When Kevin Gadsby gives one of his regular updates on the progress of the Portland Food Co-op, you can practically hear the cries of “Amen, brother!”

Here’s the latest: All of the refrigeration, heating and cooling systems are in place. Floors have been polished. Soon interior painting will begin. Within the next two weeks, shelving, fixtures and checkout counters will begin arriving and workers will start building out the interior of the store at 290 Congress St. in Portland.

But Gadsby declines to reveal a target opening date, sticking to the script that it will be sometime in “mid-fall.”

The congregation, er, co-op is quickly expanding. The store has just over 1,700 members and is still growing, nearly tripling its membership since January.

“We haven’t had to work too hard” to get new members, Gadsby said, “and I think it is because people are genuinely excited that there’s going to be a community-owned food market in Portland.”

Co-ops are funded by “member-owners” who pay for an equity share – in Portland, it’s $100 – in a store, in exchange for discounts, special benefits and voting power.

Portland isn’t alone in its enthusiasm for food-co-ops. Regionally and nationally, there’s a revival of sorts going on: Maine has six established food co-ops, and another five that have either just opened or are in the works. A new co-op planned in Gardiner has 150 members and is hoping to open by next summer. The County Co-op and Farm Store in Houlton has 100 members and opened a cafe in July; the rest of the operation is expected to be open by late autumn. The Marsh River Cooperative in Brooks opened on Aug.1, and the Market Street Co-op in Fort Kent opened in the summer of 2013.

“Every time I turn around, I hear about another one opening,” Gadsby said. “It’s more than a movement. It’s a way that people place very high value on a local foods system and a recovering food system.”

The trajectory in Maine reflects what C.E. Pugh is seeing around the country. Pugh, chief operating officer of the National Cooperative Grocers Association in Iowa, said food co-ops tend to be concentrated in the Northeast, upper Midwest, Pacific Northwest and California. His organization has 142 members in 38 states, including the food co-ops in Belfast, Blue Hill and Damariscotta, and he estimates that new ones are underway in about 100 communities around the country. The association is sending a team to Portland in October to help the co-op get its store set up.

LOCAVORES DRIVE DEMAND

Why all the interest? Local, organic, sustainable foods have become more mainstream in recent years as these foods have started appearing in grocery store chains and the public has grown more interested in local agriculture and changing the way America’s food system works. In other words, these are not your hippie grandparents’ co-ops filled with little more than alfalfa sprouts, tofu and granola. Pugh heard the same conclusion last week from a consumer research firm at a national meeting: “What was alternative and counterculture is now mainstream,” he said.

Consumers also like the fact that when they buy from a local food co-op, they are investing in Main Street, not Wall Street.

“People like the idea that a higher percentage of the money stays in the community, generally, when you buy at a co-op than when you buy at the conventional grocery store,” said Mark Deeny, general manager of the Blue Hill Co-op Community Market & Cafe.

That said, modern co-ops face a host of challenges, including increased competition from new natural organic chain stores such as Sprouts in the West, Fresh Thyme in the Midwest and Lucky Supermarkets in California (and, in Maine, places like Whole Foods and Hannaford).

Also, at a time when co-ops are becoming more popular, they are also becoming more difficult – and expensive – to launch and build. In the 1970s, Pugh said, a comparable co-op might have cost between $200,000 and $300,000 to open. Today, it can cost up to $4 million.

“And that’s just leasing the building,” he said. “That’s not buying the real estate.”

Consumers enter modern stores with a shopping cart full of higher expectations. They want not only beautiful food, they also want to shop in an attractive space where they can pick up everything they need for dinner in one shopping trip. And they want to enjoy a cup of free-trade coffee and an organic muffin while they’re buying kale and carrot juice.

Roughly 10 years ago, food-co-ops started adding features such as delis and cafes to build traffic and encourage visitors to buy groceries after they finish their mocha latte.

“What’s more community-building than sharing a meal together?” Pugh said. “It’s been a nice fit for the food co-ops, and it’s helped business dramatically, actually.”

The Portland co-op started out several years ago as a simple buying club where members would place orders to be picked up later at the Meg Perry Center on Congress Street, and then later at their home on Hampshire Street. That club had its last pick-up day in late July, as the group transitions to a full-service storefront that will be open to the public. The new store will have a cafe with a light breakfast menu, soups and sandwiches.

“It’s another way to involve the greater community in the co-op,” said Garrison Beck, vice chair of the Gardiner co-op, which is still in development but will be the town’s first storefront co-op, complete with a cafe.

Gardiner’s co-op was born in 2011 out of the Kennebec Local Food Initiative, and it got its start as an online buying club. Even operating just twice a month, the all-volunteer club brought in enough revenue to hire a coordinator. As they ready for a storefront, they’ve been sought advice from other food co-ops in the state on what works – and doesn’t – in order to appeal to “a different clientele,” Beck said.

“We absolutely intend to be a full-service store,” Beck said. “Our primary focus will be local and sustainable and organic and fair trade, but we absolutely want to make products available to the community that are going to be in demand. We’re not limiting ourselves to what we can find in a 50-mile radius.”

Today, the Gardiner Food Co-op & Cafe has 150 member-owners, who paid $100 each for their shares. They are negotiating for a location for their storefront and expect to open by next summer.

Houlton had food co-ops in the 1960s and 1970s that were limited to a few families buying in bulk and a very small buying club. The County Co-op and Farm Store Cafe, which opened its cafe on July 28, will be the town’s first storefront co-op, selling arts and crafts as well as groceries, artisanal foods and baked goods.

Some grocers in the area do carry seasonal, local products, but that competition is not as stiff for that niche as it is in other parts of the state, says Meg York Scott, president of the board of directors and an organic vegetable farmer.

“What we are finding to be a challenge, though, is producers are wanting so much for their product that we have to mark up for our overhead,” Scott said. “The local producers have only really sold retail before. It’s very hard to get them to understand that they need to sell this to us at a wholesale price. So our prices are higher than we would like to see them.”

STIFF COMPETITION AHEAD

Other inherent challenges? Access to capital is more difficult, and the co-op model can be less efficient than a chain store.

“While we remain very bullish, we also believe next five to 10 years will be much more challenging than the last 10 years because of all the additional competition, without doubt,” Pugh said. “But we’ve been here before. I think maybe 600 co-ops opened up in the ’60s, ’70s and early ’80s, and out of those only about half of them are still in existence today.”

The co-ops that adapted as expectations changed are the ones that survived.

The Blue Hill Co-op Community Market & Cafe, with 1,360 member-owners, is one of the oldest co-ops in the state. (The Belfast Co-op is the oldest.) It started as a buying club in 1974 and has been a storefront since the 1980s. The history of the back-to-the-land movement in the Blue Hill area has made it more likely that a co-op will survive there, says Deeny, the general manager, but the business has still had to adapt in order to survive. For example, a cafe was added about 20 years ago – a decade before the national cafe trend began.

“In the old days, the co-op was the place to get organic and local food,” Deeny said. “And now the conventional grocers are into that market too, and they’re efficient at what they do.

“In some ways, it shows the success of the overall goal – trying to get more good, local organic food available to everyone,” Deeny said. “If you look at it from that perspective, it’s great that everyone is joining in.”

Despite the challenges, the immediate future of co-ops in Maine appears to be bright. Pugh notes that the financial performance of its three members in Maine – Belfast, Blue Hill and Rising Tide in Damariscotta – is strong. During the past four quarters, all three showed double-digit growth in sales.

 


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