Indiana Food Co-Op Closes Storefronts: Cooperative Movement, Take Notice!

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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

Owned and controlled by the people they serve, cooperatives have a long and respected history in the United States. The following are fundamental aspects of a consumer co-operative corporation: contributions of family resources by owning a share; working in and shopping at the co-operative; exercising local, operational control; and shared voting rights.[i] Yet at one food co-op in Indiana, we find Member-Owners’ ownership and control of their community food co-op being threatened.

This is a story about Bloomingfoods Market & Deli (B’foods), which was founded in 1976—40 years ago!—by a small number of shareholders. It’s a story I know well, because I am a member of B’foods. I lived in Indiana for several years; so of course I joined the co-op!

Bloomington, a beautiful, friendly, mid-western university town, long supported the flagship (and funky) downtown B’foods store. In 2013, B’foods added two additional storefronts (Elm Heights and a small location at Ivy Tech Community College) as well as a Commissary Kitchen.

With Indiana’s lower cost of living, B’foods was long able to keep prices low. I was always impressed with the large selection of local, inexpensive Amish foods and I had no difficulty purchasing local, organic fruits, vegetables, pastured eggs and meat there. B’foods was always proud of its connections to local farms.

Stunned at Changes to Bloomingfoods

For Lease sign
“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

In March I visited Bloomington, after a two year hiatus. I was stunned at the changes. The first unpleasant discovery was the February 2015 closure of B’foods’ flagship downtown location, a once well-loved storefront.

Next, what shocked me were the skyrocketing prices and, in tandem, Member-Owner discounts had been so reduced they were virtually meaningless. Gone was the large selection of local Amish foods. Bacon (not pastured) and organic butter were no longer affordable. Meat I had never seen stocked there before, from unknown (perhaps national?) suppliers was in abundance, while I could find no local, grass-fed, grass-finished beef…mind you, this is in the heart of the Midwest!  When I inquired about where I could find the local, grass-fed beef that used to be readily available at B’foods, I was told I had to special order it.

No longer did fresh vegetables’ labels state their country of origin, nor did packaging for bulk nuts and dried fruits. I had to search to find products labeled “organic” and “locally produced.” There were many more Field Day® products available, which is a private label of the national food distributor United Natural Foods, Inc. (UNFI).

And local, fermented sauerkraut? It had skyrocketed to $10.89/pint! I couldn’t believe my eyes, knowing that I was in Indiana, which is home to Amish, Mennonite, German and Swiss families for whom sauerkraut is a basic food group!

B’foods’ storefronts were each glossy, ordered and bright, or otherwise very “chichi.” The inner aisles were neatly stocked and filled with colorfully packaged, mostly ‘natural,’ processed and packaged products. Every aisle was picture-perfect. The stores looked a lot more like gentrified high-end food boutiques than food co-ops, whose intimate connections to local farms and fresh, organic, affordable, whole, non-processed foods have always been a U.S. food co-op hallmark.

I thought to myself, “Just when did the display of food take a higher priority over the content of food?”

I talked to Member-Owners, shoppers and several staff. When I asked a staff member what was going on with the change in atmosphere, they said: “I don’t know man, it’s almost like we were taken over or something.”

Online 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 non-responsive.[ii]

Staff felt so mistreated by Management and the Board, that unionizing activities were begun in the Fall of 2014. A two-part series in the local magazine, The Ryder, called The Unionization of Bloomingfoods Part I, by Robert F. Arnove, Professor Emeritus of Education at Indiana University and Part II, by Professor Arnove with Peter LoPilato, tells the story of B’foods’ labor issues.

National Co-op Grocers (NCG) Assumes Temporary Control

The situation at this formerly thriving and vibrant food co-op, beloved by Bloomington families, had become so dire that, in June 2015, Bloomingfoods’ operations were (temporarily) assumed by acting General Manager (GM) Paula Gilbertson and Chief Operations Officer C. E. Pugh, both from National Co-op Grocers (NCG). This major change to operations meant that Member-Owners of Bloomingfoods had lost control of their locally-owned, locally-operated food co-op.

Downsizing and restructuring of B’foods by NCG was implemented as the search for a new GM began. Many employees were laid off, including significant numbers of managers. The media stated more layoffs were anticipated; that in fact happened.  B’foods’ 2015 Annual Report called for “reducing the workforce by 25%.” Many believe B’foods had over-extended itself by opening not one, but two new outlets in 2013.

B’foods’ drastic staffing cuts were implemented despite a newly forged contract with the United Food and Commercial Workers International Union (UFCW) Local 700. Many therefore feel disappointed that the union promised more than it delivered. Further, I was told the (non-local) union rep is often unavailable, making problem-solving difficult. So, the union representation that promised to be a boon and support to (non-managerial) staff did not materialize as anticipated.

What Happened To B’foods’ Member-Owner Labor Program?

 It was also during the summer of 2015, that B’foods’ Member-Owner Labor Program, known as the “owner volunteer program,” was discontinued. Member-Owners were downgraded to “volunteer” status and were no longer allowed to work in the stores.

In April, I emailed B’foods for more information about this change and received this reply from Jean Kautt, Marketing and Member Services Manager:

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 … 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….”

I bristled when I read Jean’s response, which showed that not only had the word “owner” disappeared, but the owners themselves had disappeared from day-to-day operational control of the cooperative.[iii]

In the B’foods October 2015 Annual Meeting minutes, “NCG Consultant Paula Gilbertson and the Bloomingfoods’ Consumer Services Department” stated:

“…we are introducing the Bloomingfoods Ambassadors Program to allow our owner-members to volunteer with [other] organizations in–line with our ENDS statement for a discount/incentive at Bloomingfoods.”

More recently, evidence has surfaced that the UFCW union and B’foods’ Board and Management cooperated and, perhaps, contractually agreed to removing Member-Owners from the floor and from operations. The B’foods’ June 5, 2016 document, Bloomingfoods Special Member Meeting: Consolidation Announcement Q &A, states:

“Q: What about 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.”

These moves to reduce Member-Owners to volunteers and thus remove Member-Owners from operational control drastically change the control and ownership of the B’foods cooperative corporation.

Another B’foods Visit Shows “Hoosier” Feel Is Gone From B’Foods!

I was in the Hoosier State again in June and had a chance to see what had changed at B’foods in the three months since my previous visit. The changes were shocking.

Another B’foods storefront had closed its doors – the Elm Heights store – AND the Kitchen Commissary had been shut down! The Elm Heights’ closure stunned everyone.  I didn’t hear a peep about it during my March visit; just three months later, it was gone.

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).

At a public meeting held on April 27, 2016, the Bloomingfoods Board told the public that the bank had agreed to take “interest-only payments” on the co-op’s loans. Further, 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.

I asked staff about the removal of the beautiful, authentic Hoosier Cabinet and display area in the (Westside) café, with handmade crafts, pottery, local authors’ books, and local art displayed on the walls. I was told that the staff member who used to manage these display areas had been let go; the position had been eliminated.

The café, formerly cheerful and welcoming, is now stark and utilitarian: bricks & concrete meet the eye. The Hoosier is gone from this co-op…in more ways than one.

The Future for Bloomingfoods

Bloomingfoods Co-op is in trouble. It lost 20 percent in revenue, in part, when Lucky’s (a Colorado-based natural foods chain) moved into town last year, and when Kroger’s remodeled to include more natural and organic foods. Next year Whole Foods is opening a store at the old Sears store at the mall. Already, people who can no longer afford B’foods have turned in their share and instead shop Krogers and the Farmers Market, a trend almost certain to continue.

There is great fear in Bloomington about the future of B’foods. 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; or the co-op will be bought out or subsumed by a bigger, national corporation.

National Targeting of Independent Food Co-ops

Local ownership and control of many U.S. food cooperatives—not just B’foods—is under attack. Mimi Yahn, a food co-op Member-Owner and independent journalist tells a very similar tale about The Putney Food Co-op in Vermont. In three articles: Losing our Principles, Searching for Democracy at the Putney Co-op, and Still Searching for Democracy at the Putney Co-op, Ms. Yahn reveals disturbing threats to her co-op’s democratic principles and its bylaws, and a wider pattern of “corporatization” at other American food co-ops.

The trend that is becoming increasingly apparent to me is that individuals who are invested in their local co-op – the local homeowners, residents and families – and who are also deeply invested in their local, hometown community, are losing control of both their food co-ops AND their food supply. This attack on food co-ops appears to be coming from the national level in the form of a top-down agenda targeting grassroots, local Member-Ownership and control of independently-owned food cooperatives in the U.S.

It is noteworthy that both Bloomingfoods and the Putney Food Co-op have been or are clients of CDS Consulting Co-op (CDSCC), a nationally advertised co-op consulting firm, with national interests and ties. In fact, Bloomingfoods is a featured client on CDSCC’s website. Food co-ops that have relied upon CDSCC’s consulting services are inherently represented by interests not necessarily based in or springing from the local communities they claim to assist.

In the case of B’foods, the outcome of these changes is clear: B’foods no longer has Member-Owners running operations because their legal rights to do so were systematically and silently removed. The B’foods Member-Owners have been relegated to the role of “shareholders,” as would be seen in a traditional, top-down American corporation. Though the veneer of a food co-op remains, it is stripped of the legal say-so of its local Member-Owners and thus of the true local food culture and values.

The Future of Local, Independent Food Co-ops Depends On You!

I came away from my last visit to Bloomingfoods heartened, because I know that the path taken by B’foods is not the one taken at all co-ops in the U.S.. One need not look further than our own Honest Weight to see that Member-Owners can remain vital to the day-to-day operations of a local, independent co-op.

What the lessons from B’foods and elsewhere show is that if you care about your local food co-op remaining local, it is critical that you become a Member-Owner and be persistent in standing up for the rights of Co-op Member-Owners to ensure the preservation of your community-based co-op. Your input and speaking up for your rights at your co-op really matters! The cooperative movement runs on participatory democracy principles; if you do not get involved and stay involved, somebody may start making decisions that you wake up to find you just don’t like or agree to. All you have to do is pick something to do…and stay involved. What’s not to like? You meet great people…and, it’s all about food!

At foods co-ops, we are families helping other families to survive and thrive through cooperative means. Years ago we called it a “self-reliant co-operative,” meaning I help you get what your family needs, you help me get what my family needs, and we do it together. As Woody Allen said (and he is New York’s own, so we’ve got to quote him, upriver from Manhattan as we are) “Showing up is 80 percent of life.”

This article is dedicated to Mimi Yahn.

[i] For more information  about Member-Owner operational control of a co-operative corporation (at least in New York State), see the following two documents by Kate Doyle, Esq., a Member-Owner who is also an attorney and the current Treasurer of Honest Weight :

  1. Doyle, Kate. Critical Legal Information here
  2. : A Letter to Shareholders here:

[ii] See in particular these three Bloomington blogs:

Anne Kreilkamp’s Exopermaculture here

Daniel Bingham’s The Road Goes On here

“Big Mike’s” The Electron Pencil here

[iii] See: Lushin, Laddie. Co-op Member Labor Programs Under the Fair Labor Standards Act: A Matter of Economic Reality. Braintree, VT, 2009..here

 

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Laura Hagen is a former Executive Director of a community non-profit and has years of experience teaching grassroots advocacy and communication, as well as community organizing. Laura, who has been an active Honest Weight Food Co-op Member-Owner for 38 years, began blogging about her experiences as a Member-Owner in October 2015. She invites you to join her dedicated readership and learn even more about MSG from her post, GRASSROOTS ACTION: “They Added WHAT To My Food?! No, dude!” No. 1: GMOs, MSG & Senomyx. Laura asks that, in a time-honored, grassroots tradition, you forward this HWFC Co-op Voice article on to your own personal food co-op network across the country. https://hwfcinfohub.wordpress.com/2016/09/15/grassroots-action-they-added-what-to-my-food-no-dude-no-1-gmos-msg-senomyx/