Many reasons to celebrate co-ops

By Lucas Frerichs, Kim Coontz and Eric Stromberg

The United Nations has declared 2012 as the International Year of Cooperatives, highlighting the immense contributions of cooperatives to global socio-economic development. Additionally, October is National Cooperative Month here in the United States.

Locally, the Davis Food Cooperative is celebrating its 40th anniversary, and Davis Ace Hardware is celebrating its 90th anniversary. Globally, more than 1 billion people in 100-plus nations are members of cooperatives that generate more than 100 million jobs around the world. In California, more than 10 million residents belong to a cooperative of some type.

Cooperatives are diverse. Many people do not realize that credit unions are financial co-ops. In the United States, more than 7,250 credit unions supply financial services for 93 million-plus consumers nationwide. Our local credit unions include The Golden1, (the nation’s sixth largest, with assets of more than $6 billion and nearly 700,000 members statewide), USE Credit Union, Travis Credit Union and Yolo County’s locally grown Yolo Federal Credit Union.

At credit unions, the members are the owners. At a traditional bank, profits go to shareholders. Since credit unions are not-for-profit, the money earned is primarily returned to the members in the form of lower fees, better loan rates, etc. Some credit unions do have requirements for membership such as residing or working in a particular county.

An agricultural cooperative, also known as a farmers’ co-op, is usually a purchasing or producer co-op, and sometimes a combination of the two. Agricultural cooperatives are found throughout the food chain, from inputs to marketing to consumption. They help increase economies of scale in production and marketing, enabling members to increase their incomes and quality of living.

In the United States, agricultural co-ops have nearly 3 million members and do more than $100 billion of business. Many leading brands — especially in fruit juices — are cooperatives. Dairy co-ops are also very common, including some major brands. They may look like big corporations, but they are very different in how they distribute profits and control.

These cooperatives are familiar to many of us; Ocean Spray, Land O’ Lakes, Florida’s Natural, Sunkist, Sun-Maid, Cabot Creamery, Organic Valley and Blue Diamond. Founded in 1897 as the Davisville Almond Growers Association, Blue Diamond is headquartered in Sacramento and is the world’s largest tree nut producer, with more than 3,000 members throughout California.

Purchasing and shared service co-ops are often thought of as a way to help small businesses survive, so it may be surprising to learn that some of the biggest name brands are actually marketing co-ops. They may look like a big corporate chain at first glance, but rather than a top-down structure that funnels power and profits to absentee investors, the company is owned and democratically controlled by its members, who operate one or more locations. Examples include Ace Hardware, which has 4,400 stores in a wide range of sizes, and Best Western, which is the world’s largest hotel chain, with 4,000 hotels in 80 countries.

Co-ops also have been successfully utilized as a model for child care across the country, as well as here in Davis. The Davis Parent Nursery School is a longtime Davis institution that has provided outstanding preschool services for thousands of Davis youngsters in its 63 years of operation.

Cooperatives also offer benefits to artists and craftspeople. By working together, artisans can gain marketing advantages, reap quantity discounts on supplies through joint purchasing, and share studio space and equipment. In Davis, The Artery is an artist-owned and -operated cooperative gallery of fine art and contemporary crafts. Founded in 1974, The Artery’s mission is to provide public access to high-quality artisan-made work created by its 70 members.

Cooperative housing is not a new concept. This country’s first housing cooperative was organized in New York City in the late 1800s. Today, more than 1 million units of cooperative housing are scattered throughout the United States. Housing cooperatives make up one of the largest sectors of cooperatives in California. They are set up as corporations and are owned by members who receive services from the corporation in the form of housing. Each member owns a share in the corporation, which entitles them to occupy a unit of housing. Davis also boasts a wide array of co-op housing, including the 60-unit Dos Pinos Housing Co-op, among others.

Retail cooperative food stores number approximately 350 in communities across the United States. Over its first 40 years, the Davis Food Co-op has grown from an idealistic counter-cultural alternative — a buying club that operated out of a garage in Central Davis — to become a Davis community icon. Today, the DFC is a $20 million-per-year business that sells a unique array of organic, sustainable, conventional and locally sourced products, and employs nearly 150 employees in a 26,000-square-foot building that it owns. In turn, the Co-op is owned by its nearly 11,000 members.

In Davis, we are fortunate to have a long and rich history with co-ops across all sectors, whether they represent housing, agriculture, financial, food or art. Many Davis residents are involved with co-ops in their daily lives, whether they recognize it or not. We encourage you to educate yourselves further in this International Year of Cooperatives.

Happy National Co-op Month, and please remember to “go co-op!”

— Lucas Frerichs is a member of the Davis City Council, Kim Coontz is the executive director of the Davis-based California Center for Cooperative Development and Eric Stromberg is the general manager of the Davis Food Co-op.