Consumer Grocery Cooperatives have long had a reputation for embodying the liberal ideals of Minneapolis and St. Paul residents. Their emphasis on organic and natural foods gives consumers the impression that they are “doing the right thing” by aligning their values with their commerce.

What our reporting began to reveal is beyond the glossy catalogues and manicured aesthetics  is the persistent mistreatment and exploitation of a devoted workforce. The day to day workplace practices are in stark contrast to buzzwords like equity, sustainability and diversity. Since then, our conversations with Co-op employees indicate that the dissatisfaction that drove workers to form and attempt to form a union is increasing. For example, employment satisfaction surveys from both Mississippi Market and Seward Community Co-op show increasing worker frustration.

What is also emerging from our network of sources and our own research is evidence of a dense network of co-op managers and administrators and associated national organizations who protect their own interests in stark contrast to the values of democratic participation imbued with being a co-op “owner.”

Anti-Union Practices

Last year as negotiations dragged on between Seward Co-op management and UFCW 663 Workday’s reporting revealed that Seward’s increasing financial struggles impacted workers.  

At the time interviews with over a dozen current and former workers who chose to remain anonymous for fear of retaliation, asserted that mismanagement has led to financial losses which were disproportionately affecting workers on the floor.

Most shocking was evidence suggesting that Seward was blacklisting workers who were union activists at Eastside Co-op. Workday also learned that the negotiator Seward hired was a well known union-busting consultant who has made a career of disrupting Co-op union campaigns.

Anti-union tactics are not limited to Seward.

Workday obtained a letter expressing an anti-union bias signed by General Manager Gail Graham that was circulated to Mississippi Market employees during their unionization efforts.

“While Mississippi Market is not opposed to unions and respects the rights of our employees to choose for themselves, we are convinced that it is not in the best interest of our employees or the Market to have employees represented by a union.”

The hostility to unions as a vehicle to defend the rights of workers is not limited to Twin Cities based co-ops.

In a report entitled “Why Do Co-Ops hate Unions”, Marianne Garneau spells it out bluntly,  

“Grocery co-ops not only inflict the same indignities on workers as corporate, for-profit stores – low pay, harassment, lack of benefits, etc. – but they are just as intolerant of unions. In fact, co-ops are arguably even worse than corporate groceries, because they cynically use the language of community and social mission to deepen their exploitation of workers, while using their supposedly democratic structures to evade accountability. They are a nightmare masquerading as a utopia.”

The hostility to workplace democracy reflects changing governance structures within Co-ops.

Ceding Democratic Control

Walking into a Consumer Grocery Cooperative store in Minneapolis or Brooklyn, New York, many of the aesthetic choices and products on the shelves have become increasingly similar. That is because Minnesota based, National Co+Op Grocers (NCG) is driving consolidation into what United Natural Foods, Incorporated (UNFI) CEO Steve Spinner described as a “virtual chain.”

NCG is a trade association of hundreds of grocery co-ops meant to pool operational strategies and purchasing power. UNFI is a multi-billion dollar distributor of organic foods and “natural” goods.

A 2015 statement from NCG explains their arrangement with UNFI,

“National Co+op Grocers (NCG) today announced that it has reached agreement on a multi-year purchasing contract that names UNFI as its primary distributor for natural and organic products through at least July 2021.”

UNFI has served as the primary distributor for NCG food co-ops since the two companies signed their initial agreement in 2006. At that time, NCG represented 106 retail food co-ops generating $870 million in revenue. Under the new six-year contract, UNFI will continue to provide distribution services to an expanded NCG that now includes 143 retail food co-ops which operate over 190 stores in 38 states and generate over $1.7 billion in revenue.”

Co-ops accept some oversight over their books by NCG by virtue of a “joint liability fund.”

According to NCG’s document, “Background on NCG and Opportunities to Join and Participate.

“Due to the system of shared liability for payables balances to UNFI (part of our UNFI contract), new member co-ops will need to put funds on deposit with NCG as part of our internal risk-management system.”

Adding another layer. The consulting firm Columinate (formerly CDS Consulting) influences the management structure of Co-ops. They consult on a variety of topics but most infamously train Co-ops on the use of policy governance. The result is that more control is ceded to the general manager and very little interaction is offered to member owners.

CDS is also an advocate for Co-op expansion and greater use of UNFI as a distributor.

Mimi Yahn, quoted in a blog Take Back the Co-op, witnessed CDS’ influence over two Vermont co-ops, uncovering a troubling pattern,

“The fact is CDS does promote UNFI in their training, especially for new co-ops, and this promotion does not give equal time to supporting and doing business with local producers or smaller, independent distributors.”

Profiting From Consolidation

Mississippi Market’s Gail Graham has been in the middle of the prominence of UNFI and has profited handsomely.

In October 2002, UNFI was the largest distributor of organic and natural foods in the United States when it was announced that Gail Graham was joining the board. A month before her appointment to the board, membership of Blooming Prairie Cooperative approved a proposal to sell to UNFI. Blooming Prairie was owned by more than 2,200 retail stores, co-ops and buying clubs in the upper Midwest.

At the time Graham was Vice Chair of the Blooming Prairie Board of Directors.

Michael Funk, then Chief Executive Officer of United Natural Foods, said, “We are pleased that Gail has joined our Board of Directors as an outside director. Her distinguished business career, extensive industry knowledge and over 30 years of experience on board of cooperatives, non-profits, foundations and community organizations should be of great value to our Company. We look forward to the benefit of her counsel and believe her experience offers a key complement to the expertise already available on our Board.”

She left the UNFI board in 2016 but still remains the General Manager of Mississippi Market, a post she has held for almost two decades. According to public disclosure documents, her time at UNFI proved to be lucrative. Graham has made over approximately 1.4 million dollars by acquiring UNFI stock at preferred rates or for nothing and selling them at market rates.

At the time of publication, she still holds 15,225 stocks. Currently the stock is hovering at 11 dollars a share. Making her stocks potentially worth $167,475.

Upon learning of Graham’s lucrative relationship with UNFI, a current Mississippi Market worker who spoke on condition of anonymity for fear of retaliation, stated the following.

“I’m angered and saddened by Gail’s close relationship with UNFI – one of Mississippi Market’s main suppliers – as it not only violates good business practice, but the higher values Mississippi Market purportedly lives up to.  ‘Cooperatives are based on the values of…democracy, equality, equity, and solidarity’ – it says it right there on the website. But if the General Manager of a small, three-store, Midwestern food co-op is a millionaire on paper while employees who work the sales floor can take up to a year to earn St. Paul’s ‘living wage’ of $13.27 per hour, then the message I get is that Mississippi Market doesn’t care about cooperative principles, and it doesn’t care about its employees.  

The only place I have seen the values of democracy, equality, equity, and solidarity on display is in the people who work beside me every day, and my anger, sadness, and even disgust grows every time I see one of them leave this community for another job.”

Graham’s position and influence is an example and common feature of Co-op consolidation. Various managers and administrators move between the various Co-ops, CDS and NCG.

The result has been the slow erosion of democratic control over cooperatives and democraftic participation within them.

Since we first reported on Seward Workday has been getting tips from workers throughout Minnesota about similar dynamics in their local co-ops. Based on this information and our own research we expect to continue our reporting on the consolidation of co-op’s and the apparent hostility to the democratic participation of both co-op owners and workers. This line of reporting, while unexpected, is aligned with our core value of honoring and giving deference to the perspective of workers.

So stay posted as we untangle the web of influences over these cherished Minnesota institutions..

If you have tips, insights or personal experience please share them by emailing me at: nolas011@umn.edu.

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