The Garden City Food Co-op is making a grocery store where the PEOPLE are as important as the profit. They’re down to the wire, and they need your help. They need investors.
Members of the St. Catharines community saw a need for a full-service grocery store for residents of the downtown core. At present, the farmers market runs three days a week, and after that, there is a Giant Tiger and not much else. For people who are pedestrian-only residents, they are essentially living in a food desert, right here, smack dab in the middle of one of the most prolific agricultural areas in Canada.
Meetings were held in church basements and soon, a grass-roots co-op initiative was born. The idea is that member-owners, who will direct the operation and offerings of the store, and people who invest will be shareholders, being paid out dividends annually. The Garden City Food Co-op will be a full-service store ‘for the people’, and will promote local farming by carrying local farmers’ produce. That is, if enough people catch on to this amazing idea and INVEST!!
In order for the store to open, they need to acquire $500 000 towards their capital investment campaign. Class B shares are pulling out an annual 2.9% dividends on a $1000 investment. That beats a GIC! To date, they’ve raised $177 000 raised and have over 700 members. The response has been wonderful, but there is only one month left to go.
The Niagara Local interviewed Mark Shantz, current President of the Board of Directors, and Sandy Middleton, Chair of Marketing, at the Garden City Food Co-op to learn more about the exciting opportunity for downtown residents and what it means to become a member.
TNL: How did the Garden City Food Co-op come to be, and what inspired the idea?
MS: The Garden City Food Co-op initially was born as a meeting of minds from some concerned residents, church leaders, and social service agencies (eg. Start Me Up Niagara) in downtown St. Catharines who began meeting in a church basement to address the problem of the lack of access to a grocery store in the community. The group first approached established grocery stores to inquire whether they might be interested in returning to downtown St. Catharines, and to find out why they left in the first place. The answer was a resounding ‘No!’ to returning until the population density of the community increased.
At this point, the group decided to look into what it would take to open a community-owned grocery store, and meetings soon evolved into an organized grassroots community group, which informally organized under the name ‘Our Community Food Store’. The group approached the City of St. Catharines city council and was granted $2500 to conduct a market study in the downtown area of St. Catharines to examine the level of support and feasibility that a community owned grocery store would have in the neighborhood. With almost 900 responses to the online survey, the results were overwhelmingly positive and this led the group to take the next steps to incorporate as a cooperative grocery store. History was made and the Garden City Food Co-op was born.
Since incorporating, the supporters, volunteers, members and Board of Directors of the Garden City Food Co-op have been actively working toward achieving its two major goals; building its membership to 800 members, and raising $500,000 in investments through a capital investment campaign.
TNL: Who is working on this project?
MS: Currently, the Garden City Food Co-op is an entirely volunteer run organization, with over 700 members and over 100 volunteers. The GCFC has benefited from the support and generosity of many local organizations who have contributed to helping with otherwise costly side projects, such as; marketing (eg. our most recent video for our capital investment campaign was completed for us pro bono by Fourgrounds Media), advertising, signage, food for events, etc. We have also in the past had two employees, a project manager, as well as a volunteer coordinator, who were funded by a grant from the Ontario Trillium Foundation and then later by the GCFC itself.
TNL: What is the unique vantage point or philosophy of the Co-op?
MS: Co-operatives, in general, have many aspects which make them very different from a conventional business. Probably, the clearest distinction is that co-operatives are owned and operated equally by all of their members. Unlike most businesses, which often have a primary owner/operator who’s main goal is to make a profit, co-operatives are governed by a Board of Directors (BOD), which is made up of members who are elected by the co-operative’s membership at the AGM. Co-operatives operate with a philosophy which is called the ‘Triple Bottom Line‘; a balance of emphasis on People (responsibility to the membership and community), Planet (environmental and corporate responsibility), and Profit (financial responsibility). These three priorities are of equal importance in a co-operative. Additionally, co-operatives are bound to uphold the 7 Co-operative principles.
TNL: Tell me more about how the Co-op model works.
MS: Essentially what this means is that the Garden City Food Co-op puts the needs, interests and welfare of its members and community in the top priority. No single individual member benefits any more than any other member. This is a practical working example of how a community can work together and benefit equally.
SM: Each member is also an owner; with a one member, one vote system. We all get to vote for what we want and get to have a say about how we want the store to run. The BOD manages the overall running of the co-op, but it cannot make all of the decisions for its members. Even if one member were to invest heavily, they don’t have more say in how things are done. Again, it’s one member, one vote.
TNL: What does it mean to be a member? Is it preferable to become a member, rather than just a customer at the store? Why?
SM: As I was saying, members are the foundation of the co-op; they are invested in the store as a social enterprise, they have a stake in why they want this store to benefit themselves and their community. You don’t need to become a member or owner to be able to shop at the store, but in order to own it and have a say in its governance, you can become a member. Also, many members will have arms reach preference to not be as involved and that is to be expected. Not everyone will have the same level of enthusiasm or social need to be involved fully.
TNL: Why do you need $500 000 to start up, is that for the building and operating costs? Where did that number come from?
SM: We had a project manager employed through a Trillium Grant, and it was her job to help with the writing of the business plan and create the Pro-Forma budget which is all available on our website to read. Much research was done, but also there is a Co-op handbook that was referred to. We are using the expertise of many many co-ops before us and learning from what they have done. It was based on what was needed for the store in terms of construction, taking a raw space and making it ours. Also, equipment is a huge part of a store with walk-in freezers and fridges, coolers, and displays, POS system. Finally, we have salaries to pay. If we want to get an experienced grocery manager in, to get this up and running, we need to pay them and all of our staff fairly.
TNL: Where will the exact location be?
SM: We are committed to 57 Carlisle, with a five-year lease. The owner would like to build a nineteen story, condo and retail/hotel development (which has not yet been approved by council). If the plans for the landlord’s new development go through, the Co-op will be relocated (at the landlord’s expense), until it is completed, and then the co-op will return to a retail space on the main floor, which will be built to suit. Of course, all of this is pending if we reach our investment goal.
TNL: Is it a new building or refurbished?
SM: Right now, it is based on the shell of an existing building with a newly build interior. We have rough plans drawn out by Quartek Group and a store consultant provided the interior schematics.
TNL: What can consumers / members expect from the Garden City Food Co-op? What farms / products will be available?
SM: The Garden City Food Co-op will be a full-service grocery store, and it will carry the products of many local farmers based on their availability to sell to us. Of course, we need fresh food all year round so we will rely on greenhouse grown and imported food, as needed, based on what our members want.
We can’t say what farms or suppliers we have in mind at this time. There is no formal agreement with any suppliers yet, so it would be premature to say. We do have a very active sourcing committee that has created a large database of local, ethical, organic, wholesome food suppliers/providers of all sizes for year round distribution.
TNL: Can you buy all your groceries at this store, like you would at a grocery store?
SM: Yes; plus shaving cream and personal items, drinks and snack and some pre-made food, frozen and fresh foods, meats, dairy, cheese, and of course, fruits and vegetables. It will be a full-service store!
TNL: What obstacles are the Garden City Food Co-op facing right now?
SM: We have had a few obstacles, namely, the building location. We were told before the last AGM that the landlord had plans to develop a condo, but we knew that he supported the co-op project, especially since no other grocery was interested in coming into the downtown core. People like the idea of a community supported store. We would be less of a competition for the farmers market because many of those vendors would be our suppliers. That is not likely to be the case if a chain opened up. We are in the process of a signed agreement with the landlord that will secure the co-op’s plans, but we still need a lot of investment to reach our goal.
In the Co-op guide, it was recommended that in order for our Capital Investment Campaign to be successful, we needed member base of 800 (we are at 700 now) and that 25% of those members would need to invest. To date, we have less than 10% that has invested. We don’t expect that everyone is able to invest, but from other co-ops experience, 25% is a reasonable goal.
One of the obstacles was that it took almost six months to get the offering statement approved by FSCO (Financial Services Commission of Ontario), they are the ones who decide if we can sell the investment shares. That was a challenging process that ate up a lot of the time we had to sell our shares. You have one year from application start to selling commencement, and our date is Sept 1st, 2016, one month away. We are selling $1,000 and $5,000 shares, each of which will pay a dividend for the investment of 2.9 and 4% respectively, and are calculated annually. They will be paid out in approximately five years, once the store is profitable, but will start accumulating from the date of purchase. It was recommended to us to offer these denominations in order to achieve the goal quickly. We are now at $177,000 sold shares.
TNL: How have you been spreading the word?
SM: We got the word out with our print brochure and video to explain the campaign that was supported by the mayor, as well as, a few other prominent citizens. We have used our website, blog, newsletters, press releases, and all platforms of social media, all delivered by a handful of volunteers to get the word out. We’ve also been to the farmers market, Invest Sundays, and a handful of community events.
So, how can the people of the City of St. Catharines make this store a reality?
There are a lot of ways to get involved; you can invest, you can volunteer, you can become a member.
Becoming a member is easy and costs only $120 for a lifetime.
Investments, are sold as follows:
- Class A Shares are $5000 each and offer 4% annual cumulative dividends.
- Class B Shares are $1000 each and offer 2.9% annual cumulative dividends.