Advertising
Advertising

Is Cooperative Business the New Way to Succeed in Modern Business?

Is Cooperative Business the New Way to Succeed in Modern Business?

The world of modern retail is ruled by a number of big names who control a massive proportion of a market worth over $5 trillion in the United States alone. Walmart is the world’s largest retailer by revenue. If you are an independent farmer or food producer, how do you approach such an organisation?

The simple answer is you don’t. There is no way that an independent producer can make any inroads to the large retailers alone and so a cooperative model is often the only way in which individual producers can create a large enough brand to engage with the large players in the retail industry.

What is a Cooperative?

A cooperative will look, from the outside, like any other business however the major difference is rather than being owned by investors or shareholders they are owned by their members. Ordinary people who are farmers, food producers or employees. It is owned and managed by its members for the benefit of its members.

It allows individual farmers or producers to create a brand that can be competitive in a challenging market. Members of a cooperative democratically vote with a one organisation one vote model to make key decisions and to set policies.

Types of Cooperative Organisation

There are a number of basic models of cooperative:

Advertising

  • Producer – Owned by food producers like farmers or fishermen who join forces to process and market their products under a single brand.
  • Worker cooperatives – Organisations owned by some of all its workers. It gives workers the chance to own their own company, something which would be out of reach of any individual. There are various businesses from restaurants and bakeries to small manufacturing cooperatives.
  • Consumer cooperatives – Consumer cooperatives allow numerous individuals to come together to buy anything from groceries to utilities and fuels with the benefit of bulk buying, which allows them to command better deals from suppliers.
  • Retail cooperatives – These consumer cooperative generally involving independent business owners. For example, Best Western Hotels encompasses a number of independent hotels that benefit from an international cooperative to reduce the cost of products and services to create a powerful, international brand for otherwise relatively small businesses.

The power of a cooperative allows otherwise small companies or individuals to act with the power of larger organisations while retaining inclusive business practices.

Why Producer Cooperatives Work

An producer cooperative allows individual farmers, fishermen or food producers to achieve a market scale and economic presence which would not be possible by themselves. By coming together as a collective they can create a central, large bargaining power when dealing with the major retailers for the sale of their products. In addition, they can achieve reduced costs by pooling capital and resources to employ bulk purchasing and centralised production and processing.

Cooperative organisations can create marketing resources and brands that would be out of reach of individuals. However allowing an organisation to be formed following the ethical and business ideas of the individuals creates an organisation with shared values as opposed to a ‘faceless’ conglomerate.

Introducing the Rochdale Principles

Most major cooperatives follow the Rochdale Principles, a set of ideas established in 1844 by the Rochdale Society of Equitable Pioneers in Rochdale, England. The Rochdale Society of Equitable Pioneers was a group set up with the challenges of the Industrial Revolution which forced large numbers of skilled weavers into poverty as their roles were replaced by factories. They banded together to open their own store which sold food which they otherwise could not afford. They pooled resources of £1 per person to allow them to open a store selling high quality, unadulterated goods.

The principles they created to run their first cooperative were formed by trial and error but created a set of ideas that stand even today. The principles set out values such as self-responsibility, democracy and equality as well as the importance of honesty and social responsibility.

Advertising

Cooperatives are naturally democratic organisations controlled by their members, there is no discrimination allowed in the establishment of the membership and an expectation that each member contributes and that at least part of the capital is given as common property of the cooperative.

The principles build in elements that value and develop local communities and cooperation between cooperative organisations. It is good for business, developing links and allowing smaller organisations to work together to become powerful yet responsible alliances. The most important element is that you as a consumer can trace your product through the organisation to an individual farmer or producer.

Old Fashioned New Business

In an age where consumers have a greater interest in the source of their food, the ability to trace products through a brand to individual producers is a major asset. It gives an opportunity to prove the brand heritage.

Case Study – Cabot Creamery

Cabot Creamery is one of America’s most popular cheese brands and it was established in 1919 when 94 families in Vermont formed a cooperative to secure their livelihood. Now the cooperative encompasses over 1,000 individual farms and over 1,000 employees in four production plants.

Advertising

Photo credit: Cabot Creamery

    Photo credit: Cabot Creamery

    The scalability has allowed the cooperative to grow to a business with a turnover of hundreds of millions of dollars.

    The People Behind the Cooperative

    The important story behind cooperatives are the individuals who make up the membership. Cabot Creamery encompasses over 1,000 farming families, many of whom have been members for generations. From small specialty farms with 50 cows to larger establishments with many hundreds of cattle, the key is that each is a small to medium-sized business working within and supporting a local community yet an intrinsic part of a major food brand.

    Cabot Creamery is keen to share the stories of their individual farms and the families which own them, it is a major part of their marketing and most welcome consumers to visit the farms and to meet the families allowing them to understand and appreciate the nature of the cooperative.

    Advertising

    Cabot Creamery - one of the farming families

      Photo Credit: Cabot Creamery – Birch Mill Farm

      You can learn more about how Cabot Creamery have developed their sustainable cooperative online at: https://www.cabotcheese.coop/our-coop

      Creating a Better Business

      It is the unique nature of a cooperative is as engaging for a modern consumer as it was necessary for the original co-op members 100 years ago. The cooperative model still makes considerable financial sense for small organisations or producers. However, a more enlightened consumer who wants to understand the source of their food can be satisfied with the story that a cooperative business delivers. We can see from the Cabot Creamery case study that the cooperative have enabled a large number of producers to make a viable business. A major part of their success is the transparency of their membership and they make a large play on the fact that their members are family farms, reinforced by supporting a large number of community activities. In this way, they ensure that their local producers are seen to be grounded within their community.

      The value of local community is vital for the development of a cooperative brand, not only is it built into the values of cooperative organisation it is a vital differentiator between cooperatives and other corporate entities.

      An organisation which is built from its foundations on sound, ethical values with sustainability, individuals and local community at its heart seems to be a very modern principle, yet the Rochdale Principles have just held their centenary.

      A Cooperative Future?

      Whereas the cooperative model is one based in the past, it is one which is growing from strength to strength. There are 2.6 million cooperatives worldwide with over 1 billion memberships and clients, generating $3 trillion in annual revenue (Results of the 2014 Global Census on Co-operatives).

      It is clear that cooperative business is good business.

      More by this author

      Time for an alcohol detox Cut down on drinking! Time for a post-holiday detox 5 Types of Horrible Bosses and How to Beat Them All Understanding Millennials – Who is Generation Y? Natural History Museum Museums in a Changing World – The Evolution of museums Holistic Rehab - Despair and Addiction Holistic Rehab – Choices in dealing with addiction

      Trending in Marketing

      1 8 Life-Changing Skills You Can Learn in Less Than 6 Months 2 7 Things To Consider Before Hiring An Advertising Agency 3 9 Things Every Marketer Should Do 4 Tips for Designing Your Plastic Surgery Website for Optimal Marketing 5 SEO Tools Every Business Should Be Using in 2017

      Read Next

      Advertising
      Advertising
      Advertising

      Last Updated on May 22, 2019

      50 Great People To Follow On LinkedIn, No Matter Your Industry

      50 Great People To Follow On LinkedIn, No Matter Your Industry

      LinkedIn is an excellent platform to network with great people to help you in your career and businesses. However, with over 575 million people on the site, who should you follow? This list will steer you to the right people to follow, organized by categories of expertise.

      Job Search Experts

      You will likely have several jobs throughout the course of your career, and you will constantly need advice on new trends and strategies out there in the job market. Here are the LinkedIn experts who you should follow on these matters.

      1. Liz Ryan is the CEO and founder of Human Workplace. Her articles on job searching are filled with creative and colorful cartoons.

      2. Lou Adler is the author of The Essential Guide for Hiring and Getting Hired.

      3. Dr. Marla Gottschalk will help you make an impact in a new job.

      4. Hannah Morgan runs CareerSherpa.net, where she gives expert advice on job searching and how to be more visible online.

      5. Alison Doyle is the CEO and Founder of CareerToolBelt.com.

      Management Experts

      They say that people leave managers, not jobs. These experts in LinkedIn will help you become your employees’ dream manager.

      6. Jeff Weiner. How can we leave out the CEO of LinkedIn himself?

      7. Nozomi Morgan is an executive coach. She can help you transition from a boss to a true leader.

      8. Mickey Mikitani is the CEO of Rakuten. He constantly shares his expertise in managing a global player in e-commerce platforms.

      9. Andreas von der Heydt was the head of Amazon’s Kindle Content and now the Director of Talent Acquisition. He has extensive experience in management, branding, and marketing.

      Advertising

      Productivity Experts

      By maximizing your productivity, you can win in all aspects of life. The following LinkedIn experts will help you win big in your career.

      10. Gretchen Rubin is a happiness coach and the bestselling author of the The Happiness Project.

      11. Carson Tate is the founder of Working Simply. She advises us to include play in our schedules.

      12. Greg Mckeown is an essentialist. Part of being an essentialist is saying no to many things so that we can focus on the things that matter.

      13. Brian de Haaff, CEO of Aha! Labs Inc. provides strategies on how to be productive and happy at work at the same time.

      Marketing Experts

      14. Sujan Patel is VP of Marketing at When I Work, an employee scheduling software. He is an expert in content marketing and he even shares his ideas on content marketing in 2020.

      15. Megan Berry is the Head of Product Development at Rebelmouse, a content marketing and AlwaysOn powerhouse.

      16. Sean Gardner will help you navigate the social media landscape. This includes how to use different platforms to help accelerate your career. He is also the bestselling author of The Road to Social Media Success.

      17. Christel Quek is an digital and marketing expert. She is the VP of South East Asia at Brandwatch. Their products help businesses utilize social media data to make better business decisions.

      18. Jeff Bullas is a digital marketing expert. His blog has over 4 million readers annually.

      19. Michael Stelzer is the CEO and Founder of social media powerhouse site, Social Media Examiner.

      20. If you’re looking for inbound and content marketing expertise, follow Dharmesh Shah, Founder and CTO of Hubspot.

      Advertising

      21. David Edelman is a McKinsey partner and is at the helm of the Digital Marketing Strategy Practice Department.

      22. Dave Kerpen leads the social media software company Likeable Local. He is the author of Likeable Social Media: How to delight your customers.

      23. Clara Shih is the CEO of Hearsay Social and the author of The Facebook Era.

      24. Aaron Lee is Grand Master of Customer Delight at Post Planner. He is an excellent resource for everything social media.

      25. David Sable is the CEO of Y&R, one of the largest advertising firms in the world.

      26. Content marketing trumps traditional marketing these days, and who else better to lead you in this area than Joe Pulizzi, Founder of Content Marketing Institute.

      Personal Branding Experts

      Part of what we market in our personal career is our brand. When people hear your name, what kind of brand comes into their mind? What traits and qualities do they associate with you?

      Here are some personal branding experts from LinkedIn to improve your own brand.

      27. Dorie Clark is the author of Stand Out and Reinventing You. He can help you craft the professional image you’ve always wanted.

      28. Dan Schawbel is the managing partner of Millennial Branding. If you’re a millennial, Dan is the guy to help you craft your personal brand.

      Other Notable Experts to Follow

      29. Lisa Gates is the expert to follow if you’re negotiating for higher salaries and promotions.

      30. If you’re a Baby Boomer, Marc Miller will help you navigate the continually changing landscape of the workplace.

      Advertising

      31. To avoid getting your resumé moved to the “No” pile, read Paul Freiberger’s excellent advice.

      32. James Caan provides insightful ideas on careers in general. He is also a serial entrepreneur.

      33. Jeff Haden writes on various topics, such as leadership and management. He is the owner of Blackbird Media.

      34. If you’re looking for expert business advice on getting new customers and keeping them, follow Jay Baer.

      35. Suzanne Lucas, aka Evil HR Lady, is a great human resources specialist.

      36. If you need help in using Twitter to boost your career, Claire Diaz-Ortiz can guide you in the right direction.

      37. Ryan Holmes is the CEO of Hootsuite, a social media management tool.

      38. Customers are the lifeblood of a business and Colin Shaw focuses on revolutionizing this customer experience.

      39. Brian Solis often reflects on the future of business and how technology can disrupt our world.

      40. Nancy Lublin provides advice on more lighthearted topics, which are perfect after a long day’s work. She is the CEO behind Dosomething.org, a portal designed for social change; and the founder & CEO of Loris.ai and Crisis Text Line.

      41. Katya Andresen provides advice on how to manage your career. She was the CEO of Cricket Media and now responsible for the SVP Card Customer Experience at Capital One.

      42. Gallup has created a system to test what your strengths are and how to use them at work. Jim Clifton is the CEO of Gallup.

      Advertising

      43. Adam Grant is a Wharton Professor and the author of Give and Take, which provides advice on why being helpful at work can accelerate your career.

      44. Hunter Walk is a partner at Homebrew Venture Capitalist Company and has specialty in product development and management.

      45. If you’re running a nonprofit organization, follow Beth Kanter for expert advice on this area.

      46. Emotional Intelligence is necessary to succeed in your career, and Daniel Goleman is your expert for that.

      47. Rita J. King connects science, technology and business.

      48. Tori Worthington Rose is a Creative Director at Mary Beth West Communications, LLC. She has extensive experience in sales and digital media.

      49. If you’re looking for some advice on how to use writing and personal content marketing to boost your career, follow Ann Handley.

      50. Tim Brown is the CEO at IDEO and shares his insights on Leadership and Creativity.

      These are just some of the key thought leaders and movers in various industries. They will provide you with constant inspiration, as well as the willpower to pursue the career that you’ve always wanted. Their stream of expert ideas in their respective fields will help you become well-equipped in your professional pursuits.

      More Articles About Successful People

      Featured photo credit: LinkedIn Sales Navigator via unsplash.com

      Read Next