Already in my first visit to the co-op, I was made aware of diverging concerns of the co- op Õs members in terms of the product choices they demanded in the co-op. I was also intrigued by the hostility of the local community of independent shops towards the co- op, which was seen as a new competitor. Differences among members regarding the types of products that the co-op should sell were clearly evident in the television documentary. When the founders opened their shopÕs doors to the public, they were under intense financial pressure to generate sales Ñ a minimum of £1800 per day Ñ to break even on operating costs. Hence, based on the data available from retail experts they consulted, the co-op bought 500 of BritainÕs most popular products along with some fresh produce from local wholesalers. In terms of environmental sustainability of the range offered, there were a few organic products as well as some locally sourced fresh produce. However, it was clear from the beginning that the shop had to also sell what most people wanted to buy in order to be commercially viable. Hence, the principle of environmental sustainability had to be weighed against the need for commercial sustainability. The documentary followed two local residents from the housing estate into the shop on the first day. These residents were not convinced that shopping at the co-op would save them money against their preferred supermarket branch. They complained about not finding a variety of products that they usually shopped for and the fact that there was no other cheese except organic cheese. They
also questioned whether the co-op was just a general convenience store for top-up purchases or a supermarket that can cater for a customerÕs weekly grocery needs. Another local resident from the housing estate who had joined as a member also complained about not finding Ônormal stuffÕ like fries and frozen pizzas. She was frustrated at seeing only fresh produce options for peas and artichokes. ÔI do not have time to sit and pick peas and peel artichokes; where are the frozen peas?Õ, she demanded.
The shop struggled to make decent sales for a few weeks after the opening. To understand why members were not shopping at the co-op, the founders called the first membersÕ meeting. In that meeting, a few members, in particular four residents from the nearby housing estates, gave a clear message that the products offered were too upmarket. They reckoned that there were hardly any value range products and no convenience foods they could use to put meals together in a short time. This is not what they had been promised when they joined, they felt. Their understanding was that the shop will stock what the community wanted, but what the co-op was offering was not what they wanted. It seemed to them that most members were middle class and the shop catered mainly to higher income groups. To this, one of the members responded, ÔI am middle class and I still cannot afford organicÕ. Some other members, however, pressed for stronger environmental commitment. There were voices of concern against unseasonal and air-freighted fresh produce available in the co-op. One member found that the shopping aisles at TPS did not look too different from those at a conventional supermarket. She wished that TPS would offer more sustainable food products. There were also requests for more vegan and gluten-free products. In the end, a compromise was reached with the members regarding the product choices to be offered at the co-op. It was decided that, wherever possible, each product line would offer three options Ñ a sustainable option, a market leading brand, and a lower priced value option similar to that available in conventional supermarkets.
In the same meeting, Arthur urged members to get out of their comfort zones and try to shop differently. He felt that they might be used to buying certain brands but they should adjust and adapt and make more use of what was available at the co-op to make it more successful. To this end, he made recipe flyers available at the co-op to help and educate people about preparing meals with ingredients that could be bought at the
store. The documentary showed that some of the shopÕs customers were quite happy to find these recipes.
However, it was still difficult to offer products at competitive prices. Arthur had been focusing on buying high quality products. This was perhaps not surprising given his professional background as a gourmet chef. Although he realised that he had to listen to the co-opÕs members about their demand for better prices, he did not want to get cheap produce at the cost of exploiting farmers. Also, since the co-op could only make small orders with the wholesalers initially, it could not buy stock at low enough prices. So Arthur and his team had to look for ways to offer produce at a lower price than other supermarkets despite their inability to match the volume of orders normally placed by larger supermarkets.
One such opportunity presented itself with farmers whose produce was rejected by the larger supermarkets for cosmetic reasons. This ÔClass IIÕ graded produce would normally go to waste or had to be sold at a loss as animal fodder (see also Stuart 2009). But since it was perfectly edible, it could be offered in the shop for a much lower price than usual to the co-opÕs customers. This would prevent at least some of the ÔClass IIÕ produce from going to waste and provide the farmer a better deal at the same time. So it seemed like a great idea which would benefit the producer, the consumer and the environment. The documentary showed three instances of farmers of potato, apple and cucumber who readily gave a very good buying price to Arthur for ÔClass IIÕ produce, which in turn enabled him to bring this produce to the co-opÕs customers at below market prices. The farmers also benefited from this deal. For instance, a farmer offered a certain variety of potatoes to Arthur for 16p a kilo, for which she would have received only 4p a kilo from the larger supermarket she used to sell to. Arthur could sell these potatoes at 32p a kilo and still offer them cheaper than the larger supermarkets. Many customers and members reacted positively to this initiative and hoped that the co-op could leverage more such opportunities.
One member who was critical about high prices earlier was shown in the documentary to be impressed with the low price of the newly brought in ÔClass IIÕ produce. Affordable prices were important to pull the local community together, she felt. However, the documentary also showed an example of one mum and her kids from the nearby
housing estate who did not immediately warm to the odd-shaped cucumbers. They found the produce ugly and doubted its quality. It took some persuasion by Arthur who got the family to taste the cucumbers to prove that they were not at all inferior in quality to the more conventionally-shaped cucumbers found on sale elsewhere. Once the family members appreciated the taste, they had no hesitation in buying the produce, given that the price was much lower than what they were used to paying for it. Although this family was successfully persuaded to buy the ÔcurlyÕ cucumbers, the selling experience would have suggested to Arthur that some other customers might associate poor quality with unconventional-looking produce and not every time would a co-op member be at hand to convince them otherwise.
When I joined the co-op I found that sourcing ÔClass IIÕ produce directly from farmers was an exception rather than a regular feature at the co-op. Once the documentary filming had ended the co-op did not have the human resources to search, follow up and arrange collection of farm produce that was rejected by larger supermarkets and thereafter earmarked for landfills or animal feed. Occasionally, a couple of local farmers, who had developed a relationship with the co-op as members, did bring in such produce. But the co-opÕs shop was too small an outlet for the quantity of waste the farmers had to cope with. Hence, this potentially useful way of making local food available at reasonable prices to the co-opÕs consumers could not be practically implemented on a consistent basis at TPS.
In a price comparison exercise conducted by the co-op in the first week of April 2011, in which I helped the operations committee with the implementation, prices of a select range of 31 products available at the co-op were compared with those at the nearby branches of three other supermarkets. These products were selected by the management as the ones that were most likely to be included in a weekly basket of shopping by the co-opÕs customers. We found that only in the case of free range eggs were TPS prices consistently lower than all other supermarket branches in the neighbourhood. After applying the membership discount, TPS prices were lower than 7 out of 19 comparable products in Tesco, 14 out of 30 comparable products in Waitrose and 13 out of 24 comparable products in Sainsburys. Even where TPS was cheaper, the price difference was barely a few pence. Hence, it was difficult for customers to opt for TPS over other supermarkets on the basis of price alone, especially considering the larger range of
products on offer at competing stores. The co-op needed to focus on other factors to help draw customers to the shop.
In the online membersÕ survey, members were asked to rate the factors that were important to them when they bought food from the co-operative (see Figure 4.3). If one takes a non-weighted total of both ÔimportantÕ and Ôvery importantÕ ratings, animal welfare comes up as the most important concern (212 votes), followed by price (204), fair trade (203), organic (133), vegetarian/vegan (86), personal recommendation (86), allergy concerns (55) and brand (43). Members also reported strong support for sourcing from local suppliers. Responding to the question about factors that motivated them to join the co-op, 239 out of 253 members ÔagreedÕ or Ôstrongly agreedÕ with the statement, ÔI wanted to be involved in a business that sources from local suppliersÕ (see Figure 4.1).
The co-op had responded well to some of the major concerns of their members. Most importantly, animal welfare was a key criterium in procuring meat products. One of the co-opÕs buyers, with whom I had the opportunity to speak with on many occasions, had made visits to suppliersÕ farms to ensure adequate welfare conditions of animals raised for their meat and eggs. Also, only sustainable fish certified by the Marine Stewardship Council was offered in the shop. There was a small section of the membership that was vocal in demanding a cheaper and larger range of meat and fish. This could have compromised the objectives of promoting animal welfare and sustainable fishing. But
the co-op stuck to those objectives. Arthur proudly reported at the first Annual General Meeting (AGM) that despite their decision to be ethically selective about meat and fish products, meat sales had increased significantly in the first year. In addition, going forward, the shop was now able to offer more by-catch sustainable fish options and at a better price than previously available. There were also a number of Fairtrade products on offer and this category was strongly promoted with the help of annual celebrations of events such as the Fairtrade Fortnight. Occasionally, local suppliers and small and independent local brands were supported and given a chance to introduce themselves to the shopÕs customers through product tasting sessions. Based on customersÕ responses, some of the locally produced items became a successful and regular feature on the shopÕs shelves. For example, artisanal bread from the Flourish Bakery in Tottenham, London, was reported as the top selling product in the first AGM. The shop also stocked FrankÕs Honey, which was supplied by one of the co-opÕs members from his garden in the suburbs of London.
Organic fresh produce options were limited however. This was partly a reflection of the perceived lack of demand from the shopÕs customers. Many of the residents of the neighbourhood council estates whom the founders wanted to attract to the co-op valued price over organic. Some members were vocal about this preference in the early membership meetings shown in the documentary. Arthur mentioned to me once, in a conversation we had while preparing a fruit salad in the co-opÕs kitchen, that if it was up to him he would have offered only sustainable food options in the co-op. However, since he started working on the initiative he had found in his interactions with other members that most of them did not care about sustainability as much as they did about price. And since this was a co-op and not his personal business, he had no choice but to respect the voice of the member community. The membership survey also suggests that for many members price is a more important factor in coming to a purchase decision than whether or not the product is certified organic. In response to how the shop could interest them more, one member wrote: Ô[The shop should offer] more affordable mainstream items - less of the obscure veggie, organic and non-essential food items.Õ Another member added: Ô[The shop should] appeal to more local residents who are Sainsbury and Tesco devotees - make sure it doesn't turn purely organic, middle class!Õ Hence, member preferences were an apparent reason for the limited organic choices offered in the shop.
Nevertheless, a section of the membership, about 51% of those of who responded to the survey, considered organic an ÔimportantÕ or Ôvery importantÕ factor in their food purchase decision. Preference for organic and sustainable produce also came through in some open responses to the question of how TPS can interest members more. Some members expressed that they would like to see more seasonal, local and sustainable produce in the shop with more information available about provenance and how the produce is grown. One member, for example, said: ÔI would buy organic fruit and vegetables at TPS if it was available. There are many producers at farmers markets whose produce is not accepted by the major supermarkets who could be approachedÕ. Another member expected TPS to put Ômore focus on sustainable and ÒreallyÓ local food, not just food packed and labeled in BritainÕ. So it seemed that there was at least some demand for organic and sustainable produce that was not yet being met by the shop.
When I asked one of the storeÕs buyers why the co-op was not offering more organic fresh produce, she pointed to logistical and resource constraints rather than a lack of intention from the management. In fact, she seemed very interested in finding a way to offer more sustainable fresh produce at the shop. She explained that the range of fresh produce that was currently available at the co-op was entirely determined by the shopÕs chosen fruit and vegetable supplier, Gilbert, who was also a member of the co-op. His business was to supply to some gourmet restaurants in the city. As such, his focus was on quality, and not always on sustainability. This meant that there were some days when organic and British-grown options were available, but the co-op had not implemented a consistent policy on sourcing organic and locally grown fresh produce. Gilbert had previously supplied to ArthurÕs restaurants and Arthur trusted him. So when the co-opÕs shop opened Gilbert answered the call to help out with supplying fresh produce to the shop.
Although the shopÕs buyer had thought about pushing for more organic and local produce, she was hesitant in the beginning about interfering in GilbertÕs work and disturbing a working relationship. He offered convenience and the buyer was not sure if she had the time and resources to deal with the overhead of sourcing fresh produce from several independent suppliers. But as other local growers sought the buyerÕs attention, she did speak to Gilbert and managed to expand the fresh produce offer to
include a few more local options. More organic options, however, were brought in only after some customers started asking for it. These customers were previously sourcing organic produce from another independent grocer, located on the same street as the co- op; but in the meantime that shop had shut down. Responding to this opportunity, one of the co-opÕs newly inducted staff members, Terrence, who was previously a trainee from the Future Jobs Fund programme, took the initiative to find and organise the wholesale supply of more organic produce at the store. This was the kind of additional human resource help that the co-opÕs buyer had been looking for, and the expressed demand from customers enabled her to make the business case for introducing more sustainable fresh produce options at the store. The buyer told me in an interview later that the sale of organic produce had since been going well and she was relieved that Terrence had taken over all the responsibility for managing the sourcing for this product category. However, although organic options had increased, the vast majority of fresh produce on offer was non-organic.
In this way, TPS was able to offer a product mix that catered to those members who had concerns regarding food ethics and sustainability as well as to those who wanted popular brands and lower cost product lines. This enabled the co-op to gain a broader customer base for itself. In an interview given to the Fredericks Foundation (2012), one of the co-opÕs founders and CEO of TPS, Kate Bull, summed up the product strategy thus:
We donÕt judge, but we do give choices. I personally may believe Coca-Cola, for instance, is one of the most dangerous products out there. But it's one of our top 10 lines. If we didn't sell it, we wouldn't have a business. But we always offer an alternative Ð we also sell Ubuntu [Fairtrade] cola. There's actually nothing we won't sell except cheap beer and alcopops. But cheap beer has no profit margin anyway, so why would we?
Some members did not, however, agree with this policy of trying to cater to a variety of customer segments. In response to an open feedback survey question, one member, for instance, urged the management:
Do not try to please everyone but work out what is important to sell. ItÕs a bit of