Cooperatives: A tool for economic development

2013 UW-Extension ED Inservice June 25, 2013

Courtney Berner

Cooperative Development Specialist UW Center for Cooperatives

Overview

What is a co-op? What is the UW Center for

Cooperatives? Development Examples Wisconsin Food Hub Co-op Madison Co-op Business

Conference Honey Creek Market

What is a cooperative? A cooperative is a business owned and

democratically controlled by the people who use its services.

Member - owned Member - controlled Member - benefits

Types of Cooperatives

Purchasing Co-ops

Consumer Co-ops Marketing Co-ops Worker Co-ops

Multi-stakeholder Co-ops

Cooperative Principles 1) Voluntary and open

membership 2) Democratic member control 3) Member economic

participation 4) Autonomy and independence 5) Education, training, and

information 6) Cooperation among

cooperatives 7) Concern for community

Why do people form cooperatives?

Unmet social or economic need Market power imbalances Problems with alternatives Control decision-making Gain profits up the value-chain Relatively easy to enter and exit Community support

The Cooperative Economy Cooperatives in the U.S. Nearly 30,000 cooperative

businesses >$3 trillion in assets >$500 billion in total revenue $25 billion in wages and benefits Nearly 1 million jobs

Cooperatives in Wisconsin Approximately 650 co-ops 2.12 million members $8.6 billion in gross sales

Data from 2009 UWCC Research on Economic Impact of Cooperatives

Selected sector impacts Agricultural co-ops: almost 1/3 of supplies and

products purchased or marketed Grocery co-ops pioneered introduction of

natural/organic foods, now over $26B industry Credit unions: 93 million members (2011) Rural electric co-ops: 7 customers per mile of line,

as opposed to 35 for IOUs Housing co-ops: correlation with building quality,

security, community stability in studies

UW Center for Cooperatives Three core activities: research, education, outreach Available resources Comprehensive website: http://www.uwcc.wisc.edu Extensive research and publications library Development support Deliver guest lectures and presentations on co-op model

Project history Sept 2011: Feasibility study completed Feb 2012: WFU/grower partnership Sept 2012: Business plan competed Oct 2013: Co-op incorporates

Key Players Dane County Economic Development Wisconsin Farmers Union

Project status GM and sales manager hired Moving product this season

Source: www.zoebakes.com

Lessons learned Strong institutional support presents

challenges and opportunities Project champion: Who is it? Who

should it be? Gauging member interest can be

challenging Co-op incubation vs. grassroots

efforts

Madison Co-op Business Conference June 6-7, 2012 Partnership between UWCC, City of Madison, and

other members of co-op community Target audience: business owners, economic

development professionals, general Outcomes: 160+ attendees At least one co-op development project Strengthened relationships w/city officials, co-op

community, EDs Dane Cooperative Alliance (placeholder name)

Madison Co-op Business Conference Lessons learned Bring in the right partners Need content that is relevant to all audience

members Timely follow-up critical to cementing relationships

and catalyzing action You never know what seeds you’re planting!

Conference videos available here:

http://www.cityofmadison.com/citychannel/ShowDetails.cfm?Id=133

Project history Summer 2012: Idea sparked Dec 2012: Community-wide meeting to gauge support Feb 2013: Taskforces established March 2013: Co-op incorporates

Key players: Sauk County ED, UWCC, CDS Consulting Co-op

Project status Pro forma complete Membership drive and loan campaign ongoing Purchase agreement in process

Lessons learned Fewer documented “best practices”

for conversions Community buy-in critical but

sometimes hard to assess Desire to rush the process needs to

be managed Process needs to be scaled to

project, e.g. feasibility analysis

Examples of other co-op projects Worker owned home care co-op Worker-owned mental health services co-op Producer-owned hops co-op Multi-stakeholder food distribution co-op Worker-owned co-op of biologists and

environmentalists

Selection of UWCC Resources UWCC website Cooperatives in Wisconsin: The Power of

Cooperative Action Cooperative Equity and Ownership: An

Introduction A Study of Co-op Business Development in

Wisconsin and Minnesota Cooperatives in Community Economic

Development

Courtney Berner Cooperative Development Specialist, UW Center for Cooperatives cberner@wisc.edu, 608.890.0966 www.uwcc.wisc.edu

Questions?