Growth push underway for cooperatives

Ace Hardware, Ocean Spray and Land O’ Lakes are some of the most popular business names in the U.S. They’re also among the most successful cooperatives.

Co-ops are owned and controlled by members, not outside shareholders, and there’s a movement underway to grow co-ops in Arizona.

On a sunny December morning, dozens of people gathered at Gateway Community College’s Central City Campus to learn about Arizona’s co-op landscape.

Nigel Forrest, a postdoctoral research associate at Arizona State University’s School of Sustainability, hosted the workshop with support from the Arizona Cooperative Initiative and volunteers. Forrest said out of approximately 50 to 60 co-ops in the state, credit unions dominate. Worker co-ops are the least common.

“Out of 500,000 small businesses in Arizona, there’s only one or two worker cooperatives,” Forrest said.

Technicians for Sustainability is a worker cooperative formed in 2017. The Tucson-based solar design-build firm has 17 employee-owners, including Travis Kendall who is a lead installer.

“What I really like about the worker co-op business is that it allows you to scale up a business to a larger size but still have the value of having an owner like owners of small businesses who are still out on the job overseeing work every day,” Kendall said.

A Democratic Method Nationally, agriculture is the top co-op sector with the three top financial performing businesses reporting more than half a billion dollars in revenue in 2016, according to the National Cooperative Bank (NCB).

The NCB Co-op 100 is an annual report that tracks profits. The 2016 list of top 100 cooperatives puts their total generated revenues at $208 billion.

While definitions vary, co-ops are governed on the principle of one member, one vote.

In Phoenix, Cindy Gentry hopes to attract more members to Sun Produce, a cooperative focused on increasing sales of locally-produced fruits and vegetables. She told workshop participants trust can be a tough sell to small farmers when profits are marginal at best.

“From what I hear it’s always like, ‘Oh, I’m going to go belly up, this is too scary, it’s too hard,’ ” Gentry said.

Recent legal changes could make it easier for co-ops to form and grow in Arizona. In 2016, the state changed its rules to allow a broader range of cooperatives to incorporate. This year, the U.S. Small Business Administration is expected to open its loan guarantee program to employee-owned firms.

This story was produced by KJZZ and appears through a collaboration between The Republic/azcentral.com and KJZZ. Hear the original at kjzz.org.