Cleveland Food Co-op Struggles to Compete
David C. Barnett- The letter to members of the Cleveland Food CO-OP asked a straightforward question: "Dear members, Your co-op is dying. Do you want to save it?" The note went on to outline the immediate crisis and some plans to deal with it. It was signed by a business turnaround expert named John Newman.
John Newman- I'd love to tell you that the competition has been doing some terrible things to steal our business, but quite frankly, we just haven't been doing our job.
DCB- The Cleveland Food Co-op's headquarters are housed in a plain, beige building on Euclid Avenue, just off the beaten path in University Circle. The store is actually owned by a membership of about 10,000 people. Members pay discounted shelf prices for a large variety of natural foods, everything from free-range chicken eggs to pesticide-free produce. This full-service grocery store is a far cry from far more funky beginnings in the late 60s.
Mary Rose- Everyone was required to volunteer 8 hours a month. If you weren't volunteering, you could shop, but you had to pay 30% extra -- a big incentive to join. And it was a good way to meet people.
DCB- Mary Rose made a lot of friends when she moved here from Youngstown in 1979. She also worked her way into the paying position of Volunteer Coordinator at the Food Co-op. Today, she's serving as interim general manager, riding herd over an operation that has become a victim of it's own success.
MR- Originally, we were the only place in Greater Cleveland that had such a great selection of natural foods. Little by little, as the commercial industry realized that there was a demand and an ability to make profit, more and more people started picking up on it. Now, we weren't so much of a "destination store".
DCB- As a result, sales dropped 10% -- this despite the fact that natural organic salesnationwide have risen as much as 25% a year. Longtime Co-op member Deborah Van Kleef recalls how she started finding her favorite products closer to home.
Deborah Van Kleef- So, I didn't have to drive to the Co-op to get soy milk. There were certainly some periods where it seemed like certain things were out of stock. So, it became that I was doing the bulk of my shopping at neighborhood stores and only going to the Co-op every few weeks to get a few things.
DCB- Deborah Van Kleef's disenchantment began to grow as the natural food marketplace got bigger and started straying from its more communal beginnings.
DVK- The point where I started feeling more alienated was when the Co-op expanded and opened its Coventry store, my impression at the time was that the reason for that was the fact that Nature's Bin was planning to open a store there and the Co-op was afraid of competition. I also wondered if it was a sound financial decision, because they were spreading their resources too thin.
DCB- Competition from the locally owned Nature's Bin, from Akron-based Mustard Seed Market, and from the national Wild Oats chain of natural food stores made Mary Rose and her colleagues at the Food Co-op very nervous.
MR- We just felt a little fragile and felt like we needed some outside expertise to help us evaluate where we are. And we are in a crisis. We have to look at who we are and what our mission is and where we're going here.
DCB- This past January, the Cleveland Food Co-op hired business consultant John Newman to evaluate their operations. He comes to the task with a strong record of turning around the fortunes of failing co-ops in other states. Newman has spent the past two months going over the books, talking to staff and members. And the problems he's found he's seen many times before.
JN- Too often in companies, I see what's called "ostrich management" -- sticking their head in the sand, pretending that they're heading in a direction that's going to work when it's not. And so, it's my job to say, "That doesn't work. Don't pretend that it works. Let's look at what the real options are here."
DCB- John Newman will report on his findings to Co-op membership in a special meeting Monday night. He's hoping that by yanking some heads out of the sand, he'll be able to help the Cleveland Food Co-op chart a path back to its roots. In Cleveland, David C. Barnett, 90.3 WCPN.