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What exactly is a co-op?

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While the business model has existed for some time, many consumers that shop at cooperative markets like Tidal Creek Cooperative Food Market may not know exactly what co-ops are and why they exist.

Steven Harper, Progress Energy Betty Cameron Distinguished Professor of Entrepreneurship at the University of North Carolina Wilmington, said a gap in the marketplace usually plays a role in the foundation of all co-ops.

“It is basically where a bunch of people with like interests form a business to provide goods or services that were not readily available or did not meet their specific interests,” Harper said during a Friday, Jan. 16 phone interview. “Some co-ops might have an agenda where they may want to provide something that is not readily available, which not only makes themselves better off but the community as well.”

Co-ops can range in form from food markets, like Tidal Creek, to farming cooperatives like the North Carolina Cooperative Extension and artistic cooperatives like The Dance Cooperative.

To form a successful cooperative requires a commitment of time, talents and funding on the part of the founders and the cooperative’s membership, Harper said. However, in turn, a group of owners highly invested in the co-op often results in stronger ties and more passionate followers.

“That is the classic American mentality there — there is a gap in the market and enough people share that interest and are prepared to commit their time and money to it,” he said. “Part of the justification for putting their own time and money into it is they donate their time, which can help drive the price point down and the customer service is likely better because they are passionate about it.”

Tidal Creek began in 1982 when multiple Wilmington residents noticed a lack of natural and organic foods in area grocery stores. Now, with more big box stores carrying items labeled organic or natural, the market faces uncharted waters.

Tidal Creek general manager Jason Blake-Beach said sales have dropped in the last 10 years with more organic and natural options available at grocery and convenience stores. However, Blake-Beach said it is the mere existence of the alternative ownership model of cooperatives he finds most important.

“It changes the dynamic just enough and I don’t have any incentives or directive to go squeeze out every last penny from any corner possible to increase the shareholder’s stock value like I would if I was at a publically traded corporation,” Blake-Beach said. “A co-op does not have to be defined by the type of business you do; in the end the most important thing is the why and how. With the cooperative principles every owner has an equal share.”

Cooperatives like Tidal Creek are open for more than just the members that buy into the ownership of the cooperative and Blake-Beach said that is often the biggest misconception. Tidal Creek now has 2,541 owners and Blake-Beach said those owners account for 65 percent of sales.

Like in other cooperatives, members at Tidal Creek are able to vote on decisions and issues within the cooperative itself and Harper said that democratic process is one of the main attractions for most cooperative members.

“The co-op is just a way of bringing people together and for some people it is the opportunity to make decisions they would not have at a big box grocery store,” Harper said. “It is not just a matter of offering goods and services that were not readily available; it is also that people are able to share their thoughts on what is being provided.”

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