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Posted by Laura Hagen, HWFC Member-Owner.
GRASSROOTS ACTION IS POWERFUL! is a blog dedicated to American independently-owned, Member-Owned & operated, community food co-ops, their Member-Owners and families.
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NEWS!: June 15, 2016: Read this excellent summary by Jessica Rae, entitled Approve the Budget on June 27th!
Don’t forget HWFC’s 40th Anniversary Bash tomorrow, Saturday, June 18, 2016 at the HWFC storefront! Here are directions to our co-op! See you tomorrow!
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INDIANA FOOD CO-OP CLOSES STOREFRONTS
HWFC FOREWARNED: REDUCING OVERHEAD CRITICAL
NOTE: I returned home from a 2nd visit to Bloomington, Indiana. This is an updated & expanded version of the blogpost from April 27, 2016 entitled GRASSROOTS ACTION Needed by Bloomingfoods Food Co-op Owners in Indiana.
Learning from the experience of a similar US food co-op may help HWFC Member-Owners make needed overhead reduction decisions. This is not a short post and it has important implications for HWFC.
So, go grab that pot of tea, coffee or kombucha …and prepare for a story which will, hopefully, motivate passage of the carefully prepared HWFC 2016 – 2017 budget on Monday, June 27, 2016 at FUUSA, 405 Washington Avenue, Albany, NY: dessert potluck at 5:30pm, Membership Meeting from 6:00-8:30pm. (Member-Owners, see Meeting Announcement and Budget Presentation.)
Please attend one of the Board’s five remaining Budget Information Sessions at HWFC:
Tuesday, June 14 2:00-4:00
Community Room
Thursday, June 16 11:30-2:00
Community Room
Wednesday, June 22 11:00-2:00
Teaching Kitchen
Wednesday, June 22 4:30-7:00
Community Room
Thursday, June 23 2:00-3:00
Community Room
Saturday, June 25 12:00-2:00
Teaching Kitchen
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Caroline Beebe, board president, said … about what the co-op needed to do to stay in business. ‘…It’s better to right size the business than to remain overextended and risk closing altogether.’
Bloomingfoods’ Press Release dated April 26, 2016 [i]
Both the Elm Heights store and the commissary kitchen employ up to 50 workers, who are represented by the United Food and Commercial Workers International Union. While a press release states that the fate of the staff is a high priority for the organization, the co-op cannot guarantee that there will be no layoffs.
WFHB April 27, 2016 [ii]
Bloomingfoods’ Elm Heights store, opened on August 15, 2013, suddenly closed its doors in May, 2016, after being open for less than three years.
This is a story about the devolution of Bloomingfoods Market & Deli, a Bloomington, Indiana food co-op founded in 1976, the same year as Honest Weight Food Co-op (HWFC), and with a similar number of shareholders. It is also about HWFC, located in Albany, New York’s capital, and a group of Member-Owners fighting that same fight. Bloomingfoods’ 40th anniversary is this July 23rd, our 40th celebration is this Saturday, June 18th.
In addition to being a 37-year Member-Owner of HWFC, I have been a Member-Owner of Bloomingfoods Food Co-op (B’foods) since 2008. I lived in Bloomington for several years and my first action when arriving in Bloomington – a beautiful, friendly, mid-western university town – was to join B’foods. It had grown from the original, downtown, funky, converted, two-story home on Kirkwood – to having three storefronts and operation of a commissary kitchen. In 2013 it added two more storefronts, Elm Heights and a small location at Ivy Tech Community College.
With Indiana’s lower cost of living, B’food’s prices were much lower than prices I paid at HWFC (ignoring our 24% weekly Member-Owner discount). I was impressed with the large selection of local Amish foods, usually the lowest priced foods. B’foods also hosted local Farmer’s Markets and was proud of its connections to local farms. I had no difficulty purchasing local, organic fruits, vegetables, pastured eggs & meat.
I didn’t have the time to really get involved. Member Labor only gained me a 10% reduction in purchases; I could just as easily take advantage of the 10%-off once-a-week Member Day and one monthly Wildcard Day. Also, a Member-Labor Program was not actively promoted nor advertised.
In 2013, I returned back home to Albany, NY, resumed Member-Work and shopping at HWFC, albeit in the brand new, shiny, chic-chic store on Watervliet Avenue.
FAMILIES IN ALBANY, NY SUCCESSFULLY DEFEND THEIR LOCALLY-OWNED FOOD CO-OP
On October 23, 2015, the former Board of HWFC posted a paper notice on their bulletin board and made a direct threat to the legal power of the Member-Owners by attempting to end our Member-Owner Labor Program (MLP); this despite the fact that our bylaws prohibit this action by the Board. This would have removed us from store operations and, consequently, ended our right to vote. Without these two rights, Member-Owners would lose their legal control of the co-operative corporation. [iia]
Concurrent with ending our MLP and our disenfranchisement as voters, was a strategic push by the former Board to add 12,000 new, non-working “shareholders” and a second strategic push for bylaws’ changes: to cement Board control and eliminate Member-Owner control & ownership rights. This board was paying two law firms, national co-op consultants, a Strategic PR & Lobbying firm, and an Organizational Change Agent (I kid you not) to assist them in their agenda. The Board contracted with the national firm of co-op experts, CDS Consulting Co-op (CDSCC), for their Co-operative Board Leadership Development (CBLD) program. On its website, CDSCC states, “CBLD s an award-winning innovative program designed to support your board and general manager (GM).” [iii]
CDSCC has advised many food co-op Boards and GMs across the country, including Bloomingfoods, which appears to be a current CDSCC CBLD client [iiia]. Strengthening of Member-Owner power and control of a food co-op is not part of CDSCC’s CBLD advertising: quite the contrary. Here at HWFC, the Board and Management were behaving as one unit, to the utter exclusion of Member-Owners. Thankfully, CDSCC’s CBLD ‘Fresh Start’ Bylaws Template, was never brought to a vote nor ratified by our Membership; these bylaws severely undermine, and in some cases, eliminate Member-Owner control & ownership of the co-operative.
Kate Doyle, a Member-Owner from HWFC, who is also an attorney and who is now our Treasurer, explained the actions of our (now-former) Board this way:
The [former] Board [sought] to terminate worker owner participation and control by:
A.) Expanding voter rights (read “control”) to non-working members [aka non-working shareholders] so as to eliminate worker owner control and place us under the case law cited above, thus effectively ending our existing [Member-Owner Labor] program.
B.) Placing all power and decision making in the Board and Management, thus [disemboweling] the cooperative, leaving only the corporate structure.” [See [iia]; also see [xi]]
The Strategic PR Firm even developed catchy slogans – to match the Board’s political agenda – which Board members began (noticeably) utilizing one day at a co-op meeting: “One member, one vote!” was one (to convince Owners to yield our vote – that is yield our control, power & ownership rights – to non-working “shareholders” – and thereby, to the Board/Management axis); “The law trumps the bylaws!” (to convince Owners that our bylaws somehow violated NYS labor law and needed urgent change) was another.
(Beware, they may be recycling these catchy [and expensive, our Board paid big bucks for ’em] slogans at your co-op…)
In just 38 days, Member-Owners organized & confronted the threats to our co-op. Notice of the emergency Special Membership Meeting led to an historic emergency Special Membership Meeting (SMM) on November 30, 2015, attended by ~710 people, 620 of whom were voting Member-Owners. This ultimately dis-empowered the former Board and resulted in the three-person Leadership Team (LT or top Management) dissolving several months later. 85.7% of Member-Owners voted to disapprove the Board’s decision to “…end member labor on the floor and administration by January 1, 2016…” [iiib]
It was uncovered that more than $500,000 (!!!) had been spent by the former Board on a push for bylaws’ changes and to “eliminate member labor and [on the] strategic planning to design its replacement!” [iv] $500,000 of our collective co-op savings was spent-down by that Board to pay two teams of lawyers, an expensive Strategic PR & Lobbying firm, that Organizational Change Agent, and that firm of national co-op “experts,” CDS Consulting Co-op, to help them in their stealth agenda of separating ownership of our co-operative from us, the Member-Owners!
$257,000 of that – alone – was spent in six months (July-December, 2015), just on legal fees! This former Board was spending $42,833 a month on two law firms, to assist them in legally ending our MLP, changing our bylaws, and eliminating the control & ownership of our co-operative corporation by its rightful owners, the Member-Owners.
They were attempting – in stealth – a bloodless coup of our co-operative corporation …what has all the earmarks of a classic corporate takeover attempt.
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One of the first moves our new Board members took was to place an immediate moratorium upon the use of all consultants. This halted the whisperings of all local and national consultant experts, including CDS Consulting Co-op, into the ears of any & all leadership at HWFC.
(Please see this January 7, 2016 GRASSROOTS ACTION blogpost, subheadings (FORMER) BOARD: WHAT HAPPENED TO FIDUCIARY RESPONSIBILITY TO CO-OP OWNERS?; Bylaws Secrecy, National .coop Consultants, and MLP (Crops Up Yet Again); SECRECY BECOMES THE WAY OF DOING CO-OP BUSINESS; JUST THE TIP OF THE ICEBERG IN LEGAL AND CONSULTANT FEES?; TAKE TIME TO REFLECT: WHAT – and who – IS UNDER ATTACK, SPECIFICALLY?; TAKE TIME TO REFLECT, AGAIN)
Our bylaws were not altered and current Board counsel has advised that our MLP is defendable – given our current bylaws – and supported under NYS law.
It was that small piece of paper tacked up to the Board’s bulletin board on a Friday in October – October 23, 2015 – which pulled the trigger on their secret plan to end Member-Owner control & ownership of our co-operative corporation. The following morning, Member-Owner Chris Colarusso came to a co-op meeting with her small piece of paper: a written petition for an emergency Special Membership Meeting.
It took Chris only 1 ½ hours to get the required number of Member-Owner signatures for a legally-binding petition of the Membership!
Democracy ultimately prevailed.
We Owners held that emergency meeting and, ultimately, got rid of that Board of Directors; top Management (three-person “Leadership Team”) were all gone six months later.
Had those ‘Fresh Start’ Bylaws – pushed on us by the national team of consultants from CDS Consulting Co-op – been in place at our co-op, we could have held that emergency Special Membership Meeting. However, according to the CDSCC CBLD ‘Fresh Start’ Bylaws Template
Article III 3.2. Decisions made at any special meeting are advisory only. [iva]
We Member-Owners would have been legally unable to stop the Board (and Management) in their bid to assume control of our food co-operative corporation. Member-Owners would have become “Paper-Tiger Owners:” Owners in name only.
It was a narrow escape.
We all owe a large debt of gratitude to Chris for her unerring & clear-thinking ability to gauge the temperature of the times …and act at the exact right moment demanded by the tsunami overpowering and undermining our co-op’s strong, local, family & community footing.
We Member-Owners families of HWFC should all be very, very proud that we successfully defended our co-operative from attack: in this case, initiated from the inside, and guided from the outside by national “expert” .coop consultants & a seemingly broader national agenda to thwart and eliminate local control & ownership of US food co-ops.
This story is an incredible testament to the living, breathing power of local families supporting each other and using real community, real co-operative, and real grassroots action, all of which are alive and well at this American, independently-owned food co-op, near the banks of the historic Hudson River, in Albany, NY.
We successfully defended what is ours.
STUNNED AT CHANGES TO BLOOMINGFOODS
In March I visited Bloomington. I was stunned at the state of Bloomingfoods. The first thing I discovered was the closure of B’foods’ flagship, funky & well-loved first storefront on Kirkwood! [v] This store “on the alley” had closed its doors in February 2015. [vi] [vii]
Next, what shocked me were the overall higher prices. In tandem, Member discounts had been so reduced as to be meaningless. [viia]
I called my husband back home and we compared the prices of the same products: foods like organic, bottled tomato paste, coconut & olive oil, Coconut Aminos. Everything was more expensive than at HWFC.
This was a complete reversal; this mid-western food co-op was charging higher prices than an upstate New York co-op!
Gone was the large selection of locally-grown or produced Amish foods. I could find no Amish cheeses at the Near West Side co-op and only one type of raw milk cheese: a goat cheese. There was a reduced selection of local, Amish cheeses at the Eastside store.
I have grown accustomed to the large and varied selection of regional & artisanal, raw milk cheeses we have at HWFC and it was very disappointing to not be able to get what I needed.
Bacon (not pastured) and organic butter were simply not affordable! More in evidence was meat from (national?) suppliers, with brand names I was unfamiliar with. I could find no local, grass-fed, grass-finished beef …in a food co-op in the midwest! I was told I had to special order it.
Fresh vegetables & fruits did not always list the country of origin, ditto on nuts, seeds and dried fruits, leaving me to have to find a staffer to ask where the food came from. Foods labeled as “organic” from China were not at all uncommon.
And sauerkraut? Again, this is the mid-west, Indiana is home to Amish, Mennonite and plenty of German & Swiss families; sauerkraut is one of the four basic food groups! The price for live, locally-made sauerkraut was $10.89 for a pint!
I talked to Member shoppers, several staff, and community members. A staffer, when I asked what was going on with prices and a change in atmosphere at the co-op said, “I don’t know man, it’s almost like we were taken over or something.” A floor manager cheerfully said they had a new GM and they were tightening their belts. A friend who has friends who are personally invested in B’foods, stated her friends were afraid for their financial investment (loans) to the co-op.
I found blogger and media reports about disgruntled employees, Member-Owners being denied entrance to and participation in B’foods Board meetings, and a Board which was hostile and non-responsive; stories reminiscent of our co-op’s experiences in Albany, NY in the fall of 2015. [viib]
Staff felt so mistreated by Management and the Board that unionizing activities were begun in the fall of 2014. Please read this detailed accounting of the process in a two-part series at The Ryder called The Unionization of Bloomingfoods Part I, by Robert F. Arnove, Chancellor’s Professor Emeritus of Education at Indiana University, and Part II, by Robert F. Arnove with Peter LoPilato. [viic]
AN ACADEMIC CO-OP RESEARCHER ATTEMPTS GRASSROOTS ACTION
In a popular Bloomington blog, The Electron Pencil, we learn in the April 20, 2015 post, Hot Air Food Facts:
Keith Taylor, a co-op governance researcher who works at Indiana University’s Ostrom Workshop in Political Theory and Policy Analysis … started a change.org petition calling on the Board of Directors of Bloomingfoods to come up with a clear and public plan to address some of the issues that are making B-foods employees, shoppers, and co-op members nervous… [viid]
Signed by 161 people, the task of the Change.org online petition? To “bring in external assistance.” In one of his messages to his supporters at Change.org, Dr. Taylor stated,”Keep it up folks! Alone we can do so little, together so much!” [Despite its .org domain suffix, Change.org is not a nonprofit, it is a for-profit business, see: viie] [viif]
In an April 14, 2015 WFHB podcast interview with Joe Crawford, Dr. Taylor, introduced as an academic “researcher who studies this topic,” explicitly recommended that Bloomingfoods call in National Co-op Grocers (NCG):
[Joe Crawford]: …What that petition calls for is an audit of the co-op to give the membership quote ‘in depth objective analyses of operational, governance and financial issues within the co-operative…’
[Dr. Taylor]: …The audit that I’m calling for, it’s different than a standard audit because this is in co-op world, as we shall say. Bloomingfoods is part of the National Cooperative Grocers Association. It’s the association of food co-operatives. They have teams that can come in and do a top to bottom peer review or peer audit, however you want to say it, of the organization, to assess its fiscal health, its governance health and its operational health…
…I am somewhat known among the food coop community [at Bloomingfoods] and the staff, management and administrative folks all have a high level of trust in me. Over the last six months they have confided in me. They have asked me to work behind the scenes to avoid these things from becoming public and from these ruptures from happening. The problem is that things have gotten so bad that it’s forced my hand, I’ve now had to come public with this knowledge that I have accumulated over these last few months. It’s something I did not want to do… [viig]
His recommendation and the online petition had been communicated to the B’foods’ Board, verified in his April 15th message at Change.org:
The Board of Bloomingfoods meets tonight. I was assured that the petition is indeed on the table! Let’s hope the board does indeed call for assistance from National Co-op Grocers! [viih]
The Bloomingfoods’ Board met …and complied. Two days later, on April 17th, a B’foods Board announcement stated:
…we have asked for the assistance of one of the leading cooperative professional organizations, the National Cooperative Grocers. NCG has scheduled a site visit at the end of April. Many cooperatives across the country have benefited from such site visits, and we are looking forward to both the process and the positive results. [vii i] [viij]
In this same announcement, the Board announced the resignation of its President, Tim Clougher.
On June 8, 2015, B’foods GM for more than 20 years, George Huntington, resigned. [viik]
NCG ASSUMES TEMPORARY CONTROL
The situation at this forty-year old, formerly thriving and vibrant, locally-owned food co-op, beloved by Bloomington families – and a lot like HWFC – had gotten so dire that, in June, 2015, Bloomingfoods’operations were (temporarily) taken over by National Coop Grocers (NCG): Paula Gilbertson, NCG’s Development Advisor, as acting GM, assisted by NCG’s Chief Operating Officer, C. E. Pugh. [viii]
Member-Owners of Bloomingfoods had lost control of their locally-owned, locally-operated food co-op.
Last summer, many employees were laid off, including significant numbers of managers. The media indicated more layoffs were anticipated; that, in fact, did happen. [viiia] B’foods 2015 Annual Report called for “reducing the workforce by 25%.” [ix]
Although a contract with the brand new employees’ union, the United Food and Commercial Workers International Union (UFCW) Local 700, was ratified during the summer of 2015 – finalized while NCG’s Paula Gilbertson was acting GM – and went into effect July 29th, it did not prevent layoffs from occurring. [ixa] [ixb] In fact, there is great disappointment in that the union promised more than it delivered. I was told the union rep (who is not located in Bloomington) is often unavailable; communication is difficult. So, what promised to be a boon and support to (non-managerial) staff had not materialized, as anticipated.
Discussions included acknowledgement of the fact that B’foods had over-extended itself by opening not one, but two new outlets in 2013: the brand new Elm Heights store and a small venue at Ivy Tech Community College.
In August, 2015, store items were listed for sale at an online surplus auction site, presumably from the Kirkwood store, which had closed in February. [x]
It was also during this summer, that B’foods’ Member-Owner Labor Program (MLP) – called the owner volunteer program – was discontinued; Member-Owners were down-graded to “volunteer” status and were eliminated from working in the stores.
Downsizing & restructuring of this co-op, by NCG, was implemented as B’foods began its search for a new GM. Tony Alongi, former Director of Finance for the Hanover Consumer Cooperative Society, Hanover, NH, began working for B’foods as its new GM on March 1, 2016. [xa]
Staff layoffs continued.
WHAT HAPPENED TO B’FOODS MEMBER-OWNER LABOR PROGRAM?
On April 10 – curious about B’foods Member-Owner Labor Program ending – I emailed Bloomingfoods and asked what had happened. This is, in part, the reply I received from Jean Kautt, Marketing and Member Services Manager, Bloomington Cooperative Services Inc.:
We discontinued our owner volunteer program last summer for several reasons (this was publicly announced at our annual meeting in October [2015])…
…Nationally, most co-ops have had to discontinue their volunteer programs due to changes in labor laws, tax laws, and insurance liabilities. It has gotten very complicated in the past 40 years! After conferring with our legal advisor and our labor union representative, it was apparent that we were no longer able to offer the volunteer opportunities we had in the past. We are still exploring other ways for our owners to be active at the co-op, and with a national network of almost 200 co-ops to share information with, there are some good ideas out there…
First, it is inaccurate to state that “…most co-ops have had to discontinue their volunteer programs…” Many US food co-ops continue to support a co-operative corporation structure whose backbone consists of co-op Owners working in the co-operative and in the storefront; HWFC is one such food co-op, and many of us here in Albany look down-river to Brooklyn’s Park Slope Food Co-op as a superlative example of a Member-Owned, Member-Operated food co-op.
Park Slope is very sound & stable: truly & unambiguously owned and operated by the Owners of the co-operative corporation. It is so fiscally successful, in fact, that it pulls in more money, per-square-foot, than Whole Foods: $6,500 per-square-foot average in 2010 for Park Slope vs. $838 for Whole Foods! [xb]
Second, I’ve been a Member-Owner of a vibrant food co-op for almost 40 years (in NYS, where things are always more complicated) (and despite NYS “complications” BTW, Park Slope Food Co-op which is here in NYS, founded 43 years ago, is doing just fine and HWFC, upriver, founded 40 years ago, is also doing just fine, albeit busy cleaning house, at the moment); things have not become any more “complicated” over the last 40 years, such that fundamental, legal changes to the corporate structure of a food co-op and eliminating Member-Owned, Member-Operated food co-ops from the American landscape are the only answers to perceived “complications.
Third, I was instantly sensitive to the use of the terms “volunteer-owner,” “volunteer program” and “volunteer opportunities.” The word “owner” was on its way to disappearing: being replaced by “volunteer.”
The Owners of a co-operative corporation are distinct & legally very different from volunteers in a co-operative corporation.
A nationally-recognized expert on co-operative and nonprofit law from Vermont, Laddie Lushin, Esq., in his 2009 article, Co-op Member Labor Programs Under the Fair Labor Standards Act: A Matter of Economic Reality, recommends, as a first priority, to not utilize the word volunteer, when strengthening your food co-op’s Member-Owner Labor Program! He states:
Never refer to the program or its participants as volunteers. Member-workers are compensated, and the program cannot meet the required eleemosynary [charitable]
purpose. Using volunteer terminology thus prejudices the co-op’s legal posture by suggesting a basis for exemption [from the FLSA]
that is clearly bogus. [xi]
Yet, here, we find Bloomingfoods’ descriptors intentionally waving this red flag! According to Mr. Lushin, use of this terminology – “volunteer” – could, and very probably will land an FLSA issue at a co-op’s doorstep…
…unless those “volunteers” – now a co-operative liability – are removed from volunteering / working on the floor or in the co-op itself.
The information in Ms. Kautt’s email conflicts with the minutes from B’foods October 18, 2015 Annual Meeting. In those minutes we find no mention of the ending of the “owner volunteer program,” rather, the statement by “NCG Consultant Paula Gilbertson and the Bloomingfoods’ Consumer Services Department:”
Bloomingfoods Ambassadors Volunteer Program. We are extremely limited on in-store volunteer opportunities due to labor law and other factors, so we are introducing the Bloomingfoods Ambassadors Program to allow our owner-members to volunteer with organizations in – line with our ENDS statement for a discount/incentive at Bloomingfoods. [xii]
At this point, the word “Owner” has disappeared from Bloomingfoods’ Program PR. Just what are the “labor law and other factors” limiting the “in-store volunteer opportunities” of the Owner-Members of this food co-op in the brand new Ambassadors Volunteer Program, as stated in these Bloomingfoods’ Annual Meeting minutes?
In Ms. Kautt’s April 2016 response…
After conferring with our legal advisor and our labor union representative, it was apparent that we were no longer able to offer the volunteer opportunities we had in the past.
…just why did “conferring with our … labor union representative…” result in Bloomingfoods “… no longer [being] able to offer the volunteer opportunities we had in the past…?”
What does the one have to do with the other?
Bloomingfoods’ “owner volunteer program” was replaced with the “Ambassadors Volunteer Program.” This new program has not only eliminated the word Owner, it also eliminated the Owners themselves from participation in day-to-day, on-the-floor co-op operations. These two actions together gravely threaten the legal control and ownership of the co-operative corporation, held by B’foods’ Member-Owners. [see iia and xi]
Why did the Board wait until October, at the Annual Meeting, to announce a change which had, apparently, occurred “last summer“ …notably, during the same time period the new union contract was in final negotiations and when B’foods’ operations had been temporarily taken over by two national NCG representatives?
It is very troubling – according to Ms. Kautt’s April 2016 email – that B’foods’ brand new labor union does appear to have agreed that B’foods could “…no longer … offer the volunteer opportunities we had in the past… .” Did the UFCW Local 700 at B’foods, in fact, agree with Management & the Board in ending the “volunteer opportunities” (Member-Owner Opportunities) in B’foods stores, thus benefiting its own union membership and undermining the control and ownership of the co-operative corporation by the local Member-Owners?
Is this email from Ms. Kautt accurate?
NATIONAL AP STORY STRIKES “PR GOLD” …IF YOU WANT TO SPREAD LABOR LAW FEARS & END LOCAL CONTROL & OWNERSHIP OF US FOOD CO-OPS
Owned and controlled by the people they serve, co-ops have a long & respected history in the US. [xiia] Ownership and the right to control the co-operative corporation; contributing family resources by owning a share, working in and shopping at the co-operative; Member-Owner Labor rights; voting rights; “worker-owner participation and control,” are all fundamentals of a co-operative corporation. [see iia] Yet at these two US food co-ops – one in NYS and one in Indiana – we find the same vague, undefined, frightening & threatening language being wielded – “changes in labor laws, tax laws, and insurance liabilities” and “labor law and other factors” – as a tool to peel away the control & ownership of a co-operative from the Member-Owners.
At HWFC, yet another of the plans the former Board implemented was a secret operation to attempt to get the NYS Department of Labor (NYS DOL) to issue a written opinion that Member-Labor at NYS food co-ops was, somehow, in violation of (unnamed) labor laws or illegal; this was to be used to frighten Member-Owners into willingly ending our MLP. A secret, hand-couriered letter to the NYS DOL acting Commissioner (to learn its contents, we had to FOIL it); secret two and three-hour Board Executive Sessions with upper Management, lawyers, and an expensive Strategic PR consultant – from which Member-Owners were excluded; and an actual meeting with a NYS DOL Deputy Commissioner and staff on December 2, 2015, which was kept secret from Member-Owners and newly-elected Board members, and which took place two days after our historic emergency SMM, demonstrate just how crucial implementation of this agenda was to this Board. [xiib]
(A reminder of one of the former Board’s expensive PR slogans, repeatedly thrown our way – “The law trumps the bylaws!” – is an apropos injection at this point.)
One of the last acts of acting-President Deb Dennis (and that Strategic PR firm which she had hired) – before she quit the Board on January 5, 2016 – was to participate in an interview for an AP article, Will Work for Food? Co-op Programs End Amid Labor Law Fears, by Michael Hill, which hit national newsstands on Sunday, January 3, 2016. (Also see here and here.) She disclosed the fact of the early December interview to Membership, after the fact and only because a sharp Member-Owner had witnessed the subsequent photo shoot at our co-op on December 15th …and called Ms. Dennis out at a heavily-attended Board meeting that evening.
At this same Board meeting Dennis disclosed – when pressed – that the Strategic PR & Lobbying firm working for her Board – under (then) current contract for $20,000 – had put her in touch with AP reporter, Michael Hill.
And, it was at this same Board meeting that Nate Horwitz – who had also been interviewed by Hill (via telephone) – expressed public shock at Dennis’s disclosures; she had also neglected to tell him about this upcoming AP story: that it had been brokered by her PR Firm and that she had already been interviewed & photographed. She blind-sided him, this well-liked, longtime, former HWFC employee – who was easily elected to the Board by a majority of voters at our emergency SMM – and who assumed her seat as HWFC’s Board President at this very Board meeting.
On Sunday, January 3, 2016, Ms. Dennis’s photograph was front & center in newspapers all over the United States.
This article received premiere national coverage through the AP; in fact, US news outlets are still purchasing & printing it. It transmitted a “labor law fear-mongering” message, specifically targeting US food co-ops. Its opening sentence clearly spins the PR agenda:
ALBANY, N.Y. (AP) – Food cooperative programs that allow members to scoop rice, sort organic vegetables and ring up sales in return for grocery discounts are fading fast amid a changing marketplace and fears of violating labor laws.
Bloomingfoods appeared in the article:
Bloomingfoods of Bloomington, Indiana, ended its limited program recently after implementing its first union contract for employees.
Interesting that Bloomingfoods got a mention in a national AP article about US food co-op Member-Owner Labor Programs “fading fast.” And, here is evidence, once again, that unionizing at B’foods had something to do with ending the Member-Owner Labor Program – the “in-store volunteer opportunities” – of the Owners of this Indiana food co-operative.
This article – readily pulled up on internet searches – is “PR Gold” for those national .coop corporations & consultants which are spreading labor law fear and using it as a tool to end Member-Owner Labor Programs at US food co-ops.
Three days later, in a January 6, 2016 article, Four Resign From Honest Weight Food Co-op Board, Tim O’Brien, a reporter at the Times Union (TU), our local paper, who has been closely following HWFC’s story since October, 2015, wrote:
A state Labor Department spokesman told the Times Union in November no co-op in New York had ever been cited for minimum wage violations, and the question of whether members should be paid would depend on how ownership is structured. [emphasis added]
The Laddie Lushin, Esq. article, Co-op Member Labor Programs Under the Fair Labor Standards Act: A Matter of Economic Reality, cited above, would support this NYS DOL statement:
…there is a considerable body of legal authority in four different aspects of the FLSA–predominantly of the highest courts and of remarkably consistent content–that supports the nonapplicability of the FLSA to a properly structured and limited member labor program.
[emphasis added]
[Please see p. 11, here: [xi]]
It remains a puzzle how Michael Hill, a sharp AP reporter – local to the Capital Region – missed a relevant quote like this from the NYS DOL; the TU’s Tim O’Brien sure didn’t! (My admiration for local, dig-into-it reporters invested in their local community (see the grassroots advocate’s wish for same here) just went up a notch!)
Additionally, how could he (Hill) pen an article in which he interviewed the acting-President of the Board of HWFC …and fail to highlight the historic HWFC emergency Special Membership Meeting, held on Monday night, November 30, 2015, attended by 720+ people, which had taken place just two-three days prior to his interview: a meeting whose very reason for being was Member Labor at a US food co-op?
Could it be because at this same historic Membership Meeting acting-President Deb Dennis had received a 67.9% vote of non-confidence and censure: just shy of the 75% needed to remove a Board member?
Did Dennis neglect to tell him the vote tally? Or, with those kind of election results, did he realize it would ruin her credibility as a reliable source representing HWFC?
Hill did not fail to highlight a (much smaller, secret) meeting between “Honest Weight representatives … [and] … state labor officials…” He is referring to the meeting which took place on Wednesday, December 2, 2015, – planned for by Dennis before our emergency SMM and held two days after – between a NYS DOL Deputy Commissioner and his staff & HWFC attorneys / Board representatives …a meeting which Deb Dennis kept secret from Member-Owners and our three newly-elected Board members!
It seems that news of the largest Membership Meeting ever in our co-op’s 40-year history just wasn’t news-worthy enough.
Additionally, 85.7% of HWFC Member-Owners voted to disapprove the Board’s decision to “…end member labor…”; news which would have fit in nicely as a counterpoint to his article, focused as it was, on US food co-op Member-Owner Labor Programs “fading fast.”
This news was quite literally “hot off the press” yet it never made it into this AP article.
A quote in his article, “‘…the potential risks of [HWFC] being found out of legal compliance [by the NYS Department of Labor] were high…'” comes verbatim from the December 3, 2015 Inside Scoop (a Board publication, controlled by Dennis at that moment in time): in the form of a Memorandum from HWFC’s Governance Review Council co-chair, Ursula Abrams, entitled HWFC Meeting With The New York State Department of Labor.
It has subsequently been uncovered, by our new Board through a review of corporate records – that this Inside Scoop Memorandum was written by that same PR firm hired by Deb Dennis’s Board. (Please see the section labeled SECRECY in my December 19, 2015 post, GRASSROOTS ACTION and Bylaws (Again) ARE POWERFUL!)
So, that Strategic PR & Lobbying firm got its professional, paid-for spin published in this national AP “news” article by reporter Michael Hill; spinning a web of labor law fears for all US food co-ops to read.
You can argue, successfully, that this reporter had no way of knowing that a document, a Memorandum, provided to him by the person he was interviewing, Deb Dennis, had, in fact, been written by a Strategic PR firm.
However, I have seen no evidence whatsoever – in all the coverage we have gotten from the Times Union – that the TU’s reporter, Tim O’Brien, has ever quoted the spin of a Strategic PR firm and presented it as fact …or news. None. O’Brien would check additional sources – which he in fact did do, when confronted with the labor law fear-mongering tactics of acting-President Deb Dennis.
In his November 30, 2015 TU article published the day of our emergency SMM, Co-op coup: Turmoil at Honest Weight Food Co-Op leads to attempt to oust board (referred to, above, in O’Brien’s January 6, 2016 article), O’Brien checked with the NYS DOL:
Christopher White, a spokesman for the Labor Department, said … Whether owner workers are required to be paid depends on how a co-op is organized, he said in an emailed response to questions … Asked if any co-op in the state had ever been cited, White said, “we ran through our system the names of all the co-ops we could find and found the department had not issued a violation against any of those coops for violating minimum wage laws.”
In a second TU article, also published on November 30, 2015, Chris Churchill: At Honest Weight, ruffled feathers amid the kale and tofu, reporter Chris Churchill wrote:
The recall, said Carolyn Presser, a leader in the effort, is about taking back a co-op that has strayed from its ideals. The threat of a Labor Department crackdown, she added, is a red herring designed to provoke fear — an opinion that has been buttressed by [John E.] Sweeney, the former Republican congressman and head of the state Labor Department. He told supporters of the recall that it’s unlikely the Labor Department would target the store.
(Carolynn Presser, BTW, won her bid for election to our Board at the emergency SMM, and is currently serving as our President.)
Where are the basics of good journalism relating to this AP article: that a reporter check facts and interview a variety of different sources (please see below for more on this), so a reader is provided with a more balanced view of an issue?
Mr. Hill owes us a rebuttal article.
After this experience, give us grassroots advocates on the ground a local reporter like Tim O’Brien at the TU, following this HWFC story like a dog with a scent (and his colleague Chris Churchill, as well), over an AP reporter seeking national acclaim & recognition. My regard for local, hometown reporters just went up yet another notch: they do their homework …and do their job!
~~~~~
Given that Hill referred to “…a shake-up of the board that cost the president his position…” and “…the co-op board with Horwitz and two other new members…” there remains no doubt that he knew about our November 30th emergency SMM: it was at this very meeting that three new Board members – including Nate Horwitz – were elected and this former Board President (Bill Frye, the one just before Dennis) was voted off the Board (recalled) for disparaging remarks he made about Member-Owner workers, captured by Times Union reporter, Tim O’Brien, not once but twice.
It would have been very hard for a local reporter (AP or otherwise) to not know about the goings-on at HWFC; the TU’s Tim O’Brien (…up another notch! And he, a reporter covering a food co-op who self-professes he “…wouldn’t know a candlenut from a kumquat…“) wrote no fewer than four major articles about our emergency SMM and its election results, in the days surrounding the co-op’s meeting. (Please read his four articles: November 25th Co-op coup: Turmoil at Honest Weight Food Co-Op leads to attempt to oust board; November 26th Vote Monday seeks to remove Honest Weight board; November 30th Honest Weight Food Co-op members oust just one board member; and December 2nd More changes possible as Honest Weight Food Co-op members shake up board.)
Obviously, the newspaper which reports out from New York’s busy state capital, the Times Union, felt this issue – this big to-do over an emergency meeting about Member-Owner Labor at a local food co-op – was important enough to cover and gave it a high priority in its pages.
One is, therefore, left to wonder why this AP reporter chose not to report on the biggest, local food co-op news story in Albany’s history: a historic meeting centered on a fight to retain a Member Owner Labor Program at a US food co-op! He could have been onsite, reporting (Tim O’Brien from the TU was.) It can be argued (and I’m arguing it) that the national relevance of our story – saving Member Labor at & Member Ownership of US food co-ops – is more important than his “Food cooperative programs … are fading fast…” perspective.
To wit, Hill gave three examples of US co-ops ending Member Labor Programs: (City Market in VT) “finished phasing out of its traditional member work program,” (East End in PA) “ended its volunteer program,” and (Bloomingfoods in IN) “ended its limited program recently.” Dire warnings about the life expectancy of these food co-op programs abound. Statements like: “they have become rare,” “the list gets shorter each year,” they’re “fading fast,”and (the title) “…Co-op Programs End…” subliminally inform the reader that these endangered programs are a dying breed…
…they may be extinct already, like the Dodo bird, by the time your nose gets itself out of the newspaper!
This AP news article did inestimable damage to independently-owned US food co-ops: sowing labor law fears & disinformation and promoting the weakening & dissolution of local, Member-Owned & operated, community & family run food co-ops.
PR gold …for some.
~~~
What remains noteworthy is this: this Board was interested in not only (secretly) forcing unwanted, legal co-operative corporation changes upon its own food co-op in Albany, it was also attempting to force policy changes at the state level – through the NYS DOL – which would affect all NYS food co-ops. Furthermore, its acting-President went one step further and made damned sure this “labor law, fear-mongering PR message” got out to a wide, national audience …before she abandoned the co-op ship, two days later, and quit on January 5, 2016.
Google the title of this AP article or just google the terms labor law and food co-ops. PR jackpot …for those wishing to spread fear and use it as a tool to undermine & eliminate local control & ownership of US food co-ops.
WHO AT THE BARGAINING TABLE WAS REPRESENTING MEMBER-OWNERS’ LEGAL RIGHTS?
Let’s return to that sentence about Bloomingfoods, in the January 3, 2016 AP article, Will Work for Food? Co-op Programs End Amid Labor Law Fears:
Bloomingfoods of Bloomington, Indiana, ended its limited program recently after implementing its first union contract for employees.
The sentence implies that the beginning of a new union at Bloomingfoods has something to do with the ending of its Member-Owner Labor Program: or, what Bloomingfoods called its owner volunteer program, now re-named its Ambassadors Volunteer Program.
Did unionizing at B’foods cost the Member-Owners their “legal place at the table” as Member-Owner workers in their own co-operative? Were their legal rights as Owners of this co-operative corporation bargained away? Without their knowledge and say-so? [Again, please read the two docs in [iia]: 1. Critical Legal Information by Kate Doyle and 2. A Letter to Shareholders by Kate Doyle and Laddies Lushin’s article, Co-op Member Labor Programs Under the Fair Labor Standards Act: A Matter of Economic Reality, [xi] ]
As I said above:
Did the UFCW Local 700 at B’foods, in fact, agree with Management & the Board with the ending of Member-Owner Labor in B’foods stores, thus benefiting its own employee membership and undermining the control and Ownership of the co-operative corporation by the local Member-Owners?
Did the new union at B’foods strike a contractual deal with B’foods’ Board & Management to eliminate Member-Owners from work on the floor? …to eliminate Member-Owners’ (who had been handily re-named “volunteers”) rights to work in their co-op and maintain operational control as Owners?
Did B’foods Board & Management formally agree to a UFCW Local 700 union contract which restricts who can (and can’t) do work on the floor at the co-op?
Have B’foods’ Member-Owners been restricted – contractually – from exercising their rights as owners of their own co-operative? If so, why haven’t they been told so by the Board & Management? Why weren’t they involved in that decision-making process?
The national AP article and that email from Ms. Kautt, raise these additional questions:
- Did the negotiations and finalized contract between B’foods and the UFCW Local 700 – ratified during the summer of 2015 while NCG’s Paula Gilbertson and C. E. Pugh had temporarily assumed control – specifically call for the ending of the right of Member-Owners (re-named “volunteers“) to work/volunteer in their own co-operative storefronts?
- Does “volunteer” terminology (as opposed to use of the word “owner”) have a legal implication when negotiating a union contract, such that volunteers would be disallowed from work on the floor if there is a union contract in place? (This change in terminology from “Owner” to “Volunteer” also occurred during summer, 2015)?
- Did Bloomingfoods’ Board & Management agree – contractually – with unionized employees, to disallow volunteers (Member-Owners) from working, side-by-side with union employees, on the floor in Bloomingfoods’ storefronts?
- Are those union employees still considered Owners of the co-operative? Isn’t that a conflict-of-interest? How can a union employee also be an Owner of a business?
- Was the Ambassadors Volunteer Program created to get rid of the term “Owner?”
- Was the Ambassadors Volunteer Program ostensibly created as a means to placate those few Member-Owners who still understood their rights as Owners of a co-operative, while, in fact, serving to remove Member-Owner’s legal rights in the co-operative by removing them from day-to-day, on-site, operational control of the co-operative?
- Has that Ambassadors Volunteer Program, in fact, one year later, ever been implemented?
- Do B’foods unionized employees realize that, in garnering their rights to unionize, they may have eliminated Ownership rights of Owners of the food co-op?
- Were the Owners of the co-op ever formally informed as to the union / Bloomingfoods contract deal …or did Management, the union, the union employees, and the Board of Directors all keep Member-Owners in the dark as to the final deal?
Did B’foods’ Management, the union, the union employees, and the Bloomingfoods Board of Directors all collectively strike a deal …and collectively bargain away Owners’ legal rights, without involving them in the decision?
Who – at this bargaining table – was representing the legal interests of the Owners of this co-operative corporation?
~~~
The reasons provided by B’foods Management for the ending and/or re-working of their “owner volunteer program” need to now be re-visited. Were those reasons meant to deliberately obscure from the Member-Owners of B’foods what does appear to be a deal struck with a labor union …at the expense of co-operative corporation Owners’ legal rights?
Jean Kautt: “We discontinued our owner volunteer program last summer for several reasons … Nationally, most co-ops have had to discontinue their volunteer programs due to changes in labor laws, tax laws, and insurance liabilities. It has gotten very complicated in the past 40 years! After conferring with our legal advisor and our labor union representative, it was apparent that we were no longer able to offer the volunteer opportunities we had in the past.” [emphases added]
NCG Consultant Paula Gilbertson and the Bloomingfoods’ Consumer Services Department: “Bloomingfoods Ambassadors Volunteer Program. We are extremely limited on in-store volunteer opportunities due to labor law and other factors, so we are introducing the Bloomingfoods Ambassadors Program to allow our owner-members to volunteer with organizations…” [emphases added]
Could the term “labor law” here, be a veiled reference to the labor laws attached to collective bargaining?
DID EVERYBODY – THE UNION EMPLOYEES, BOARD & MANAGEMENT – COLLECTIVELY THROW B’FOODS MEMBER-OWNERS’ LEGAL RIGHTS UNDER THE BUS?
Above, I posed a question raised by Ms. Kautt’s email reply to me:
Just why did “conferring with our … labor union representative…” result in Bloomingfoods “… no longer [being] able to offer the volunteer opportunities we had in the past…”?
I have found at least a partial answer to that question.
First, I need to define two terms: “bargaining unit” and “bargaining unit work.” According to USlegal.com:
A bargaining unit is a group of employees … who are represented by a labor union in their dealings with agency management.
For purposes of this discussion, bargaining unit work is the work which the union (UFCW Local 700) and the bargaining unit, and the employer (Bloomingfoods Board & Management) agree will be performed by bargaining unit employees. Non-bargaining unit personnel (Management and salaried staff) will not (usually) perform work which both agree is bargaining unit work.
In a May, 2016 document entitled Bloomingfoods Special Member Meeting: Consolidation Announcement Q&A, the following question was asked and answered, under General Questions:
Q: What about the volunteer opportunities for those who wish to help the co-op?
A: The best thing you can do for the co-op is shop at the co-op. We are unable to offer many of the volunteer opportunities we had in the past because work that qualifies as bargaining unit work cannot be performed by volunteers… [emphasis added]
So, what ever happened to that Ambassadors Volunteer Program, announced last October in the Annual Meeting minutes and – presumably – at the Annual Meeting?
The answer continues:
…Owner-members can engage with our Board of Directors and the administration by participating in the Owner Linkage Committee, and other committees created by the Board. Additionally, we are currently working with our board to create a new volunteer opportunity for our owner- members, and hope to be able to announce it soon!
The explicit use of labor terminology in this B’foods’ response – bargaining unit work – clarifies that Bloomingfoods’ Board and Management must have agreed with the UFCW Local 700 that volunteers (formerly known as Owners) cannot perform the work of unionized employees (the bargaining unit) in Bloomingfoods’ storefronts.
There must also be an agreement as to what constitutes bargaining unit work and who can and cannot do bargaining unit work.
It now appears likely that B’foods Board & Management insured the death of this Member-Owner legal right by agreeing contractually with unionized employees that it would violate the rights of those union employees if the Member-Owners of the food co-op performed work on the floor – side-by-side with union employees – in Bloomingfoods’ storefronts.
Step-by-step, this food co-op Board & Management appear to have methodically paved the way for elimination of Member-Owners’ substantive, legal rights in the co-operative corporation:
- First, this food co-op altered the name of its “owner volunteer program” to eliminate the term “Owner.” The new, re-named program is called the “Ambassadors Volunteer Program. (initiated while NCG was temporarily in charge)
- Second, they moved / shifted the (former Member-Owners, down-graded to) volunteers in the Ambassadors Volunteer Program, off-premises “…to allow our owner-members to volunteer with organizations…” (initiated while NCG was temporarily in charge)
- Third, this move to get volunteers (off-premises) would salve the Member-Owners who still remember what democratically-run food co-ops are all about: working, side-by-side, co-operatively together – on a regular basis – with your friends, neighbors, family & colleagues, for a worthy, community cause.
- Fourth, B’foods appears to have utilized the opportunity of negotiating with a labor union to contractually solidify the position that volunteers cannot perform bargaining unit work, that is, the work of paid, unionized employees. (initiated while NCG was temporarily in charge)
- Fifth, this food co-op no longer has Member-Owners on the floor, working side-by-side with paid employees who, presumably, are also Member-Owners.
- Sixth, Member-Owners have (methodically & silently) had their Ownership rights threatened or removed.
- Seventh, throughout all this manipulation of Member-Owner rights …what happened to the Member-Owner discount? How small has it actually become?
- Eighth, this co-op’s structure now appears a lot more like a (hip, expensive) natural foods’ store with a bunch of employees …than a food co-op.
The end result? The Owners of this co-operative corporation may have lost the right to maintain operational control of their co-op: a basic, legal right of an Owner of a co-operative.
Empowering employees to unionize (finalized while NCG was temporarily in charge) can be viewed as – well – empowering employees. It can also be viewed as a means to ply a wedge and leverage conflict between employee and Member-Owner rights, with the endgame of eliminating Member-Owner ownership & control of the co-operative corporation.
In this scenerio, Member-Owners’ power has been peeled away from the co-operative, and handily swept out of the picture.
~~~~~
We do not know the specifics of the contract between B’foods and the UFCW Local 700. That document needs to be made public. These questions need to all be answered.
However, this new information from this May 2016 B’foods “Consolidation Announcement” is enough to tell us that Bloomingfoods’ Owners appear to have lost significant legal standing …and might even no longer be considered Owners of their own co-operative corporation.
Short of formal, written answers by the B’foods’ Board of Directors to co-op Owners – to whom the Board did and does hold a fiduciary responsibility – and short of viewing the actual union contract, we are left without enough information.
The local families, homeowners, residents, investors & community members all invested in Bloomingfoods – and its legal, shareholding Member-Owners – need to immediately be informed as to the status of their legal position in this co-operative corporation …and whether or not B’foods Board & Management allowed a union to be utilized as yet another means to remove the legal control & ownership of the co-operative corporation held by its Member-Owners.
Just where is the “co-operative” in this co-operative corporation?
This Board – and Management – have a lot of questions to answer.
UPDATE: OCTOBER 3, 2016
Bylaws’ changes may be all that is needed to solidify corporate changes – and they are slated to be voted on at the B’foods Annual Meeting which is:
Wednesday, October 19, 2016, 6:00 – 9:00pm, at the Wonderlab, 308 W. 4th Street, Bloomington, Indiana
and also
“Fully revised and modernized bylaws” will be voted on beginning March 20, 2017.
Please see this new October 3, 2016 blogpost, GRASSROOTS ACTION: INVITATION (RSVP) REQUIRED for some to Cast Vote at Bloomingfoods’ 40th Annual Meeting.
END NEW UPDATE
BACK TO THAT AP ARTICLE
That AP article, Will Work for Food? Co-op Programs End Amid Labor Law Fears, by Michael Hill, as already stated, is PR Gold for those national .coop corporations & consultants which are busy spreading labor law fears, undermining Member-Owner Labor Programs, and eliminating local control & ownership of US food co-ops by the food co-op Owners.
Why were Bloomingfoods and Honest Weight Food Co-op two of a small handful of US food co-ops featured in this national news article? Well, both co-ops were or are clients of CDS Consulting Co-op, for starters.
Who was the source for this AP reporter which provided the names of US food co-ops, virtually all of which had ended or were attempting to end their Member-Owner Labor Programs: the means by which food co-op Owners exercise their legal right to be a substantive part of day-to-day store operations …to work in their food co-op storefronts and, thereby, maintain their operational control, voting rights, and Ownership of the co-operative corporation?
We don’t know.
However, for the record, 100% of the US food co-ops cited in this article were or are CDS Consulting Co-op clients: City Market in Burlington, Vermont, (a featured client), East End Food Co-op in Pittsburgh, Bloomingfoods of Bloomington, Indiana (a featured client) and Honest Weight Food Co-op. [xiid]
The one stated exception in the article – to co-ops ending their MLPs, that is – is Park Slope Food Co-op, in Brooklyn. However, as the article stated, Park Slope “…requires most of its members to work … and the store is not open to non-members.” The corporate structure of this particular food co-op is (as I noted, above) very sound & stable: truly & unambiguously owned and operated by the Owners of the co-operative corporation.
Park Slope is also, however, a new CDS Consulting Co-op client. [see xiid]
One additional organization was cited in this AP article, called the Food Coop Initiative; this 501(c)(3) is not a client of CDS Consulting Coop but rather an affiliate.
(The Food Coop Initiative is a CDSCC affiliate along with National Co+op Grocers (NCG), CoopMetrics and Cooperative Grocer Magazine. It is unclear if the International Cooperative Alliance is also a CDSCC affiliate; their logo/click-on is placed next to the list of CDSCC “Affiliates,” on their website, without actually showing up on that list. [xiie] Additional information on CDSCC’s website shows that the Cooperative Grocer Magazine is offered as part of a Membership Package to the Cooperative Grocer Network (CGN). CGN is a “501(c)6 trade association.” CGN’s sponsors are CDS Consulting Coop, National Co+op Grocers (NCG) and National Cooperative Bank.) [xiif]
Honest Weight Food Co-op was also an active CDS Consulting Co-op client at the time this AP article was written; former acting President Deb Dennis had a documented history of attempting to secretly end our co-op’s MLP. By her own admission at a Board meeting, it was her Board’s Strategic PR firm which arranged this AP interview; her photo managed a “prime time,” front & center position in this national AP article.
Former HWFC Boards had begun contracting with CDSCC in, as far as we can tell, 2009. A one-year contract was executed in December, 2014 with CDSCC for its CBLD program. Dennis hastily executed a brand new contract with CDSCC in December, 2015 …shortly after she had received a 67.9% vote of non-confidence and censure at our emergency SMM, just shy of the 75% required for recall!
This AP interview with Dennis also occurred several days after our historic Special Membership Meeting on November 30, 2015. Clearly, the will of the people meant nothing to this former HWFC acting-President.
According to information gleaned from his own article, it does appear likely that AP reporter Hill used one national source (and/or one of its affiliates), for information about names of specific US food co-ops ending their Member-Owner Labor Programs: that is, CDS Consulting Co-op.
It has the good name of the Honest Weight Food Co-op, Inc. attached to it for posterity … a time bomb with the potential to harm other US locally-owned, community food co-ops; something we HWFC Member-Owners could not prevent: seeing as conversations between former acting-President Deb Dennis & the Strategic PR & Lobbying firm she had hired, and the subsequent media interview & photo shoot, were strategically kept secret from us.
And I’m more than a little put out that a powerful, expensive Strategic Public Relations & Lobbying Firm – a partner to one of the top-10 lobbying firms in NYS (remember, Wall Street is just downriver a ways from our food co-op) – hired by the former acting-President of the Board of HWFC, Deb Dennis…
…has a place …in this story about a national AP article …and its story about community food co-op Member-Owner Labor Programs “fading fast.” [xiic]
…an AP article which includes an affiliate of – and (only) the names of US food co-op’s which were or are clients of – CDS Consulting Co-op.
~~~~~
The AP article states:
It’s not clear how many food co-ops still maintain their [Member-Owner Labor] programs, though the list gets shorter each year.
That list will continue to get shorter each year if the legal Owners of US local, independently-owned, community food co-ops don’t protect their legal rights, organize, and do the grassroots advocacy required to understand, guard, maintain and strengthen their Ownership rights in the co-operative corporation. That, and refusing to contract with and pay for the advice of very expensive, nationally-based “expert” food .coop consultants & advisors.
For, no matter what happens to the local food co-op – sink or swim – national consultants will still get paid their outrageous fees.
“TWO ROADS DIVERGED IN A YELLOW WOOD…”
from The Road Not Taken, by Robert Frost, pub. 1916
Both Bloomingfoods and HWFC had direct threats made to their Member-Owner Labor Programs in 2015. While HWFC Member-Owners defended our control and ownership of the co-operative corporation, Bloomingfoods’ Member-Owners quietly, IMHO, lost the battle …if they were even aware there was a battle to fight.
According to recent B’foods’ Board minutes, bylaws’ changes are in the works: calendared in for discussion in (March and) August, 2016 . Bylaws’ changes can also signal another red flag, threatening Member-Owner control & ownership of a co-operative corporation. The Annual Meeting takes place on October 19, 2016; a bylaws’ vote is planned and will any proposed changes further undermine (or eliminate) Member-Owner control of the co-operative corporation? (Please see my December 07, 2015 post, GRASSROOTS ACTION and current bylaws ARE POWERFUL!, my December 19, 2015 post, GRASSROOTS ACTION and Bylaws (Again) ARE POWERFUL! and my January 7, 2016 post, GRASSROOTS ACTION and the Times Union ARE OH SO HELPFUL!)
At HWFC, elimination of our Member-Owner Labor Program and changing our bylaws to eliminate Member-Owner control of the co-operative were the very things our former Board targeted for change: that, and adding 12,000 new non-working “shareholders;” getting us Member-Owners “off the floor” at the co-op; disenfranchising our vote; consolidating the power of the Board/Management axis; preventing communication; and attempting to manipulate the NYS DOL such that we Member-Owners would willingly give up our own MLP. [Read the docs cited in [iia] and [xi].]
Our former Board, with the assistance of its top Management, efficiently targeted and attempted to rip apart the very underpinnings of our co-operative corporation. Their attack was efficient, orderly, calculated and devious. They had the help of two law firms (one with D.C. offices), a local organizational change consultant, the aforementioned nationally-promoted CDS Consulting Co-op, and a Strategic PR & Lobbying firm, with ties to a NYS top-10 lobbying firm.
Big bucks. Big stakes.
They spent $500,000 of our collective savings (!) in their (secret & camouflaged) attempt to get rid of us!
The former Board and Management used our $ .5 million, with an endgame of wrestling Member-Owner control of the co-operative corporation out of the Owners’ hands …and replacing it with control by the Board & Management …or, to put this another way, to stealthily assume control of our corporation.
This story – taking place at a simple American food co-op, for goodness’ sake! – reads like any one of the vicious, hostile, corporate-takeover, Wall Street movies Hollywood puts out.
Were this happening at just our co-op, no big news. You might shrug and say, What d’ya expect out of a co-op in the most corrupt capital in the most corrupt state in the nation …which, by the way, does have Wall Street in it? (We upstate New Yorkers are very jaded: just look up the names of down-staters Silver and Skelos. Interested? See this December, 2015 NYPIRG document, CAPITOL OFFENSES: A Review of the Criminal Conduct, Self-dealing and Ethical Lapses of New York’s Public Officials.)
However, this same pattern is cropping up, over and over, at independent, locally-owned & operated food co-ops all over the US.
It does appear that the Bloomingfoods’ Board is quietly and successfully doing the very same thing: eliminating Member-Owner control and ownership of this food co-operative corporation, replacing it with control by the Board and Management, and altering the co-operative corporate structure.
Are the Owners of this food co-operative even aware that their control is silently disappearing; their very ownership is threatened? Or has Bloomingfoods’ Board, like the former HWFC Board, spent hundreds of thousands of dollars on “expert”national consultants, lawyers …and a Strategic PR consultant or two, paid to expertly massage the messages getting out to the Owners?
A PATTERN OF “CORPORITIZATION” OF U.S. COMMUNITY FOOD CO-OPS
Local ownership & control of many US food co-operatives is under attack. Mimi Yahn, a food co-op Member-Owner and independent journalist tells a very similar tale about her food co-op in Putney, Vermont, just over the border from us. In a series of two articles and a follow-up Letter – January 14, 2015 Losing Our Principles at The Commons Online; February 4, 2015 Searching for Democracy at the Putney Co-op at VTDIGGER.org; and February 11, 2015 Still Searching for Democracy at Putney Food Co-op at The Commons Online – Ms. Yahn uncovers disturbing threats to her food co-op: threats to its democratic principles and bylaws, Member-Owner control, and, a wider pattern of “corporitization” at other U.S. food co-ops. [xiig]
This Powerpoint Presentation, put together by Member-Owners of HWFC – as they prepared for their 11/30/15 emergency Membership Meeting & vote to get rid of both an out-of control Board & recommend the removal of the out-of-control Management partnering with that Board – details similar problems at many U.S. food co-ops. These food co-ops are taking – or fending off – expensive advice brokered by nationally-based .coop consultants. Strikingly similar problems are occurring with “policy governance,” dissolution of their Member-Labor programs, significant alteration of the bylaws, secrecy, lengthy Board executive sessions excluding Member-Owners, vague & frightening labor law threats, gag orders, removal of Member-Owners from on-the-floor operations, and moves to cement the legal empowerment of Board & Management, concurrent with removal of ownership rights of the Member-Owners of the co-operative corporation.
The individuals who are invested in their co-op – the local homeowners, residents and families – and who are also deeply invested in their local, hometown communities, are losing control of both their food co-ops …and their food supply.
This attack upon food co-ops appears to be coming from the national level: it appears to be a top-down agenda targeting grassroots, local, community, Member-Ownership & control of U.S. independently-owned food co-operatives.
NATIONAL COOP GROCERS AND UNITED NATURAL FOODS, INC.:
NATIONAL NATURAL and ORGANIC WHOLESALE SUPPLIERS
Bloomingfoods, like HWFC, is a member co-op of National Coop Grocers. NCG is “a business services cooperative for retail food co-ops located throughout the United States … represent[ing] 143 natural food co-ops operating 196 stores in 38 states, with combined annual sales of $1.8 billion.” NCG’s primary distributor is United Natural Foods, Inc., (Nasdaq: UNFI), with whom it signed a primary distribution agreement in 2015, good through at least July 2021. NCG and UNFI have had a contractual relationship since 2006. [xiii] [xiv]
UNFI is the leading independent national distributor of natural, organic and specialty foods and related products including nutritional supplements, personal care items and organic produce, in the United States. [xiva]
UNFI distributes its products throughout the United States and to more than 40 countries. [xivb]
UNFI is also the primary distributor for Whole Foods Market (Nasdaq: WFM) and has had distribution agreements with WFM for 17 years. Their primary distribution agreement was also re-negotiated in 2015; it extends until September 2025.
WFM is “UNFI’s largest customer.” [xv]
UNFI’s net sales for fiscal year 2015 were $8.18 billion. Whole Foods Market, UNFI’s only “supernatural chain,” made up 35% of UNFI’s net sales in FY 2015. 32% of UNFI’s net sales in FY 2015 came from the category called “independently owned natural products retailers, which include buying clubs;” this category includes NCG and its virtual chain of US food co-ops, with combined annual sales of $1.8 billion. [xvi]
If my math is correct, NCG’s virtual chain of US food co-operatives, represents 22% of UNFI’s net sales in FY 2015.
UNFI’s “independently owned natural products retailers which include buying clubs” – which includes NCG and its virtual chain of US food co-ops – are, at 32%, vying with Whole Foods as UNFI’s largest customer. [xvii]
The respected Organic Consumers Association notes in its 2009 article, The Organic Monopoly and the Myth of “Natural” Foods: How Industry Giants Are Undermining the Organic Movement:
…Whole Foods Market … [and] industry giant United Natural Foods (UNFI) … [market] Row after row of attractively displayed, but mostly non-organic “natural” (i.e. conventional) foods and products… …Natural, in other words, means conventional, with a green veneer.
UNFI and Whole Foods Market are the acknowledged market and wholesale distribution leaders in the $70 billion organic and natural foods and products sector… [xviii]
Both Bloomingfoods and HWFC are a part of the large UNFI and NCG distribution network, called a virtual chain. An August 19, 2015 Press Release, NCG Signs Primary Distribution Agreement with UNFI, states:
‘As a virtual chain, NCG is one of our largest and fastest growing customers in the last 10 years’ said Steve Spinner, UNFI’s president and chief executive officer. ‘Our connections to food co-ops go back to our company’s founding and we are excited to be selected once again as the best fit to serve the needs of this important sector.’ [xix]
The brochure, National Co+op Grocers Partnership Opportunities (January – June 2016), which extends an invitation to US food co-ops to join NCG, states:
NCG co-ops are independently owned and operated; combined, our “virtual chain” is one of the largest natural foods product retailers in the United States. [xixa]
A dot coop FIRM: CDS CONSULTING CO-OP:
DO NATIONAL CONSULTANTS HAVE MEMBER-OWNERS’ BEST INTERESTS AT HEART?
It is noteworthy that both co-ops, Bloomingfoods and HWFC, have been or are clients of CDS Consulting Coop; in fact, Bloomingfoods is a featured client on CDSCC’s website. Bloomingfoods’ former, three-term Board Director, Art Sherwood, was and is a CDSCC consultant; he joined CDSCC in 2009 and served on the Bloomington Board until October, 2014, when he resigned his position as President, due to work commitments. [xx] Both of these US food co-ops – Bloomingfoods and HWFC – have relied upon the consulting services of this nationally-advertised .coop firm, with national interests and ties: interests not necessarily based in nor springing from each of the local communities of these two food co-ops.
CDSCC advertises that it helps Boards and GMs work together; conspicuously absent in its PR and program description for its CBLD program (Cooperative Board Leadership Development) are statements about strengthening the control and ownership rights of the Member-Owners of a co-operative.
The former HWFC Board spent an estimated $84,000 (!) over the last three years on CDSCC advice and has at least a six-year history with this firm, going back to our days on Central Avenue, before we got all glossy, high-end, and chic-chic with a brand new, expensive, over budget, “Just-in-Time” model storefront. We – a food co-op for gosh sakes – were advised to build a new store which has virtually no storage capacity! CDSCC’s consulting advice served to efficiently consolidate power between our top Management and Board, to the exclusion of Member-Owners.
In 2015, the HWFC former Board was contracted with CDS Consulting Coop for its CBLD program. Two CDSCC consultants were also a part of the 2015 HWFC Bylaws Task Force (BTF), as “subject matter experts:” Mark Goehring and Thane Joyal. These consultants created a “Bylaws Research Document” for our co-op, which included their ‘Fresh Start’ Bylaws Template. (Please see this December 19, 2015 blogpost and its section entitled ALICE IN WONDERLAND DOWN THE RABBIT HOLE Is this a Bylaws Task Force or a Better End Member-Labor Task Force?)
The BTF was developing new Bylaws, in secret, with all committee members required to sign a nondisclosure agreement: a gag order …over bylaws …at a food co-op! To this day, no one, save the 27 members of the BTF, ever saw those draft bylaws (rumor has it they were never produced, it was all in the hands of the corporate attorneys).
Gag orders’ll have you grasping at rumors in your co-op, when you can’t get facts about bylaws’ changes because people’s lips have been intentionally sealed.
So, no one in our co-op had ever seen these draft bylaws, yet the former Board had intended to present them for Membership vote and ratification at the January 24, 2016 Membership Meeting!
The copy of the ‘Fresh Start’ bylaws CDSCC presented to our co-op in 2015, eliminated the right of Member-Owners to rein in an out-of-control Board via a Special Membership Meeting (SMM): the only means available at most co-ops to halt a wayward Board’s actions.
Due to Member-Owner advocacy, we did halt the actions of an out-of-control Board & out-of-control top Management through an Emergency SMM. (Please see Notice of the emergency Special Membership Meeting, a recap of the meeting, and the official vote tally.
Those secret bylaws were never presented for a vote; they were deep-sixed …if they even ever existed, except in the lawyers’ offices.
(Also, see this post, about another CDS Consulting Coop client, the East End Food Co-op in Pittsburgh, this Powerpoint Presentation, and here, here, here, here, here and here for background info. Please also read this article by Laddie Lushin, Esq. nationally-recognized expert on co-operative law, Assessing the Adequacy of Your Co-op’s Bylaws.)
The CDSCC article, Why Rehash the Old When You Can Start New? Try Fresh Start Bylaws by Susan Munkres, effectively demonstrates the lure of ‘Fresh Start Bylaws’ to an unwary food co-op Board.
Interestingly, author Mimi Yahn also reports that her co-op in Putney, VT utilized the services of CDS Consulting Co-op; in fact, CDSCC lists Putney, VT as its corporate home. Putney Food Co-op did ratify bylaws based upon CDSCC’s bylaws template; Ms. Yahn’s articles tell the story of this Vermont co-op losing its democratic principles. [See January 14, 2015 Losing Our Principles at The Commons Online; February 4, 2015 Searching for Democracy at the Putney Co-op at VTDIGGER.org; and February 11, 2015 Still Searching for Democracy at Putney Food Co-op at The Commons Online and See xiig and xxa]
~~~~~
It is unknown how much Bloomingfoods has spent on CDSCC services over the years. Bloomingfoods Member-Owners are, however, left with this conundrum: contrast the glowing picture painted of Bloomingfoods by CDSCC, with this assessment of the co-op by National Co-op Grocers (NCG), at the time acting GM Paula Gilbertson and C. E. Pugh arrived from NCG. This was captured on June 23, 2015 by blogger and Bloomingfoods’ Member-Owner Ann Kreilkamp:
Last night I attended a Member/Owner OpenHouse set up by the Bloomingfoods board … [National Coop Grocers, NCGA] has been brought in during this crucial transition to help stem the bleeding which, according to the NCGA, is the worst they have seen. Though food co-ops nationwide are going through hard times, for Bloomingfoods, ‘the path to solve for cash-positive is the most difficult we’ve ever encountered.’… [xxi]
One has to pose the obvious question: if CDSCC’s consulting services for strategic Board & Management training and CBLD are so effective, why is this CDSCC-featured co-op in such dire straits? Why is Bloomingfoods “the worst they [NCGA] have seen,” according to this B’foods Member-Owner’s blog post report?
TWO AMERICAN FOOD CO-OPS MORPH INTO “FOOD BOUTIQUES”
The three Bloomingfoods’ storefronts I shopped at were all glossy, ordered, bright & clean: chic-chic. The inner aisles were very neatly stocked & filled with colorfully-packaged, mostly “natural,” processed & packaged products.
I had to search harder to find products labeled “organic.” Locally-produced foods – highlighted with a label picturing the state of Indiana with Local printed on it – although noticeable because of this label, were much harder to find; they were also not usually organic.
Bloomingfoods’ cafes use the same paper goods as HWFC (“co+op stronger together”) [xxii] and the same paper bags (with the handles that always break). The sale flyers look the same as ours. Every aisle was picture-perfect, in fact, the product layout on shelves could have been a mirror to that at HWFC.
What happened to the modest, community-owned storefronts selling high-quality, low-cost organic, bulk, and locally-produced foods and farm products? What happened to our direct connection to the land via a wide, regional network of farm families and our support of local, sustainable and organic farming practices? What happened to the abundance of local, minimally-processed, organic foods? In fact, what happened to just plain-old minimally-processed food with fewer than five ingredients?
What happened to our value & practice of keeping overhead low so as to keep food prices low for our Membership?
What happened to American food co-ops selling real, whole, locally-produced, organic, nutrient-dense, bulk foods at affordable prices?
When did the displaying of food take a higher priority over the content of the food being displayed?
The similarities between B’foods’ and HWFC’s storefronts – the trending towards upscale gentrification, higher prices, lower overall food quality, fewer locally-produced foods, more processed, nationally-branded, packaged foods, vegetables labelled as “organic” coming from China (and not disclosed as such), much more (colorfully packaged) “natural” as opposed to “organic” foods, meats from unknown national sources, deceptive labeling & clever product PR, an over-emphasis upon display & marketing – are readily apparent.
Both of these co-ops have been transformed to look like expensive, high-end food boutiques.
In fact, our two (independently-owned) food co-ops are designed & laid out and operate so similarly, with such similar marketing tools, newsletters, sales flyers and product for sale, that we could be co-op franchises: different cities, same business model, much like one sees with a McDonald’s, a Trader Joe’s or a Whole Foods.
(An aside… …because you need this information right now…
A troubling pattern emerging nationally among local, independently-owned food co-ops, is either their expansion into brand new, very expensive, “bigger & better” storefronts or their too-quick expansion into multiple storefronts. These storefronts are based upon a “Just-inTime” grocery model, which includes virtually no room for storage and depends upon a regional warehouse system providing daily & weekly delivery. These expansions are being brokered by several different firms of very expensive, national “expert” food co-op consultants & corporations: These expansions:
- bleed the co-operative corporation of its valuable (!) local capital & savings
- force expensive mortgages onto the back of the co-operative and
- utilize local, community resources in the form of unsecured family & Member-Owner-investor loans to the co-op
- financially weaken & strap the food co-op almost to the point of insolvency
- pay the consultants: their advice, itself, is not cheap!
These expansions have leveraged many formerly strong & solvent US food co-ops into positions of weakness: capital is gone, debt is now high …and the pockets of co-op Member-Owners – via unsecured loans to the co-op – have also been tapped!
The food co-ops are now financially strapped and vulnerable to and positioned for either corporate take-over, assimilation or consolidation, or – failing that unwanted future – closure.
In the meantime, those consultants have already been paid …and are off looking for the next independently-owned food co-op to prey upon.
Our two cents from HWFC? Don’t expand! Don’t be wooed into thinking you need a shiny, chic-chic new storefront because “that’s what lots of co-ops are doing across the US.” They’re doing it because they took the “experts’ advice” to expand …or build new!
So, don’t take national “expert” & expensive food co-op consultants’ advice! Take care of your Member-Owners, your families, your community, and your capital.
These teams of consultants are out there – and they are preying upon independently-owned US food co-ops. They have figured out that there is capital lying around in many successful, independently-owned US food co-ops. They have figured out a way to separate you, your co-op & community …from your capital.
Keep your capital in your pockets! Hang onto it! Keep a cushion; be financially smart. Do you really need that shiny, chic-chic new storefront? Expansion into a 2nd or 3rd brand new storefront? Those consultants? Or can you all make do?
Invest in each others’ families: that is your co-op, your fellow Member-Owners & your community …not in the advice of highly-paid, nationally-based food co-op “experts” with questionable motives.
To quote my Grandma and my Mom (and other Depression-era Moms): Use it up, wear it out, make it do, or do without! [xxiia]
End aside.)
However, this food co-op in Indiana, with its glossy, picture-perfect store lay-outs and fully-stocked shelves, is in trouble. It lost 20% in revenue, in part, when a Lucky’s (a Colorado-based natural foods’ chain) moved in to town last year, and when Kroger’s remodeled to include more natural & organic foods. Next year Whole Foods is opening a store just minutes’ away from the Eastside co-op, in the former Sears store at the mall. [xxiib]
An adjunct professor friend of mine told me she can no longer afford B’foods. She now hits sale days at Lucky’s (Wednesdays), has switched to shopping almost 100% at Krogers, and she buys at the Farmers Market on Saturdays. She plans to buy a freezer and buy bulk grass fed, grass finished beef directly from farmers at the Farmers Market, where one can readily buy high quality, pastured meat in Bloomington.
In 2014, B’foods Member-Owner and blogger Ann Kreilkamp captured sentiments, which we here at HWFC experienced in 2015, as we began uncovering our former Board’s plan to eliminate us from control & ownership of our co-operative corporation:
But wait a minute you say! Bloomingfoods is a Co-operative, not a Corporation!…
…something happened along the way to begin to torque our original member-owner operation into a quasi-corporation, with an expanding physical presence (three major stores, two minor ones, and counting), a long-time CEO-like General Manager, a budget that is not transparent, workers who are both underpaid and feel disrespected and disenfranchized, and a board that vets anyone who wants to serve on it to say whether they can even be nominated to come up for a vote!… [xxiic]
VISIT TO THE HOOSIER STATE, AGAIN: STUNNED, AGAIN
THE HOOSIER IS GONE FROM THIS CO-OP
I was in Bloomington last week and had a chance to see what had changed at the co-op in two months.
This visit, it was the Elm Heights store which had closed its doors, joining the flagship Kirkwood store. A large For Lease sign was posted on the vacant storefront.[xxiii] The kitchen commissary had also been shut down.
The Elm Heights’ closure stunned everyone! It came out of the blue. I did not hear a rumbling about it when I was in Bloomington in March. Two months later it was a done deal. Gone.
“The Elm Heights neighborhood is saddened by the news that its Bloomingfoods store is closing. We worked hard with the coop to get the store built, and Bloomingfoods in turn worked closely with the neighborhood association in every phase of its planning. Many individual neighbors contributed financially as well…” Elms Heights Neighborhood Association [xxiiia]
At a public meeting held on April 27, 2016, the Bloomingfoods’ Board told the public that the bank has agreed to take interest-only payments on the co-op’s loans. Local, family investors were told that the loans they had made to B’foods and Elm Heights are unsecured and subordinate to payment of the bank loans. [xxiiib]
I got differing stories about staff being let go from Elm Heights & the commissary kitchen. One person told me that no one had lost a job from either; everyone had been re-located to the existing stores. Another person told me staff had been let go, jobs were lost, and positions eliminated. A review of Bloomingfoods’ website and its newsletter reveals nothing as to this issue. Local media is uncharacteristically silent.
The Eastside Co-op parking lot was nearly empty. I do not recall seeing this parking lot that empty, ever. Store hours have been reduced. The incredible outdoor garden shop is gone, closed last summer; replaced by a tiny selection of local plants.
Signs in the Near Wests Side parking lot warn you that parking is limited to one hour.
Parking is limited to 1 hour at the Near West Side store. The city has placed on-street parking meters out front, which may have precipitated this move. However, it is decidedly non-welcoming, for a food co-op which also hosts a delicious food bar and a café at which to sit with friends.
I asked staff about the removal of the beautiful, authentic Hoosier Cabinet and display area in the café, with handmade crafts, pottery, local authors’ books, as well as local art displayed on the walls. [xxiv] (In fact, this is where I was first introduced to Bloomington author Nancy R. Hiller’s wonderful book The Hoosier Cabinet in Kitchen History. Visit Ms. Hiller’s website, here, to read her story about the making a Hoosier cabinet – from a local Elm tree, how cool is that! – for the, now-closed, Elm Heights store. See also A Home of Her Own; Ms. Hiller’s articles at American Bungalow magazine: Miracle on South Dunn Street, Harris Lebus – Arts and Crafts Style For Trade and Bringing Back Stinesville; and her articles at Fine Woodworking.) (I am a bungalow lover; Nancy Hiller and Jane Powell are my top-drawer bungalow and arts & crafts authors!) In addition, local kitchen gadgets, jewelry, cards and candles which used to be displayed at the end of the aisles in the bulk section had all disappeared, to be replaced by that week’s national promotional and sale items from NCG.
I was told that the staff member who used to manage these display areas had been let go: the position had been eliminated.
The aisle ends at Bloomingfoods used to display jewelry, kitchen gadgets, locally-made cards and crafts: one of my favorite spots at the co-op! This has been replaced with that week’s sale items from NCG (co+op deals).
The café, formerly cheerful and welcoming, is now stark and utilitarian: bricks & concrete meet the eye. The Hoosier is gone from this co-op.
Green & Black’s organic dark chocolate bars – usually $3.69 a bar at B’foods – were on sale at 2 for $6.00. At Krogers, the exact same bars were on sale at 2 for $5.00.
I tried to purchase organic pumpkin seeds. The bulk bin states: “Pumpkin Seeds Organic (Raw, Hulled) Current supplier information available upon request.” I tracked down a staffer, asked about the supplier (country of origin). She had to track down someone else and about 5” later I was informed the pumpkin seeds were from China. I asked if there were any truly organic pumpkin seeds from the US; she stated there were not, I could, however, buy US non-organic ones.
There were a lot more Field Day products for sale this visit: this manufacturing company is owned by UNFI and these products are marketed only to its “independently owned natural products retailers” including NCG food co-ops. [xxiva] Field Day’s clever marketing (hover over the icon: “A harvest of natural and organic products, carefully selected to deliver exceptional quality and value.”) enmeshes the terms “natural” and “organic,” suggesting an equality to the terms which is not born out by US regulation fact; use of the term “organic” on a food label requires adherence to strict standards, not required of foods labelled as “natural.”
UNFI states:
Manufacturing & Branded Products Divisions
Our Field Day® brand is primarily sold to customers in our independent natural products retailer channel (“independent retailers”), and is meant to serve as a private label brand for independent retailers to allow them to compete with conventional supermarkets and supernatural chains which often have their own private label store brands.
Our subsidiary, Woodstock Farms Manufacturing, specializes in the international importation, roasting, packaging and distribution of nuts, dried fruit, seeds, trail mixes, granola, natural and organic snack items and confections. We sell these items in bulk and through private label packaging arrangements with large health food, supermarket and convenience store chains and independent owners. We operate an organic (USDA and QAI) and kosher (Circle K) certified packaging, roasting, and processing facility in New Jersey that is SQF (Safety Quality Food) level 2 certified.
Our Blue Marble Brands portfolio is a collection of 15 organic, natural and specialty food brands representing more than 650 unique products. We have a dedicated team of marketing, supply chain and sales professionals that have a passion to energize our retail partners and provide consumers with affordable Non-GMO foods. Our unique Blue Marble Brands products are sold through our wholesale division, third-party distributors and directly to retailers. [xxivb]
(See the list of all UNFI Blue Marble brands and Woodstock products.)
UNFI also owns Select Nutrition, which “distributes a wide variety of brands, which includes vitamins, supplements, sports nutrition products, and personal care items that cater to the growing demand for natural and organic products.” [xxivc]
Many of the Field Day products at B’foods were conspicuously marked with sales’ stickers and significantly out-performed competing brands: e.g. bionaturae Organic Balsamic Vinegar (17 fl oz) was $6.69; Field Day’s Organic Balsamic Vinegar (16. 9 fl oz) was only $4.99. Spectrum Organic Olive Oil (1 liter) was $18.99; Field Day’s Organic Extra Virgin Olive Oil (1 liter) was only $12.99.
However, one must be a clever detective to determine what is in Field Day products, where they come from and who certifies that they are, indeed, organic, especially if they include imported ingredients. [xxivd]
For my family’s tastes, not safe enough to eat with labeling that is designed more to obscure what’s in the food, than to inform.
These are UNFI’s Field Day brand, non-organic olives. The label states “Produced in the USA with domestic and imported ingredients.” Are these foreign olives which are then canned in the USA? What percentage of the ingredients are from the USA, from an (unknown) foreign country(ies)? This label leaves me with too many unanswered questions. I would not buy this product for my family.
For example, the Cornucopia Institute, in its Organic Dairy Report (updated 06/09/16), gave UNFI/Woodstock Fluid milk products/butter a 2 Cow Rating (“2 Cow Rating PRIVATE-LABEL (good, but questionable long-term commitment to organics) Note: information based on ”industry sources.” None of the two cow rated private-label brands were open enough to participate in the study.”); a 5 Cow Rating – the highest – is “Outstanding.” [xxive]
Cornucopia clarifies:
Private-label, or store-brand, dairy products rated with two cows are sold by grocers or distributors who have the obvious desire of wanting to grow their presence in the organic marketplace. Unfortunately, there is an inherent limitation in private-label organic products: organic consumers tend to want to know where their food is coming from and how it is produced, and private-label products are anonymous by their nature. [xxivf]
BLOOMINGFOODS’ FUTURE DEPENDS UPON ITS MEMBER-OWNERS
High prices at B’foods are forcing local shoppers to seek lower prices elsewhere in town. My adjunct professor friend has turned in her B’foods share and no longer shops there. Many people I spoke to complained about the outrageous prices at B’foods. They are taking their business elsewhere: Kroger’s, Lucky’s (on April 1, 2016, Kroger’s & Lucky’s signed a partnership agreement [xxivg]), Sahara Mart, Marsh’s, Trader Joe’s in Indy, the Saturday Farmers Market.
Since UNFI also distributes to “…conventional supermarkets, which include mass market chains…” one must check to see if Kroger’s, Lucky’s, Trader Joe’s, Walmart’s and other supermarkets and mass market chains are being serviced by UNFI …and offering lower prices for the same items one sees at B’foods. [xxivh] (In fact Kroger was “…included among [UNFI’s] wholesale customers for fiscal 2015…”) [xxivi]
There is great, unvoiced fear in Bloomington, about the future of Bloomingfoods. Many assume that when Whole Foods opens next year, the co-op will go belly-up; local families will lose their investments; Bloomington will lose a treasured 40 year-old community institution.
Since Whole Foods and Bloomingfoods both utilize the exact same national distributor – UNFI – and both have primary distribution agreements with UNFI (B’foods, indirectly through its membership in NCG), it won’t really matter very much to industry giant UNFI which store stays, and which goes …or if both decide to duke it out across the College Mall parking lot (See B’foods’ GM’s blogpost re. the new WFM coming to Bloomington, here.)
Who it should matter to are the homeowners & residents of Bloomington, and the Member-Owners, shoppers and local investors of Bloomingfoods. Bloomingfoods is a local treasure! Like our Honest Weight Food Co-op in Albany, NY, local families started B’foods 40 years ago; it is worth fighting for! …but – only if local Member-Owners truly own and control the co-operative corporation. Otherwise, Bloomingfoods is just another corporation (minus the “co-operative”) – like Whole Foods – retailing a majority of natural (and organic) foods from industry-giant UNFI …with a sprinkling-in of local & regional organic farm products and foods to give it that “green veneer.” [xxivj]
This visit, I still shopped at B’foods because I am a loyal co-op supporter and I love the Bloomingfoods community. But, I was very hard-pressed to be able to afford enough food to last the week.
WHERE IS THE “CO-OPERATIVE” IN BLOOMINGFOODS “CO-OPERATIVE CORPORATION?”
It appears that B’foods financial troubles are not just due to the Lucky’s moving into town, the Kroger’s remodel, and “the competitive landscape.” [xxivk] This co-op no longer has Member-Owners running the show!
Given NCG’s poor assessment of the co-op’s financial condition in June, 2015, CDSCC’s consulting advice – consolidating Board & Management control – must be thrown into question. However, B’foods’ 2016 Board minutes indicate that they are still actively working with CDSCC and its CBLD program. [xxivl] [also see iiia]
It does appear that it is the Board of Directors (supported by the GM) which is functionally, if not legally, in control of this co-operative corporation. The Member-Owners have been relegated to the role of shareholders in a traditional, top-down American corporation. They are not functioning like the Owners of a co-operative corporation business.
In addition, the local, Member-Owner, family money invested in Bloomingfoods is now in jeopardy. There were Elm Heights neighbors who loaned money to B’foods! Imagine how all the investor-families in Bloomington feel! In this small, tight-knit community, this fact may serve to pull the rug out from under any future, local financial & community support this co-op could have expected. Local investors, in addition to local shoppers – the community itself – may turn their backs.
This one fact alone can spell the death-knell for any local, community-based organization, citizen group, nonprofit …or food co-op.
As a Member-Owner of B’foods, I have personally & sadly witnessed this sister US food co-op to HWFC being assimilated, co-opted, if you will, with power & control silently removed from the local, Member-Owners. Once that control was lost, decisions were out of their hands.
I do not, at all, like the results I see. I do not like the reduction in the quality of the food supply that has resulted. I do not like the industrial, impersonal, cookie-cutter result. I do not like the explosion of national “natural” products and processed “natural” foods, and the reduction in locally-produced, organic food and farm products. I do not like the virtual elimination of Member-Owner benefits, as well as the many staff cuts. I do not like the deceptive food labeling which is more & more evident each time I visit Bloomingfoods.
I do not like a food co-op maintaining the veneer of a Member-Owned, Member-Operated food co-operative …when it dissolved its Member-Owner Labor Program; removed Member-Owners from floor operations; re-labelled “Owners” as “volunteers;” negotiated a union contract which appears to have contracted-away Member-Owner power & control; diluted or virtually eliminated Member-Owner voting power with the addition of non-working “shareholders;” and has eliminated Member-Owners from substantive decision-making and control in the co-operative corporation.
I especially do not like the evidence I see of a Board & Management axis which has, silently, step-by-step, removed Member-Owner control and threatened their legal Ownership of the co-operative corporation.
(Since we here at HWFC in NYS are still working to regain our power & control, this is not at all meant as a condemnation of Bloomingfoods’ Member-Owners. Just a wake-up call.)
If a bylaws’ vote is, indeed, planned for the B’foods’ October 19, 2016 Annual Meeting, that may well seal the coffin on yet another American independently-owned, Member-Owned & Operated food co-operative corporation. The legal rights of local families to own & control their co-operative and thereby, their food supply, will have been eliminated: ownership, by the local Member-Owners, dissolved.
IMHO, Bloomingfoods’ Member-Owners need to call an emergency Special Membership Meeting and take back their power and control. Trouble is, Board & Management ended their “owner-volunteer program” (Owners lost legal standing) and, I believe, the current bylaws have already empowered all (12,000?) shareholders to have a vote. This means the number of signatures required on a petition just to call a meeting would be daunting (assuming 12,000 shareholders, B’foods bylaws require 10% to call a Special Member Meeting or 1,200 signatures); reaching quorum at the meeting would take “…the presence of ten percent of members entitled to vote at any meeting…” or 1,200 voters!
This would require huge & concerted grassroots advocacy efforts! (Review [iia] and Bloomingfoods’ bylaws.) Bloomingfoods’ Member-Owners also need a local attorney or two: with knowledge of Indiana co-operative corporation law.
B’foods’ Member-Owners need to secure the draft copy of the new bylaws now and attend that bylaws’ meeting in August (I could not find a date for the meeting), en masse. Just what are the proposed changes; will they secure Member-Owner control of the co-operative corporation …or remove it?
If there is not enough grassroots’ will to call an emergency Special Member Meeting and if bylaws’ changes are legally enacted at the October 19th Annual Meeting which further erode Owners’ control, there are, to my way of thinking, only two important questions to answer:
- Are the Owners of Bloomingfoods “owners” in name only: “Paper-Tiger Owners?”
- Can Bloomingfoods continue to be deemed a “co-operative corporation” or is it, more correctly, functioning merely as a “corporation” trying its best to look like a co-operative?
IS HWFC OUT OF THE WOODS YET?
No. Not by a long shot.
But, I came away from last week’s visit to Bloomingfoods heartened, with this thought: HWFC Member-Owners we did an awesome, phenomenal thing defending our co-op! We did the right thing and don’t you doubt that for a second! We stopped our co-op from being “assimilated” as a co-op clone; one of many, high-end, chic-chic, expensive “food boutiques” being replicated across the United States. We retained local power and control of our co-operative corporation! We defended our own! We did it co-operatively, with energy, tenacity, hard work, organization, communication-against-all-odds, skill and vision!
Grassroots advocacy at its finest!
I wish this kind of success upon Bloomingfoods’ Member-Owners!
With that success, however, comes a price.
We here at HWFC know we are the owners of a (not-so-small) business in the private sector. The economy is worsening. We have a large debt load.We have a budget to pass.
We were left in a financially precarious position by the former Board and Management, which, in addition to listening to the expensive advice of national .coop consultants, spent down our savings as fast as they could. We, like B’foods, were advised to expand with, not one, but two operations in 2013: our brand new, very expensive store on Watervliet and the Empire State Plaza outlet. In addition, we would have had more than $1 million in the bank right now but for the harmful agenda and fiscal waste of that former Board and the former LT (top Management). [xxv]
We would have had a cushion.
That cushion is gone.
If we do not maneuver correctly, right now, HWFC will be one of the US co-ops which closes its doors: like Bloomingfoods’ Elm Heights store, its flagship Kirkwood store and its kitchen commissary.
HOW DO WE PRO-ACTIVELY PREVENT SUCH A FUTURE FOR OUR CO-OP?
We acknowledge that our budget is very tight. There are only so many pieces to our HWFC financial pie. Therefore, the only answer right now is cost cutting. If we can’t pay our fixed bills, we are in jeopardy. If we don’t sell enough goods, we are in jeopardy. If we raise our prices we are in jeopardy. When the economy gets worse, we are in jeopardy. This is not the time to expand operations or increase employee benefits! If we do that, we risk the closure of HWFC, sooner rather than later. Then no one will have a job, because our doors will be shut. We, the member-owners, through poor fiscal planning, will have secured the closure of our own co-op.
ALL Member-Owners may need to take a temporary cut. Member-Owner employees are not exempt from this, as employees at HWFC are (for the most part) also Member-Owners. If we 8% and 24% Member-Owner families take a cut, so must the Member-Owner employees. If there needs to be a reduction, it is being done as a means to keep HWFC’s doors open and preserve the jobs of employees.
However, if we even temporarily reduce Member-Owner discount, we are in jeopardy because we will lose a percentage of the weekly spending power of Member-Owner families, some of whom are, themselves, on very tight budgets.
Will a downturn in the economy – in this, a Presidential election year – and a rise in gas prices force us to raise prices?
Will Member-Owners & shareholders be forced to shop elsewhere, and even turn in their shares, as they have been doing at B’foods? Will the general public silently shift to buying at cheaper, local outlets?
It is likely – given our budget and if there is even a small downturn in the economy – that we will be forced into downsizing our pool of employees. If it is that …or closing our doors permanently… which will you choose?
Formation of an employee union here at HWFC will not prevent employee layoffs, if that is what is required to keep our doors open. Bloomingfoods’ history clearly demonstrates that.
Financially, with every decision, what we must weigh is this: will this financial move result in the closure of HWFC’s doors or will it stabilize us and sustain us through the financial mess that was left to us by the previous Board & Leadership Team’s management, supported by their passel of advisors, lawyers, Strategic PR gurus, and national .coop consultants? They positioned us for fiscal weakness! We are forced into rebuilding.
It is now up to us to be thoughtful, creative, and business-minded practical.
WE MEMBER-OWNERS ARE THE BUSINESS OWNERS: THINK LIKE AN OWNER
We HWFC Member-Owners successfully took the first step: we wrestled back control of our locally-owned and operated food co-operative from an out-of-control Board working hand-in-hand with out-of-control upper Management and a bunch of highly-paid, national .coop “experts.”
We “stopped the bleeding.”
Given this important fact, our fiscal problem is still the same as Bloomingfoods: we must reduce overhead and spending.
We are the owners and it is our responsibility to do so.
Can we take the next step? To stabilize our budget, cut costs, reduce overhead, and develop a plan so that in two-three years we can begin implementing the dreams we all envision and imagine so clearly right now?
If we do not take this prudent and necessary step, we will, assuredly, sooner rather than later, see the closure of our co-op.
We worked hard – co-operated together! – to get to that emergency Special Membership Meeting in November. 720 people: our friends, neighbors, work colleagues and family. Our community. The results have been outstanding with our new Board in place and functional as a team; our Committees revving up, energized; our employees continuing to do good, solid, daily teamwork in our storefront; our Member-Owners working, participating, and buying.
Can we hold firm, work together, and pass a budget which will stabilize us for the future, anticipate a downturn in the economy, tighten our belts, keep employee layoffs and cuts to MLP discounts to a minimum, and keep our food supply high-quality and – as much as possible – organic, nutrient dense, fresh and supportive of local & regional organic farm families and food producers?
This is a tall order.
If we cannot do this, we will face a future like Bloomingfoods. Staff layoffs & downsizing will happen, multiple times. Prices will go up. Food quality will go down. Member-Owner benefits may be entirely eliminated. Member-Owners, shareholders and shoppers will walk: a downward spiral. Will we – like Bloomingfoods – have to work with a national consultant team from NCG to help us out …and live with the results?
IMAGINE THE WORST, PLAN FOR THE BEST
Store closures can happen fast.
Please imagine, for one moment, a future where you pull into our parking lot at HWFC some Saturday morning, and the doors are locked shut with a big For Sale sign taped to them.
I did that at Elm Heights in Bloomington, one week ago. No imagination necessary.
A locally-owned food co-op storefront shuts its doors: Elm Heights, Bloomingfoods, in Bloomington, Indiana.
Where would you go to shop …buy real, local, organic food? Where would you be able to buy what your family needs to eat? To stay healthy? How would you connect up with your community?
Clearly imagine a future with no locally-owned co-op here in Albany.
Is that future a pleasant one for your family?
What do you – individually, as a Member-Owner worker / employee or shareholder – have to do, right now, to prevent this reality?
We are, truly, all in this together. We all have to right the ship. Every single Member-Owner of HWFC – 8% and 24% family workers and employees alike, as well as our 2% shareholders – need to pull together and agree upon a financial plan to secure our future. Then we need to hold to it for 2 – 3 years.
What we are doing here – we HWFC families – is making history in the respected, centuries-old American co-operative movement. We HWFC Member-Owners understand and live what it means to be a member-owned, member-operated food co-op! We get the critical importance of our bylaws and our MLP. We get what it means to (all) own our co-operative together! We proved that in spades by successfully defending it!
We HWFC families are – seriously – walking in the very footsteps of Benjamin Franklin, who is credited with starting the very first American co-operative in 1752! [xxvi]
We families have a responsibility to preserve, for us, now, and for the future, the local, 40 year-old institution that is the HWFC. It is a rare, community resource and treasure! And, more than ever, we need continued access to whole, healthy, nutrient-dense, organic, local food!
I cannot predict where the economy will go. Wild card, not looking good.
However, I, for one, have utter confidence in our families and in our grassroots’ ability to do again what we did on November 30, 2015 and since then: pull together for the common good of our beloved co-operative corporation: the Honest Weight Food Co-op. The co-operation and teamwork we all participated in, since October 23, 2015 is nothing short of amazing and wonderful! We are making national, co-operative history! Let’s all – community-minded, grassroots families – co-operatively do it again and sustain it until we are financially stable, once again.
We are families, helping out other families, to survive and thrive through co-operative means. Years ago, we called it, “self-reliant co-operative:” I help you get what your family needs, you help me get what my family needs, and we work it, together.
SAVE THE FAMILY FARM
Imagine Honest Weight Food Co-op is a farm: and, in a way, it is an “urban farm” with its intimate connections to actual local, family farms and their families. Wouldn’t you, your partner or your spouse, your kids, the grandparents and aunts & uncles, do anything necessary to save the family farm?
~~~
Member-Owners, please see the Meeting Announcement and read & print off the Budget Presentation.
See you at the Annual Budget Membership Meeting on June 27, 2016 at FUUSA, 405 Washington Avenue, Albany, NY: dessert potluck at 5:30pm, Membership Meeting from 6:00-8:30pm. Room for as many Member-Owners as show up! No RSVPs required!
© Laura Hagen
~~~~~
The condition upon which God hath given liberty to man is eternal vigilance; which condition if he break, servitude is at once the consequence of his crime and the punishment of his guilt.
John Philpot Curran [xxvii]
~~~~~
[i] http://blogs.hoosiertimes.com/govtracker/wp-content/uploads/2016/04/Bloomingfoods-Press-Release.pdf
Click to access Bloomingfoods-Press-Release.pdf
[ii] http://wfhb.org/news/bloomingfoods-closing-elm-heights-store/
[iia] 1. Critical Legal Information by Kate Doyle and
2. A Letter to Shareholders by Kate Doyle.
[iii] http://www.cdsconsulting.coop/cooperative_governance/
[iiia] Bloomington Cooperative Services. Board of Directors January Meeting. Thursday,
January 28, 2016. I. E. “Opportunities for CBLD training were announced (board members
should consult writeboard Board Participation in CBLD Workshop signup).”
See: http://www.bloomingfoods.coop/wp-content/uploads/2014/09/January-2016-Minutes.pdf
Bloomington Cooperative Services. Board of Directors February Meeting
Thursday, February 25, 2016. 5. iii. “Beebe spoke with Leslie and Paula about looking at the bylaws and getting the template from NCG. 1. Leslie says CBLD has a new template out in the next 10 days and compare.”
See: http://www.bloomingfoods.coop/wp-content/uploads/2014/09/160225-BOD-Minutes-DRAFT-4emp-2.pdf
Bloomington Cooperative Services. Board of Directors May Meeting. Thursday, May 26th, 2016 Committee Reports, Governance Committee 4.D . iii. “The CDS template will be used for bylaw review.”
See: http://www.bloomingfoods.coop/wp-content/uploads/2016/07/160526-Minutes-v2.pdf
Bloomington Cooperative Services. Board of Directors May Meeting. Thursday, June 30th, 2016 Minutes. Under “Bylaws Review Update: 3.c. ii. “Beebe has mapped the proposed changes of the first 4 articles to the CDS template.”
See: http://www.bloomingfoods.coop/wp-content/uploads/2016/08/160630-BoD-Minutes-Draft-v2.pdf
[iiib] This is part of the actual text of a motion passed by the Board on October 20, 2015.
[iv] http://www.honestweight.coop/uploads/MemMtgs/1460062524_MemMtg_2016-04-17_Agenda.pdf
[iva] See the CBLD ‘Fresh Start’ Bylaws Template, Article III: Member Meetings, 3.2 from CDS Consulting Co-op. Please note: CDSCC changed the electronic copy of its ‘Fresh Start‘ Bylaws, archived on its website, as of early 2016. Article III, 3.2 has been changed. The ‘Fresh Start‘ Bylaws our Member-Owners were provided with by two CDSCC consultants in 2015, and which were also located on CDSCC’s website in 2015, contain the text quoted in this blog.
[v] http://www.bloomingfoods.coop/banner_slider/locations-2/kirkwood-announcement/
[vi] http://www.bloomingfoods.coop/417-board-announcement/
[vii] https://beta.prx.org/stories/152745/details
[viia] http://www.bloomingfoods.coop/members/
[viib] Posted October 9, 2014 to Exopermaculture by blogger and Bloomingfoods Member-Owner Ann Kreilkamp at https://www.exopermaculture.com/2014/10/09/bloomingfoods-co-op-crisis-act-ii-unite-bloomingfoods-unite-marches-to-board-meeting/
http://indianapublicmedia.org/news/bloomingfoods-employees-voice-concerns-coop-board-72940/
http://theroadgoeson.com/articles/article/why-do-i-shop-at-bloomingfoods and search http://theroadgoeson.com
https://www.exopermaculture.com/2015/06/23/iconic-bloomingfoods-co-op-starts-to-right-its-ship/ and search https://www.exopermaculture.com/
https://electronpencil.com/category/bloomingfoods/
https://www.facebook.com/nancy.hiller.31?fref=ts
https://electronpencil.com/category/nancy-r-hiller/
The Ryder called , by Robert F. Arnove,
[vii] Arnove, Robert F,. Chancellor’s Professor Emeritus of Education at Indiana University. The Unionization of Bloomingfoods Part I. The Ryder, December 21, 2014. See here.
Arnove, Robert F., Chancellor’s Professor Emeritus of Education at Indiana University with Peter LoPilato. The Unionization of Bloomingfoods Part II. The Ryder, February 8, 2015. See here.
See this July 23, 2015 article Bloomingfoods Workers Ratify Their First Union Contract at the UFCW 700 website: http://ufcw700.org/2015/07/23/bloomingfoods-workers-ratify-their-first-union-contract/
Also, see this blogpost: http://theroadgoeson.com/articles/article/dear-bloomingfoods-please-dont-hire-union-busters
And see: http://yourbreadandbutter.com/news/436-bloomingfoods-workers-win-voice-on-the-job-with-local-700
[viid] Glab, Michael G. The Electron Pencil. From the April 20, 2015 post, Hot Air Food Facts.
[viie] Change.org, although using the domain suffix “.org” reserved for nonprofits, is not a nonprofit. It is a for-profit, multi-million dollar, multi-national corporation. Charges have been levied that is is being used in astroturf operations by corporations, big business and their Strategic PR firms (wishing to appear like real grassroots) and that it gathers and sells its users’ information for profit.
In 2012 Change.org “decided to change its advertising policy to allow for corporate advertising, Republican Party solicitations, astroturf campaigns, anti-abortion or anti-union ads and other controversial sponsorships, according to internal company documents.” See the October 22, 2012 HuffPo article with a response from Change.org founder, Ben Rattray.
See this February 28, 2012 Change.org exposé article, Change Dot Biz, by Clay Johnson; he uses the term “industrialized activism” for this type of deceptive behavior. Also begin researching the citations referenced at Wikipedia.
[viif] See Dr. Taylor’s Change.org page here.
[viig] WFHB Podcast. Host: News Director Joe Crawford interviewing Dr. Keith Taylor, April 14, 2015. Listen here.
NB: Much as I greatly admire and respect academicians & researchers, Dr. Taylor, an academic researcher who studies co-operatives, got this one wrong. He did not conduct thorough research on the matter; furthermore, at least in this podcast and on the Change.org website, he did not disclose professional affiliations which are pertinent to the issues at hand.
Dr. Taylor’s bio from Indiana University’s website states, in part:
Keith has a PhD in Human and Community Development, and a Masters in Public Administration. His research interest is in better understanding the processes of institutional, community and economic development, specifically through optimization of organizational self-governance…
He was, seemingly, unaware of the U.S. grassroots movement to keep the ownership and control of US food co-ops vested in the local community, with the families who are the legal Owners of these food co-operatives (his “optimization of organizational self-governance,” one would presume).
Among the food co-op grassroots, it is a well-known fact that U.S. independently-owned, locally-owned and controlled, community food co-ops are under attack!
Being a scholar and studying co-operatives in the ivory tower of academia, does not assure that you are “plugged in” to grassroots movements, nor that you will necessarily come up with the right answers to a community-based issue.
Dr. Taylor’s recommendation that Bloomingfoods bring in “outside help” in a time of crisis was assisted by a grassroots Change.org petition, which he initiated and which garnered 161 signatures, along with many heartfelt, Bloomingfoods’ Owner-Member comments (one is asked to trust that these “online petition names” are not false; one of the many charges lobbed against online petitioning, with groups like Change.org).
As already noted, Change.org is a for-profit, multi-million dollar, multi-national corporation which is masquerading as a grassroots, nonprofit organization; it is deceptively using the domain suffix “.org.” Any grassroots advocate worth their salt already knows this fact or would have checked this organization out (on any number of U.S. websites which post the yearly IRS 990s of legitimate nonprofits) before mobilizing people and beginning community activism. In addition, Change.org has had charges levied, that it is now a platform being utilized by corporations and their Strategic PR firms in astroturf operations (fake grassroots) to garner (illegitimate) community support for corporate issues.
Corporate astroturfing and infiltration of legitimate community groups has been clearly documented as taking place within the US food arena, including in the “natural” and “organic” food worlds. [See [viia] and [12c]]
In the April 14, 2015 WFHB podcast, cited above, and to his Change.org petitioners, Dr. Taylor specifically recommended that the “outside help” Bloomingfoods bring in, was NCG (National Coop Grocers). That message, along with the 161 signatures on his petition, was conveyed to the B’foods Board and the Board speedily complied; NCG conducted a “peer review” of Bloomingfoods.
Not two months later, NCG had assumed (temporary) control of Bloomingfoods!
Had Dr. Taylor conducted diligent, academic research, he would have found Mimi Yahn’s articles, written and published in January & early February, 2015: several months before his Change.org petition began. These articles conveyed clear warnings to the Member-Owners of U.S. food co-ops to, in particular, avoid utilizing outside national consulting help from .coop “experts,” including CDS Consulting Co-op and National Co-op Grocers (NCG).
Where else would one search for grassroots articles ushering in: dire warnings about threats to participatory democracy, undue corporate influence and bitter fights to wrestle legal control of the co-operative from the Owners, all taking place at U.S. Indy food co-ops? In Indy magazines, of course, which is exactly where Ms. Yahn’s articles may be found. [See Mimi Yahn: January 14, 2015 Losing Our Principles at The Commons Online; February 4, 2015 Searching for Democracy at the Putney Co-op at VTDIGGER.org; and February 11, 2015 Still Searching for Democracy at Putney Food Co-op at The Commons Online.]
The doors of academia – and its publications – do not readily open to a grassroots’ message; however Dr. Taylor, as a researcher of community-based co-operatives, should know that, and should have also conducted research in the Indy media arena.
In addition, Dr. Taylor did not disclose in this same podcast and on his Change.org website relevant professional relationships.
He is the co-author of an academic research paper, published in the August 2014 International Journal of Co-operative Management, entitled Unique Expectations of Cooperative Boards: taking on the challenges of the democratic enterprise, which he co-authored with Arthur Sherwood. See here, here, here, here and here.
Dr. Taylor and Professor Sherwood were academic colleagues at the Indiana University Vincent and Elinor Ostrom Workshop on Political Theory and Policy Analysis, when they co-authored this article in 2014.
Art Sherwood, a former Board member and past President of Bloomingfoods is also a CDS Consulting Co-op consultant, and has been since 2009; during his tenure on Bloomingfoods’ Board he was also a CDSCC consultant. (See the author’s articles, listed at the Cooperative Grocer Network, CDS Consulting Co-op and Researchgate.net. The above-mentioned article with Dr. Taylor was not found on all lists.)
Professor Sherwood was, therefore, at the time when he and Dr. Taylor co-authored and published their academic article in 2014, a consultant with CDS Consulting Co-op.
CDS Consulting Co-op and NCG have a working relationship, the full extent of which is unknown to the public. CDSCC names NCG as an affiliate on its webpage footer. Both .coop corporations, CDSCC and NCG, sponsor the Cooperative Grocer Network, along with the National Cooperative Bank (see page footer); CGN is a nonprofit, 501(c)6 trade association. A large number of NCG member and affiliate co-ops are also current or former clients of CDSCC, including Bloomingfoods: see here and here.
Was CDS Consulting Co-op advising Bloomingfoods’ Board & Management during the period Dr. Taylor began his petition at Change.org and recommended to the Board that NCG come in and do a “peer review?” It appears they were and have been for a period of (unknown) years. A review of available Board minutes finds, in the July 2, 2015 minutes, when B’foods was “tightening its belt” with NCG (temporarily) at its helm:
6. c. v. C8 —Governance Investment —CDS Consulting Status
1. CDS consultant Michael Healy offered consult on hourly basis or discounted rate for remainder of the year.
2. Kristina Wiltsee motions that we compensate Michael Healy on an hourly basis for the remainder of the year, and Dedaimia Whitney seconds the motion. All in favor, motion passes.
It is also quite noteworthy that Bloomingfoods is one of only 30 or so “Featured Clients” on CDSCC’s website.
Dr. Taylor’s actions in recommending that NCG – in specific – be brought in to Bloomingfoods must be viewed in light of these newly-uncovered facts.
He had a responsibility to disclose these professional relationships when he was conducting grassroots, community organizing and mobilizing people both online and in Bloomington in 2015.
Dr. Taylor would be best served if he continued his academic research of co-operatives and left the “optimization of organizational self-governance” – i.e. the real community organizing at U.S. independently-owned and operated, community food co-ops – to the Member-Owners and families who actually OWN their food co-ops, are defending their food co-ops, and who actively practice participatory democracy at their co-ops.
Dr. Taylor did a disservice to those 161 Change.org petition signers and to all U.S. independently-owned and operated, community food co-ops – which are struggling for their very “independent” existence – by not doing his due-diligence research, by not first investigating Change.org, and by not being upfront about his professional relationships from within the national .coop business world. [See also [viij] and [xiic]]
[viih] See Dr. Taylor’s Change.org petition.
[vii i] Bloomingfoods, Bloomington Co-operative Services, Inc. website: see the April 17, 2015 Announcement.
[viij] Think “grassroots advocacy” isn’t for sale as a “service” to a .coop food corporation with a pocketbook (BIG food and BIG Organic included)? Corporations and their Strategic PR firms have been buying “grassroots” for years. See [12c], below.
Co-op Member-Owners are advised to become acquainted with terms, well-known for more than 20 years by national grassroots’ advocates, community organizers and nonprofits battling corporate greed & influence: astroturf, co-opted, skunkworks, stinktanks, sockpuppets and industry front groups. See this Teletruth webpage of newnetworks.com, one of the top consumer rights’ websites on the issues of telecommunications and broadband, for term definitions.
The Center for Media and Democracy has excellent primers on astroturfing, front groups, a front group portal and industry-funded organizations.
Stacy Malkan Co-director U.S. Right to Know, “a nonprofit organization working for transparency and accountability in our nation’s food system,” has a hot-off-the-press June 30, 2016 article, Monsanto Fingerprints Found All Over Attack On Organic Food. The story begins with Academics Review, described as “a non-profit led by independent academic experts in agriculture and food sciences,” co-founded by “two independent professors” who kept the “corporate [funding] fingerprints hidden.”
U.S. Right to Know also has an excellent 2015 report about front groups in food: Our Investigation of Big Food and its Front Groups.
Friends of the Earth has also issued an excellent 2015 report Spinning Food How Food Industry Front Groups and Covert Communications Are Shaping the Story of Food.
Read the Center for Food Safety’s May 2013 report, A Guide to Food Industry Front Groups.
In a 2013 article, Dr. Mercola discloses how 50 Industry Groups Form a New Alliance to Manipulate Public Opinion About Junk Food, GMOs, and Harmful Additives: formed by food and biotech trade groups.
[viik] Please see the Herald Times article, Bloomingfoods Asking National Grocery Group for Assistance Amid Changes.
[viii] http://www.bloomingfoods.coop/wp-content/uploads/2014/09/AnnualReport.2015.ElectronicCopy.pdf
[viiia] http://www.heraldtimesonline.com/news/local/bloomingfoods-meeting-hints-at-more-layoffs/article_cf4184c7-a923-552b-9a5c-09449c1015a9.html
http://indianapublicmedia.org/news/bloomingfoods-layoffs-expected-business-declines-83509/
http://www.heraldtimesonline.com/news/local/bloomingfoods-co-op-announces-layoffs-amidst-increased-competition/article_aad9b893-840e-5b11-befe-ced2d02eacb9.html
Posted to Exopermaculture by blogger and Bloomingfoods Member Ann Kreilkamp, on June 23, 2015. See, https://www.exopermaculture.com/2015/06/23/iconic-bloomingfoods-co-op-starts-to-right-its-ship/
http://indianapublicmedia.org/news/bloomingfoods-hires-general-manager-92167/
[ixa] http://www.ufcw.org/2015/08/07/bloomingfoods-workers-ratify-their-first-union-contract/
See Facebook: Unite Bloomingfoods.
[ixb] See Bloomingfoods News: A Message from Paula Gilbertson.
[x] http://www.globalauctionguide.com/indiana-auctions/bloomingfoods-surplus-auction-s-267373.html
[xa] http://indianapublicmedia.org/news/bloomingfoods-hires-general-manager-92167/
See: Bloomingfoods General Manager Update
See Bloom Magazine, April/May 2016: Tony Alongi: Bloomingfoods General Manager
Member-Owners of the Hanover Food Co-op in NH started an independent, grassroots organization, after disagreements with co-op Management & Board over firings at their co-op, and other issues. See Concerned About the Co-op (CATC), here: https://www.facebook.com/concernedaboutthecoop
[xb] http://www.grubstreet.com/2010/09/the_park_slope_co-op_makes_mor.html
[xi] Lushin, Laddie, Esq. Co-op Member Labor Programs Under the Fair Labor Standards Act: A Matter of Economic Reality. Braintree, VT, 2009, page 9. See: http://www.eastendfood.coop/wp-content/uploads/2014/10/Laddie-Lushin-article.pdf
[xii] http://www.bloomingfoods.coop/wp-content/uploads/2015/12/151018-AnnualMeetingMinutes2015-DRAFT-1.pdf
[xiia] http://www.uwcc.wisc.edu/whatisacoop/History/#Development_in_the_United_States
http://www.historyhome.co.uk/peel/economic/owencoop.htm
https://scholarworks.iu.edu/journals/index.php/imh/article/view/10250/14211
Knupfer, Anne Meis. Food Co-ops in America. Ithaca: Cornell University Press, 2013. (See: http://www.cornellpress.cornell.edu/book/?GCOI=80140100986350)
[xiib] See GRASSROOTS ACTION: Board Messages Don’t Add Up Part I and GRASSROOTS ACTION: Board Messages Don’t Add Up: Part II.
[xiic] See my January 7, 2016 blogpost, GRASSROOTS ACTION and the Times Union ARE OH SO HELPFUL! and its section, THE SECRET AP NEWS ARTICLE: HWFC MLP ISSUE IS (SECRETLY) LEVERAGED TO GO NATIONAL.
See Professor Sharon Beder’s articles, Public Relations’ Role in Manufacturing Artificial Grass Roots Coalitions, Industry Conjurers and her list of publications, here.
Also, view this 2015 TEDx Talk by journalist Sharyl Attkisson, entitled Astroturf and Manipulation of Media Messages, here.
The Center for Media and Democracy’s project, Sourcewatch is a good place to begin your education about astroturfs and other terms used to describe corporate hijacking of real grassroots efforts, especially involving Strategic PR & Lobbying firms.
Newnetworks.com, a highly-respected national, grassroots group, advocating for consumer-based telecom issues, has accurate, concise definitions for: astroturf, co-opted, skunkworks and stinktanks, here.
Think (the appearance of) grassroots advocacy & activism isn’t for sale to those corporations which can afford to pay? Think again. Read this webpage of a top-rated D.C. “integrated public relations and public affairs agency,” advertising its “grassroots services,” when “lobbying alone isn’t enough:” seventwenty strategies:
Grassroots
Mobilize your constituents and be heard on the Hill.
Lobbying alone isn’t enough.
Every year, more than 100,000 bills are introduced at the state and federal level. Lobbying alone can’t always ensure your organization’s viewpoint is represented before lawmakers. To shape the legislative and regulatory outcomes that impact your organization and industry, Congress and state legislatures need to hear from “real world” experts—their constituents. Grassroots advocacy is the art and science of identifying citizens, educating them about the issues that matter and mobilizing them to take desired actions—when and where you need them, tapping their political power to influence legislative outcomes.
[xiid] http://cdsconsulting.coop/case_studies/featured.php
[xiie] See http://www.foodcoopinitiative.coop/about/model and
http://library.cdsconsulting.coop/ (view page footer)
[xiig] January 14, 2015: Losing Our Principles by Mimi Yahn. Click here.
February 4, 2015: Searching for Democracy at the Putney Co-op by Mimi Yahn. Click here.
February 11, 2015: Still Searching for Democracy at Putney Food Co-op by Mimi Yahn. Click here.
[xiii] http://partners.ncga.coop/sites/default/files/2016%201st%20Half%20NCG%20Program%20Introduction.pdf and https://www.ncg.coop/find-co-op and http://www.bloomingfoods.coop/national-cooperative-grocers-helping-bloomingfoods-be-better-grocers/ and https://www.ncg.coop/partners-find/ny/honest-weight-food-co-op
[xiv] https://www.unfi.com/ and http://www.theshelbyreport.com/2015/08/20/ncg-signs-primary-distribution-agreement-with-unfi/
http://honestgreen.com/Pages/AboutUs.aspx
[xiva] https://www.last10k.com/sec-filings/unfi/0001020859-15-000165.htm
http://honestgreen.com/Pages/AboutUs.aspx
[xivb] https://www.tallan.com/company/client-stories/united-natural-foods/
[xv] http://www.businesswire.com/news/home/20151102005138/en/United-Natural-Foods-Extends-Distribution-Partnership-Foods
[xvi] https://biz.yahoo.com/e/150930/unfi10-k.html;_ylt=AwrBTzihoyNXGcoAhKxXNyoA;_ylu=X3oDMTBybGY3bmpvBGNvbG8DYmYxBHBvcwMyBHZ0aWQDBHNlYwNzcg–
[xvii] IBED and http://www.benzinga.com/analyst-ratings/analyst-color/16/04/7824229/united-natural-foods-downgraded-to-underweight-at-morgan#ixzz479SygNGH
[xviii] https://www.organicconsumers.org/essays/organic-monopoly-and-myth-natural-foods-how-industry-giants-are-undermining-organic-movement
[xix] https://www.ncg.coop/newsroom/ncg-signs-primary-distribution-agreement-unfi
http://www.progressivegrocer.com/industry-news-trends/wholesalers-distributers/unfi-named-primary-distributor-national-coop-grocers
[xixa] http://partners.ncga.coop/sites/default/files/2016%201st%20Half%20NCG%20Program%20Introduction.pdf
[xx] http://cdsconsulting.coop/case_studies/bloomingfoods-market
http://www.cdsconsulting.coop/consultants/art-sherwood
Click to access cooperative_strategic_leadership.pdf
[xxa] https://www.facebook.com/CDSConsultingCoop
http://www.putneycoop.com/bylaw-changes/
[xxi] https://www.exopermaculture.com/2015/06/23/iconic-bloomingfoods-co-op-starts-to-right-its-ship/
http://www.cdsconsulting.coop/contact/
[xxii] http://strongertogether.coop/
[xxiia] http://history1900s.about.com/library/photos/blywwiip211.htm
[xxiib] On June 8, 2014, WFM moved into space from our former Sears store at a mall in Albany, NY, too, less than a year after we moved to our brand new storefront on June 19, 2013. See: http://www.bizjournals.com/albany/news/2014/05/19/whole-foods-pinpoints-opening-date-for-albany.html and http://www.honestweight.coop/page/history-18.html.
[xxiic] Posted October 9, 2014 to Exopermaculture by blogger and Bloomingfoods Member-Owner Ann Kreilkamp at https://www.exopermaculture.com/2014/10/09/bloomingfoods-co-op-crisis-act-ii-unite-bloomingfoods-unite-marches-to-board-meeting/
[xxiii] http://www.bloomingfoods.coop/bloomingfoods-board-of-directors-announce-consolidation/
[xxiiia] http://blogs.hoosiertimes.com/govtracker/?p=10220
[xxiiib] https://www.exopermaculture.com/2016/04/29/bloomingfoods-and-me/
http://www.heraldtimesonline.com/news/local/bloomingfoods-elm-heights-grocery-to-close-in-may/article_26d64686-0c88-11e6-a031-9b3d1f1feff7.html?mode=comments
Click to access OwnerMeetingQA.pdf
[xxiv] https://nrhiller.wordpress.com/2013/07/03/a-hoosier-for-bloomingfoods-elm-heights/
[xxiva] http://www.fielddayproducts.com/fd_retailers
http://finance.yahoo.com/q/pr;_ylt=A0LEVyHFW2BX.tsA6jVXNyoA;_ylu=X3oDMTEyNHE5czNjBGNvbG8DYmYxBHBvcwMyBHZ0aWQDQTAyNzVfMQRzZWMDc3I-?s=UNFI
http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=241113902
[xxivb] https://www.last10k.com/sec-filings/unfi/0001020859-15-000165.htm
[xxivc] http://www.selectnutrition.com/about-us/select-story
[xxivd] http://www.fielddayproducts.com/fd_values#organic1
[xxive] http://www.cornucopia.org/dairysurvey/index.html
Also, see this blogpost, “Horizon, Aurora, and Woodstock Organic Milk get the Smackdown from Cornucopia” http://eatdrinkbetter.com/2008/10/29/horizon-aurora-and-woodstock-organic-milk-get-the-smackdown-from-cornucopia/
[xxivf] http://www.cornucopia.org/dairysurvey/FarmID_173.html
[xxivg] http://www.progressivegrocer.com/industry-news-trends/national-supermarket-chains/kroger-luckys-market-announce-strategic-partnership
[xxivh] https://www.last10k.com/sec-filings/unfi/0001020859-15-000165.htm
[xxivi] https://www.last10k.com/sec-filings/unfi/0001020859-15-000165.htm
[xxivj] https://www.organicconsumers.org/essays/organic-monopoly-and-myth-natural-foods-how-industry-giants-are-undermining-organic-movement
[xxivk] http://www.bloomingfoods.coop/wp-content/uploads/2014/09/AnnualReport.2015.ElectronicCopy.pdf
[xxivl] http://www.bloomingfoods.coop/board-meetings/
Click to access 182_michel-sharing_stories.pdf
[xxv] At least $500,000 of which was spent on consultants and lawyers by the former Board!
[xxvi] http://www.uwcc.wisc.edu/info/history/ben_franklin.html
[xxvii] See the Thomas Jefferson Foundation, Inc. and Suzy Platt, ed., Respectfully Quoted, p. 200, #1054.
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