'Take Back the co-op' group alleges corporatization
Group Seeks Special Meeting to Oust Leadership
BY DENNIS DOMRZALSKI
In the winter of 2015, a La Montañita Co-op member got home from shopping at the co-op’s Santa Fe store. She checked her receipt and thought she spotted a huge mistake: A single head of organic cauliflower had cost her $26.
She returned to the store to check if the price was a mistake and was told it wasn’t, as it was organic cauliflower that was out-of-season. She returned the cauliflower.
That incident exemplifies the complaints that co-op members had been leveling against La Montañita for years about produce being too expensive, and led the co-op’s management to decide to stock less expensive non-organic fruits and vegetables.
So earlier this year, it added 15 non-organic fruits and vegetables known as the “Clean 15,” which is conventionally grown produce that has the least amount of pesticide residue, as defined by the Environmental Working Group, a non-partisan nonprofit dedicated to identifying toxins in food, water and the soil.
The co-op’s critics objected, arguing that the difference in pesticide residue between the 15 cleanest and 15 dirtiest vegetables and fruits is insignificant, and demanded that non-organic food be removed from the co-op’s stores. The debate over the “Clean 15” decision sparked a movement among a small group of co-op members who call themselves “Take Back the Co-op.” The group’s goal is to impeach all nine of La Montañita’s board members and to fire its recently hired general manager, Dennis Hanley.
The insurgency has also put forth a rather sweeping conspiracy theory: A cabal of three for-profit and nonprofit entities are working to “corporatize” the 40-year-old co-op, minimize the decision-making authority of its 16,000 member-owners and turn the venerable Albuquerque institution into just another grocery store.
The dump-the-board movement is led by two Santa Fe residents and co-op members, Django Zeaman and Dorothy Finnigan. They’ve said that La Montañita’s new management direction will destroy the co-op and its democracy-based values. To prevent that, they’ve launched a petition drive that they hope will lead to the ouster of the co-op’s board members and Hanley.
Under the co-op’s bylaws, Zeaman and Finnigan need only 1,600 signatures to call a special meeting of La Montañita’s board and attempt to replace it with their own slate of candidates. They’ve already acquired 1,400 signatures.
Co-op officials and the board’s supporters deny the existence of any conspiracy. Its leadership argues that to survive in today’s highly competitive grocery market, in which national retailers like Wal-Mart and Trader Joe’s carry organic produce, La Montañita needs to offer a wider and cheaper variety of goods.
Co-op supporters said that if Zeaman and Finnigan get their way, La Montañita – a nonprofit business that operates six stores and employs around 280 people – could disintegrate.
What would also go, they say, is a warehouse and distribution system for local farmers that La Montañita has built over the past 10 years. The system gives farmers an efficient way to sell their goods throughout the state.
“What is at risk is stability, and people [are] making decisions without understanding the business,” said Martha Whitman, who has been involved in the co-op since 1982. She served as chairman of its board from 2004 to 2014.
“If you think there is a conspiracy, you are going to see it everywhere,” she said. “If they take over, we will go back to people making the decisions without understanding the consequences, and potentially, if we keep losing market share, we could go out of business.”
How it began
The trouble started in March when La Montañita began stocking the “Clean 15” non-organic produce. Some co-op members, including Zeaman and Finnigan, were infuriated and demanded answers from the board, which they said they never got.
“This was a violation of ecologically sound principles and a lack of transparency,” Zeaman said. “The board was not being responsive.”
But Whitman, who has managed stores for the co-op and oversaw its move in 1987 to its Nob Hill location, said not every decision on what to stock can, or should, be put to a vote of 16,000 members.
“We have made a lot of decisions to carry things that have not involved the members,” Whitman said. “Being a co-op means a lot of different things to different people, and it is never about small groups saying ‘This is how we want it.’”
She reiterated: “We have 16,000 members.”
La Montañita Board President Ariana Marchello said the board did offer to meet with Zeaman and other co-op members upset over the “Clean 15” in public meetings, but Zeaman refused because he wanted to meet privately with the board. Instead, the board held a series of meetings in Albuquerque and Santa Fe.
“I hear that a lot, that the board was unresponsive. You have to take that to mean that they did not like what the board’s response was,” Marchello said. “We called our own town hall-style meetings and invited Django [Zeaman] and his group to these meetings., But they wanted to meet only with the board. I said, ‘We don’t meet that way. We have a general manager, a senior management team and the board,’ and they didn’t want it.
“We went through these meetings and got to know a lot of people who had all kinds of views, people who were curious, but it wasn’t the kind of meeting Django wanted,” Marchello said.
She added that some Take Back the Co-op members who did attend those meetings suggested that people who wanted cheaper goods and conventional produce “could go shop somewhere else.”
After that failed attempt at detente, Zeaman and Finnigan expanded their list of complaints to include labor issues as well as the fact that La Montañita’s West Side store, which opened in 2013, hasn’t yet turned a profit. According to Take Back the Co-op’s website, that store has lost $500,000.
One of the triad of accused co-conspirators is a Vermont-based consulting cooperative that is allegedly training co-op boards across the nation on how to de-democratize co-ops, according to the Take Back the Co-op movement.
Another is a co-op of 151 food cooperatives that allegedly is trying to standardize every single food co-op in the U.S.
The third is a private, for-profit natural foods distribution company that Take Back the Co-op alleges is bent on achieving monopoly status –to serve as the sole organic supplier to the 151 co-ops – which would have the effect of crushing local organic farmers, a mainstay of the co-op movement.
Zeaman said the lead conspirator is the CDS Consulting Co-op. CDS, he said, is persuading local co-ops to change their bylaws to strip members of their decision-making authority and leave power solely with the board. He said the company was active in La Montañita’s hiring of Hanley. He also alleges CDS subverts the traditional democratic process in co-ops by giving boards templates of sample bylaws that, if enacted, make special membership meetings “advisory” only.
But CDS is hardly a corporate giant. It’s a nonprofit co-op that relies on the advice of 40 consultants to help guide local co-ops on best practices. The Putney, Vt.-based nonprofit, founded in the 1980s, has just two employees, said its general manager Marilyn Scholl.
“We specialize in financial feasibility, store design, and we help with the capitalization of startups to try and get more co-ops to serve more people,” Scholl said. “We do provide templates and samples to make up bylaws, and we believe it is a service.
“We work with co-ops all over the country and see what works well, and are able to coalesce that into documents that represent the best of the best so an individual co-op does not have to go out and ask 30 other co-ops what they’re doing. All of our templates are clear that they are recommendations.; We have no decision-making authority at any co-op.”
ABQ Free Press watched a CDS webinar on bylaws. Its advice to local co-ops was, “Approach the task of drafting [bylaws] with the diligence and enthusiasm it deserves,” and “Never just copy another co-op’s bylaws. Instead, start with a solid template.”
Zeaman supported his allegations by saying that Whitman is a CDS consultant and CDS basically maneuvered to get her to briefly operate La Montañita’s North Valley store. Whitman became a CDS consultant in April and was named the interim manager of the North Valley store in May after the previous manager unexpectedly resigned. Her contract with La Montañita ended on Sept. 23, she said.
The second puppeteer, Zeaman said, is National Co+op Grocers of Iowa City, Iowa. NCG recently signed a deal with the third alleged conspirator, United National Foods, Inc., (UNFI) of Providence, Rhode Island, to supply NCG’s 151 member co-ops with food.
Zeaman argues that NCG wants to standardize co-ops across the U.S. It gained its position of influence with local co-ops by offering store design and other services, he said.
NCG is a cooperative of local cooperatives. It was formed in 1999 by 100 food co-ops that wanted to increase their buying power and share best practices, said NCG Chief Operating Officer C.E. Pugh. La Montañita was one of NCG’s founders and is a member-owner of NCG.
“NCG offers a variety of purchasing, management, development and marketing services, and facilitates direct co-op-to-co-op support and peer networking,” Pugh said. “While not a chain, NCG does seek to provide food co-ops with many of the advantages that large chain stores enjoy, while still enabling them to reflect the unique qualities of their local communities.”
Pugh said the deal with UNFI, which has $8 billion in annual sales, gives co-ops a cheaper and more efficient and unified way of buying products from UNFI, which most were buying from. NCG’s role as a bulk buyer of groceries “is saving them money on the products they choose to buy,” Pugh said.
All businesses, including food co-ops, evolve over time. If they don’t and insist on hewing to the practices of the 1970s when the co-op movement began, they’ll be out of business, Pugh said. Plus, with more competitors offering organic foods, local co-ops have to offer more variety and less expensive goods in order to be competitive. Basically, their monopoly on organic goods is long gone, he said.
Wal-Mart, for instance, is the largest buyer of organic goods in the U.S., Pugh said. In 2015, sales of organic and natural foods totaled $115 billion. Of that, less than 2 percent was from co-ops, he said.
La Montañita, which was formed in 1976 by a group of 300 vegetarian families, originally didn’t carry meat. It was housed in a one-story converted office building with low ceilings and cracked and falling tile that looked nothing like a modern grocery store.
In 1997, co-op members and the board realized that the Wild Oats natural foods store was coming to Albuquerque and that La Montañita had to change or go out of business. The co-op began carrying meat, and it moved to its present Nob Hill location.
“When we moved to Nob Hill I made the argument that we had to sell meat and become a one-stop location,” Whitman said. “We studied for a year before Wild Oats came, and we would not have made it if we hadn’t moved. There was an uproar that we had gone ‘corporate.’”
A local co-op that has gone through what La Montañita is facing is the Honest Weight Food Co-op in Albany, NY. When it was founded in 1976, Honest Weight didn’t carry meat, caffeine products or sugar products. Now it does, said its secretary, Rebekah Rice. And it also sells non-organic produce.
Marchello said La Montañita has to offer a wider selection of merchandise more cheaply than stores like Albertson’s and Smith’s because only 3 percent of its 16,000 members shop exclusively at the co-op. More than 50 percent of its members also shop for food at other grocery stores, she said. Not many people can afford to pay $14.99 a pound for out-of-season organic asparagus, she said.
“This is a complex situation with a lot of moving parts,” Marchello said. “Purity is not within reach of what we can achieve right now.”
Dennis Domrzalski is an associate editor at ABQ Free Press. Reach him at email@example.com
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