Food cooperative

A food cooperative or food co-op is a food distribution outlet organized as a cooperative, rather than a private or public company. Food cooperatives are usually consumer cooperatives, where the decisions regarding the production and distribution of its food are chosen by its members. Like all cooperatives, food cooperatives are often based on prioritizing collective needs over the maximization of profit. For food co-ops, this means ameliorating and redefining food systems in a given community. The existence of food co-ops is then centered around consumer consciousness by providing sustainable and ethically sourced products.^[1] Consumer consciousness addresses a rejection of corporate agribusiness and corporate powers that enmesh Americans with chain grocery stores.

Food co-ops are then an alternative to these powers, hoping to target and reorganize power in communities in response. Decisions about how to run a cooperative are not made by outside shareholders. Instead, decisions are made by cooperative members and elected board members, demonstrating an organizational democratic operation. Decisions include what ethical products appear on the shelves, the wages of cooperative workers, and a cooperative's ideological orientation.^[2] Therefore, cooperatives often exhibit a higher degree of social responsibility than their corporate analogues.

In the United States, the National Cooperative Grocers (NCG) is a cooperative federation that is composed of 146 food cooperatives.

History

The cooperative movement started in the 19th century and the first notable food cooperative was started in Rochdale, England by industrial weavers known as the Rochdale Pioneers. In the establishment of this cooperative, several principles were established serving as a roadmap to cooperative organization. Defining principles involve democratic member control, education and training, concern for community, and substantive values.^[3]

Such values are seen in the modern cooperative movement which began in the 1960s when many "second wave" cooperatives started. The goals of these cooperatives were to provide an organic and anti-corporate alternative to chain grocery stores.^[4] Food cooperatives began to emerge in major cities and college towns, catering to the food-conscious. Co-op members made the decision of what foods to buy and how to purchase and distribute it.

Before food co-ops became an alternative, cooperatives would function as what is called "old wave" cooperatives.^[1] "Old wave" cooperatives were established as a response to a lack of governmental support, providing members with short-term alleviation. 40 million Americans, during the New Deal era, were a part of cooperative institutions that involved electric, farm, telephone, and housing services as a supplement to capitalism.^[1] Modern food cooperatives transition from this economic survival strategy to a more radical focus on getting consumers to become more conscious of their purchasing power.^[5]

This focus was a part of the countercultural movement that later developed a countercuisine. Countercuisine, in the late 1960s throughout the 1970s, was a creation an alternatives to consolidated corporate power that transformed and eroded food industries and the decision making powers and freedoms of farmers.^[6] Between 1969 and 1979, close to 10,000 food co-ops were established.^[4] Later, transnational agribusinesses and firms would control 40% of the market.^[7] Before this centralized control of corporations, new wave cooperatives sought to utilize a counterculture as a framework, posing personal dietary choices as a tool for political and social transformation.^[1] This meant more personal farms and cooperative grocery stores, which served as a connection between sustainable farmers and consumers.^[1] Food co-ops then adopted an inherent political identity or ideological orientation.

The alternative food co-ops provide against corporate chains speaks to the common mission co-ops aim to fulfill. Their popular uprising began as a result of power imbalance and exploitation between workers and corporate power during the Industrial Revolution. Immigrant groups established food co-ops as a solution to the lack of food accessibility in the early 20th century.^[8] Food cooperatives tend to be more than just an alternative; they are a political landscape that addresses food, labor, and other injustice's resulting from the centralized powers within the global food system.

A comparison of economic flows and ownership structure for a food cooperative and corporate grocery store

Economic and operational structure

A key aspect of the food cooperative model is the socialization of potential profit associated with running a grocery store. In a typical food production model, a store is owned by a company, which is in turn managed by either a board of directors and shareholders (if the company is publicly owned) or by a collection of private individuals (if it is not). A food cooperative, in contrast, is directly owned by both its employees and its members, people who shop at the cooperative and who typically pay a nominal fee for joining.^[9] When the store makes a profit, much as with a corporation, these profits are either divided among the members or reinvested in the business.^[9] These decisions are often made by a board, for which any member of the cooperative can run. In general, membership is open to any community member, with stores adopting official policies of nondiscrimination.^[10] However, some cooperatives will limit membership to a certain geographic area, such as a state.^[10]

Pricing

Each cooperative has a different fee structure, typically determined by its management, but in general, members of the public will have the option of purchasing a membership that will yield discounted prices on food, as well as a vote on decisions. A key difference with corporations is that while voting power on corporate decisions is in proportion to the number of shares owned, nearly all cooperatives operate according to the “one member, one vote” principle.^[9]

Tax policy

In the US, cooperatives are taxed differently than small businesses. Earnings of the cooperative itself are not subject to business taxes; however, any profits made by the individual members are treated as income and as such are subject to income taxes.^[10]

Operational Structure

Weavers way in Philadelphia, like many other food co-ops, runs under a hierarchical system that relies on democratic inclusion between members, the board, and other personnel.^[11] Many co-ops demonstrate a democratic system of operation as they actively try to produce and sustain human capital. Leadership and governance are then crucial elements to co-op operations, requiring participatory approaches in which there is a balance of power met between co-op board members, consumers, and producers.^[12]

Within democratic governance, there are challenges involving differences in education, race, and class. These challenges prevent inclusive discussions and create an environment where members feel unqualified to contribute. This requires cooperatives to structure leadership that is more inclusive by providing services that level the field. Equal and democratic decision-making is then dependent on the levels of leadership that are within a given food co-op.^[12]

Comparison with CSA

In contrast, a similar program, community supported agriculture, socializes the risks associated with growing the food, transferring it from the growers to consumers. These two programs often work in concert in rural areas, and are associated with each other by consumers.^[13] However, in a CSA program, the consumer is purchasing a limited ownership in the farm, the production of the food, instead of the grocery store, the distribution of the food.

Scale of cooperatives in the United States

Food cooperatives in various forms operate on a large scale in the United States, occupying a noticeable part of the grocery market, albeit with large geographic variation. One study found that grocery cooperatives claim 485,000 total members in the United States, with 325 total stores.^[14]^[15] However, differences in definition can lead to measurement discrepancies, depending on what exactly one defines as a food based cooperative, since many cooperatives operate in the food sector, but are not restricted to groceries. For example, “Farm supply and marketing” cooperative members totaled 2.484 million in the US.^[14]

Formation of a food cooperative

Cooperatives are generally formed by a core group of members who form the initial governing body. These members must contribute enough in initial membership fees to get the grocery store off the ground and finance startup costs, such as purchasing a store, which can be a significant challenge for the cooperative model.^[16] The logistical and financial obstacles associated with planning a store and establishing a distribution network are significant, especially when no individual owns the store.^[16] This contrasts with typical corporate grocery stores, which can be financed using debt or equity, and whose owners can eventually reap a profit to recoup their investment. Nevertheless, cooperatives claim higher levels of success than for-profit businesses: after 5 years, 90% of cooperatives are still in business, compared to 3-5% of businesses.^[17]

The reason for their formations involve several reasons. One reason, widely shared by co-ops, is food justice. Other factors involve a variety of social and economic goals that differ from those of a typical grocery store. Food co-op formation relies on the identity they choose to adopt as an alternative grocery store. Such identities involve assigning a co-op with certain values, such as affordability for the community it may serve. Other identities are based on environmental sustainability goals and or healthy food access.^[18] No matter the identity chosen by a food co-op, community need is often represented. While given a sudo name, Fair Horizons is a Food Co-op located in a gentrified location with majority hispanic population. Their goal is then centered on their communities need, which is accessibility to affordable groceries and economic ownership that serves the issue of inequity they experience in their community.^[19]

Governmental support

While food co-ops are sustained through member-wide ownership, for a broader success of communities' social and economic development, institutional support is required. Specific ways in which the government has invested are through agencies such as the U.S. Department of Housing and Urban Development (HUD), which provided funding for different stages of city development. In Burlington, HUD provided a grant for market feasibility.^[20] Burlington was in the process of developing the Onion River Co-op (City Market) with institutional support for creating accessibility to nutritious groceries. This was in response to the loss of food access in the 1990s, when a regional food store chain closed, leaving Burlington with limited food choices.^[20] This created a critical need for a food alternative that carries less risk of closure. The community proposed building a co-op that would foster a social need and economic development. Later, the government would fund this project to ensure food security. The co-op received a loan from the USDA Rural Development Division.

In relation to food co-ops serving the communities' need to ameliorate food insecurity, the role of the government is essential. It is not just in America, or even with food cooperatives, but agricultural cooperatives demonstrate the necessity of a government to supplement the actions of collective work. In Zambia, there are agricultural co-ops that have collaboratively increased household food security by 20.39%, and dietary diversity has increased by 11.26%.^[21] This is due to the implementation of social protection programs, such as a farmer input support program, in addition to a cooperative membership in rural Zambia.

In comparison to agricultural cooperatives, food co-ops are mechanized very differently. U.S agricultural co-ops respond to the trend of globalization of the agricultural and food sector. These cooperatives provide a wide range of economic and strategic resources that are designed to improve the financial position of farmers and rural residents and are actively supported by the United States government.^[22] This compares to the assistance that food co-ops get, demonstrating a stark difference in terms of governmental support for food co-ops.

Benefits

Market benefits

Cooperatives have potential spillover effects on the rest of the grocery store market. According to researchers at the University of Wisconsin, “Cooperatives play a key role in agricultural markets not only because they account for a significant fraction of economic activity in this sector, but also because they are believed to generate a pro-competitive effect in imperfectly competitive markets.”^[23] The grocery market, in particular, is often not very competitive in geographically isolated areas, with only enough consumer base to support one major supermarket. In response to high prices caused by this monopoly, a cooperative may spring up, supported by a network of consumers looking for lower prices. Because the profits are redistributed to the members, a traditional grocery store must reduce its profits in order to compete.^[23] Lastly, some studies indicate the spillover benefits to the community are significant. One found that “For every $1,000 spent at a food co-op, $1,606 goes to the local economy; for every $1 million in sales, 9.3 jobs are created”.^[17]

Agricultural sector benefits

Academic research has described the benefits cooperatives can have in economically connected sectors, namely food production: “Cooperatives play other socially beneficial roles in the agricultural sector. They provide an opportunity for farmers to share risk and to control managerial decision-making for their direct benefit. Additionally, they offer a credence attribute — farmer ownership — which can be attached to farm commodities, thus providing additional value to some consumers.”^[23]

Consumer benefits

Another potential benefit to members is the different niche of the food market often occupied by cooperatives. Cooperatives often have a focus on local, organic, or otherwise more sustainably sourced products.^[17] Consumers often support the local ownership of the cooperative model, in contrast to many grocery store chains owned by multinational corporations.^[17]

Food justice

Food cooperatives present themselves as a food alternative. Their existence is largely centered on community needs and the pursuit of food justice. In Oakland, California, the rise of cooperatives and urban gardens was a response to food deserts, which meant limited access to fresh and healthy produce. The Black Panther Party initiated community empowerment, responding to food deserts as a result of redlining.^[24] The organization created a free breakfast program for children in 1969, which involved breakfast in addition to educational lessons.

Food co-ops take a different approach to meeting nutritional needs in their communities by focusing on their community and consumer-specific needs that depart from only nutritional accessibility. Co-ops address the labor injustice that producers face and the need for consumers to use more than their purchasing power, but also enter into solidarity movements in support of co-op values that involve producers.^[25] Cooperatives, specifically food cooperatives, become politically involved in the details of the global food system and aim to recognize the power of consumers to create change by participating in an alternative grocery store. This occurs when food co-ops prioritize social responsibility alongside economic success. Consumer cooperatives have historically supported farmworker-led movements, such as the United Farm Workers (UFW) boycotts and the Coalition of Immokalee Workers (CIW) campaign for fair food.^[26] These actions hone in on the social responsibility of food co-ops and their efforts to build alternatives that consider equitable outcomes for everyone involved in food systems.

Food co-ops operate on obtaining a broad range of justice involving racial, labor, and food justice. Food justice is always inherently visible in food co-ops, as the need for affordable food is still pressing. In America, many programs battle food insecurity like SNAP, but there are also community strategies that involve food banks and other formal and informal community-based programs. Food banks distribute food to food pantries located in community centers, churches, schools, and other community locations.^[27] Government-initiated community strategies and food co-ops both aim to address food insecurity by harnessing the potential of community and or collective action with different forms and structures of mobilization.

Geography

In the United States, food cooperatives are more common in the northern states of the US, with Vermont, Minnesota, and Wisconsin having the highest concentrations.^[28] Vermont, in particular, has a concentration three times higher than any other state.^[28] Food cooperatives are commonly co-located with higher incomes, higher educational attainment, the presence of land trusts, and population over age 65.^[28] In the United States, there are a number of regional associations of food cooperatives. These associations can provide logistical support, a distribution network, or operate under the franchise model, which can provide a recognizable brand.

Footnotes

^ ^a ^b ^c ^d ^e Belasco, Warren J. (2014). Appetite for Change: How the Counterculture Took On the Food Industry (Kindle ed.). Cornell University Press. ISBN 9780801471261.
^ The New Food Activism: Opposition, Cooperation, and Collective Action (1 ed.). University of California Press. 2017. doi:10.1525/j.ctt1pv88qh.11.
^ The New Food Activism: Opposition, Cooperation, and Collective Action (1 ed.). University of California Press. 2017. doi:10.1525/j.ctt1pv88qh.11.
^ ^a ^b Greenberg, Brian; Watts, Linda S. (2009). Social History of the United States, Volume 1. Santa Barbara, Calif.: ABC-CLIO. p. 157. ISBN 9781851099030.
^ The New Food Activism: Opposition, Cooperation, and Collective Action (1 ed.). University of California Press. 2017. doi:10.1525/j.ctt1pv88qh.10.
^ Jayaraman, Saru; De Master, Kathryn, eds. (2020-05-12). Bite Back: People Taking On Corporate Food and Winning. University of California Press. doi:10.1525/9780520964051. ISBN 978-0-520-96405-1.
^ Seipel, Michael; Heffernan, William (October 1997). "Cooperatives in a Changing Global Food System" (PDF). USDA.
^ The New Food Activism: Opposition, Cooperation, and Collective Action (1 ed.). University of California Press. 2017. doi:10.1525/j.ctt1pv88qh.11.
^ ^a ^b ^c "What is a Co-op? – Neighboring Food Co-op Association". nfca.coop. Retrieved 2018-03-06.
^ ^a ^b ^c "What Is a Food Co-op and Is It Worth Joining? - Costs, Benefits & Drawbacks". www.moneycrashers.com. Retrieved 2018-03-06.
^ The New Food Activism: Opposition, Cooperation, and Collective Action (1 ed.). University of California Press. 2017. doi:10.1525/j.ctt1pv88qh.11.
^ ^a ^b Hale, James; Carolan, Michael (2018-03-21). "Cooperative or Uncooperative Cooperatives? Digging into the Process of Cooperation in Food and Agriculture Cooperatives". Journal of Agriculture, Food Systems, and Community Development. 8 (1): 113–132. doi:10.5304/jafscd.2018.081.011. ISSN 2152-0801.
^ Yang, Shang-Ho. "The Divergence of Defining Local Food – Consumer Co-op versus Conventional Grocery Shoppers" (PDF). Agricultural and Applied Economics Association Annual Meeting.
^ ^a ^b Deller, Steven. "Research on the Economic Impact of Cooperatives" (PDF). University of Wisconsin Center for Cooperatives.
^ "Food Co-op Finder". Grocery Story: The Promise of Food Co-ops in the Age of Grocery Giants. Retrieved 2022-10-04.
^ ^a ^b "Food co-op FAQ and feasibility" (PDF).
^ ^a ^b ^c ^d "The Benefits and Impacts of Cooperatives | Grassroots Economic Organizing". www.geo.coop. Retrieved 2018-03-06.
^ Hale, James; Carolan, Michael (2018-03-21). "Cooperative or Uncooperative Cooperatives? Digging into the Process of Cooperation in Food and Agriculture Cooperatives". Journal of Agriculture, Food Systems, and Community Development. 8 (1): 113–132. doi:10.5304/jafscd.2018.081.011. ISSN 2152-0801.
^ Hale, James; Carolan, Michael (2018-03-21). "Cooperative or Uncooperative Cooperatives? Digging into the Process of Cooperation in Food and Agriculture Cooperatives". Journal of Agriculture, Food Systems, and Community Development. 1 (1): 113–132. doi:10.5304/jafscd.2018.081.011. ISSN 2152-0801.
^ ^a ^b Phillips, Rhonda (2012-01-01). "Food Cooperatives as Community-Level Self-Help and Development". International Journal of Self Help and Self Care. 6 (2): 189–203. doi:10.2190/SH.6.2.f.
^ Zemba, Cornelius; Prah, Stephen; Ng’ombe, John N. (2025-09-01). "Agricultural cooperatives boost food security through input subsidies in rural Zambia". World Development Perspectives. 39 100710. doi:10.1016/j.wdp.2025.100710. ISSN 2452-2929.
^ Seipel, Michael; Heffernan, William (October 1997). "Cooperatives in a Changing Global Food System" (PDF). USDA.
^ ^a ^b ^c "Farm Supply and Marketing | Research on the Economic Impact of Cooperatives". reic.uwcc.wisc.edu. Retrieved 2018-03-06.
^ Curran, Christopher J.; González, Marc-Tizoc (2011). "Food Justice as Interracial Justice: Urban Farmers, Community Organizations and the Role of Government in Oakland, California". The University of Miami Inter-American Law Review. 43 (1): 207–232. ISSN 0884-1756.
^ The New Food Activism: Opposition, Cooperation, and Collective Action (1 ed.). University of California Press. 2017. doi:10.1525/j.ctt1pv88qh.10.
^ The New Food Activism: Opposition, Cooperation, and Collective Action (1 ed.). University of California Press. 2017. doi:10.1525/j.ctt1pv88qh.11.
^ Seligman, Hilary K.; Berkowitz, Seth A. (2019-04-01). "Aligning Programs and Policies to Support Food Security and Public Health Goals in the United States". Annual Review of Public Health. 40: 319–337. doi:10.1146/annurev-publhealth-040218-044132. ISSN 0163-7525. PMC 6784838. PMID 30444684.
^ ^a ^b ^c Young, Seth T. (2014). "The Geography of Food Cooperatives in the United States". International Journal of Undergraduate Research and Creative Activities. 6 (2): 2. doi:10.7710/2168-0620.1025. ISSN 2168-0620.