By Matt Stanley/General Manager
Published in the Co-op’s Winter 2016 Newsletter

Our Owner Equity Drive in October 2015 was a resounding success. Hundreds of owners paid off their shares, made an equity payment ahead of schedule, and some even forked over an additional $100 in equity to help us raise nearly $30,000 to kick off our expansion. But our expansion plans require significantly more capital. Fortunately, we have capital raising tools at our disposal that we intend to use. To that end, we intend to offer preferred shares to our owners.

What are preferred shares?

Under the Oregon Cooperative Corporation Act co-ops can issue dividend earning preferred shares that have a specified par value. Members can purchase these non-voting shares that will provide Co-op owners an additional means of investing in and supporting a local business. Those who purchase preferred shares will watch as we build a new store with their equity! At the same time, preferred shares will allow the Co-op to leverage additional funds from banks or other lenders. Finally, preferred shares align perfectly with one of the seven cooperative principles: Member Economic Participation.

Preferred shares work like this: Co-op owner Tom wants to invest in the Co-op beyond his normal membership share. Each preferred share has a specified par value of $100. The minimum purchase requirement is 25 shares. So Tom invests $2,500 in the Co-op and will receive a 3% annual dividend on his shares, which amounts to $75 per year. If Tom has more money to invest, he can earn an annual dividend premium in addition to the 3% annual dividend. Owners who purchase 100 ($10,000) or more preferred shares will earn an additional 1% annual dividend premium. Our goal is to raise $1.3 million through the offering of these preferred shares. We hope to have an average investment of over $5,500 so we will need many Co-op owners to invest, some at the $2,500 minimum level and others at $5,000, $10,000, $20,000 and even more.

First Steps
But we are getting a little ahead of ourselves. In order to offer the preferred shares we have some preliminary work to do. Specifically, we need to amend our Articles of Incorporation to establish this new class of preferred shares. The board of directors approved this amendment at its October 2015 meeting.
According to state law, our owners must approve this amendment to the Articles of Incorporation, too. We’ll need you to attend our special meeting of owners on March 2 at 6 p.m. to approve the amendment to the Articles of Incorporation. We’ll make it a fun evening full of tasty treats from Chef Andy at Street 14 Café. The board of directors will also give owners an update on the progress of our proposed expansion. We look forward to having you there!

Capital Campaign
With the approval of the amendment to the Articles of Incorporation, we’ll tentatively plan on a capital campaign this year during which we’ll work hard to reach our goal of $1.3 million through the offering of these preferred shares. In the meantime, we’ll be working with our securities attorney and fellow food co-ops who have engaged in successful capital campaigns through the offering of preferred shares in order for us to create an effective and successful campaign.

If you have any questions you can contact me for more information. We are compiling a preliminary list of owner investors that I can add your name to, as well. I can be reached at the store or at [email protected]. We are excited to take this next step toward our expanded store!

By Matt Stanley/General Manager
Published in the Co-op’s Winter 2015 Newsletter

Visiting our fellow food co-ops across the country is practically a pastime for me. My wife doesn’t always get what all the fuss is about, but she’ll oblige a visit to the local co-op because it usually means a source for eating healthy on the road.

Recently, our Board of Directors generously gave an entire weekend to the task of writing the store’s five year strategic plan. We decided to make a trip up to Port Townsend for our retreat this year. We chose Port Townsend because of the similarities between it and the City of Astoria.

Both cities have similar populations. Both have downtowns that are characterized by locally owned businesses. Astoria has slightly lower median household incomes (about 5% less). And Astoria and Port Townsend alike are relatively isolated from major highway corridors. But most of all, of course, we chose to travel to Port Townsend because it boasts a successful food co-op!

Kenna Eaton is the Port Townsend General Manager. She, too, generously gave of her time to give our Board of Directors a tour of the Co-op she manages. If you’ve ever had the pleasure of visiting this co-op, you’ll know that it is considerably larger than our food co-op. In fact, it is about the size store we are beginning to envision for ourselves here in Astoria. And this size is not overwhelming. Even though it is nearly quadruple our size, it still very much felt like a food co-op. Photos of local producers adorned the walls. Staff was accessible and friendly. We envied the expansive produce section, customer service desk, filtered water filling station, and more than ample deli seating area. They had some neat ideas in the store too. For example, a section of the store was reserved for local cottage industry producers to sell their wares (for no charge) directly to consumers.

But the Port Townsend Co-op is running out of room! They sell more than $13 million in heathy foods each year, mostly to their consumer owners. They employ over 100 folks. Their well laid-out and merchandised store betrays a back stock nightmare. They simply do not have enough room to store all the products that they sell. Each morning, staff rolls all the back stock of packaged grocery items outside underneath a tent. At night, it comes back in. This takes a lot of work!

Such a process reminds me of some of the inefficiencies that our store endures. Receiving our large grocery, produce, and meat deliveries outside in the rain comes to mind. Fortunately for both Co-ops, we are carefully planning our futures to accommodate our growing needs and aspirations. The Port Townsend Co-op prominently displays their recently created strategic plan. We are looking forward to

sharing our plan in the coming months. It will communicate the big ideas, goals, and focus points that will guide our decision making as we plan for more space.

Thank you to the Port Townsend Co-op for showing our Board of Directors what is possible, even in a small town, when we cooperate. And thank you to all Astoria Co-op Grocery owners for being a part of our planning process. We look forward to continually improving our store and all that it has to offer to our community. And next time you are traveling, be sure to check out the local food co-op. If you see ideas, products, or practices that you like, be sure to let us know!

Matt has been the Astoria Co-op Grocery General Manger since April 2008. To contact him, please e-mail [email protected]

By Zetty Nemlowill/Marketing Director
Published in the Co-op’s Winter 2015 Newsletter

Results of a recent survey we offered you are shaping the Co-op’s strategic plan. There were several ways we gathered community input, but the shopper survey in October, was the farthest reaching. We heard from advisors (National Cooperative Grocers) that based on our size we’d need about 300 responses to be statistically robust. Guess how many responses we received from you? 760! For those who took the time to complete the survey, thank you.

How did we achieve such a high level of response? I think first and foremost, we have a very engaged community. There was obviously a lot of interest from Co-op owners and shoppers in helping shape the Co-op’s present and future. We got the word out regarding the survey via emails, Facebook, newsletter, in-store signs, newspaper, and radio shows. There were many questions, but the big one was regarding expansion, and whether Co-op shoppers would align themselves with the Co-op board and management’s vision which includes a bigger space within the next five years. We heard a resounding “yes”.

85% of respondents support growing the Co-op, 13% neutral and less than 2% opposed. One concern cited was the Co-op re-locating too far away from its existing footprint. But rest assured, the survey also told us that if the Co-op were to expand, most people would prefer it to happen in Astoria.

The most important aspects of a possible expansion listed in the survey results include a greater variety of products, new or expanded services in the store (such as a deli, meat counter, bakery etc.), selling more local and/or organic foods, increasing the Co-op’s purchasing power (which could result in lower prices), and expanding the number of living wage jobs.

While an expansion would probably be months to years in the making, the survey results are really helpful for the work we do now, to know where your priorities lie. For example, the top social issues survey-takers thought the Co-op should champion are as follows: supporting local agriculture, providing nutrition education, promoting recycling, and addressing local hunger problems. We can keep this feedback in mind when planning outreach activities.

Overall, it is good to see we are doing a good job of meeting our shopper’s needs. Nearly everyone said they’d recommend Astoria Co-op Grocery to a friend. We are so grateful for all the feedback which will help us improve our cooperatively owned local food store.

Click here to view the Daily Astorian article.