Greetings and thanks for writing. As usual, suggestions and responses may have been edited for brevity, clarity and/or comedy. In addition, no idea, concept, issue, remark, phrase, description of event, word or word string should be taken seriously. This also applies to the previous sentence.

Last month’s Shuttle included some thoughts written by member Janis Risch (read it here), about how co-ops have evolved in the last few decades, and part of that evolution has resulted in higher prices, too high for many people to afford, including people who helped start and maintain food co-ops over the years. Thanks to Janis for raising these issues in this way. Our editor Mary Sweeten asked me to reply. 

I could almost write a book about what I think about the evolution of co-ops since my first involvement in one, Temple University’s buying club co-op, near 15th and Norris, I think in 1973. I had been to a friend’s house and she offered me an apple and told me they were 10 cents at the co-op. I joined the Co-op the next week. The markup — what’s added to the cost to get the selling price — was 10 percent, and it was probably too high, as we soon had a bit of surplus cash in the cigar box.

About a year later I started working at Weavers Way. I think the markup was in the range of 25 percent. (Weavers Way had rent and paid staff and other expenses, while Temple had free rent, and labor was just the members.) Weavers Way’s founding manager, Jules Timerman, was also the main buyer and was famous for finding deals (albeit sometimes at the cost of quality). Then the Co-op grew and grew. As Janis pointed out, part of that growth included becoming more “professional.” As we made things a little better for staff and shoppers by offering health benefits and upgrading our building and equipment, the markup grew a little, but was still lower than most other grocery stores, so we were still comparatively cheaper.

In those days, our Board was also much more involved in operations, and we had a couple of Board members who were both sensitive and vocal about beating the others’ prices (Vince Pieri and Fred Novin, to name two). We mostly sold things we could compete on — produce, cheese, lunch meat, day-old bread, nuts and dried fruit. We simply didn’t sell things like milk and conventional groceries, as we could not buy them cheap enough to offer a savings after applying our markup. (Jules would occasionally find conventional groceries at a salvage place, although cans might be dented and cereal boxes might be crushed, or brands might be unknown.) We had a couple of different markups; I think the highest was 33 percent on things we packed ourselves, like raisins and nuts. Today we have dozens of markups, which range from about 25 percent to over 100 percent.

As the Co-op grew, members wanted us to be more of a one-stop shop, so, after fixing up 559 Carpenter Lane (we started in 555), we added things like milk and groceries like flour, sugar and Cheerios. Although we used lower markups on these items, we still couldn’t beat supermarket prices, as commodity food pricing is based on volume, and our volume was low. Plus, supermarket markup on dry groceries is relatively low anyway. So we explained to shoppers that these items were offered as a convenience and we could not sell them at a great savings. This seemed to suffice for a decade or so.

Gradually, natural foods became more popular and sought-after by our members. And at first, we could undercut the competition because we were actually moving more volume and charging lower margins than the smallish “health food” stores that were the only other places that carried the stuff. 

We continued to grow as a business and organization, and, as other co-ops also grew, we all became more “professional,” which appears to me to include some of the following:

• Adopting the John Carver Policy Governance model, which dictates the relationship among Board, general manager and staff.
• Elimination or de-emphasis of member work programs (due to a variety of reasons, both legal and operational).
• Growth of administrative departments, especially Finance, IT and Marketing,
• Hiring managers from the supermarket industry and adopting some of the systems and practices from the supermarket industry, such as category management of product lines and development of hybrid pricing and other strategies to “manage price image.”
• In general offering a more “polished” appearance of both facilities and product, requiring capital for modern facilities and new equipment and staff time to do things like wash and band lettuce, trim broccoli and sort strawberries.
• Increased borrowing for improvements, expansion, building purchases and new programs and the resulting interest payments.

Most, if not all, of these things added substantial overhead to what were once simpler and leaner organizations and operations. As co-ops grew more “professional,” this added overhead was paid for by increasing markups. I suspect this is one of a number of factors that have resulted in higher prices at Weavers Way and many other co-ops. I believe our markups have increased by about 20 percent since the late 1990s. There are other factors too, including a shift toward healthier food, often locally grown and or produced, typically by smaller companies, which costs more. 

Whether the drift to “professionalism” and the resulting price increases was good or bad is difficult to judge. Our co-op is blessed with healthy sales numbers and has more members than ever, yet many members, especially longer-term ones, have long voiced complaints about feeling priced out of the co-op they’ve supported for decades. 

Lest you think this was the only course available to the co-ops of the ’70s, Park Slope Co-op, in Brooklyn, still runs an administratively lean operation, with a member work requirement of about 40 hours per person per year. With an operating payroll much lower than most other co-ops, their markups and prices can be lower too.

Pricing is an interesting concept. In a market economy, it seems to be about supply and demand, and may or may not be related to cost of production and other “real” factors. I’d like to continue to write about the role of price in a co-op, and explore what the role of pricing would be in a healthy food system, so stay tuned.

suggestions and responses:

s: “Did the Co-op participate in the May 21, 2016, worldwide anti-GMO march? Do we know whether any of our conventional produce is from GMO crops?”

r: (Norman) We did not participate in the march. (Jean) Our local produce is not GMO. (Norman) Our info is the only GMO produce on the market right now is papaya, some squash, zucchini and sweet corn and, coming soon, some apples. The GMO corn and squash are fairly rare and we don’t stock them. We don’t stock fresh papayas, either.

s: “I would love to see more local, small-farm, ‘organic’ fruit and produce in general, but definitely I think joining the Driscoll boycott would be a good thing. See if it’s feasible.”

r: (Jean MA) Local: You’re in the right place — the local season is just cranking up. Look for tons of local produce in the coming weeks and months. We’ve looked into the Driscoll boycott and it turns out it’s not Driscoll but one of Driscoll’s growers that’s the problem. Also, members can bring an issue to a membership meeting by getting a petition signed by at least 1 percent of active members and submitting it to the Board. Boycotting a distributor would be that kind of issue.

s: “Please supply small cellophane and paper bags in produce area for those shoppers who do not want to use plastic bags for produce and baked goods downstairs. Thank you!”

r: (Matt MA) Space is always a problem, but we now offer paper bags in bagel area. Feel free to use them for produce also.

s: “Please stop slicing the (pre-sliced) Cooper’s Sharp American cheese so super-thin. The slices sort of meld together in the plastic wrap and can’t be peeled apart. Ends up being a crumbly mess and a crummy sandwich filler.”

r: (Shawn MA) FYI, we slice cheese first thing in morning so if you want you can call in around 7 a.m. and order some sliced however you want. Everyone has different preferences, but we should not be cutting too thin as a rule. Next time you come across a too-thin package, please give me a call and let me know the date on the label. (Norman) Weavers Way members are sooo fussy! FYI, the slicer was invented by Wilhelmus Adrianus van Berkel, a butcher in Europe who thought human life could be much improved if cured meat could be cut into thin slices. Few Philadelphia hoagie-makers and -eaters realize the debt of gratitude owed to Wilhelmus. Unlike baseball and basketball and rock ’n’ roll, there is no Hall of Fame for people like Wilhelmus, who toiled so fellow humans could enjoy mechanically precise thin slices of cured meat (and cheese).

s: “Can we please carry quarts of goat yogurt in MA? They have them at the fancy co-op. Thanks!”

r: (Kathryn MA) Thanks for the suggestion. I wish we had room in MA for some more of the interesting and specialty items carried in CH. Unfortunately, fewer MA customers are into the goat-milk products, so we won’t be bringing it in at this time.

s: “Wild Zora’s jerky. Quite tasty. No added sugar.”

r: (Kathryn MA) Thanks for the suggestion! We’re thinking of bringing in more jerky, so we’ll definitely check this out.

s: “Now that the soda tax passed, will we reduce our selection of sugar-sweetened beverages?”

r: (Norman) Yes and no. We will likely reduce our offerings as sales dictate, and it’s expected that we’ll see some sales decline. On the other hand, we’ve recently been made aware of a new product to consider, a soda originally produced in 1885, billed as “a delicious blend of bitter and sweet, a drink to satisfy everyone's taste.” Look for this new-to-us soda, called Moxie, on our shelves soon.

s: “I was in Whole Foods the other day (eww) and tried a different kind of Terra chips: Pickled Beet! Oh, they are so good! Can we please get them? Thanks!”

r: (Kathryn) Sounds good — thanks for the suggestion! 

s: “Please make small containers of parmesan cheese. I just want to sprinkle it. Do not want it to go bad.”

r: (Shawn MA) You can always ask to have a container split at the Deli. Feel free to ask Deli staff about anything like this.

s: “Can we slap labels on sliced cheese so that one can read the name and price all at the same time? Thanks!”

r: (Shawn) We do that with sliced cheese. Blocks are tagged to show what the cheese looks like and so you do have to look on back for that info.