WHITEWATER — Momentum for a grocery store cooperative in Whitewater is building, but making it a reality will require more work and support.
When Sentry Foods closed its doors about 18 months ago, the City of Whitewater was left with only one grocery store, the Walmart Supercenter.
Whitewater governmental officials, working with the city’s Community Development Authority (CDA), have attempted to lure another grocery store — whether a chain or independent store — to the city; however, those attempts have not been fruitful.
The La Crosse Tribune reported last year that many rural communities are losing grocery stores for a variety of factors: an aging small-store ownership population with no transition in place, a more mobile home-to-work culture, a decrease in residential rural populations which in turn means less profitability for small store owners, and an unwillingness or inability to compete with Walmart.
However, the Whitewater Grocery Cooperative is seeking to buck those trends.
Two of its founding members — Lacey Reichwald and Brienne Diebolt-Brown — shared how much work has gone into making that cooperative a reality and how much more still needs to be done.
“Lacey had been wanting a co-op well before Sentry closed, as far back as 2008,” Diebolt-Brown said.
“We started talking in 2009 about starting a co-op in addition to Sentry, looking to have a natural food option in Whitewater, but that fizzled out for a while,” Reichwald recalled. “So, when news that Sentry was closing broke, the idea came back to the surface. This was a good opportunity for us to pursue a co-op again.”
Reichwald said they approached the CDA to see if the idea of a co-op in Whitewater was viable.
“The CDA was searching to bring another store to town, and while they were working with other stores, they funded a trip for us to go to the Up and Coming Co-op Food Conference in March 2016,” she said.
Attending the conference in Bloomington, Ind., were Reichwald, Diebolt-Brown, common council member Stephanie Goettl and Pat Cannon of the CDA.
Upon their return, they presented their findings to the CDA.
Reichwald said she felt the conference was inspiring.
“We walked away from that conference feeling like, whether or not this is the option the city chooses to support, this was an option and we could make it happen,” she said. “So, over the last year, we picked up some steam.”
The group started getting followers on Facebook and received a lot of feedback.
“We put together a vision statement, but that really steered us away from being a natural foods co-op and more toward saying we would opt for the grocery option for Whitewater,” Reichwald said. “It will be a hybrid; it will be more of a traditional grocery store to meet the needs of all the owners in the Whitewater community.”
The group formed a steering committee, and most of its members attended this year’s conference, which took place in Milwaukee and was hosted by Outpost Natural Foods.
The co-op then incorporated, ratified its bylaws and started accepting owners on May 5.
Reichwald explained that a traditional store might have a single owner or proprietor, be a corporate-owned chain store or a franchise of a chain store, with the ultimate goal of making a profit.
A co-op, though, is a type of “community-owned” store in which the needs of the community are more important than pure profit; usually any profit is reinvested into the store. The community members buy a share of the co-op that never changes in value; thus, a large number of community owners are needed in order to get the co-op up and running.
Additionally, each owner gets a vote in the co-op store’s direction or other decisions that affect it. A co-op is open to the public, unlike a “club” store.
“We want to make it clear that we are going to be a traditional grocery store because sometimes when people hear the word co-op, they often think it is only going to be natural foods or supplements or high-priced organic produce,” Reichwald said. “That is not the direction we want to go. We want to have a traditional store, but also have those items.”
Diebolt-Brown said that a hybrid store like the Whitewater Grocery Cooperative is not as unusual as it might first sound.
“What we learned at the conference was there is an organization called the Food Co-op Initiative (FCI) that sponsors these types of conferences, and the reason they do that is that there has been a resurgence in co-ops over the last few years,” she said. “Some of that had to do with the recession, and because of that, many grocery stores are leaving small towns because they are beholden to their corporation; if the store does not make a profit, they leave. Co-ops don’t need to make a really big profit; they just need to make sure that they can stay in business and owners are shopping there.”
Diebolt-Brown said the FCI has provided guidelines — she called them a “cookbook of benchmarks” — that indicate the levels to be reached in order to have a successful co-op.
“We looked at case studies to see what they were doing in North Carolina or California or Michigan because co-ops serve their owners, which means there has to be a hybrid at some point,” she said. “If they want locally-made sausages but also Cheerios, you have to sell both of those. This has been done a number of times.”
It costs $150 to become a member of the Whitewater Grocery Cooperative, and ownership applications can be downloaded from the website at www.whitewatergrocery.co — be sure to note that the URL domain name is .co and not .com.
The forms can be printed and can be mailed in with checks to P.O. Box 25, Whitewater, WI, 53190.
Additionally, the cooperative has a table each week at the Whitewater City Market, which is held across from the Whitewater Municipal Building, on Tuesdays from 3 to 7 p.m. and people can sign up in person.
The payment can be made in installments, as well. Ownership in the Whitewater Grocery Cooperative is open to anyone, even residents who live outside the City of Whitewater; in fact, Diebolt-Brown noted some owners reside in Fort Atkinson, Elkhorn, and Illinois, for example.
So far, the Whitewater Grocery Cooperative has 150 owners, and that has been for its first month.
“The FCI said that we hit 100 owners faster than any other cooperative that they have ever worked with before,” Reichwald said. “We hit 100 people in four days. They were especially impressed, given the size of our community.
“We need 1,000 owners to open our doors,” she added,” noting that certain benchmarks must be met before that happens.
Both Diebolt-Brown and Reichwald said they are confident that the 1,000-owner benchmark can be achieved.
The benchmarks recommended by the FCI are posted on the website as well. Those benchmarks are:
• 100 owners: Organizing Stage. Launch first ownership campaign and begin recruiting volunteers for task groups. Hold first annual meeting and establish a board of directors, as well as bylaws. Commence contract negotiations for professional and consulting services.
• 300 owners: Feasibility Stage Part A. Establish a feasibility task group to begin looking at site options and financial feasibility. Conduct a co-op specific market study and develop business plan.
• 500 owners: Feasibility Stage Part B. Begin site analysis, finalize business plan and start to research supplier options and distribution networks.
• 650 owners: Preconstruction Stage. Identify site options.
• 700 owners: Store Design. Seek input from owners on preferred exterior design features, as well as interior design choices (which services are most desired by owners, parking, deli, etc). Professional interior and exterior store designers will use owner feedback to guide the design process.
• 800 owners: Site Announcement. The Board can sign a lease once it reaches 800 owners, which demonstrates sufficient support and provides the necessary capital to move forward with confidence.
• 900 owners: Launch General Manager Search. The board will begin a national search for a general manager who will be involved in key operational decisions and oversee store operations.
• 1,000 owners: Capital Campaign. The capital campaign will raise the funds necessary to convert the site into a full-service grocery store. It will rely on a mix of bank loans, non-traditional financing, and owner loans to fully fund start-up expenses.
The most significant chunk of revenue will be owner loans, at about 50 percent. Owner loans are a fundamental method of funding for modern food co-ops. Traditional lenders require 50-percent owner funding before making their loan available
Diebolt-Brown and Reichwald emphasized that some of the most-asked questions are not able to be answered yet because those decisions are made by votes taken by the owners.
“Because the owners have a vote, they are part of the process,” Diebolt-Brown said. “So people ask us where is the store going to be located, we say, ‘you have to tell us where it is going to be’ when we are several-hundred more owners down the line.”
They said that before any vote takes place, official market studies will be completed, looking at things like traffic counts and available property. That way, the owners will cast an informed vote. The first annual owners meeting is planned for September.
“We still have a lot of planning and procedures and policies to follow,” Diebolt-Brown said. “We are moving at a steady rate, and following steps that have worked for decades. I am certain we will get that 1,000 mark.”
Reichwald said the next step the Whitewater Grocery Cooperative takes is to conduct a feasibility study to make sure the community can support the cooperative.
“We have a diverse population in Whitewater so we want to try to be as accessible to as many people as possible,” Reichwald said.
In conclusion, both Diebolt-Brown and Reichwald said that city officials have been supportive of their work.
“The CDA gave us a $10,000 grant because they have been tasked by the city to make a grocery store happen,” Diebolt-Brown said.
“It is also important because the city tried to lure many stores here, and they almost had a deal, but it fell through,” Reichwald said. “Them helping us does not mean they are not in support of helping another grocery store come to Whitewater; it’s just that we are the option that is moving forward, we are the option that has gained steam, when everyone else has not to this point. So rather than waiting for a store to come to Whitewater, we are going to build one.”