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National Cooperative GrocersNational Cooperative Grocers AssociationDEVELOPMENT COOPERATIVE: HELPING OURSELVES ACHIEVE GROWTHGROWTH

NCGA OverviewNCGA Overview

• Business services co-operative– 55 employeesp y– Commercial and home offices

136 t il f d i U S• 136 retail food co-ops in U.S.– 129 members, 7 associate co-ops– 178 locations in 37 states– $1 5+ billion annual retail sales$1.5+ billion annual retail sales– 1.3 million consumer owners

NCGA OverviewNCGA Overview

• Mission: NCGA will provide the vision, leadership and systems to catapult a virtual p y pchain of food co-ops to a position of prominence in the natural foods industryprominence in the natural foods industry.

• How? Purchasing, marketing, training and other services that optimize resources and ultimately offer more value to natural food co-yop owners and shoppers

NCGA’s Early YearsNCGA s Early Years• NCGA was formed out of several regional cooperative

grocer associations• 1996: Six CGAs across the country• NCGA officially formed in late 1999• 2000: 59 stores in 20 states, $270M in total sales• NCGA operated under a federated system from 1999 to p y

2004, direct-membership model • Direct-membership model since 2004Direct membership model since 2004• Preserving regionalism

NCGA in 2013NCGA in 2013

• Program Areas– Operational & Professional Developmentp p– Advocacy, Outreach & Education

• Issues focused on organic standards small • Issues focused on organic standards, small farmer and local food systems

P h i d M k ti D t t– Purchasing and Marketing Departments• Two largest departments

Honest WeightAlbany, New York

Purchases Under ContractPurchases Under Contract

$900,000,000

$1,000,000,000

$600 000 000

$700,000,000

$800,000,000

$400,000,000

$500,000,000

$600,000,000Non‐COGS

GOGS

$100 000 000

$200,000,000

$300,000,000

$0

$100,000,000

2008 2009 2010 2011 2012

Problem StatementProblem Statement

• Our members are operating in an increasingly competitive environmentp

• Replicating Success and Avoiding FailureMi d d f h i ddi i l – Mixed record of success when opening additional locations or relocating or expanding existing

ioperations– New services and departments require new skills– Large community of consultants but no one to tie

all the pieces together for successp g

NCGA’s SolutionNCGA s Solution

• NCGA Development Cooperative (DC)• Wholly owned subsidiary of NCGAWholly owned subsidiary of NCGA• Cooperative structure with the options to add

d b h foutside members in the future• Internalizes the experience and expertise p p

needed to achieve successUlti t l i t i k t h• Ultimate goal is to increase market share

DC OperationsDC Operations

• Store expansions, relocations, opening new locations, business improvement projects and , p p jstart-ups

• Project Management: coordinating financing • Project Management: coordinating financing, work with external consultants, and NCGA staff

Cost is Tied To SuccessCost is Tied To Success

• The DC gets paid only if the project is successful

• DC staff stay engaged long after the project has been completedhas been completed

• Pricing is based on:– Long-term payment schedule– Tied to revenue meeting predictionsTied to revenue meeting predictions

Cooperative SubsidiaryCooperative Subsidiary

• The DC is organized as a cooperative– NCGA is currently the only membery y

• DC board is appointed from the NCGA board• Initial funding indirectly through NCGA

member increases in equityq y– Provides legal and fiscal protection

• Profits from DC activity are shared • Profits from DC activity are shared cooperatively through NCGA patronage

New Cooperative Conversion Opportunity

• NCGA is experimenting with converting an independent grocery store into a cooperative

• Consumer cooperative entity would be able to operate anywhere in the USAp y

• If successful, more stores could be purchased to expand the co-opexpand the co op

• Growth to increase volume on all NCGA contracted services as well as cooperative market shareservices, as well as cooperative market share

Cooperative Conversion Opportunity

NCGA t id• NCGA to provide:– Management and administrative services on

contract– Store design, marketing, merchandising and other

services• In-store branding with NCGA’s consumer brand• Stores will provide a venue for R & D for a variety of

NCGA services and programsp g

NCGA DC Loan FundNCGA DC Loan Fund

• Cooperative Capital– NCGA Funds– NCGA Member Stores’ Funds

NCB Capital Impact– NCB Capital Impact

• Leveraging idle member cash to create a fund of $10-20M USD

• Funds to be deployed by the DC to support Funds to be deployed by the DC to support DC projects

The Cooperative DifferenceThe Cooperative Difference

• Food co-op impactstudyy

• Initial Study: 2012U d 2014• Updating in 2014

• Quantifies theQpositive impacts of cooperatives vs cooperatives vs. non-co-op grocers


• Gathering updated information from our members

• Offering incentives • Offering incentives for participation

• Will provide basis for continuous for continuous improvement

The Co+op ForestThe Co+op Forest

• Partner with Pur Project• Reforestation projects promoting Reforestation projects promoting

sustainable agroforestryF U S • First U.S. partner to plant trees

• Full circle supply chaind t ff tremedy to offset

The Co+op ForestThe Co+op Forest

• Alto Huayabamba Project • Northern Peru

along Huayabamba River• Promotes sustainable Promotes sustainable

agroforestry among small-scale cacao farmers small scale cacao farmers associated with ACOPAGRO co-opACOPAGRO co op

Sustainable agroforestrySustainable agroforestry

• Native trees inter-planted with cacao• Trees provide shade, Trees provide shade,

bark (medicinal uses)and berriesand berries

• Farmers sustainably harvest trees for income and health of forestincome and health of forest

Farmer benefitsFarmer benefits

• Compensation for planting & maintaining native trees

• Income from harvested treesharvested trees

• Fair trade premiums for cacao

• Guidance on • Guidance on sustainable agroforestry techniques

Contact InfoContact Info

Robynn Shrader, CEONational Cooperative Grocers Assoc (NCGA)National Cooperative Grocers Assoc. (NCGA)14 S. Linn St. Iowa City, IA 52240 USA319-466-9029 ext 1100319-466-9029, ext. [email protected] (or)[email protected]

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