, we do not currently have a reliable estimate of their economic impact.”

The project work is funded, in part, by a U.S. Economic Development Administration (EDA) University Center CARES Act Award received by the Center for Economic Development at Cleveland State University. Dr. Iryna Demko, Research Associate with the Center for Economic Development, shared that cooperatives play a unique role in the agri-food supply chain. “The purpose of the agricultural supply chain is the fast and efficient delivery of agricultural products from farmers to consumers. Each cooperative acts as an intermediary in the supply chain by connecting its members to wholesalers,” Demko said. “Cooperatives also purchase products and materials needed for their business to function. We want to quantify the impact of the COVID-19 pandemic on cooperatives’ supply chain and on their role in the supply chain.”

For more information, contact Hannah Scott, Program Manager of the CFAES Center for Cooperatives at Ohio State, at scott.1220@osu.edu.

Sustainability through Cooperation

While the concept of sustainability can mean different things to different audiences, the cooperative business model builds sustainable practices into the fabric of businesses from agriculture to food cooperatives to credit providers. The Sustainable Agriculture Research and Education (SARE) organization include concepts of productivity, environmental stewardship, profitability, and quality of life in the way they think about sustainability. The examples shared here from cooperatives across industries, geographies, and growth stages demonstrate how sustainability is a part of being a co-op.

Environmental Stewardship

In early 2020, Ocean Spray, a farmer-owned cooperative of cranberry growers across the United States, Canada, and Chile, announced that 100% of the cranberries it used in products from juices to snacks to fresh fruit were sustainably grown, according to the Sustainable Agriculture Initiative Platform’s (SAI Platform) Farm Sustainability Assessment. The SAI Platform defines sustainable agriculture as the “efficient production of safe, high- quality agricultural products in a way that protects and improves the natural environment, the social and economic conditions of farmers and their communities, and safeguards the health and welfare of all farmed species.”

Practices like water efficiency technologies, nutrient management practices, and more help ensure that cranberry production enhances the quality of natural resources. Ocean Spray shared that, on average, every acre of cranberry bog conserves 5.5 acres of natural lands for native plants and wildlife.

Concern for Community

Social aspects of sustainability focus on promoting resilience and well-being for individuals and communities. The National Council of Farm Cooperatives (NCFC) adopted an approach to sustainability that includes community well-being, including “conducting our businesses responsibly, maintaining safe, healthy and respectful workplaces for our employees, and fostering vibrant rural communities.” Co-op regulars will recognize in these concepts one of the principles of the cooperative model – concern for community. The concept of community engagement is an internationally recognized and celebrated principle of the cooperative model. Not only are co-ops rooted in community through their member-owned structure, but they also support their communities in ways that are as diverse as the co-op community across the U.S. For example, in Ohio, three cooperatives founded Fueling the Cure, an effort to promote cancer research and prevention. By donating $1 for every delivery stop of bulk propane purchased through their cooperatives, the group has now donated over $1.5 million to help find a cure for cancer.

Economic Viability

For an enterprise to be sustainable, it must be economically viable over the long term. Cooperatives are no exception. But cooperatives also have characteristics that ensure that their economic viability spreads beyond the co-op itself to its member-owners. One of the hallmarks of the cooperative business model is that member-owners share in the benefits of the business, including the profits or surplus. Cooperatives share profits based on member-owners’ use of the business rather than their investment in the enterprise. This is known as patronage. Patronage refunds that are returned to member-owners can be reinvested in their farms, businesses, or homes. For example, in early 2020, Farm Credit Mid-America, a lender in the Farm Credit system serving Ohio, Kentucky, Indiana, and Tennessee, announced that it would return $186 million in patronage to customer-members. In 2019, the co-op returned $146 million to customer members.

Watch “Cooperating for Sustainable Development”

In November 2020, the CFAES Center for Cooperatives teamed up with the OSU School of Environment and Natural Resources Environmental Professionals Network and the OSU Sustainability Institute to host “Cooperating for Sustainable Development.” The webinar was a conversation with Dr. Kip Curtis and founding members of the Richland Gro-Op cooperative (RGO), Matthew Stanfield, and Walt Bonham. RGO is a marketing co-op supporting new growers in Richland County, Ohio, in their goals to grow new farmers and build a more sustainable and just food system in their community. The CFAES Center for Cooperatives team has supported the development of RGO since 2018. You can view the video of the conversation below with introductory comments from special guests Dr. Ryan Schmiesing, Vice Provost for Outreach and Engagement at The Ohio State University, Dr. Cathann Kress, Vice President for Agricultural Administration and Dean of The Ohio State University College of Food, Agricultural, and Environmental Sciences, and Doug O’Brien, President, and CEO of the National Cooperative Business Association CLUSA International.

Cooperatives interested in developing a comprehensive sustainability program, or refreshing an existing program, can use the National Council of Farmer Cooperatives’ Field Guild for Farmer Cooperative Sustainability Programs for guidance.

Beef Co-op’s Marketing Efforts Offer Insights for Local Food Entrepreneurs

For every business, getting marketing right is key. For food entrepreneurs selling directly to consumers at farmer’s markets, farm stands, online, in grocery stores, and via subscriptions, telling their story through marketing is vital to reaching their target customer demographic to enhance sales. But how do food entrepreneurs — especially those selling locally produced products through local supply chains –know which marketing channels to use?

The farmer-owners of Buckeye Valley Beef Cooperative, a young co-op marketing locally raised beef in southwest Ohio, set out to answer that question. They wanted to know how they could maximize their marketing efforts to generate new customers and sales for their farmer-owners. In 2019, the co-op proposed and was awarded a project to the 2019 Sustainable Agriculture Research & Education (SARE) Farmer/Rancher grant program. Their project would help the co-op develop, implement, and then measure the effectiveness of four new advertising channels: Google ads, billboards, radio advertisements, and Facebook ads. The co-op placed their ads, some of which were created in consultation with marketing professionals at the companies they purchased advertising through, and then tracked whether their efforts translated into new customer orders. What they learned can offer insights to other local food producers, particularly those selling meat.

Readers can learn more about the project, the co-op’s experiences, and the results in a presentation by a founding member of the co-op available above as a part of The Ohio State University College of Food, Agricultural, and Environmental Sciences online Farm Science Review.

What Did the Co-op Learn?

  • Facebook ads and radio ads on the local public radio channel were the most effective new advertising channels the co-op tested. Facebooks ads resulted in an astounding 10900% return on the dollars invested in the channel. Also, co-op members were surprised to learn that radio ads resulted in an 85% return on their investment.
  • Some new advertising channels took a lot of time and energy to learn. The co-op relies on volunteer labor and they took a team approach to implementing the new advertising methods. Even so, learning the ins-and-outs of utilizing certain channels took a significant time investment.
  • Word of mouth is still the most effective marketing strategy for the co-op. Sales from customers who reported learning about the cooperative by word of mouth dwarfed sales generated from customers who reported finding out about the co-op through one of the new advertising channels. This reinforces the idea that food entrepreneurs should ensure they are paying close attention to customer experiences and creating ways for their customers to share their excitement about their products.

About Buckeye Valley Beef Cooperative

Buckeye Valley Beef Cooperative was formed in 2016 by southwest Ohio farmers who wanted to expand their markets for locally raised beef and to increase their farmer incomes. The co-op markets beef to retailers and directly to consumers. You can learn more about the cooperative via the video, Buckeye Valley Beef Cooperative: Our Story  The co-op’s farmer members were supported by the CFAES Center for Cooperatives in their start-up and the development of their SARE proposal.