financial – Houghton STAR

The Allegany Harvest Cooperative Market (Co-op) is struggling financially, and without significant improvement in their sales by December, it will be forced to close.

Dr. Sunshine Sullivan, co-op board president, said that one cause for the current situation is the fact that half the members did not renew their membership for another year. Part of the reason for this is that many members have moved out of the area and no longer find it practical to shop at the co-op. But, another reason may be that the co-op does not sell all that they need to keep afloat. Rather than being able to go to the co-op and get all they need, customers often must make a trip there and then to another store, often the Shop-n-Save in Fillmore, to finish buying all their necessary groceries.

Vice-president of the board Peter Meilaender stated that residents in the area were not as interested in organic items in the area as the board members initially thought that they would be. Therefore the number of families included in calculations for weekly organic sales were much lower, resulting in profits that were overall lower than expected.

Another problem the co-op faces is accommodating the diversity in what customers want and need, according to Meilaender. It has proven more difficult than expected to meet the diverse demands of the people in the area. Though some may shop at the co-op just for the fresh produce, others come for the organic food or for various other reasons. Keeping up with these demands continues to be a struggle for the co-op.

Further down the list of difficulties the co-op has faced include issues with its building and with store maintenance. “We’ve had repeated problems with the floor, problems with cooling systems, [and] two changes in management,” Meilaender explained. “All these things cause at least short and sometimes longer problem periods where we have to shut the store temporarily, or sell out (or throw out) stock at a loss, or re-design systems.” In addition to cutting into its sales during closed days, these problems have cost the co-op money that it cannot afford to spend.

The board members’ ultimate goal, in order to remain in business in the long term, is to earn $4000 more in sales per month. For now, the board members have a target amount of $150 to $200 more monthly. This would be enough to hire a part-time manager and alleviate much of the current volunteer duties from the board members.

One of the ideas that board members have implemented to increase income is the practice of allowing co-op members to order and pre-pay for items. That way, members can purchase specific items not on shelves and purchase them in bulk.

Sullivan encourages student participation, saying that “students can help by shopping there more and putting suggestions in the suggestion box.” Although non-members cannot make pre-paid orders, they can advise board members as to which items of which they might like to see more in the co-op. All in all, what the co-op needs more than anything is patronage.

Closure of the co-op, if necessary, will affect many. The store still has loans from the bank and from about forty members who will not be repaid if it closes. The vendors who currently sell to the co-op will also have to find other venues through which to sell their goods. In addition, the customers in the Houghton area who depend on the co-op for much of their shopping will be forced to go elsewhere. Rebecca Rowley stated on Alleganyharvest.coop that, “ The [Allegany Harvest Cooperative Market] will provide a way for me to both get the quality of food I desire and support the local economy without having to track down individual farmers – a win/win situation!” Closing the co-op will force customers like her to either travel greater distances to acquire the same goods or settle for unwanted food.

Although those who enjoy the benefits of the co-op are many, the store will most likely have to close if it does not gain business soon. The members do not wish for this to happen; however, a realistic view of the co-op’s current state is required. Until forced to close, it is their wish to keep the store running.

After a recent annual board meeting, the Allegany Harvest Co-op appears to be at a crossroads. This past Wednesday, board president Sunshine Sullivan, along with other board members, met with the rest of the board to address questions regarding the future sustainability of the community organization. Presenting financial data, membership information, and volunteer availability, the board and other co-op members are attempting to secure enough income to hire a manager in the near future, a task which proves to be difficult.

“We did a lot of research to figure out if [the co-op] was something that [was] actually possible in this small rural area,” stated Sullivan. Although emphasizing community development through contact and transactions with local farmers and businesses, the board also recognized a need for a balance between fair prices for farmers and fair prices for consumers in order to maintain a regular consumer base.

However, membership in the co-op has continued to be lower than expected, with the number of regular shoppers even lower as most residents in the area continue to opt for more distant but larger supermarket chains.

According to Peter Meilaender, vice president of the board for the co-op, original targets for membership were around 200 to 250 members. Sullivan cites a current figure of around 100 actual members, 75 to 80 of which Meilaender estimates to be regular shoppers.

Co-op member-owners had originally prepared to operate at a loss, but not at the loss that has shown up in sales figures. A lack of growth in membership and purchases in this case translates to low sales, undermining the co-op’s goals. “With the initial plan, it was assumed that the co-op would lose money for about the first three years before it started to break even,” explained Meilaender. “We have in fact lost money more rapidly than we were supposed to, primarily because sales have been much under where they need to be.” Sullivan cited some figures, adding, “For our budget that we’ve outlined in our business plan to work, we actually need to have $4400 in sales every week. Not only to get our fixed costs taken care of, but also to be positioned to actually hire a new manager,” explained Sullivan. “Our best week has been $2400, but in reality, in the summer it was hovering between $900 and $1500.” As community members, faculty, and students leave to travel or return home during the summer and as residents begin to rely more on their personal gardens, sales tend to go down.

In addition to struggles with raising membership and sales, the co-op faces difficulties after running into unexpected expenses. After the first manager stepped down for medical reasons, the co-op decided to take on a new manager, one who was eventually let go due to mishandling of finances. “We realized our finances weren’t being handled in the way it was reported to us,” explained Sullivan, a situation which resulted in several outstanding debts, many of which the co-op is still working to fulfill.

Recently all of the board members decided to serve as different facets of management, saving the co-op a projected $10,000 through December. Balancing what amounts to about 15 volunteer hours per week can be difficult, though, especially for those working outside the co-op. Several of the board members are full-time professors at Houghton College, some undertaking research as well. “That’s quite a bit to hold onto as a volunteer,” said Sullivan.

“We’re trying to transition from that to a place where we can hire someone to do that job again,” added Dani Johnson, volunteer coordinator and board member. The viability of this transition will be seen at the end of next month. “We’ll see how sales go in October and, based on that, we will decide if we are going to have enough money to start looking for a manager,” Sullivan stated. “If not, we’ll be making plans to start closing at the end of the fall semester,” she explained.

For now, outlook amongst board members remains mixed but hopeful. “I’m cautiously optimistic about it continuing,” stated Johnson. “If you look at co-ops on a national level, co-ops are doing really well.”

Said Sullivan, “With all of these businesses that are connected with us, they are invested in us succeeding because they need business in this area. It’s amazing the community that is really supporting [the co-op]—we just need more people to shop there.”