To foster a local food community and promote a culture of stewardship by cultivating farmer-consumer relationships, promoting the enjoyment of healthful food, increasing food security through diversity, and enhancing overall rural sustainability.
The Idea
The Nebraska Food Cooperative got its start in 2005 during the Nebraska Sustainable Ag Society (NSAS) conference when a speaker from Oklahoma talked about his model of an online farmers’ market and how it worked as a cooperatively owned business. The idea stuck with NSAS members Randy Watterman and Libby Brockmeier who conferred with Mark Hutchinson of the University of Nebraska—Lincoln Food Processing Center and Elaine Cranford and Jim Crandall of Nebraska Cooperative Development Center (NCDC).
This initial group decided to model Nebraska Food Cooperative after Oklahoma’s organization but gave it a Nebraska twist. Oklahoma’s model has a central location with-in the state that the organization works from, while Nebraska Food Cooperative’s hub location is in Omaha, due to the access to a large group of potential consumers in the eastern part of the state.
The Nebraska Food Cooperative faced an early setback when trying to spread the word about the organization and catching people’s interest. William Powers, Nebraska Food Cooperative Executive Director, said NSAS, NCDC and the Food Processing Center helped immensely in the early months with spreading the word and getting people to recognize Nebraska Food Cooperative as a business that works.
“A lot of people wanted something like [Nebraska Food Cooperative], but weren’t aware it existed. This is still a problem we face today with
[both producers and consumers].”
-William Powers
According to Powers it was a challenge trying to increase interest in producers to join as well. There were a decent number of producers but the range of products and their growing seasons was limiting the amount of produce available year round. Nebraska Food Cooperative used marketing and word-of-mouth to make producers aware the organization was another outlet to sell through.
Yet, Powers said that the biggest initial challenge for Nebraska Food Cooperative was getting people to understand the business model. This included informing people they had to pay to be members to receive the membership perks. As of 2010 Nebraska Food Cooperative has around 1000 members.
When asked what advice Powers would give to someone looking into starting a cooperatively owned business he said to do a business plan, and have a very active group of people that are interested and willing to participate.
The Business
“The way that Nebraska Food Cooperative is set up is an interesting business model,” Said Powers. “It's even different from most cooperatives.”
The Nebraska Food Cooperative is set up as an online shopping center or farmers’ market where each producer has their own page. On this page the producer can detail his or her operation, practices, products or other relevant information. Each week the producer decides how much produce they have available for purchase and places the number on their page, along with descriptions of the produce, which can include weight or color. Throughout most of the year Nebraska Food Cooperative averages between 650 and 750 products listed for purchase; during the middle of the growing season the average is closer to 1,000 products.
Consumers use the online market just like a real grocery store by looking around at all the different producer pages and picking what they want to place in their shopping cart. When a consumer picks something from a producer’s page the page automatically updates so the new number of available produce is accurate.
“The best part about being a part of the Nebraska Food Cooperative is knowing where my food is coming from and being able to
purchase 12 months out of the year!”
-Elaine Cranford
Powers said one of the main questions Nebraska Food Cooperative has been asked is if the website is set up to compete with area farmers’ markets or local foods grocery stores. But Powers is adamant in saying no to the questions. “It’s not a competition between traditional farmers’ markets and our online one,” Said Powers. “Nebraska Food Cooperative is just another possibility for producers.”
While the Nebraska Food Cooperative does not have set regulations or rules for producers to sell their products each producer with-in the cooperative must meet USDA regulations for producing and selling. These regulations include the packaging of each product, which must be individually wrapped or labeled before going to consumers.
Each producer is asked to disclose growing and production processes on their producer page. This gives consumers a better understanding of where their produce is coming from and how it’s grown, helping to create a better connection between the producers and the consumers.
“I buy through Nebraska Food Cooperative because I know who it comes from and how it’s farmed. I also know it’s going to be fresher and it will taste better.”
-Member of Nebraska Food Cooperative
On pick-up days Nebraska Food Cooperative has trucks sent to each producer or farm in an area to collect the necessary produce. The truck then delivers the produce to the hub site in Omaha where it is sorted into the different pick-up areas (located in Omaha and Lincoln). Each truck drives to the individual pick-up or delivery site and consumers show up between the allotted hours to pick up and pay for their purchases. These pick-up days are every two weeks from May through October and every four weeks from October to May.
Each delivery and pick-up site is managed by two or three volunteers and is located in a central area, preferably with an available refrigerator. These sites have been located in post offices, churches, coffee shops and several other local businesses. If the site does not have an available refrigerator Nebraska Food Cooperative supplies coolers filled with dry or packaged ice.
Nebraska Food Cooperative has done well with a steady increase in amount of sales for all producers combined; since 2005 they have increased from $300 to $10,000 per cycle. (Each cycle consists of four weeks.) Powers did say that the numbers in 2009 weren’t as good as they had been previously but something picked up this year (2010). Powers also said that in the beginning stages all the member producers (included in sales) were farmers and today the majority of sales are made by non-farmers. “Our numbers have been holding steady and are still growing, not as much as they were but they’re still growing.” Said Powers.
The Challenges
Maintaining Nebraska Food Cooperative as an online market serving producers and consumers has had its fair share of difficulties. The website currently utilizes several different list serves for all the different areas, including: members, producers, consumers and board members; this had made keeping information straight a slight hassle.
Through this system if one producer doesn’t fill his whole order it can cause some consumers to not receive their products. If it is determined to be the fault of the producer, they normally leave it up to the consumer and producer to work it out. If it is determined to be the fault of the Coop, a credit is issued for the consumer, and the farmer would still receive their funds. The board always assures the consumer the issue was the fault of the Coop and the producer, not the consumer. Powers said one of the biggest challenges with-in Nebraska Food Cooperative has been forging cooperation between consumers and producers to find that middle ground.
Currently Nebraska Food Cooperative’s largest challenge is both good and bad; they’ve outgrown their current hub site location in Omaha. While this means their original business has grown enough to create this problem, it’s still something that needs to be addressed. Powers said they are currently looking into funding, possibly through a mini-grant, to build in a more centralized area of Nebraska, either by location or population of consumers. They hope to equip this hub site with a certified kitchen, coolers, freezers and possible office space.
Even though Nebraska Food Cooperative has faced some challenges Powers said the good parts always outweigh them. When asked what the best parts about working with the Nebraska Food Cooperative were Powers answered that he enjoyed the different dynamic of working with-in a cooperatively-owned business and working towards a common goal; yet the best part was the people he gets to work with.
“The farmers are some of the coolest people I know; very friendly and hardworking and all around just good people.”
-William Powers
The Future
When asked what else the next five to ten years held for Nebraska Food Cooperative Powers said he hopes to see profit margins and number of members double. He hopes the number and variety of producers increases as well so Nebraska Food Cooperative could expand sales and delivery sites further west across Nebraska. Powers said the opportunity for such expansion is there but the logistics just haven’t come together yet.
Powers also stated that he hopes the new centralized hub site is soon up and running. They are looking for this to be completed in 2011. When asked who they plan to contact if they need help with this expansion Powers listed: NSAS and NCDC to help with cooperative development and gaining more producers; Buy Fresh Buy Local Nebraska (BFBLN) to help attract more customers and The State Department of Agriculture, who has currently expressed an interest in similar endeavors.
Powers said one of the main drives for the growth of Nebraska Food Cooperative is the growing number of members wanting to purchase local produce. He hopes with the growing number of members they can eventually reach all of Nebraska producers and consumers. With increasing awareness of agriculture and particularly local foods, success for the Nebraska Food Cooperative is only a click away.
For more information on Nebraska Food Cooperative, please visit their website at: www.nebraskafood.org
