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Co-op grocery in Mid-county?


Montavilla Co-op member Paula Cadiente, right, talks to neighbors Michael Freeston and Felicia Rutledge about the benefits of a food co-op at the group's inaugural member meeting in February.
Montavilla Co-op member Ken Lucini and Board of Directors candidate Connie Jan chat about the future of a food co-op.
Montavilla Co-op member Ken Lucini and Board of Directors candidat Connie Jan chat about the future of a food co-op.
The city of Portland has become the darling of the national food media for its agricultural abundance and culinary artisanship, epitomized last September in the FEAST food festival sponsored by Bon Appétit magazine. Proceeds from the event benefited hunger relief charities that help to improve food security for thousands of Oregonians who may otherwise go hungry, a paradoxical predicament in a state with such fertile farmland.

Not surprisingly, none of the events took place in mid-county. While not the locus of the Portland food paparazzi, mid-county residents share the city's appetite for flavor. The area is home to food producers such as Giusto, Garre and Zenger farms, and popular purveyors from wholesale meat processors to the metro area's mainstay butcher shops, and arguably the best Asian restaurants in the region.

If you add the Lents, Montavilla and Parkrose farmer's markets to all the community gardens springing up on empty patches of arable land, east Portland neighborhoods have fresh produce aplenty come spring and summertime, but share the same predicament during the cold months. Consumers are closer to farms, but the chain supermarkets that source goods from large national and international producers dominate the landscape here, and those seeking healthy food produced closer to home must drive further from theirs to find it.

Locavores tout that buying food from regional producers and suppliers helps support the local economy. The environmental impact of transporting food from other states when it is readily available in our own has also inspired others to buy local.

In 2009, a group of neighbors in the Montavilla area started bandying about the idea to open a cooperative grocery store in their neighborhood. The success of their venture would establish the fourth co-op grocery in Portland, and give mid-county residents a voice to choose where their food comes from.

A cooperative is a business owned and controlled by those who use its services. Like a buying club with a storefront, cooperatives leverage the strength of their open membership to acquire bulk goods that they then sell at high enough margins to cover operating costs only. Unlike a buying club, it offers shoppers the convenience to peruse seasonal stock for that evening's meal ideas.

Members of the co-op finance, operate, and patronize their store, removing the incentive to escalate prices for higher profits. Earnings are either returned to members in the form of a dividend, or retained to improve the business -however the members agree on how to distribute it.

Co-ops have existed in some form since the 19th century, but grow in popularity during the lean times. Considering the current economic climate, it is not surprising that the United Nations declared 2012 the International Year of the Co-op. Because they bring economic resources under democratic control, co-ops can counteract such negative trends as environmental degradation, economic instability, and income inequality, according to the UN IYC website. Food co-ops are a commercially efficient way of doing business that accounts for a wider range of human needs and factors; are effective in small and large scale; and create long-term security by being sustainably successful in the end.

“People realized that we have to take control of this economy and the co-op is a great business model because it says, 'yes, we have to make ends meet and no, we don't take massive amounts of public money,'” said the Montavilla Co-op's Member Equity Coordinator Bob Davis, “These are businesses. They are not a nonprofit or a social action group. They are owned by the members and they have to have an economic element.”

The Montavilla Co-op steering committee recruited Davis, a co-op consultant with 20 years of experience with the unique business model, to help drum up support for the store. With a little over 150 members recruited so far, the co-op needs more community backing to establish itself. Charging $150 for membership, the Montavilla Co-op could open a 4,000 square foot storefront with a 1,000-member investment, but the team is optimistic. (For comparison, the Safeway on southeast 82nd Avenue at East Burnside Street is 29,000 square feet.)

Since more members equal more purchasing power, and the more products that they can offer at lower prices in a larger space, organizers are reaching out to all segments of the diverse community in the hopes to create a co-op that truly reflects the neighborhood they wish to serve.

“We've had some pushback that people of other cultures and races are not going to be interested in a co-op because they think a co-op is all organic, natural hippy dippy,” said Montavilla organizer Luby Wind. “We have a lot of work to do if we are going to generate the support we need.”

Since members decide everything from what products to offer to how the store is governed, a co-op is only “organic, natural and hippy dippy” if the members want it that way. That said, every existing co-op grocery in the Portland area promotes organic 'natural' foods, and co-op groceries tend to source goods from co-op suppliers who are also associated with the natural/health food market. Moreover, the Montavilla Co-op's website advertises that they will “focus on products that benefit the health and well being of our members, the community and our planet. This means organic, non-GMO (genetically modified) food that is sourced locally. Co-op products are produced in an ecologically sound manner by companies and producers that follow fair trade and labor practices.”

Well-informed shoppers know that such commitment to quality usually comes with a higher price tag. Davis has advised organizers to carry both organic and conventional choices and have an education program about the true cost of food (as in the cost to the environment and exploitation of workers that keep the prices of some conventional products low.)

Wind, a self-described “die-hard optimist who truly believes that the answer to war, cancer and hunger all leads to healthy, abundant and generous food,” advocated other ways to keep prices low. These include offering SNAP (formerly known as food stamps), farmer incentives, and organizing displays in a no-frills style rather than having someone arrange them in pretty display boxes.

However, the designs of 10 percent of the eventual membership may not hold sway if the concluding 90 percent have a different vision. Co-ops operate on a one-member one-vote basis, and can only weigh their product and price options once they have formed their co-op community, which, depending on size, determines its parameters.

In addition to building individual membership, co-op organizers have considered enrolling business members, such as restaurants, to bring bulk prices down. Organizers also hope to collaborate with other small grocers - east Portland's many ethnic markets as well as other Portland co-ops - to leverage their combined buying power so that all stores can sell shared products at lower prices.

After reaching the 100-member milestone, the group started accepting applications for their first board of directors - at this point a development board. In a November press release, the group stated their intentions for this board, “The unique diversity of our neighborhood and our desire for inclusivity will be reflected in our board's composition. We seek to attract people of all ethnicities, cultures, backgrounds and experiences to wholeheartedly serve as representatives of our membership.” Four candidates have so far stepped up to the job and though they hope to appoint up to five more board members throughout the course of this year, voting on this first quartet began at their annual member meeting on Feb. 17, and continued for the following two weeks. Upon approval, board members will be elected to staggered terms of one to three years. This will ensure that each year introduces a new face to the team.

Organizers are also in the process of organizing a crowd-sourcing campaign to raise funds for a feasibility study, which will ultimately determine the viability of the enterprise. Feasibility studies identify strengths, weaknesses, opportunities, and threats of existing businesses or proposed ventures. The Montavilla Co-op feasibility study will also highlight where the co-op would find the most support for its services. Organizers estimate the study will cost between ten and fifteen thousand dollars. Funds raised for that purpose are separate from the membership fees.

The co-op utilizes the Northwest Cooperative Development Center to store membership funds in an equity account until after the results of the feasibility study are analyzed. If the study negates their dream, the membership monies will be refunded. If they get the green light, existing members will vote on whether to start leveraging membership funds to move forward. However, they require at least 500 members to demonstrate ample support to either a bank - if co-op members choose to borrow, like most traditional businesses - or apply for a development grant available to co-ops.

The Montavilla Co-op idea has steadily gained momentum, and has even created interest within the Portland Development Commission. Wind mentioned that PDC offered to match funding if the co-op was interested in populating certain areas of east Portland. “We've been in conversation with PDC and had a good meeting with them a year and a half ago when they had their healthy grocery initiative,” she said. “They were interested in what we are doing and what a co-op is.”

Davis attended the East Portland Development Summit last October, where he found himself in an educator's role on the topic of co-ops. “One of our challenges is to explain the co-op model because developers and bankers are not familiar with it,” he said.

Co-ops all share seven basic guiding principles regarding their open membership, democratic structure, economic participation, autonomy, education/training, cooperation with other co-ops and community-awareness. Yet because each member-controlled business has a unique culture, they do not all share the same management and governance structures. Some have a board of directors, a general manager and employees like a conventional company, others, like People's co-op in southeast Portland, operate on a multi-stakeholder structure where all workers are managers who agree on consensus to establish and follow organizational practices. It sounds like a chaotic situation, but Wind said, “There is that circle of trust that you put everyone in so that you know they are looking out for everyone's interest.”

Another co-op model is the multi-shareholder structure where farmers, consumers, workers and business partners each comprise a certain percentage of the co-op, and board members are allotted to reflect that percentage. “It is a very complicated process to work through,” said Davis, “some co-ops are successful, and some tear themselves apart like any other business.”

Ultimately, it will be up to the members to choose how they want the Montavilla Co-op to be structured. “That is one of the advantages co-ops have is that the consumer is also the owner so they can actually help shape the co-op and help make decisions,” said organizer Benjamin Cutler.

People's Co-op, as well as the other two Portland co-op grocery stores, Alberta and Food Front, supports the Montavilla group's efforts by helping with outreach, providing networking resources, and sponsoring the group's application for the SE Uplift Neighborhood small grant. All have donated money to the cause. According to Shawn Furst, development manager at People's Co-op, “Their (Montavilla's) biggest challenge in the next couple years is getting member-owners to invest in the co-op.” She added, “Their group is working very hard to get community support.”

Organizers have hosted potluck parties, pancake breakfasts, and movie benefits. They have set up information booths at farmer's markets, concerts in the park, and will have an info table at the Creative Science School's Montavillage event this May. They have forged cross-promotional partnerships with Portland Metro Arts, local theatre group Living Stages and have volunteered to feed the Friends of Trees volunteers during a tree-planting event on March 2.

The group continues to call for volunteers to help with fundraising, event coordination, volunteer coordination, writing, social media, and business planning. Those interested in getting involved can check their website for updates on the volunteer orientation event tentatively scheduled for mid-March.

Essentially, all co-ops rely on a community's commitment to invest in its future. Wind, who cut her teeth working in some of the country's most established co-ops in Vermont, said, “As an invested member in this community, I want to support something local and if it is going to improve these streets and these schools that is where I want to generate that interest and resiliency.”

More information on the Montavilla Co-op, including membership information, can be found at
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