The evolution of food co-ops
Three Toronto co-operatives are coming up with innovative ways to stay relevant and bring fresh healthy food to their communities
Inside a charming brick building behind Palmerston Ave., on Karma Ln., just a short walk north of Bathurst subway station, you’ll find a bounty of fresh and local produce, as well as eclectic items such as samosas and bulk honey. There’s a small town feel inside Karma Food Co-op, an Annex fixture since 1972, where general manager Talia McGuire greets every customer and co-op member by name.
Decades ago, Karma was one of the few places to source local, international or organic produce or ingredients catering to special diets such as gluten-free or vegan. But as the popularity of online grocery and meal delivery services rises, and giant supermarkets now have entire aisles devoted to organic and health foods, there are more choices than ever. Combine that with rising rents and the expenses of running a non-profit, food co-ops are applying creativity to their business models in different ways, such as finding overlooked niches consumers are looking for, eliminating their bricksand-mortar operations and even joining forces with condo developers.
A co-op, or co-operative, is loosely defined as an organization jointly owned by a group of like-minded people or members.
In the case of a food co-op, customers, employees and suppliers (e.g.: farmers) become part-owners by purchasing a membership, or sometimes working at the co-op. The appeal is that members can have a say in how the business is operated, such as what the store sells. All co-ops have to follow the Co-operative Corporations Act put forth by the Ministry of Labour, with rules stipulating that there has to be a board of directors and a minimum membership, for example.
Despite the idyllic premise, in 2013 Karma announced to its members that it was struggling financially and was in danger of closing after four decades in business with a legacy of members that included the late urbanologist Jane Jacobs. A meeting was called, says McGuire, who had just stepped into the manager role at the time.
Members stepped up and started to spend more money at the shop and recruited friends and family to join in order to pull Karma out of financial trouble. A free trial membership was extended from a day to a month to allow people to get a better feel of the shop before joining and paying an annual membership fee of $50, plus additional costs for members who cannot work at the co-op for two hours a month. The store began to hold more food and DIY workshops, and nonmembers were now able to shop there (they pay a 15 per cent surcharge on top of the sticker price).
While the store was saved from shuttering, McGuire says the changing consumer landscape presents ongoing challenges.
“This year has been particularly bad for sales declines, and I suspect a lot of that is going to delivery platforms,” she says, referring to competition from online grocery delivery. “It’s been huge for us; we’re no longer unique in the products we carry. Most people are so timestarved these days that they have to shop where it’s easy whether it’s ordering online or going to the store across from them.”
There’s also the changing (and aging) demographics of the neighbourhood due to the price of Toronto housing being out of reach for many young people.
If they don’t live near the coop, then there’s less of an incentive to join.
“We don’t have a problem with recruitment right now, it actually increased, but the issue is retaining members,” she says, adding that there are currently 500 members who shopped at Karma in the last three months. “We need to look at why people drop off.”
So the co-op is staying ahead of its competition by looking closer at what members want. The shop was already selling local and vegan fare, but now it’s ramping up its zero-waste reputation for the environmentally conscious member base. Karma long had a bring-your-own bags and containers policy, and it’s now going one step further and testing out bulk toothpaste and deodorant by having customers scoop the stuff out into smaller reusable containers before purchasing. There’s even biodegradable silk floss that comes in tiny refillable glass jars. McGuire says places like Karma enable start-up companies to test out new products, such as bulk beauty care, without having to commit to a large order from giant retailers.
One big factor that also helped Karma stay open is that it purchased the building during the early ’80s, enabling the nonprofit to avoid rent hikes. That’s not the case for West End Food Co-Op at the corner of Queen St. W. and Dufferin St., which is closing its bricks-and-mortar store and community kitchen on July 31. Office administrator Leanne Unruh, who is overseeing the closure, says the grocer has been operating out of the Parkdale Community Health Centre since 2012 but two years ago, the community centre told the co-op that they needed the space back in order to expand the health services it provided.
“They gave us a lot of notice and it’s really understandable that they needed the space for their programming because there are huge health needs here,” says Unruh. “As we started looking for other properties the cost of commercial leases have skyrocketed, and with Parkdale becoming more of an up-and-coming area, landlords don’t want to commit to more than a two-year lease. Also, as a relatively new co-op (it was incorporated in 2009) we don’t have the capital to buy a property.”
Despite the impending closure of the shop, Unruh says there will always be demand for the food co-op model. “I joined a co-op because I wanted to meet people when I first moved to Toronto and wanted to be a part of something,” she says.
West End will continue to run its year-round, weekly farmers’ market at Sorauren Park in Roncesvalles Village (it moves inside the Fieldhouse building during the winter) as well as its partnership with the Parkdale Activity and Recreation Centre in a co-op cred program in which low-income and marginalized residents are given onthe-job training in exchange for credit to purchase food at the popular farmers’ market. The store’s closure isn’t so much a failure, but an adjustment to the realities of running a nonprofit in a gentrifying neighbourhood while also addressing the needs of locals.
“I think co-ops can continue to exist but have to change and figure out what the new needs are. Our members still have food needs, but maybe not the need for a full service retail shop like this. While were closing this space, we’re not disappearing,” she says.
It’s the nature of being flexible to change that makes food coops able to stay in business, says Sally Miller, project manager of the Local Food and Farm Coops, an Ontario-based nonprofit that provides support and networking opportunities food and farming co-ops in the province.
“In the ‘60s and ‘70s, food coops focused on organic, but now it’s also involving the local production of food to include the farmers and other areas of the food system. We’re seeing a revival of farm co-ops because land is getting expensive so farmers are working together to share the risks. That’s the wonderful thing about co-ops: you have other people to worry with and other people with specific expertise.”
Still, Miller recognizes that money is a big hurdle for many co-ops just starting out. Later this year, the organization is launching the Fair Finance Fund with the Sault Ste. Marie Innocation Centre that will give co-ops, whether they are farming co-ops or food store co-ops, loans between $25,000 to $75,000 to get started.
They are also working on smaller, short-term loans for co-ops who need funds for a new fridge or to get through a bad growing season, for example.
As West End prepares to close, a new co-op has found a way to leverage the resources of Toronto’s booming real estate market. In Etobicoke just west of the Humber River, the Berry Road Food Co-Op is getting ready to open in the fall at the upcoming Shoppes At Stonegate condo and retail complex.
What’s unusual about Berry Road compared to most co-ops is that the 8,000 square-foot grocer is getting help from developer Vandyk Group. The developer is reducing the co-op’s rent for the first seven years and doing the bulk of the construction. The first phase of the condo complex is a two-storey, 32,000 square-foot building that will house the grocer on the ground floor and the Stonegate Community Health Centre on the second.
“Berry Road is an experiment in the city in that it has support from a civic and developer level,” says executive director James Partanen, adding that Ward 5 Etobicoke-Lakeshore councillor Justin Di Ciano is a big proponent of the co-op.
Berry Road was conceived 18 months ago, when a condo developer took over an old plaza that held a supermarket.
Partanen says nearby residents were concerned that there wouldn’t be a place for groceries within walking distance, so councillors told the developer that a food retailer had to be at the base of the building as per Section 37 of the city’s planning act, which allows developers to go beyond typical zoning regulations in exchange for ammenities that benefit the community. None of the larger supermarket chains were interested, so the Stonegate Community Health Centre reached out to the West End Food Co-Op.
West End didn’t have the resources to expand, so Partanen, who was working at West End as a co-ordinator at the time, opted to help create a new food co-op on the ground floor of the new complex.
The new store will have a onetime $10 membership fee and Partanen says 300 people have already signed up to be members on its site, Berry Road-Food. Coop.
In addition to selling grocery staples, there will be also be a community kitchen for cooking workshops that will give elderly and low-income residents the opportunity to make food for the co-op in exchange for groceries.
Partanen says there will also be online shopping, a factor that not all food co-ops have because of the costs associated with establishing and maintaining an e-commerce site, but Berry Road has volunteers who are IT specialists who are helping with the set-up.
Partanen points to co-ops in the U.S., such as the Hunger Mountain Co-op in Montpelier, Vt., which has 8,000 members, 170 employees, 500 local suppliers and more than $20 million in annual sales at its 20,000 square-foot building as proof that food co-ops are able to thrive with a bit of support.
“People like co-ops because it gives them that collaborative feeling that’s missing from most of our day-to-day lives,” says Partanen.