Co-op Impact Conference – how co-ops are creating an inclusive economy in the USA

Ed Mayo, secretary general of Co-operatives UK, on learnings from the USA Co-op Impact Conference

The United States could become a beacon for an entirely different way of running an economy, according to delegates who gathered in Washington DC for the annual Co-op Impact conference of the National Co-operative Business Association (NCBA, 2-4 October 2019).

Co-op Impact

The idea of an ‘inclusive economy’ is core to what is now needed in the USA to replace a failed set of market and shareholder dogmas, argued Felicia Wong, CEO of the Roosevelt Institute in her opening address.

For me, a first timer in Washington, this sounded familiar, a European agenda. But over the course of a training session that I helped to lead in advance of the event with St Mary’s Sobel Business School, I learned how dynamic and widespread the co-operative model is in the USA. There is a particular energy among a younger generation of co-operative activists, looking for different ways of meeting people’s needs, such as tackling racial inequalities through worker co-ops, often in partnership with state authorities such as in New York.

October is Coop Month in the USA and was opened this year by Chuck Snyder, CEO of the National Co-operative Bank, an institution with over US$7.5bn (£6.10bn) in assets under management. Mr Snyder used the Washington conference to launch the 2019 Co-op 100 – the thirtieth annual list of the top one hundred co-ops in the country.

The turnover of the leading co-ops has grown from US $214bn (£174.08bn) to US $222bn (£180.59bn). The largest three co-ops, by revenue, are all farmer co-operatives: CHS and Land O’Lakes, both based out of Minnesota, followed by Dairy Farmers of America. Other sectors represented in the top ten include grocery, healthcare and finance.

Mr Snyder suggests that there are around 30,000 co-ops in total in the USA and that one in three Americans are members of a co-op.

One of the strongest models are enterprise owned purchasing co-ops. I met Carol Henry, CEO of the Veterinary Cooperative, that does bulk buying for around 4,000 veterinary surgeries across the USA and Mike Gentile, CEO of the Independent Suppliers Group, working in the office supply sector.

Gentile has just overseen a merger of three buying groups and the secret of their combined success, and willingness to come together, creating a new entity with a total annual purchasing power of $3.7bn (£3.01bn). The merger took fifteen years to happen, but “sometimes you just need the stars to align”, in this case being led by members who could see the benefits of a new way of working. The success of any purchasing co-op, he suggests, is “to make it like a family for members”.

It was their close relationship with their members that has led a pet shop co-op, NexPet, to branch into direct production, not just purchasing. Failing to win a fair price for their members – 540 pet shops across North America – from the dominant dog food manufacturers, the co-op has developed a private label premium dog food, and now cat food, Grandma Mae’s Country Naturals. This has become a genuine market success, opening up a new revenue stream for the co-op.

It is the mix of a practical business focus, whether dog food or credit union finance, together with a willingness to argue the case for wider economic change that marks out the American co-op sector. There is a lot for me to learn and to share.