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On the road to organic retail

In Good Tilth Article - Volume 18v - On the road to organic retail

By Erin Volheim

In the blazing sun of late summer, I found myself dressed “smartly” in black, while riding my motorbike to the Ashland Food Co-op. My assignment was to uncover why this co-op was going through the tedious process of certifying the store itself as “organic.”
Ashland Food Co-op is following a proud co-op model of organic retailing.

I remembered my editor fervently asking, “Why certify a store? Isn’t just selling organic products enough?” Since it was deadline day for this piece of investigative reporting, I thought I should at least start. So I pulled into A-town, to corner Annie Hoy, Ashland Food Co-op’s Outreach Manager, at the edge of the co-op’s community classroom.

Channeling my editor’s vexation, I bleated, “Why, why, why?” She calmly replied, like any quality Outreach Manager, “From the farm to the shelf, co-op members can be assured that whatever they purchase at the co-op meets national organic standards of quality.”

“Was the answer really that simple?” I wondered to myself. “Co-ops have always been ahead of the curve,” Annie reminded me. The earliest cooperatives appeared in Europe in the late 18th and 19th centuries, during England’s Industrial Revolution. In 1843, a group of striking flannel weavers in Rochdale, England decided to take control of their food supply, rather than relying on the corrupt company store.

Twenty-eight people founded a food co-op and named themselves the Rochdale Equitable Pioneers Society, (REPS). Although the REPS weren’t the first group to try forming a co-op, they were the first to make their co-op endure. To help others avoid the mistakes made by earlier co-op societies, they developed a list of operating principles governing their organization. These formed the basis for what is now known as the “cooperative principles.”

From colonial times on in the U.S., most early co-ops were formed primarily to help agricultural communities. A co-op helped farmers keep their costs low through joint purchases of supplies, while others focused on marketing, providing storage or production services. Still, it wasn’t until the early 1900s that co-ops gained recognition as a truly viable business form, and began to have their first long-lasting successes in the United States.

What is now known as the “new wave” of consumer co-ops began in the late 60s and early 70s, born out of philosophies of the counterculture. Most were aligned with members’ beliefs in equality and social justice, while focused on whole, unrefined, and bulk foods. These co-ops were pioneers in a growing health-conscious society, in what came to be known as the “natural foods” industry. Although many co-ops experienced problems such as insufficient capital and inadequate membership support, those that survived are well-established, and strong protégées of a long and rich consumer co-op legacy.

Co-ops are based on the values of self-help, self-responsibility, equality, equity, and solidarity. In turn, co-op members believe in the ethical values of honesty, openness, social responsibility, and caring for others. While focusing on member needs, co-ops work for the sustainable development of their communities through policies accepted by their members.

With this kind of historic integrity, it’s a short investigation as to why any natural foods co-op would want to pursue organic certification. Certification has been a strategic goal for the Ashland Food co-op since 2005. One inspiration was the Wedge Co-op in Minneapolis, Minnesota.

On October 21, 2002 the USDA’s Organic Rule went into effect. After months of preparation, The Wedge had the distinction of being the first certified organic grocery store in the U.S., and several of its departments are the first to be certified in the country. The Good Organic Retail Practices Manual (GORP), is a guide-book for steering stores through the maze of certification, and includes calls for strict cleaning regimens, logs for recording cleaning tasks between handling of conventional and organic produce, resetting displays to prevent commingling and contamination of organic product.

The USDA rule allows stores to seek certification department by department, so the Ashland Food co-op started with the produce and bulk sections. Anne remarked, “The processes for certification were things we were already doing, all it did was force us to write things down. That’s been a gift to our management team.”

Why does it matter?

“In a store with so many foods commingling, the potential for contamination with non-organic substances can be high,” argues Cissy Bowman, an Indiana-based organic produce farmer and a USDA-accredited certifier. Some problems are non-organic produce stored above organic. Residues can drip onto the food below when misted with water to stay fresh. Worse yet, is mixing up conventional and organic produce that look virtually identical. Chemicals used in a non-certified store — everything from cleaning agents to rodenticide — may also wind up in the food.

Joyce Ford, one of The GORP Manual’s authors, convinced Barth Anderson, (who was integral to Wedge’s organic certification) that whether the USDA intended it or not, organic retail certification was built for co-ops. “The hurdles stores would jump through favored small, nimble stores with motivated workers over ponderous corporate chains whose directives trickle down to disinterested employees.” In his words, “Retail certification was a strategic gift from the organic movement to its long time companions, co-op groceries.” Writing in reference to organic retail certification, that “This is a watershed moment in the growth of the organic movement. As more co-ops accept the challenge of retail certification–stepping forward to complete the chain of certified organic integrity between farmer and shopper–co-ops will reassert themselves as the face of the organic industry.”

Certainly since the Wedge, major natural foods conglomerates like Whole Foods have been certified organic, which refutes Joyce Ford’s supposition. Meanwhile Whole Foods and Wild Oats are merging, and trying to answer the question, “What happens when your niche becomes a mass-market commodity?” The erosion of a niche market is something Whole Foods is worried about, as revealed in internal memos referenced in a recent court ruling on the contested merger. “Whole Foods believes it is in ‘a time of unprecedented competition’ where it increasingly does not have ‘the advantage of offering a unique selection of products,’” the judge’s opinion noted.

There is already considerable cross-shopping by customers between the health food retailers and the conventional grocers, and the latter want more of the former’s business. In an August 2007 Seattle Post-Intelligencer column, Bill Virgin cites a Kroger memo: “Kroger is the No. 1 grocery retailer; we should also be the No. 1 natural and organic food retailer.

“The question is: How big do we want to get and how soon do we want to get there? If we are to gain dominance in this industry, we must do more and we must do it now.”

He asks further, if Whole Foods is worried, should his local Puget Consumer’s Co-op be worried too? And answers, “Puget Consumers Co-op may be helped by its cooperative ownership structure and its geographic concentration. PCC plans to stay “a locally owned business for a local market,” spokeswoman Trudy Bialic says. The local focus not only allows PCC to respond to what its clientele wants, but to build “brands” with local producers who are big enough to supply PCC, but not big enough to be a provider to a national chain.

On this note, I think Annie would agree. “It is about maintaining a certain level of distinction in our niche market,” she told me. “But really, there was no good reason not to do it. We want to assure our members that everything has been handled properly.”

Erin Volheim writes from her rural hideaway in the Little Applegate Valley of Southern Oregon.

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