Co-ops in Nebraska are bigger - and smaller - than ever

Elwood Hometown Cooperative Market board member Sharlette Schwenninger checks out at the new co-op grocery in south-central Nebraska. (Photo: Hilary Stohs-Krause, NET News)
When the old grocery store closed down, concerned community members worked for a year to open the Elwood Hometown Cooperative Market in Elwood, Neb. (Photo: Hilary Stohs-Krause, NET News)
Board member Sharlette Schwenninger said the tin ceiling of the Elwood Hometown Cooperative Market is original to the near-century-old building. (Photo: Hilary Stohs-Krause, NET News)
Elwood Hometown Cooperative Market board member Sharlette Schwenninger said the new co-op grocery in south-central Nebraska works hard to stock a wide variety of products. (Photo: Hilary Stohs-Krause, NET News)
F.R.O.G.S., or First Rural Organic Grocery Store, was open for a little more than two years in Wolbach, Neb. (Photo: Hilary Stohs-Krause, NET News)
A mural lines the west wall of F.R.O.G.S. cooperative grocery store in Wolbach, Neb., which closed in early May. (Photo: Hilary Stohs-Krause, NET News)
F.R.O.G.S. cooperative grocery store board members Roy Guisinger, Mena Sprague and Dave Sprague struggled to keep the co-op running, but lack of membership and volunteers led to them closing in early May. (Photo: Hilary Stohs-Krause, NET News)
At recently closed cooperative grocery store F.R.O.G.S. in Wolbach, Neb., many of the shelves have been emptied. (Photo: Hilary Stohs-Krause, NET News)
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May 8, 2013 - 6:30am

The United Nations declared 2012 the International Year of the Cooperative, but the number of co-ops in Nebraska has been steadily declining. The cooperative model, long a staple of Nebraska’s agricultural community, is changing, but it’s also being adapted for other essential rural services.


For about a year, the south-central Nebraska town of Elwood - population 700 - was without a grocery store. Three months ago, that changed.

Sharlette Schwenninger shows a reporter around a new cooperative grocery store, pointing out the energy efficient freezers and explaining how volunteers restored the original tin ceiling.

Photo by Hilary Stohs-Krause,
NET News

Board member Sharlette Schwenninger said the tin ceiling of the Elwood Hometown Cooperative Market is original to the near-century-old building. 

 

“I get very emotional almost every time I’m in here, because I’m just so happy to have this store,” she said. “And I think it’s something we’re going to be proud of for a long time.”

Cooperatives have been around in Nebraska for more than a century, but the model has changed drastically. In 1993, Nebraska was home to 157 ag-related cooperatives, according to the U.S. Department of Agriculture. By 2007, that number had been cut in half.

But cooperatives don’t just exist in ag. For example, national chain Ace Hardware is a co-op.

“There’s just a variety,” said Elaine Cranford with the Nebraska Cooperative Development Center. “There’s grocery stores, and then there’s worker co-ops, and ag co-ops, and marketing co-ops, and credit unions are cooperatives. Typically, the bottom line is member-owned, member-controlled, member-benefited.”

Cooperatives, or co-ops, are businesses owned by community members, who pay a membership fee and in return receive financial benefits and voting power.  According to the United Nations, one in five adults over age 15 are members of co-ops - that’s 1 billion people worldwide. Co-ops are expected to be the fastest-growing business model by the year 2025.

So why is the number of co-ops in Nebraska declining so rapidly?

“What has happened is cooperatives have converged to make them competitive in the world market,” said Ed Woeppel with the Nebraska Cooperative Council.  “So there’s a lot less cooperatives, but in terms of their importance to Nebraska agriculture, I’m not sure it’s any different at all.”

He spread out a map of ag co-ops in Nebraska, covered with what look like neurons, or maybe fireworks – central dots showed the co-ops’ headquarters, while lines stretch outward in every direction from each dot indicated local branches. The 39 coops that belong to the council operate in 352 locations.

In line with the growth of co-ops worldwide, revenue from the United States’ 100 largest ag co-ops increased by $88 billion from 2007 to 2011, compared with only $25 billion from 1980 to 2006. According to the U.S. Department of Agriculture, ten Nebraska cooperatives are on that list.

Yet at the same time that many ag co-operatives are going global, hyperlocal cooperatives like the Elwood grocery store are also springing up in greater numbers.

“I think that’s due to people moving out of rural communities,” Cranford with the Cooperative Development Center said. “Or you’ve got an older population in some of the rural communities, and so the family that owns the diner, or the grocery store, or whatever it may be – the gas station – they want to retire.

“But maybe their children aren’t interested (in taking over the business), or there isn’t somebody else that’s willing to do that,” she explained. “And so the community is more excited about being able to take ownership and keep those services in their town.”

 

Photo by Hilary Stohs-Krause,
NET News

 

F.R.O.G.S., or First Rural Organic Grocery Store, was open for a little more than two years in Wolbach, Neb. 

 

 

 

The town of Wolbach, located 45 minutes north of Grand Island, was one of those communities.

“We’ve had this idea for a long time … and I read in the paper that this grocery store was for sale, and I called Roy and I said, should we give F.R.O.G.S. a try?” said Mena Sprague with a laugh. Sprague is one of the founding members of F.R.O.G.S., or First Rural Organic Grocery Store. The co-op opened in January of 2011.

Last Tuesday, it shut its doors.

“We had high hopes for it, and we’re sad,” she said wistfully, pausing before adding, “but it’s kind of a relief not to have to worry about who’s working, and who’s covering the store.”

F.R.O.G.S. succumbed to two big challenges common to retail co-ops, especially in small towns and rural areas. As a cooperative and a non-profit – the two are distinct – F.R.O.G.S.’ plan relied heavily on volunteerism. If each of the 30 or so initial members worked one day a month, the founders reasoned, they’d be set. But members’ enthusiasm slowly died off, and the board members found themselves putting in more and more hours.

Fellow board member Dave Sprague said there was also the issue of competition with stores in surrounding communities – in particular Grand Island, where much of Wolbach’s population already travels for work.

“And once you’re down there for 8 hours, you might as well shop there,” he said matter-of-factly. “And we cannot compete with Walmart.”

They’re not alone.

“We had that problem, to some extent, because we were without a grocery store for a year,” said Schwenninger. The Elwood co-op supporters tried to break those habits by focusing on the economic benefits to the local community.

“If they spend money in Elwood, 54 cents of every dollar stays in town,” Schwenninger said. “If we shop in Lexington, 15 cents of every dollar stays in Lexington, and none of it comes to Elwood.”

Cooperatives help Nebraska’s rural economy weather tough times – when the profit margin decreases, Woeppel with the Cooperative Council said, big corporations will pull out. But co-ops stay put; they’re a part of the land.

That sense of community is what allowed the Elwood grocery store to open in the first place, Schwenninger said. The cost – and risk – of buying and remodeling the business was too much for anyone person. By spreading it across a wide group of people, that meant the rewards are spread across the community, too.

“Because we were pooling money, we were able to do it right,” she said. “That’s kind of what the beauty of a cooperative in a small town is. So I think for small communities and rural communities, it allows you to do more.”

The Elwood Hometown Cooperative Market has only been open three months, and there are still challenges. But Schwenninger said she has faith the community will work together to make it successful.  

 

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