The Co-operative Movement

Difficult times call for interesting ideas – and the co-operative idea is one that has had varying levels of success for generations in several industries. In fact, rarely has such a simple idea had such a huge impact for those that earnestly participate.

Risking the obvious here … the word "co-operative" comes from the word "co-operation" or "co-operate." Most people don’t think of this when you ask them what a "co-op" is. Ask 100 people what a co-op is and you will get a lot of answers that involve organic farming or other small local farm operations. However, a co-operative can involve as few as two "members" or as many as thousands. Indeed, farming has often been the genesis of many co-operatives. To this day, dairy farming, organic farming and berry farming are areas where we see co-operatives thrive. The reason? It makes sense.

A co-operative is a partnership, of sorts. By doing things together, the members are able to see some kind of efficiency. It doesn’t matter why the co-operative was formed. It may have been to buy similar supplies from a single supplier more cheaply. It may have been to share a common resource like capital equipment (Why have equipment sit idle when it can be shared and used by several members of a co-op?). Or it could have started to get product to market on shared trucks. In fact, it doesn’t matter what the initial reason was that the co-op formed, because members often find other interesting ways to capture the "power of many" and ultimately save money as they mature. But, as my column is concerned with transportation and distribution, we will start with the subject we know best – and the ways our industry can leverage this concept. 

Transporting The Co-Op

What is interesting about growers is that they usually distribute product on a combination of owned trucks and third-party trucks. Another interesting thing about growers is that they are often situated in common geographical areas (relative to other industries). These two facts make growers prime candidates to leverage the power of co-operatives, especially in distribution. Sadly, they don’t use co-ops as successfully (or as much) as they could. We will look at those reasons later.

For now, let’s focus on what a grower can get out of joining (or starting) a co-op centered on transportation and distribution. For many growers, they struggle with small orders, especially in the off season. This means shipping costs on a per plant basis can be very high. Using LTL (less than a load) carriers is very expensive, and many won’t take live goods. However, in a perfect world, the space you have on your truck can be filled by other local growers shipping the same general destination. Or, rather than use an LTL carrier, which on average costs 3.2 times that of a full truckload, you can use a third-party truck (a common carrier) and share it with your co-operative members.

Moreover, how about the savings you could see if you are delivering on your own trucks? If you delivered your material in a specific area, and then picked up for another grower in that area and returned to near your growing location, it would make a lot of sense for you both. Why drive back from your deliveries empty if you can actually make money on the return trip? And the good part about our industry is that racks and carts are strewn across the United States waiting to be picked up and returned to growers and pooling points. How often are you driving around empty when you could be getting paid?

The concept sounds simple, but in reality a successful co-operative needs several elements to work correctly. Without them, your co-op will fail. But with them, you can not only succeed, but provide better customer service and save money from day one. 

Beginning A Co-Op

Getting a co-op up and running isn’t hard. Here are some of the major things to be aware of, and a little advice on how they should be handled:

Responsibility: Everyone may agree that co-ops make sense, but who will be responsible for all the work, coordination and day-to-day activities? One way around this issue is that the co-op members can pool money to pay for independent staff that "is" (essentially) the co-op. The staff will help write the "rules" for the members and arbitrate the typical disagreements that occur. Staffing is usually minimal (one or two people to start), making the expense negligible compared to the savings seen from the co-op’s activities.

Trust: In some cases, you may have competitors become members of the co-op. Trust can become an issue, especially if independent co-op staff does not exist to maintain fairness.

Technology: Shared technology platforms allow you to see another grower who has needs and the system can "match you up" just like a dating service. In turn, they will see you have truck capacity to help them. It couldn’t be easier. You both get something you need, you both save money, you both provide better service to your customers and you both have less headaches. Make technology an important part of your plan.

Membership: You can’t just let anyone join your co-op. It is important to have specific membership guidelines and rules, along with an application process and governing body. The integrity of the co-op, on several levels, is at stake if you let in the wrong members.

Commitment: Having 10 members in your co-op is only as good as your commitment to the process. If you are a co-op only in name, it is a waste of time. The easiest and fastest way to show you the power of your creation is to pick a product you all buy a lot of, like pots or soil. Then, pool your entire purchase needs and shop prices with several suppliers. Make it a fair and open-bidding process. You now control the market for your purchase, and thus to some extent, the pricing. Buying pots or third-party truck transportation is no different. I have seen millions of dollars saved this way.

Some of the biggest corporations in the world started off as co-operatives. As they grew, they harnessed the power of their size and each member became a shareholder of the newly formed corporation. It isn’t complex if you have the essential elements in place – responsibility, trust, technology, membership and commitment. The results will be rewarding and some immediate.

Leave a Reply

More From Finance/Operations...
Katherine Wolper

January 24, 2016

Ludvig Svensson Hires Katherine Wolper As West Coast Sales Manager

Wolper says she looks forward to listening to growers and understanding the concerns, obstacles, and opportunities they face.

Read More

January 20, 2016

Tips For Overcoming Challenges In Family Business From The Owners Of Costa Farms

Our industry is run by a collection of family businesses, and every one, no matter how big or small, has its share of management issues. But there are several differences between one that is run successfully as a business and one that allows family politics to distract from the organization’s goals. In this year’s State Of The Industry Survey, we noted that labor recruitment and succession are two areas where growers struggle. In talking with the owners of Costa Farms for this month’s cover story, I thought some of the values they have incorporated into the operation’s management structure really stood out as practices that other family businesses could use. The participatory management approach to business and team building is one that Tony Costa, the second-generation owner of Costa Farms, instilled in his children, Maria Costa-Smith and Jose Costa, and son-in-law, Joche Smith, the current owners of Costa Farms. In […]

Read More
I-9 Form

January 13, 2016

Proposed Changes To I-9 Form Important For Greenhouse Growers

AmericanHort’s Government Relations and Grassroots Representative Davi Bowen says growers need to become familiar with the new form and should be prepared to make comments if necessary.

Read More
Latest Stories
Katherine Wolper

January 24, 2016

Ludvig Svensson Hires Katherine Wolper As West Coast Sa…

Wolper says she looks forward to listening to growers and understanding the concerns, obstacles, and opportunities they face.

Read More

January 20, 2016

Tips For Overcoming Challenges In Family Business From …

Our industry is run by a collection of family businesses, and every one, no matter how big or small, has its share of management issues. But there are several differences between one that is run successfully as a business and one that allows family politics to distract from the organization’s goals. In this year’s State Of The Industry Survey, we noted that labor recruitment and succession are two areas where growers struggle. In talking with the owners of Costa Farms for this month’s cover story, I thought some of the values they have incorporated into the operation’s management structure really stood out as practices that other family businesses could use. The participatory management approach to business and team building is one that Tony Costa, the second-generation owner of Costa Farms, instilled in his children, Maria Costa-Smith and Jose Costa, and son-in-law, Joche Smith, the current owners of Costa Farms. In […]

Read More
I-9 Form

January 13, 2016

Proposed Changes To I-9 Form Important For Greenhouse G…

AmericanHort’s Government Relations and Grassroots Representative Davi Bowen says growers need to become familiar with the new form and should be prepared to make comments if necessary.

Read More

January 13, 2016

Wenke Greenhouses Buys Zylstra Greenhouses

Two Kalamazoo, MI-based greenhouses have merged after Wenke Greenhouses closed on Zylstra Greenhouses at the end of November. The additional property and facilities will allow Wenke Greenhouses to expand its young plant business, among other areas.

Read More

January 13, 2016

Costa Farms Wins With Its Emphasis On Team, Solutions, …

Based in Miami, FL, Costa Farms has gone global by focusing on strategy, systems, and vertical integration. See how the operation continues to expand through its emphasis on team, solutions, and growth.

Read More

January 11, 2016

New Transportation Funding Bill Is Good News For Floric…

According to AmericanHort, perhaps the biggest benefit of the new bill is what it doesn’t include: a proposed amendment that would have prohibited the use of federal funds for vegetative enhancements.

Read More

December 29, 2015

The Home Depot Says No To Neonics

The Home Depot plans to phase out neonicotinoids by 2018, according to a recent statement on the company’s website. The large home improvement retailer stated that its live goods suppliers have reduced the number of plants that they treat with neonicotinoids, and now more than 80% of all flowering plants sold at The Home Depot are not treated with neonicotinoids. The retailer said it will continue this decrease unless: Treatment is required by state or federal regulation, or Undisputed science proves that the use of neonicotinoids on live goods does not have a lethal or sub-lethal effect on pollinators Aside from these exceptions, the retailer has implemented a complete phase-out of neonicotinoid use on live goods by the end of 2018. Meanwhile, The Home Depot has required all of its live goods suppliers to label plants that have been treated with neonicotinoids. “The Home Depot is deeply engaged in understanding the […]

Read More
Gardeners of all ages enjoyed the annual plant sale at McCorkle Nurseries

December 22, 2015

Allan Armitage Explains Why People Will Always Want To …

We may believe that an appreciation for gardening and plants is rapidly draining away, but there is reason to hope.

Read More
Canadian Greenhouse Conference 2015

December 21, 2015

Presentations From Canadian Greenhouse Conference Avail…

Many of the talks that took place at this year’s Canadian Greenhouse Conference in Ontario focused on improving production efficiencies in the greenhouse.

Read More
Sanitation programs are essential to preventing and removing food safety concerns.

December 7, 2015

How The Finalized Produce Safety Rule Will Affect Green…

While the new rule from FDA has many exemptions that will likely apply to greenhouse growers, the reality is that buyers may still require strict adherence to food safety standards.

Read More
Smith Gardens Marysville outdoor field production

November 30, 2015

Why Smith Gardens’ Marysville, WA, Facility Is A Great …

Labor rates in Washington State are some of the highest in the nation, making competition for labor fierce. This is why Smith Gardens in Marysville, WA, wants to strengthen its reputation as a great place to work.

Read More
Great Lakes Expo

November 30, 2015

6 Reasons You Should Attend The Michigan Greenhouse Gro…

The Michigan Greenhouse Growers Expo, held Dec. 8-10 in conjunction with the Great Lakes Fruit, Vegetable and Farm Market Expo, will feature an expansive trade show and several educational sessions aimed at greenhouse growers.

Read More

November 25, 2015

Everything You Need To Know About the New England GROWS…

Held In Boston December 2-4, New England GROWS includes a comprehensive conference program, a trade show, and with six special programs that teach new skills and provide opportunities to network with colleagues.

Read More

November 20, 2015

Lessons Learned From The California Drought

For those of us who live in the areas of the country that experienced harsh winters and significant rain over the past three seasons, water has become a nuisance in some cases, rather than a blessing. I can’t count the number of times I have wished to be able to send the snow or the rain to the West Coast, tied up with a big red bow. But think about how we’d feel if we didn’t have the snow and the rain, and we were experiencing the same dry conditions that the residents of California, Oregon and Washington have. With fresh water supplies dwindling in regions of the world, and the resistance of residents in states like Michigan to share water from the Great Lakes, it’s likely that the next civil or world war could be fought over our most precious resource. California’s epic drought should cause everyone to look […]

Read More
Jill Calabro

November 3, 2015

AmericanHort Names New Research And Science Programs Di…

Jill Calabro will bring strategic direction and oversight to research funding by the Horticultural Research Institute, the research affiliate of AmericanHort.

Read More
SBI’s ANY Device Application allows growers to quickly determine availability-featuer

November 2, 2015

SBI Software’s Solutions Help Simplify Logistics For G…

The company focuses on helping growers improve their existing processes with solutions for site fulfillment, replenishment, inventory management and more.

Read More
Griffin Expo15 seminar

October 28, 2015

Griffin’s Hits Record Attendance With 2015 Expos,…

Griffin Greenhouse Supplies set new attendance records with its 2015 Expos. Its 2016 Expos are set for August 31 and September 1, 2016, in West Springfield, Mass., and September 21-22, 2016, in Lancaster, Penn.

Read More

October 28, 2015

Possum Run Greenhouses Taken Over By New Owners

Justin and Lynn Marotta have placed Possum Run Greenhouse and Gifts into the hands of new owners. John and Caroline Bletner, a newly married couple, took over the Bellville, Ohio, property October 2, according to an October 24 article in the Mansfield News Journal. The Marotta family has run Possum Run Greenhouse and Gifts for 41 years. When the Marottas announced in April the greenhouse operation was for sale, they said they were looking for an energetic couple to take the business to the next level, which is what they found in the Bletners, the article reports. The Bletners have hinted they’ll be “opening to a larger market” and that the retail side will “look different.” They’ll hold a grand re-opening the week of April 22, 2016. Staff are staying on board and the Bletners are maintaining many of the suppliers. The 200-plus varieties of fuchsias Justin brought to the greenhouse […]

Read More
[gravityform id="35" title="false" description="false"]