role of co-ops in fair trade & entrepreneurship 5 8 08
TRANSCRIPT
NW Cooperative Development Center
Fair Trade and Entrepreneurship
Oct. 28th, 2007
Eric Bowman; Cooperative Development [email protected]
1063 S Capitol Way # 211Olympia, WA 98501
360.943.4241
Presentation Overview
1. Intro & my organization2. Co-ops 101 - Why Ownership Matters3. How to start a co-op4. Co-ops in meat marketing – CNB 5. Co-ops in dairy – Organic Valley6. Tillamook v Monsanto7. Co-ops & Fair Trade8. Q&A
The role of co-ops in entrepreneurship and Fair Trade
NW Co-op Development Center
The Centera 501(c)3 nonprofit which provides development services for new and existing co-ops
Our mission to foster community economic development through the cooperative business model
We’rea team of co-op developers with skills specific to start-up and organizational business development
Co-op 101Co-op = any corporation, that’s member:
Owned Benefited Controlled
Top 100 co-ops’ 2007 revenues = $150 Billion! Ag & Grocery Energy/Communications Finance Hardware/Lumber
Ownership
Member-Owners can be: Consumers Producers/Farmers Workers Other Businesses
Ag Ownership
Ag producer co-ops provide: Assemble & Transport Process & Manufacture Bargaining & Market Access Brand Recognition
Why Cooperate?
Co-ops are a proven strategy to access economic resources which may not be individually achievable
Marketable Co-op Benefits; “Goodwill” Local = accountable Trusted: people like to deal with producer Social and economic bottom lines
Unique Characteristics of Co-ops
Conclusions Owned/controlled by members, not outside investors Exist solely to serve members Motivated not by profit, but by service Return surplus to members based on use, not
investment Pay taxes on income kept for investment/reserves;
surplus revenue returned to members who pay taxes
Adding Value
Product
Slaughter
Transport
Marketing
Retail
This is what a farmer gets paid for a pound of meat
This is what a customer pays for a pound of meat
Product
Slaughter
Transport
Marketing
Retail
This is what a farmer gets paid for a pound of meat
This is what a customer pays for a pound of meat
Value-added Marketing
Shorten link to customer Know:
Who customer is… What do they want? How often? Where? How much?
Then meet customer needs!
Adding value = keeping the $ at home
Project Lifecycle
Co-op Development Stages
Identify a need a co-op could meet
Form Steering Committee Research Feasibility Review Findings (Go/No Go) Membership Drive Planning and Financing Begin Operations (Go/No Go)
How We Can Help
Facilitate identifying mission and goals
Train founding Board members Market and feasibility research Assist with organizing Professional, 3rd party perspective General business consulting
Organic Valley
Wholly Owned Subsidiaries
“Un-Corporation” 1,205 members (40 in NW) ~ 10% of organic farm community
Why? Shipping scale and efficiency
Philosophy: “Crafting new vision of foods/farms” “More than delicious”
Country Natural Beef
“Our product is more than beef…”
1986 = “we were going broke” Economics: increasing interest rates, land prices Social: cholesterol fears, “enviros” 14 farmers in Brothers, OR
Selling direct = value added Business philosophy:
it’s about the people shinrai and consensus
Ownership Matters Tillamook vs. Monsanto
Conflict over 2004 ban of hormone (rBGH) and labeling
Farmer-owned, dairy marketing co-op 150 farmers; ‘05 sales = $260 million Needs = protection of brand & consumer perception
Investor-owned, multi-national agribusiness ‘05 sales = $6.3 billion Needs = Investor ROI
Case Studies Review
Key Points:
2. Born out of need & adversity
3. Marketing values and philosophy
4. Successful innovation & reinvention
5. Represent a different way of doing business
6. Connect farmers & consumers
Co-ops and Fair Trade
Market-based social movement Sales = $2.3B worldwide; a 41% year-to-year
increase
Co-ops: A natural fit for Fair Trade principles Tells & sells “the Story”
Supply Chain; Co-op to Co-op
Domestic Fair Trade Typical co-op development Preexisting co-op
But different vision
5 growers w/ theme: Coffee is the fiber of our
being
Conducting Feasibility study Business planning Board/member training
In Conclusion
Co-ops provide opportunities Add value = create assets/wealth Economically clustering farmers/owners Empower producers/consumers Keep control local Balance multiple bottom lines
Thank You!
Eric Bowman
Northwest Cooperative Development Center
1063 Capitol Way S # 211 | Olympia, WA 98501
360.943.4241
[email protected] | www.nwcdc.coop
Fostering community economic development through the cooperative business model