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...

August 4, 2015

New 2015 California Spring Trial Edibles For The Patio And Garden

If you are looking to capitalize on the foodie trend and spread your risk beyond Spring sales, new vegetables showcased at 2015 California Spring Trials offer plenty of opportunities to focus on unique, flavorful vegetables and edible plants that also hold ornamental value. Here are a few of new varieties Editor Laura Drotleff and Group Editor Carol Miller discovered at Spring Trials that will help diversify your crop mix.

Read More
Roots To Re-Entry’s ornamental plant nursery donates plants to local community gardens

August 4, 2015

Roots To Re-Entry Transforms Lives

An inspired employment initiative takes green-job training behind prison walls to help inmates find jobs in urban agriculture and the landscaping industry upon their release, and along the way, it is changing lives for the better. The Roots To Re-Entry (R2R) job training program, conceived by the Pennsylvania Horticulture Society (PHS) and its partners, does more than teach inmates of the Philadelphia Prison System the skills they need to find meaningful employment; it also teaches them invaluable life skills. The PHS staff leads participants through a 16-week course that includes hands-on projects designed to teach them horticultural skills and provide them with training in landscape maintenance and greenhouse growing. In addition to English and math, the nonprofit Federation of Neighborhood Centers (FNC) offers supplemental courses in health education and employment preparedness. Upon inmates’ release from prison, the FNC assists R2R graduates with the transition to life outside prison walls by […]

Read More
Oso Easy Lemon Zest rose_featured

August 4, 2015

Oso Easy Lemon Zest Rose Honored With Award Of Excellence

The American Rose Society (ARS) announced at the 2015 National Conference that Proven Winners received the Award of Excellence for Oso Easy Lemon Zest rose. To receive the Award of Excellence, a rose must prove itself in six different no-spray trial locations across the U.S. This is the second Proven Winners rose to win this prestigious award; Oso Happy Petit Pink rose received the Award of Excellence in 2012. “We are thrilled to receive this award from ARS for Oso Easy Lemon Zest, as its one of our favorite roses and a top seller,” says Tim Wood, product development, Spring Meadow Nursery. “A healthy-growing, self-cleaning rose that does not fade to white has been on a lot of people’s wish list, and this award confirms that this is a very special rose.” The Oso Easy Lemon Zest rose was developed by Chris Warner, the highly acclaimed rose breeder from Shropshire, England. […]

Read More
Latest Stories

July 30, 2015

Spread Your Risk Beyond Spring Sales [Opinion]

Growers who participated in Greenhouse Grower’s 2015 Spring Crops Recap Survey said they have had enough of the uncertainty that the weather brings. They said it’s time to build up sales in other seasons like fall so we’re not so dependent on spring. As a couple of wholesale growers, both from the Southeast, very eloquently stated, our industry has mastered squeezing everything we can out of the spring season. And while this year happened to be a very successful one, thanks to the improving economy and elevated consumer confidence, they said, “now is no time to celebrate.” “Spring is still Christmas in the horticulture industry, but we have done such a good job focusing on spring that we have neglected other seasons,” one grower said. “Having so many eggs in the spring basket is dangerous. Fall will never be what spring is, but having a solid second season is in […]

Read More
Berns_Roberto Lopez_Purdue6

July 22, 2015

Cultivate’15 Greenhouse Learning Tour Showcases G…

Growers took advantage of the Greenhouse Learning tour held Saturday, July 11 at Cultivate'15 to see the strategies and technology two successful growing operations are using to tackle production challenges and come out ahead of the game.

Read More
thermoflor

June 16, 2015

Philip Schaafsma To Represent Thermoflor In The U.S.

Philip Schaafsma is a new sales representative for Thermoflor, a company with a lot of experience building garden centers worldwide. The history of the Dutch construction company Thermoflor goes all the way back to 1877. Since then, the company has been through a lot of changes, from simple conservatories to complex glass and steel turnkey projects. With a new sales representative, Thermoflor is well equipped to service the American market. Previously, Petitti Garden Center (Avon, Ohio), Chuck Hafner (Syracuse, N.Y.), Jacob’s Garden (Ottowa Lake, Mich.), Hicks Nurseries (Westbury, N.Y.) and Holes (Alberta, Ca.) were all built by Thermoflor. After a period of absence, the company is now  represented in the U.S. and Canada by Schaafsma, who has more than 40 years of experience in retail lawn and garden, greenhouse growing and the floral industry, and is a former board member of the Garden Centers of America. Schaafsma is the former owner […]

Read More

June 15, 2015

Hortica Insurance To Become Member Of Sentry Insurance …

Upon completion and approval of an affiliation agreement, Hortica Insurance (Florists' Mutual Insurance Company) will become a member of the Sentry Insurance Group, based in Stevens Point, Wis. As a member of the Sentry Insurance Group, Hortica keeps its name and brand and will continue doing business from its current headquarters in Edwardsville, Ill.

Read More
Cal-Poly fields

June 2, 2015

Cal-Poly Students Seek Continued Industry Support To Sa…

Agriculture students and faculty at California Polytechnic State University, San Luis Obispo, want industry members to continue to stand with them in their effort to preserve Class 1 agricultural land from being repurposed. The university recently released an update to its Master Plan that indicates that almost all of its orchards, horticulture facilities and field sites could be repurposed for buildings, including residential and/or recreational space. According to Joel Leonard of Students For Agriculture, an organization of Cal-Poly students in favor of saving the land, the Master Planning Committee will be meeting over the summer to form a final version of its plan and present it once more to the public in the fall, before it is submitted for final approval to the California Board of Trustees. Students For Agriculture’s goal in the meantime is to increase awareness and rally industry supporters to continue to send their input to the planning committee. Visit studentsforag.com to see more […]

Read More
Cal-Poly fields

May 27, 2015

Cal-Poly Students And Faculty Ask Industry To Help Save…

California Polytechnic State University, San Luis Obispo, has released an update to its Master Plan that indicates that almost all of its orchards, horticulture facilities and field sites could be repurposed for buildings, including residential, and/or recreational space. According to a letter from Scott Steinmaus, the horticulture and crop science department head, the proposed changes directly affect the current orchard plantings and other long term plans for the department. The department is committed to making sure that its facilities remain invaluable teaching environments that enable its students to learn about crop, fruit and horticulture production, food safety and pest protection, in addition to providing sites for externally funded research projects that benefit the industry. Industry members are invited to submit comments to the university. According to Steinmaus, a recent eMail to the Cal-Poly community from the university president indicates that all of the input gathered through the end of May will be studied by the planning […]

Read More
people-of-Battlefield

May 13, 2015

Battlefield Farms Receives MPS-A Qualification

Battlefield Farms, Inc., in Rapidan, Va., has been awarded the MPS-A qualification after becoming a participant for MPS-ABC in 2010. After four years of showing effort and improvement, the company has been awarded the qualification.

Read More
Barry_Sturdivant_columnpic

May 8, 2015

How To Survive Succession Planning And Resolve Conflic…

If you work in agriculture, you most likely work with family-owned businesses. This is especially true within the greenhouse industry. I’m fortunate to work for a company that specializes in financing and supporting such businesses. Family-owned businesses often have a level of commitment and support that helps during lean times. This is important for a company exposed to seasonality and events that are sometimes beyond management’s control. Business owners and management are constantly looking for solutions to the unique issues faced by these small but complex businesses. Specifically, how these issues affect the transition from one generation to the next. There are many family enterprise success stories, cases of harmony, health and longevity. Yet it’s no secret that family businesses can struggle with governance, leadership transitions and even survival. According to the Family Business Institute, only 30 percent of family businesses last into the second generation, 12 percent remain viable […]

Read More

April 30, 2015

North Creek Nurseries Welcomes Nikki Drake As New Finan…

Nikki Drake will fill the role of new financial administrator at North Creek Nurseries, with responsibility for the accounting department. She will also serve on the strategic planning committee.

Read More
Andy Huntington Pleasant View

April 29, 2015

Pleasant View Gardens Promotes Andy Huntington to Natio…

Pleasant View Gardens recently announced that Andy Huntington will be the company’s National Sales Manager. Huntington, who has years of horticulture industry experience, will oversee national territory and inside sales departments, while fostering strong partnerships with customers. “Our relationships with customers are central to all that we do at Pleasant View,” Huntington says. “In my new role, I am excited to work with a broader base of broker, grower and retail partners to understand their business needs. Pleasant View’s goal is to be so in tune with our customers that we are able to anticipate their problems before they arise.” Huntington has a history of growing sales and forming long-lasting relationships with a diverse customer base. For the past two years, he has been working as a territory account manager for Pleasant View Gardens, responsible for young plant liner sales in New England and New York. Prior to that, Huntington was […]

Read More
PittMoss on Shark Tank

April 22, 2015

PittMoss Wins On Shark Tank

Mont Handley, president and CEO of PittMoss, appeared on ABC’s Shark Tank on April 17 to try to get the “sharks” to invest in his peat moss alternative. Three investors from the TV show contributed $600,000 to PittMoss for a 35 percent stake in the company. Check out this clip from ABC’s website in which Mark Cuban, Kevin O’Leary and Robert Herjavec discuss getting on board with the product. PittMoss is an alternative to sphagnum peat moss, made up of a mix of proprietary additives and recycled paper rescued from landfill space. Handley founded the Pittsburgh-based company in 1994. What started as a small experiment grew into a full-fledged business with the help of funding provided by an EPA SBIR grant and Pittsburgh’s Idea Foundry. Today, PittMoss is available to commercial greenhouses and nurseries from Michigan to Maine to North Carolina, with plans to grow. To learn more, visit PittMoss’ website, or check it […]

Read More
Syngenta logo

April 15, 2015

Syngenta Names Chris Freeman Senior Key Account Manager…

Chris Freeman is the new senior key account manager for Syngenta Flowers, Home & Garden's Commercial Sales business in the Americas, effective March 2015. Freeman, who joined Syngenta in 2006, carries more than 25 years of experience in the agriculture and floriculture business.

Read More
Lake Buchanan_LCRA

April 10, 2015

USDA Designates Areas Of West And Southwest As Drought …

The ongoing drought has resulted in disaster area designations in counties across nine Western and Southwestern states, including Texas, where some reservoirs are at or near historically low levels.

Read More

April 9, 2015

Altman Plants’ Online Cactus Shop Shows Strong Sa…

Altman Plants recently opened its new Cactus Shop, an online retail store that sells a variety of cactus and succulents. The store is a take-off of Altman’s original wholesale business, as the company started as a mail order catalog.

Read More
Dummen

April 8, 2015

Dümmen Group Welcomes Jim Devereux And Andrew Konicki T…

Dümmen group recently announced the addition of Jim Devereux and Andrew Konicki to its team. They are the newest members of the Key Account and Broker Support team for Dümmen, and will be responsible for building, developing and maintaining current broker and grower customer relationships.

Read More
Gov._Jerry_Brown_California

April 8, 2015

California Institutes First Ever Statewide Mandatory Wa…

California Gov. Jerry Brown announced April 1 that, for the first time in state history, action will be taken to implement mandatory water restrictions, with the ultimate goal of reducing water usage by 25 percent. As Californians are pushed to conserve more, growers will need to think about how demand for products will be affected.

Read More
DNA-logo

March 31, 2015

DNA Green Group Will Acquire Rijnplant

DNA Green Group and Riknplant have finalized DNA Green Group's acquisition of Rijnplant, meaning that the breeding and propagation activities in pot and cut anthurium, bougainvillea and heliconia will transfer to DNA Green Group.

Read More
AFE scholarship_Ryan Dickson

March 25, 2015

AFE Educational Grant And Scholarship Application Deadl…

Apply now for American Floral Endowment (AFE) scholarships or educational grants. Applications can be found online. For educational grants for 2015-2016, applications must be submitted no later than June 1. Scholarship applications are due May 1. AFE will award $40,000 in scholarships for 2015.

Read More