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...

October 10, 2017

Sharpen Your Skills in Cost Management and Profitability With This Online Course

The University of Florida is offering a new online course on costing and profitability. The course will take growers through the process of how to accurately evaluate cost of production, labor efficiency, pricing, and equipment investment decisions.

Read More
Willoway Nurseries Team

October 1, 2017

How Willoway Nurseries Gets Its Staff Engaged in The Company’s Future

Willoway Nurseries in Avon, OH, is creating a culture with people who think, act, and feel like owners. Learn how its team is taking the business to the next level.

Read More

September 21, 2017

Horticulture Is All About Connections

The beauty of our industry is that we are more than willing to reach out and help those around us. What connections can you make today to help your business, and what can you offer to help another grower?

Read More
Latest Stories

October 10, 2017

Sharpen Your Skills in Cost Management and Profitabilit…

The University of Florida is offering a new online course on costing and profitability. The course will take growers through the process of how to accurately evaluate cost of production, labor efficiency, pricing, and equipment investment decisions.

Read More
Willoway Nurseries Team

October 1, 2017

How Willoway Nurseries Gets Its Staff Engaged in The Co…

Willoway Nurseries in Avon, OH, is creating a culture with people who think, act, and feel like owners. Learn how its team is taking the business to the next level.

Read More

September 21, 2017

Horticulture Is All About Connections

The beauty of our industry is that we are more than willing to reach out and help those around us. What connections can you make today to help your business, and what can you offer to help another grower?

Read More
Worker taking cuttings at Vivero Internacional.

September 11, 2017

Vivero Internacional Elevates Clean Cuttings to New Hei…

One of the last independent cutting operations, this fast-growing company raises the standard for delivering clean, high-quality unrooted cuttings.

Read More
Selecta Sponsor bed at Raker trial gardens

September 5, 2017

C. Raker & Sons Acquired By Roberta’s Unique Garden…

Ownership will change hands in December, and Raker will supply young plants for the 2018 season. Beyond that, leadership of the two operations say they are excited to move forward with a partnership that will continue to supply the industry, and gardeners, with top-quality plants.

Read More

August 1, 2017

MPS Honors D.S. Cole Growers for 10 Years of Sustainabi…

At Cultivate’17, a ceremony to mark a 10-year milestone since D.S. Cole Growers became involved with More Profitable Sustainability (MPS), as the first U.S. grower to achieve MPS certification, took owner Doug Cole by surprise. Separate celebrations also recognized Metrolina Greenhouses and Dümmen Orange for achieving MPS certification.

Read More
Nexus greenhouse construction for Knox Cannabis Facility

July 27, 2017

Ornamental Growers Will Revolutionize Cannabis Industry…

Professional growers have much to offer the emerging cannabis market, according to the co-owner of Knox Medical, one of the licensed cannabis producers in Florida.

Read More
Ball ColorLink logo

July 11, 2017

Get Guidance on Running Your Business from Ball ColorLi…

Representatives from Ball ColorLink will be on-hand at Cultivate’17 to answer questions and present business-building tools and industry insights to growers.

Read More
Lean Consortium in Washington

July 10, 2017

Washington Growers Join New Horticulture Lean Consortiu…

The group of growers has committed to learning and applying the principles of Lean, a method for eliminating waste that results in more value to customers delivered at a lower cost, in a shorter time, with fewer defects and less human effort.

Read More

April 11, 2017

Jerry Halamuda of Color Spot Nurseries Retires

The co-founder of Color Spot Nurseries has retired, effective immediately, and has named a replacement.

Read More

March 21, 2017

How Greenhouse Vegetable Growers Can Prepare for a Prod…

The United Fresh Produce Association is holding a Recall Ready Workshop in April that is designed to help growers properly manage a recall, from liability to communications.

Read More

March 14, 2017

Expanded Customer Footprint, E-Commerce, Succession Key…

Costa Farms' acquisition of indoor foliage producer Delray Plants rocked the industry, but the story behind Delray Plants' sale is the same as for many growers struggling with succession planning. For Costa Farms, the strategic purchase expands its customer footprint and also fast tracks its foray into e-commerce.

Read More

March 10, 2017

Costa Farms Expands With Purchase of Indoor Houseplant …

Costa Farms annnounced March 10 that it has acquired Delray Plants, one of the leaders in the indoor houseplant industry. The two operations are committed to the same values, principles, and goals to grow the industry, and will fit well together to accomplish this, say Randy Gilde, CEO of Delray Plants, and Joche Smith, CEO of Costa Farms.

Read More
Ken and Deena Altman

March 7, 2017

Altman Plants in Escrow to Purchase EuroAmerican Propag…

Ken Altman, a co-owner of Altman Plants based in Vista, CA, has confirmed that the operation is currently in escrow to purchase EuroAmerican Propagators, the Bonsall, CA-based young plant and finished plant grower that filed Chapter 7 Bankruptcy on Jan. 23, 2017. Ken and Deena Altman are co-owners of Altman Plants and The Plug Connection, along with their son Matthew, who has recently bought into the family business. The 55 acres of land and all of the facilities on it, which were previously owned by Jerry Church, a partner in EuroAmerican Propagators, are part of the purchase agreement currently in escrow, Altman says. However, it would not be absorbed by Altman Plants, which in 2016 was number 3 on Greenhouse Grower’s Top 100 Growers list with more than 11 million square feet of environmentally controlled greenhouse production, 62 acres of shade production, and 400 acres of outdoor field production. Altman Plants’ property […]

Read More
EuroAmerican Propagators Greenhouses

February 14, 2017

Suppliers Comment on Plant Genetics’ Fate After EuroAme…

Since the operation’s bankruptcy filing on January 23, 2017, suppliers associated with EuroAmerican Propagators have updated Greenhouse Grower on what the operation’s bankruptcy means for them – and how it will impact grower customers.

Read More
Stephanie Whitehouse

January 17, 2017

Stephanie Whitehouse Takes Her Passion for Plants to Di…

Stephanie Whitehouse, who has spent the last seven years as the Sales and Marketing Director for Peace Tree Farm in Kintnersville, PA, recently joined Dickman Farms Greenhouse and Garden Center in Auburn, NY, as the company’s new Retail General Manager.

Read More
Laura Drotleff

December 6, 2016

Are You Driving Young Growers Away? [Opinion]

In a time when the industry is facing a critical shortage of both labor and skilled, educated growers, it's important that grower operations don't unwittingly turn candidates off to a career at their business or in the industry in general. Take a closer look at your hiring practices to ensure you are being inclusive and not breaking any laws.

Read More
Trays move on an overhead conveyor to the end of the production line, where workers carefully pack the cleaned, sized, graded, counted and sorted Calla tubers

November 29, 2016

Texas Judge Halts Overtime Rule; Here’s What It Means F…

According to Craig Regelbrugge at AmericanHort, the injunction against the overtime rule is welcome news for horticulture.

Read More