The Cooperative Difference
Local food cooperative brings together area producers, consumers
A food cooperative is coming to Bismarck this spring, thanks in part to significant community and cooperative support.
Located at 711 Sweet Ave. in Bismarck, the BisMan Community Food Co-op will be a year-round, full-scale retail grocery store that will offer a variety of fresh, local and organic foods, in addition to bulk items, produce, deli, health and home products, dairy, meat, bakery goods, frozen foods, and a coffee and juice bar.
The cooperative will also feature an educational center with classroom space, where members, their families, and the general public can attend cooking classes and experiment with food.
To create a vibrant local-foods system, the cooperative will purchase as much produce locally as possible from area farmers and ranchers, including grass-fed beef, eggs from free-range chickens, honey, fruit and much more. The cooperative currently has a growing database of more than 50 area producers who are being evaluated and approved to supply food.
“We are different. As a cooperative, we want to know how the food is produced and grown. There’s a connection with the grower and the food, and how it’s produced. People will know where it comes from,” says Heidi Demars, outreach coordinator. “When someone sells to us, we’ve established an in-store marketing plan where they will have some type of labeling that notes where the food came from, to show people the broad selection we have in North Dakota.”
Fresh, local food will be always be sold when possible. To fill the gaps out-of-season, the cooperative’s primary food vendor will be United Natural Foods Incorporated, or UNFI. Anyone will be able to shop at the food cooperative. Members will receive exclusive emails on deals, discounts on food, free or discounted admission to cooking classes, and additional cooperative benefits including patronage dividends in profitable years. Demars says pricing will be comparable to area grocery stores, although consumers can expect to pay slightly more for organic products.
“That’s what our community space is all about. We want to educate people on food, and the process of it and why organic is a little more expensive,” Demars says. “We want people to have options. That’s why we’ll offer conventional foods in addition to organic; that way consumers can determine their food values and choose how to spend their dollars.”
Cooperatives are a tradition — and one of the best-kept secrets — in America. From electric cooperatives, telecommunications cooperatives, credit unions, Farm Credit Services, Farmers Union and other organizations, cooperatives are businesses organized by people to provide goods and services. Some of the benefits include:
• The consumers are member-owners;
• Cooperatives are governed by a member-elected board of directors;
• Cooperatives are not-for-profit entities that return profits back to their member-owners as the financial condition of the cooperative permits, and as bylaw provisions are met;
• Cooperatives are committed to community and enhancing the quality of life in the areas in which they serve.
Food cooperatives have been innovators in the marketplace in the areas of unit pricing, consumer protection and nutritional labeling. As of 2013, there were about 350 retail food co-ops in the United States. There are also 120 new start-up food co-ops currently in development in the United States.
The BisMan Community Food Co-op is one of the fastest-growing cooperatives in the nation, as far as its membership. A couple months ago, the cooperative’s board of directors took a hard look at finances and determined the co-op may need to dissolve if additional funding wasn’t received quickly. The cooperative contacted area media and reached out to the public, and then hosted a cookout at headquarters to explain what a food cooperative is, and how it could benefit local consumers and producers.
“We said, join us for (grass-fed beef) burgers. Come and learn about the co-op. Come taste the co-op. Come ask questions,” Demars says. “It’s what people needed to get comfortable with the actual store. Education about cooperatives was huge, and the foods we are going to carry are important. Being transparent with people was a big deal.”
The cookout generated 70 new members in one day, and the cooperative went on to build its membership by 377 new member-owners in September. This growth, along with member loans, provided the necessary funding to meet the goals of the cooperative’s capital campaign. Securing funding was a challenge, because it was an urban project that would be funded by 1,500 people at $200 apiece, rather than a few people with a personal guarantee behind a loan.
When local banks felt they weren’t in the position to take on the risk, the BisMan Community Food Co-op turned to cooperative banks for financing including CoBank and North Country Development Fund. They also sought a low-interest loan secured through the Rural Development Finance Corporation (RDFC). The corporation is owned by North Dakota’s electric and telecommunications cooperatives, in partnership with the North Dakota Association of Rural Electric Cooperatives (NDAREC).
“We needed financing partners that could be flexible and creative,” Demars says.
Lori Capouch, rural development director for NDAREC, says the RDFC board of directors agreed the food cooperative had a major rural benefit, even though it would be located in a growing city.
“The best way to market these rural products is to be next to a population base, and the food co-op could provide that. There are very few financing entities out there that could fill the gap in financing, and we were pleased RDFC was able to contribute.”
Capital Electric Cooperative, on behalf of its board of directors, also approved a preferred equity investment to the BisMan Community Food Co-op. Wes Engbrecht, who serves as the director of communications and public relations, says Cooperation Among Cooperatives and Concern For Community are two of the seven cooperative principles that guide Capital Electric. He noted that some of Capital Electrics member-owners will be supplying fresh produce to the food cooperative, and hundreds more are members. Supporting the food co-op was a wise investment in cooperative and community.