Making America Stronger – One Cooperative at a Time
What Do You Know About Cooperatives?
If you believe that independent businesses and entrepreneurs are important to the American economy, then you’ll believe – as we do – in the importance of cooperatives. They are a proven way to help independent businesses stay strong and independent. In fact, there are now somewhere around 30,000 cooperatives in the United States with over 350,000 members. Co-ops are helping independent businesses in just about every industry you can think of – from citrus growers and flooring dealers (Sunkist and CarpetOne) to grocers and hardware stores (Topco and Ace Hardware). That’s because co-ops work. Not just for their members, but for their customers and communities too.
The more cooperative we are, the more valuable we become.
— William Author Ward
A Fairer and More Sustainable Business Model
Cooperatives offer an alternative to typical corporate structures. They are run democratically, by and for their members – not corporate shareholders. This simple change makes things better in ways that are almost miraculous. On top of that, most co-ops originate out of a desire to do something good for their members, customers and communities. Typical motivations include:
- Protecting small businesses facing big corporate competition
- Ensuring fair trade and fairer sharing of profits
- Improving the pricing and quality of goods and services
- Filling gaps in services that other businesses ignore (think insurance for low income people, credit unions or rural electricity)
- Sustaining and growing the communities where they operate
- Protecting the environment
- Protecting the rights of employees and consumers
Cooperative business models power these goals by giving individuals and businesses the strength and advantages typically only available to larger, more powerful entities. As businesses, co-ops are also more sustainable. The strength they get from member and community support results in a success rate for co-ops of 90% (after 5 years) versus less than 10% for traditional businesses.
A cooperative (also known as co-operative, co-op, or coop) is an autonomous association of people united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled business.
The Mission of the Cooperative Management Group
It’s simple. CMG’s mission is to identify industries that could benefit from a co-op, but don’t yet have one. Then we partner with the independent businesses within these industries and help them build a cooperative that the members own and control. CMG provides expertise, funding, and leadership to launch the cooperatives, and to keep them operating successfully.
The three industries we’ve targeted so far are characterized by many smaller independent businesses threatened by a few dominant players attempting to consolidate market control and access. You can read about all three below, and you can link to the CMG site here.
1. Protecting the Future of Craft Beer
Most of you are probably craft beer fans, or know someone who is. In fact, for the past decade or so, craft beer has been one of the country’s fastest growing industries. It’s a remarkable American success story, led by thousands of passionate entrepreneurs in pursuit of both independence and “better beer.” It has created thousands of local jobs, and it unites towns and communities around their own local brands and brewpubs. It’s even created a growing brewpub tourism business. It’s a phenomenon worth supporting, but it’s threatened by its own success, as hundreds of eager new brewers flood the market each year, and “big beer” and other investors buy up the most successful.
That’s why the Cooperative Management Group has launched the Independent Brewers Alliance – America’s first brewer-owned cooperative, dedicated to helping craft beer brewers stay strong and independent. It takes the form of a purchasing cooperative and leverages the resources and buying power of the group to save members money on raw materials, packaging and operational expenses. This makes them stronger and more competitive, helps them keep their prices down, and it lets them keep the independence that led so many into the business in the first place. Learn more at BrewersAlliance.org.
2. What’s a Golf Ball Diver?
Here’s something that may surprise you. Collecting and reselling the millions of golf balls lost in the lakes and ponds of America’s golf courses is a big multi-million-dollar business. And the hard and often dangerous work (think alligators, snakes and pesticides) of collecting those balls is performed by hundreds of independent golf ball divers.
In the beginning these innovative entrepreneurs owned the market, selling their balls at flea markets, local stores and golf shows. Not anymore. The industry is now dominated by big commercial interests. In fact, the industry’s largest sells over 50 million used balls each year on-line and at retail stores. These big guys have marginalized the divers doing the hard work, squeezing the price they get per ball.
Enter the Golf Ball Divers Alliance
The idea for an alliance of these independent divers was brought to CMG by one of the divers. The resulting co-op – the Golf Ball Divers Alliance – is most analogous to a “farming” cooperative – an association of the growers of a particular type of product – in this case the “crop” is recycled golf balls – who voluntarily work together to pool their production for sale, and then market and distribute it through the cooperative under a shared brand name. And by selling direct to the consumer, they ensure that customers get a fairer price. Check out their e-commerce site at GolfBallDivers.com.
As part of the co-ops community support, the alliance created its new state-of-the-art used golf ball processing facility at Lapeer Team Work’s GO Industries. GO has been supporting and training people with disabilities in and around Lapeer, Michigan for over 50 years. Learn more about GO Industries and the work they do at their website.
Other classic examples of farming cooperatives include Ocean Spray, a cooperative of over 700 cranberry farming families and Cabot Creamery, a cooperative of over 1,000 New England-based dairy farmers.
3. Finding Opportunities in Empty Boxes
You’re all familiar with corrugated cardboard – the material used to make all kinds of packaging, shipping boxes and many product displays. What you probably don’t know is that corrugated packaging is a $33 billion-dollar industry, one also threatened by consolidation. Here, a few dominant players are buying up hundreds of local, independent packaging manufacturers, simultaneously putting pressure on the jobs of the national network of independent salespeople who rep for them. And while consolidation is not always bad, in this case experts see the long-term outcome as price increases, reduced innovation, fewer packaging options, and the extinction of a lot of local, independent businesses – many family-owned for generations.
So, it looks like these independent manufacturers and independent sales people – as well as the customers they sell to – are all perfect beneficiaries of an intelligently applied cooperative model.
The GlobalPac Alliance
The idea for a corrugated alliance came from several visionary leaders within the corrugate industry. These folks came to CMG for our help in developing it. Called the GlobalPac Alliance, its mission is to empower the success and entrepreneurial spirt of the industry’s independent manufacturers and salespeople in the face of continued consolidation efforts by the big integrated companies. And in doing so, protect and improve the pricing, creativity and breadth of options offered to their customers.
The GlobalPac Alliance is a “hybrid” cooperative with features of both a purchasing and a sales cooperative. It’s a purchasing cooperative because it pools member buying power to reduce the costs of raw materials and other operational expenses. It’s a sales cooperative because it unites members in a joint effort to sell their products, either under their own names, or – when it’s to their advantage – under the GlobalPac Alliance brand. Learn more at GlobalPacAlliance.com.
So, What Does All This Mean to You?
We believe that when you try to do something good, it leads you to good people and good opportunities. And while CMG has an understanding of how to do good things, we certainly don’t have all the ideas and answers. That’s where you come in. So if you believe in the power of cooperatives, the values they spread, and in what we’re trying to do, you can help. Here are a couple of ways you can do it.
- The Independent Brewers Alliance is actively seeking new qualified members. If you know a friend in the craft beer business please introduce us. We can help them and make the IBA even stronger at the same time.
- Are you a golfer, or do you know someone who is? Try out some of our recycled golf balls at GolfBallDivers.com. You’ll be amazed at both the quality and the price. Then do your friends a favor and let them know too. Also, if you know a golf pro, general manager, superintendent, or influencial member of a golf club, please introduce us. The Golf Ball Divers Alliance is actively seeking ball retrieval work from new golf course partners. We can offer them some substantial benefits they won’t get from other golf ball retrieval companies.
- Do you have a friend that works for a manufacturer or distributor – large or small? Or a friend that works for a company that packs and ships their products in boxes (think items sold in a grocery store, consumer electronics, etc.)? Please introduce us so we can tell them how the GlobalPac Alliance can bring them better engineered and lower cost solutions for their packaging needs.
- Or maybe you have a great idea for a new cooperative? All three of our co-ops came from the innovative ideas of friends like you. So if you know a fragmented industry with lots of individual businesses that could benefit by working together in a cooperative framework, let us know.
Please share any thoughts or ideas you have with us by using the contact form below. And help us make America stronger, one cooperative at a time. Thank you.