GRASSROOTS ACTION and La Montañita Member-Owners ARE POWERFUL!

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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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FOR IMMEDIATE RELEASE: UPDATE, BREAKING NEWS STORY, Thursday, October 6, 2016: Tonight in Sante Fe, NM at 5:30pm La Montañita Food Co-op is the sponsor of a Town Meeting for “questions, answers, and productive dialogue.” The invited guests are: Marilyn Scholl, the co-founder and current Director of CDS Consulting Co-op (CDSCC) and C.E. Pugh, the Chief Operating Officer (COO) for National Co+op Grocers (NCG).

A similar event occurred last night at the La Montañita Food Co-op in Albuquerque, NM. There are no updates as of yet.

It is noteworthy that this co-op is the very same co-op which has a very large group of Member Owners who are Taking Back Their Co-op  and who are, right now, community-organizing an emergency Special Membership Meeting.

La Montañita Member-Owners, go here to sign the petition to legally call for a Special Membership Meeting of the Member-Owners of La Montañita Food Co-op.

In a very surprising move, these two separate “.coop” corporations, National Co+op Grocers and CDS Consulting Co-op, are appearing together on the same stage at these two Town Hall meetings, to “focus on discussing what’s been going on recently at La Montañita:” special guests of the Board of La Montañita.

From La Montañita’s website:

There are some member-owners who strongly disagree with some of our retail business initiatives and decisions, and a campaign has been started, which calls for a special meeting to replace the current member-owner elected Board of Directors and remove our general manager, Dennis Hanley.

The La Montañita Co-op Team is here to ensure member-owners, customers and the community-at-large that it has not forgotten its mission/vision: La Montañita believes in the shared benefits of healthy food, sound environmental practices and a strong local economy. And in the markets we serve, La Montañita provides increased access to, and purchase of, healthy food options for our diverse customer base.

On the website of the Member-Owners of La Montañita, under the heading Follow the Money, we find a different perspective:

In truth, our Co-op’s net income was very strong until 2013—an average of $649K in profit per year. We were not in financial trouble until we expanded three years ago. Guided by CDS Consulting, our board decided to open a new store on Albuquerque’s Westside, located in a strip mall near a Walmart.

That store loses ~$500,000 per year. Overall, it appears that La Montañita has lost between $2 million and $5 million due to an expansion that CDS Consulting, NCG, and UNFI profited from. So why are the GM, board, and senior staff blaming La Montañita’s financial challenges on something other than the real cause?

A National Takeover…One Co-op At a Time
Across the country and at La Montañita, co-ops are changing their policies, products, and personnel. Over and over again, those decisions can be traced back to the influence of CDS Consulting and NCG…

In a September 21, 2016 Press Release from National Co+op Grocers, NCG Responds to Santa Fe-Based “Take Back the Co-op” Campaign Claims, issued two weeks before this NCG/CDSCC visit to Albuquerque, C.E. Pugh states:

Iowa City, IA — National Co+op Grocers (NCG) — a business services co-op for 150 independent, community-owned and locally-governed co-ops nationwide — today is responding to claims from the Santa Fe, New Mexico-based “Take Back the Co-op” campaign.

“We believe strongly in the cooperative principles and respect the rights of co-op owners everywhere to voice their hopes and concerns for the future of their co-op,” said C.E. Pugh, Chief Operating Officer, NCG. “However, we feel this campaign grossly mischaracterizes NCG, its purpose and its relationship with its member and associate co-ops, as well as the benefits offered by CDS Consulting Co-op and UNFI. We take issue with these false claims and want to provide clarity…”

It is noteworthy that NCG’s PR people felt it necessary to to issue a national press statement to the media about one of its member co-op’s Member-Owners grassroots’ fight to maintain control & ownership of their co-op. Have Member-Owner issues at U.S. independently-owned food co-ops become that much of a concern to this .coop corporation, founded in 1999 and “..represent[ing] 143 natural food co-ops operating 196 stores in 38 states, with combined annual sales of $1.8 billion…”? [1]

Interesting that an NCG corporate Press Release found it necessary to defend not only its own corporation, but two others, as well: that of CDS Consulting Co-op and – a brand new corporate player to this particular New Mexico “Town Meeting” food co-op story – United Natural Foods, Inc, UNFI.

NCG’s primary distributor is United Natural Foods, Inc., (Nasdaq: UNFI), founded in 1976, with whom it signed a primary distribution agreement in 2015, good through at least July 2021. NCG and UNFI have had a contractual relationship for ten years, since 2006. [2]

UNFI’s net sales for fiscal year 2015 were $8.18 billion. [3]UNFI is the largest multi-billion dollar wholesale distributor of organic and “natural” foods in the U.S….” [4]

A 2009 Organic Consumers Association article characterizes UNFI as a “near-monopoly wholesaler.” [5] Four years later, in 2013, Wenonah Hauter, the Executive Director of Food & Water Watch, in an interview about her new book Foodopoly: The Battle Over the Future of Food and Farming in America, stated, “(UNFI) now controls the distribution of organic and natural products. Publicly traded, the company has a contract with Whole Foods and it is the major source of these products for the remaining independent natural food stores…” [6] This includes U.S. Member-Owned, independently-owned & operated, community food co-ops. [7]

Perhaps it is no coincidence that La Montañita, a member of NCG and the second largest food co-op in the entire United States, and its “La Montañita Co-op Team” – its Board and Management – are receiving immediate corporate support from NCG…

…and La Montañita’s rightfully-angry, grassroots OWNERS are, instead, the recipients of their very own NCG corporate headquarters Press Release. [8]

Corporations don’t send two of their top people – one,  a co-founder and the current Director of the entire corporation, and the other, the Chief Operating Officer – to a couple of simple “Town Meetings.” It’s clear that NCG and CDSCC are there to address the uprising of the Member-Owners of La Montañita Food Co-op: the Member Owners who are Taking Back Their Co-op.

Why did both of these U.S. .coop corporations find it necessary to fly their people out to New Mexico and – together – take to the co-op podiums in Albuquerque and Santa Fe? This certainly confirms rumors we have heard from multiple U.S. co-ops in attendance, that La Montañita was on the lips of NCG Board members at the NCG Annual Meeting last week in Minneapolis.

But just what does CDS Consulting Co-op have to do with rumblings on the NCG Board? What’s the connection between these two separate .coop corporations?

Any why are they confronting this Member-Owner uprising …together?

The website of the Member Owners who are Taking Back Their Co-op poses an answer in an article entitled A National Takeover…One Co-op at a Time:

‘NCG will provide the vision, leadership and systems to catapult a virtual chain of food co-ops to a position of prominence in the natural foods industry.’
– NCG Mission Statement

But how do you create a chain when you’re dealing with unique, autonomous member-owned co-ops? Some group would have to go to those co-ops and install the same bylaws, board policies, and the same kind of GMs. They’d have to promote the same produce, standardize all cereal aisles, and most importantly: disenfranchise the actual owners. They’d enforce uniformity, but convince co-ops it was their choice to do so.

A ten-year contractual relationship between NCG and UNFI is a matter of public record; not, perhaps, surprising that NCG would defend its primary distributor and industry-giant UNFI in its Press Release. However, it does raise the question: Is there also a contractual relationship between NCG and the eight-year old CDS Consulting Co-op, of which the public is unaware? [9]

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       It’ll be very, very interesting to hear reports about these two “Town Meetings” from the grassroots, OWNERS of La Montañita themselves.

If you go visit NCG’s website, La Montañita (Nob Hill) is currently one of the featured co-ops on their homepage: see here and here.

ALERT: Bloomingfoods Member-Owners, in Bloomington, Indiana, this same article, on the website of the Member-Owners of La Montañita, A National Takeover…One Co-op at a Time, has a section about your co-op, Bloomingfoods.

Please, everybody, send your Member-Owner good energy and powerful grassroots’ vibes to fellow Member-Owners in Albuquerque & Sante Fe who are now “the dragon being poked” at this US food co-op!

For “dragon” reference, please see this November 5, 2015 Albany, NY Times Union article, Honest Weight Food Co-Op Reverses Decision on Member Workers, by Tim O’Brien, containing the words of HWFC Member-Owner Jules Harrell (she, the heroine of the NYS DOL FOIL coup campaign):

Harrell said the [Board’s] actions [reversing a decision to stop members from working in the store to gain discounts], while welcome, may not undo the damaged confidence members have in the leadership.

“They have already poked the dragon,” she said.

How appropriate that foils and a fire-breathing dragon (“snuffling in baffled rage and injured greed” ) appear in this U.S. food co-op epic tale and saga …yet again. [10] This is the stuff of folk legend …yet it is real life for the families & Member-OWNERS, invested in saving American independently-owned, locally-operated, community food co-ops. Grendel, Grendel’s mother and that dragon, antagonists of the hero Beowulf from the epic tale, Beowulf (Nowell Codex, ca. ~ 1000 A.D.), have nothin’ on us and our (organic carrot) spears!

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© Laura Hagen

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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

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[1] See this NCG document, National Co+op Grocers
Partnership Opportunities January – June 2016
.

[2] See the August 20, 2015 The Shelby Report.

[3] See this form 10-K report from the September 30, 2015 UNFI SEC filings.

[4] See this January 31, 2013 article, Domestic Fair Trade: A Plea to UNFI and Whole Foods for Justice by Ronnie Cummins, founder and International Director of the Organic Consumers Association, and Dave Murphy, founder and Executive Director of Food Democracy Now!

[5] Cummins Ronnie. The Organic Monopoly and the Myth of “Natural” Foods: How Industry Giants Are Undermining the Organic Movement. Organic Consumers Association, July 8, 2009. See here.

[6] Karlin, Mark. Our Food Is Being Hijacked by Monopolizing Corporations. Truthout, February 27, 2013. See here.

[7] Though not directly on topic, you are encouraged to read yesterday’s – the October 5, 2016 – New York Times Magazine Food Issue Can Big Food Change?, and the article by Michael Pollan, called Why Did the Obamas Fail to Take on Corporate Agriculture? Note Mr. Pollan’s references to “Little Food;” something we independently-owned, community food co-ops know a little something about!

[8] This corporate Press Release flew to Albuquerque and did its job. See these two media hits, both involving Albuquerque local reporter, Dennis Domrzalski, who – clearly – utilized this NCG Press Release and who – clearly, twice – expressed his bias against the La Montañita Member-Owners and their issues; particularly shocking for a reporter operating in the Indy Media field.

This same reporter also got significant facts wrong. Cooperative Development Services (http://www.cdsus.coop/home) of St. Paul, MN and Madison, WI, is a not-for-profit corporation founded in 1985. “CDS consists of two organizations exempt under Internal Revenue Codes Sections  The activities of Cooperative Development Services, Inc. are classified as exempt under Section 501c6 and the activities of Cooperative Development Fund of CDS are classified as exempt under Section 501c3  The 501c3 organization is classified as a public charity…” See here: the 2012 IRS Form 990 for Cooperative Development Services, Inc. and here: the 2014 IRS Form 990 for the Cooperative Development Fund of CDS. Both organizations list the same corporate address in Madison, WI.

CDS Consulting Co-op, of Putney, VT  (http://www.cdsconsulting.coop/), a .coop corporation, was founded on July 20, 2008.

The predecessor of CDSCC, according to co-founder Marilyn Scholl, is CDS: see here and here, (go to 6′ 56″). On CDSCC’s website: “Like many organizations in its infancy, CDS Consulting Co-op started with one consultant working in collaboration with Cooperative Development Services in St. Paul, Minn. … CDS Consulting Co-op became a cooperative in 2008 after a mutually beneficial 21 year affiliation with Cooperative Development Services.

[9] CDS Consulting Co-op and National Co+op Grocers have a working relationship, the full extent of which remains unknown to the public.

A large number of NCG member and associate co-ops are also found listed as clients of CDSCC.

CDSCC names NCG as an affiliate on its webpage footer (along with CoMetrics, Cooperative Grocer Magazine, the Food Co-op Initiative and, possibly (it is not clear), the International Cooperative Alliance.

Both .coop corporations, CDSCC and NCG, sponsor the Cooperative Grocer Network  (formerly know as Co-operative Grocers’ Information Network, CGIN), along with the National Cooperative Bank (NCB) (see page footer). The Cooperative Grocer Network publishes the Cooperative Grocer Magazine.

CGIN is a not-for-profit, 501(c)(6) trade association, chartered in 1998. The CGIN website states: “In 2007, CGIN contracted with National Cooperative Grocers Association to assume responsibility for the management of CGIN.NCG, a “business services co-operative”, managed CGIN until 2011, when the contract was moved to Triangle Park Creative, which also published the Cooperative Grocer Magazine for NCG. The Cooperative Grocer Magazine, still published by “Triangle,” has been, since 2012, a publication of CGIN, now re-named the Co-operative Grocer Network. See CGN history here and membership information here.

A March 11, 2015 article in the international Cooperative News, entitled US Co-op Grocers are Sharing Data for Mutual Benefit, interviewing NCG Chief Executive Robynn Shrader and acting Chief Executive Tim Ferguson of CoMetrics (another partner with NCG, offering a shared data platform for NCG member co-ops) states, “The NCG has partnered with Cooperative Development Services [sic] and the National Co-operative Bank [and the NCB Development Corporation] for Food Co-op 500, an initiative to start-up new food stores.” [emphases added]

The Food Co-op 500 “a program to increase the number of retail grocery cooperatives from the current 300 to 500 in 10 years” and which was founded in 2005, led to the formation of a new 501(c)(3) not-for-profit in 2010, the Food Co-op Initiative, with the subheading, New co-ops start here.

Founding partners of the Food Coop Initiative include National Co+op Grocers, CDS Consulting Co-op, Cooperative Development Services, National Coop Bank, National Coop Bank capital impact, USDA Rural Development and the Blooming Prairie Foundation.

[10] Tolkien, John Ronald Reuel, ed. Christopher Tolkien. Beowulf  A Translation and Commentary, together with Sellic Spell. London: Harper Collins, 2014. The quote is taken from the publisher’s Book Overview on its U.K. webpage. Please see here, here and here.

May this American Indy food co-op saga eventually include the honest, generous and pleased Hrothgar bestowing gifts…

…or not. Participatory democracy has no room for kings, be they despotic …or benevolent.

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2 thoughts on “GRASSROOTS ACTION and La Montañita Member-Owners ARE POWERFUL!

  1. Pingback: GRASSROOTS ACTION: INVITATION (RSVP) REQUIRED for some to Cast Vote at Bloomingfoods’ 40th Annual Meeting – hwfcinfohub

  2. Pingback: GRASSROOTS ACTION: “My Food Comes From WHERE?! Oh, there!” No. 2: Who Owns Organic – hwfcinfohub

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