River Valley Market
By Kristen Wilmer, CISA Program Assistant
Published in the November 2012 CISA Enewsletter
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In a world where most of our investment money goes to Wall Street, food co-ops like River Valley Market continue to foster a thriving system of local investment. River Valley Market, a consumer-owned cooperative, got its start largely through loans from its own members, and has already given millions of dollars back to the local community. In this way, the cooperative business model is a refreshing alternative to the dominant investor-owned business model. Instead of being guided by the interests of distant investors, a co-op is owned and governed by the very same people it serves. “Our interest is the most public it could be,” says River Valley Market’s General Manager, Rochelle Prunty. The choice to be a consumer co-op, she explains, was made because it was “the biggest broadest umbrella you could put a business under that would bring in the most different people in the community.”
With an initial $1.7 million investment from its members, the payoff to the community has already been substantial. This year alone, River Valley Market provided $3 million dollars to local farms and other local businesses, in addition to $3.4 million to its one hundred employees. “That’s a really cool thing about co-ops,” says Rochelle. “Co-ops can aggregate a little money from a lot of people. You can create a locally owned economic engine that really does strengthen the local community.”
Establishing River Valley Market has had its share of challenges: one of the greatest was finding appropriate real estate. From the outset, those engaged in planning the co-op were committed to finding a large piece of property to house the co-op. “There was an early commitment to having a sizable co-op,” explains Rochelle, “so it would have a major economic impact and meet many people’s needs” in the local community. This posed a challenge, however, since landlords of larger properties typically restrict tenancy to “Triple A” tenants, or those with enough assets to cover 10 years of rental, even if their businesses failed. This enables owners to get a lower interest rate themselves, but at the same time makes many properties inaccessible to small or mid-sized businesses, giving very large businesses and chains the advantage in accessing much local real estate.
Challenges aside, there were many early indications of success. Results of market research and financial projections were extremely promising,” says Rochelle, and initial membership drives and loan drives proved “wildly successful.” The founding group had access to substantial financial support and technical assistance from other food co-ops as well. “Co-ops help each other,” explains Rochelle, who points out the novelty of such mutual aid in a society where similar businesses are often viewed as competitors. Not so with co-ops. Green Fields Market, for instance, loaned River Valley Market $10,000 toward its start-up costs, and other co-ops together gave hundreds of thousands of dollars in loans and loan guarantees.
The search for suitable real estate had continued for almost a decade, with more than one failed attempt at purchasing property, before construction finally commenced at the co-op’s current location in early 2007. Despite real estate failures and other delays, community investment remained high and the membership had continued to grow over the years. There were about three hundred member households in 2001, thirteen hundred in 2003, and the co-op opened at last in April 2008 with two thousand members.
Opening just as the economic downturn started, the co-op filled an important community role just when it was most needed. By focusing on local purchasing from the start, it provided support to many local businesses at a crucial time. “Some might say that was a bad time to open a business,” acknowledges Rochelle, “but maybe it was a great time to open for the local community… because it really did help.” The co-op has thrived despite the difficult economic times, and sales have grown significantly each year. In particular, the amount of food purchased from local producers continues to rise steadily, providing support to countless local farms and food producers.
With over $15 million this year in sales, far beyond projections, River Valley Market is a testament to the resilience afforded by a business model based on investing in the local community. Fifteen years since the inception of the idea to create the co-op, River Valley Market is now a community fixture, as well as a symbol of what the sustained faith and commitment of many individuals working together can achieve. A symbol of what cooperation, and local community, can achieve.
“So it was a good idea,” says Rochelle with a smile. “It feels really lucky.”