By Matt Stanley/General Manager
Published in the Co-op’s Fall 2015 Newsletter
Our store has accomplished many things that set us up for a successful expansion. We have a board of directors aligned around the idea of building our co-op’s capacity as a grocer, a strategic plan that serves as our guiding document, and we have an engaged and growing ownership that shares what they’d like to see in a new expanded store. Our current store continues to grow sales and improve our operation, all in preparation for our evolution into a larger platform grocer. Staff, me included, continues to develop their capacity as leaders and operators of a natural foods store too.
Dollars and Cents
But no matter how much strategic alignment or community excitement we create, much of our project’s success will depend on our ability to raise financing. Fortunately, co-ops have unique opportunities to raise capital. Indeed, one of the seven cooperative principles is “member (owner) economic participation.” To raise capital, co-ops use common shares, owner loans, and preferred shares in addition to traditional loans from banks and credit unions. Owner investments help both with actual capital and with showing lenders that our owners are committed to supporting this business’s growth.
“Own a Grocery Store With Us” Equity Drive
As you may know, a fully paid ownership is $200 per household. Most owners pay this in annual $25 installments. By making payments early and adding more owners, we can raise $10,000 in owner equity in October! Everyone can participate in one of the following ways:
1) Sign up or encourage a friend to sign up and pay the full equity amount of $200.
2) Owners paying in installments can pay off the remaining balance on their $200 share.
3) Owners who have already paid off their $200 (or any owner) can pay an additional $100 in owner equity as allowed by the state of Oregon.
Anyone helping us reach our October equity goals in any of these ways will receive a free Astoria Co-op Grocery cotton tote bag as a thank you! Upon purchasing a full share you’ll receive your Astoria Co-op Grocery share certificate. And those who pay off their full $200 share can enter to win their own personal chef for an evening: Marco Davis, the fabulous chef from our farm to fork dinner events.
The capital that we raise in October will be used to strengthen our balance sheet as we move into expansion mode. Our normal monthly equity is around $3,500, so this will take a lot of help from a lot of owners to reach our goal. October is National Co-op Month too, so this is a great time to become fully committed to your local food co-op. It’s not just about the money; the success of this equity drive will show a future lender just how much community support our store has.
In the near future we’ll begin using the other methods used by many co-ops to raise capital. We’ll be sharing more information with you next year regarding owner loans and preferred shares. In the meantime, we’ll be hard at work developing our expansion plan and searching for a site.
Owners loan the Co-op money and the Co-op pays it back with interest according to a predetermined schedule of payments. Our Co-op used owner loans in 2008 to make our move to the current location.
Preferred Shares, or Class B Stock
Preferred shares, unlike common shares, earn a dividend for owners who purchase them and may be purchased in quantity. When and how they are redeemed will depend on the Coop’s financial situation. Thanks to everyone who pays some equity during the month of October. Simply shopping at the Co-op and spreading good word of mouth about our store helps too. Cooperatively (and with a lot of hard work and careful planning), I know we can own a new grocery store!