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Albany & the Co-op

January 9, 2012

Why am I so hard on the Honest Weight Food Co-op? It’s a good question, and one that I don’t think I’ve ever tackled directly. Plus it’s an easy one to answer. The truth is that I really love what they are and believe in what they do.

Is that surprising to hear?

Part of the human condition is that we can only be disappointed by people and things we care about. If Burger King goes and makes a bunch of people sick selling tainted beef, it would be appalling, but my opinion of the brand is already so low, its impact would be muted. However, should the same thing happen at Chipotle, I’d be crushed.

While I love what the Honest Weight Food Co-op is and believe in what it does, I find myself frustrated by its execution. Sure, I could get involved and try to change things from within, but right now I do not have the patience to attend meetings and deal with committees. But despite my persistent concerns regarding prices, cheese and meat, the Co-op fills a very valuable role in the community.

And this is why I’m worried.

The Capital Region is changing. It is. And there may be people who want to believe that it’s not, and that’s fine. But let’s look very narrowly at the changing dynamics of the area as they pertain to grocery shopping.

Our homegrown grocery chain is Price Chopper, and I would like to see this institution do better too. But for years if you wanted food it was a choice between Price Chopper, Hannaford or the Co-op. Then Walmart came to town selling groceries and opened up the largest super mega store in our backyard. Walmart may be reviled by some, but I shop there quite a bit for reasonably priced organic & local foods in addition to household staples.

When The Fresh Market opened up in Latham, you would have thought they were giving away gold ingots. Obviously there was a hunger in regional consumers for something more than they’ve been getting from their local market options. This was a first and early warning sign of what was to come.

Because about a year later came the ShopRite in Niskayuna. This is right in the backyard of Price Chopper corporate headquarters, and our hometown market made some major improvements to Capital Region stores in advance of the opening. Despite those efforts the newest addition to the local supermarket scene had “the highest-volume sales for a grand opening week for any ShopRite in the history of the chain,” according to Burt Flickinger III of Strategic Resource Group.

Naturally there are more ShopRite stores on their way.

You may have also heard we are getting our first Trader Joe’s ahead of schedule. I shudder to think of the mayhem the first day of the new store will bring. But if All Over Albany will pay me to go, I’ll be there. Otherwise I’ll do the much more sensible thing and stay the f*ck at home.

Now here’s the thing.

Without a doubt, there is totally room for the Honest Weight Food Co-op to peacefully co-exist with Trader Joe’s in Albany. However, it would be foolish to suggest that the presence of a TJ’s will not cut into the market share of the coop or affect their overall sales.

While TJ’s doesn’t stock local grass-fed beef or milk, and while it may not have a staffed cheese counter, it does sell humanely raised meat without antibiotics and hormones, organic milk, and decent cheese for a fraction of the HWFC’s prices. It also sells natural cereals, good olive oils, organic crackers, gluten-free cookies, organic yogurt, sprouted wheat bread, fair trade coffee, and host of other things people have been buying almost exclusively from the co-op for many years. Oh, and TJ’s prices are a fraction of what is charged at the Co-op for similar or even identical items.

But Trader Joe’s is not the co-op. It doesn’t participate in the same community events. Plus TJ’s does not have nearly the same fresh produce selection, nor does it have the impressive assortment of bulk goods. The Co-op also has a leg up because it is relatively small and does not have a lot of overhead expenses.

Oh.

Except for the fact that our small co-op is about to embark on an $11 million dollar new store in an industrial area a bit off the beaten path in Albany’s west end. On top of that, only five months ago the HWFC had just $1.7 million of this in cash and planned to finance the rest with loans.

You know, maybe this will be a case of, “Build it and they will come.” But this decision was based on a set of sales projections that were made long before the recent changes to the competitive landscape. I know that I’m not the only one who has concerns about this project.

The Honest Weight Food Co-op is too small to fail.  

It would be a shame if a board with its heart set on a building project pushed through with grandiose plans that were made years ago, in an entirely different marketplace. This venture is a risk. And it seems to be getting riskier all the time. All I hope for is that somebody slows the project down and takes a hard and honest look at the numbers to see if this still makes sense today (and down the road when we eventually get a Wegmans).

24 Comments leave one →
  1. Bill Swallow permalink
    January 9, 2012 10:50 am

    It certainly does sound like a risky venture. You can’t move forward with only historical data points to go by. If the current trend is downward and the expectations set years ago have not yet been met, then I agree the venture is extremely risky. If it’s not too late, I would suggest a different strategy: an urban grocery model where there are small shops slowly popping up over the city in various locations that are walkable for many urban neighborhoods. The risk is smaller given expansion is contingent on a fraction of sales growth compared to the larger store, and the inventory can be tailored based on the needs/wants of the local market they’d be serving.

  2. Jessica R permalink
    January 9, 2012 11:26 am

    “…and down the road when we eventually get a Wegmans”
    Strike Wegmans and put in Whole Foods.

    Very good points in this article. Hopefully some people at HWFC will read it. I would hate to see it fail for any reason.

  3. Chris permalink
    January 9, 2012 12:10 pm

    The co-op is facing additional competition from the existing marketplace as well: Price Chopper is stocking local, pastured eggs at $4/doz ($7.99/doz at co-op from same farm), Green Grocer & Four Seasons both have grass-fed beef at half the price of Honest Weight (plus the increasing popularity in the weekend markets have given more people the opportunity to buy direct from the farmer for even less), Hannaford and PC have both expanded their organic-GF-better-for-you selection in the past year, TFM as well as Roma, among other import stores, have a decent cheese selection at a more favorable price, and I’ve even seen local & non-homoginzed milk appear at some of the flagship grocery stores in the area. With TJs coming, the co-op needs to take a hard look at the competitive landscape before considering such an investment.

    If anyone from the co-op reads this: sure, it’s inconvenient to have to hop around to multiple grocers to stock up for the week, but I rarely go more than 2-3 days without driving past a Price Chopper / Hannaford, import store, small grocer, etc. Please consider taking a hard look at your pricing relative to the competition for the exact same products so as to not isolate your customer base – I’d really love to keep supporting you, but I’ve been spending an increasing percentage of my grocery budget elsewhere over the past year.

    Oh, and stop treating us meat shoppers as criminals… the “undercover security” you have in the department is an insult to your customer base and makes me avoid spending money in that department when I’m at your store… which is a shame, because the woman who heads up the meat department is super knowledgeable and great to talk to. I understand theft is an issue, but it makes for a really uncomfortable shopping experience – one of the staffers was literally following me around and watching my every move when looking at the steaks on Saturday, even though I’m a pretty recognizable customer who has been shopping there for years.

  4. Mirdreams permalink
    January 9, 2012 12:45 pm

    Maybe it’s because I live in Latham and rarely have a reason to go by it, but I consider myself a foodie and I’ve shopped at the Co-op maybe four times in as many years. While I admire their goals I have in those four years rarely needed something they were the only ones to carry (given their high prices it’s not feasible for me to buy staples there) that would make me travel there. Four times is probably around the same number of times I’ve schlepped something back from one of the Trader Joe’s in NYC. I agree that the Co-op needs to be very very careful. On the plus side this article made me feel like going to the Co-op and poking around to see what they’ve got in currently.

    • Nino permalink
      September 26, 2012 11:44 pm

      please keep poking deeper, you may find some surprises, good luck

  5. January 9, 2012 1:04 pm

    This is a thoughtful piece considering the possibilities of the future of grocery shopping in the Albany area. I think (and hope) something somewhat like Bill Swallow suggests will happen- where shoppers learn to diversify their shopping habits even more. I realize this idea can seen a bit unnecessary, especially when it involves driving and parking at multiple stores to get the things needed to eat for the night, the week or two weeks. It is a way for everything to co-exist. One could easily go to the mega WalMarts and get everything the need for a lifetime, but that would harm the community to the point where we’d no longer have these discussions.

    If I lived in Albany I would frequent the co-op for vegetables and grains and other things, order meat and eggs from Farmie Market, and then when TJs comes around go there for my favorite things they offer like their chai latte mix and bags of nuts and dried fruits. If we can all commit to shopping at businesses that are mostly local and supplement with other stores as needed, we will be doing good by the community and by ourselves.

    • Bill Swallow permalink
      January 9, 2012 3:24 pm

      The multi-mini store approach won’t work outside an urban area, but IMHO it’s the kind of renewal that Albany needs. I would suggest that these not be treated as one stop shopping centers and not something that people primarily drive to, but ones that support the community immediately surrounding them.

      I live in Clifton Park, so there’s no hope of anything other than centers for me. That said, I’d much prefer walkable retail, dining, and groceries. while I have a plaza within a half mile walk from my house, it’s not safely walkable. I have to contend with crazy traffic (prone to shoulder-hopping to get to wherever they’re going 2 seconds quicker) and there are NO SIDEWALKS.

      Albany businesses, especially ones within dense residential reach, have a real opportunity to jump on a local service bandwagon and cater to sidewalk shopping/pedestrian commuting. I am continuously hearing how my friends living there are keeping their cars parked as much as possible and favoring walking and public transportation to get around. Catering to this shift in lifestyle, to me, makes sense. And it may make dollars if the business research is sound.

    • January 9, 2012 8:57 pm

      Mary, that’s essentially what my husband and I do. We have a CSA share in the spring/summer (or, rather, more like summer/fall) months along with an egg share which we supplement with Co-Op produce (and almost exclusively Co-Op produce when the CSA is not running); we buy meat mostly from Cardona’s, with some from the Co-Op and sometimes we venture to the Meat House (which I’ve been extremely impressed with their business model thus far, though I wish they were more transparent about where they source their meat from), and then staples/dry goods/etc. are split between the Co-Op (perishables) and Trader Joe’s (dry goods) (My in-laws live near a TJs.)

      So, with the new TJs, we’ll probably shift some of the perishable staples to them, and we won’t have to buy cereal in bulk anymore, which will be nice. (My dog, Finnegan, will be thrilled to not share the back seat with four bags of groceries for 3.5 hours.) I still imagine I’ll buy those staples occasionally at the Co-Op, depending on what I’m looking for.

      I don’t think that TJs is going to harm the Co-Op all that much, if at all. Most of the people who shop there are like me, who only utilize it for certain things and will continue to do so, or the members, who are devoted (with good reason). I think it will hurt Hannaford and Price Chopper (or force them to be better, which is great in my mind), and I think it will REALLY hurt the Fresh Market, which is not really any less expensive than the Co-Op.

      • Nino permalink
        September 26, 2012 11:48 pm

        TJs is going to harm the Co-Op all that much, if at all,
        but their ignorance will..

  6. Gabby permalink
    January 9, 2012 2:32 pm

    I agree with most of the above–I love the co-op, want to support it, but live on minimum wage and can’t really afford to shop there, and poor health dictates that I a) stay in this minimum wage job, at least for now, and b) buy the best food I can at the best price I can. I suspect a lot of people in this area are in similar situations. Daniel, can you tell us what you’ve found worth buying at Wal-Mart? I hate shopping there, but would at least like to think I’m encouraging more sustainable practices if I do have to buy some organic things there.

  7. Skroo permalink
    January 9, 2012 2:44 pm

    The problem with the new building is that we already bought it. The store needs a newer, bigger location and the Board had been looking for close to eight years. Nothing at the Co-op happens quickly or efficiently, which is actually part of the charm. The amount of BS and political stuff that goes on behind the scenes is amazing, and it is really a miracle that it manages to be as successful as it is.

    So you have a Board that is eager to finally get a location. You have a real estate bubble that hasn’t QUITE popped.

    The location that was purchased was pitched to the Membership as ideal, with some modifications. The Membership voted to approve the purchase. Then this happened:

    1) Real estate bubble popped and the economy collapsed.
    2) Further site surveys of the building indicate that the building is unacceptable even with modification. The best plan is to demolish the existing structure and rebuild.
    3) We need more money now and NOBODY IS LOANING

    The single highest expense for the Coop, and the one that drives its prices to be where they are, is member discounts. Member discounts are figured in the accounting as labor costs, and if you compared the labor cost of the Coop to any other grocery store you’d think everyone working there makes $100/hour.

    The only way to control this cost is to further reduce the already disappointing discount, or move to a model of all paid staff with a simple base discount for share holders. The existing share holder (non working/non-voting Member) discount is 2%. You could probably raise that to 5% and get rid of the working member discount, if you got rid of working members. And … to be perfectly honest, most of the work in the store is already done by paid staff. The paid staff would be more productive if those folks didn’t have to chase Member workers around finding crap for them to do.

    This would be an impossible sell to the voting Membership as the current bylaws read, since only working Members can vote on things like this, not shareholders. There has been some push by certain Board members from time to time to change the bylaws to allow shareholders a vote, but again … it is an almost impossible sell to the Members who would have to vote yes on such a change.

    I was knee deep in the politics of the place when we started selling meat. That was a nightmare, and that was nothing compared to what a change in voting rights would involve.

    In some ways the Coop is a victim of its own success. Many of the old-time, very respected Members were there when it was just a buying club that sold nothing but bulk items. Now it is an overflowing store with $11 million in sales a year.

    The Members are, for the most part, dedicated, committed people who are passionate about food. I’m sure the place will be standing and selling good stuff for a long time, but it might end up looking quite a bit different than it does now.

    • January 9, 2012 5:11 pm

      Everything that is bought can then be sold. It may have to be sold for a loss. But there is some kind of saying about throwing good money after bad. Sometimes it’s best to take the small loss rather than risk an even bigger one. Although it’s never an easy decision to make, especially by a committee for which the risk is widely distributed.

      • January 26, 2012 11:55 am

        It’s hard to see the problems with an organization in which you’ve invested time and money from the inside. The Profussor is the kind of shopper the co-op seems to want to attract–a suburban foodie–and he sees problems with their new plan.

    • Nino permalink
      September 26, 2012 11:56 pm

      “we already bought it” – supper trick,
      …we all know Monsanto is America’s most dangerous criminal. History will judge them to be mass murderers.
      From Agent Orange to NutraPoison, to Dioxins and PCBs, Monsanto has introduced many horrible chemicals into our food supply and environment.
      who are really the gray cardinals of this dishonest COOP… that is the real question

  8. Shopper permalink
    January 9, 2012 9:17 pm

    I think you first few sentences sum it up! You like what the Coop stands for and what it does for the community but you are to lazy to be involved in the good. So lets sit back and write about the negative things to attract attention. I think what the capital district needs is more people like the workers at the Coop and less people like you.

    • Nino permalink
      September 26, 2012 11:58 pm

      this COOP stands for your money,
      trhanks

  9. Greenguy permalink
    January 12, 2012 6:19 pm

    The co-op is run very poorly for the amount of time poured into it by community members, for whom the co-op is often their sole “activist” credential. Perhaps that is the problem. While technically a co-op, the paid workers are treated as disposable, like most other grocery stores. I would be much happier if it were run as a worker co-op and there were no “membership shares.” Yet, the worst blunder they made was purchasing the location for a new store; it is literally in the middle of nowhere for most shoppers. Now you can either choose to be a store that provides services to the West Hill community (which it does because all other stores have abandoned that part of town) or you can cater to a mostly affluent middle/upper-middle class base. You cannot do both in Albany at this point. If you want to be an urban store your current location is fine. Save the money and put it into further refurbishing or price reductions. Buy out Family Dollar and expand so you have the street traffic as well. Or, drop the charade and move to Wolf Road or someplace in Guilderland or Colonie. The co-op board wants to have its cake and eat it too, which is not surprising giving the idiocy of their decisions over the years.

    • Nino permalink
      September 26, 2012 11:39 pm

      most honest review I’ve ever read,
      is nothing honest left about this coop except of weight of course,
      thanks

  10. Terrence Rusch permalink
    January 17, 2012 12:05 am

    I agree with just about everything said so far. Daniel is exactly right that we mustn’t simply throw away good money after bad (“we” as I am a working-member). I hate the new location. Let me repeat that. I hate it. Call me a cynic, but there is something very odious about moving a community food co-op to a place that’s at the intersection of “Commerce Ave” and “Industrial Park Rd” – Don’t believe me? Google Map it!

    I wish there were more members of the Co-Op that we with me on this so we could potentially vote to dump this toxic piece of real estate. All rancor aside, there must be an interested party out there that can do more with this plot of land than us. Of course, if you take a look at the map it is worth mentioning that the new store would be easily accesible to those driving into Albany via I-90, 87, or 787. You know, folks out there in wonderful Suburbia with more disposable income…but I digress.

    Any HWFC members here, feel free to email me, I’d love to work with anybody else who feels that we deserve better than this.

    pax

    Terrence
    trusch82@gmail.com

  11. January 17, 2012 11:48 am

    Wait, people pay $8 for a dozen eggs? I… have things I want to sell them.

    I avoid Albany like the plague, but last time my truck was at Larry’s (had to chuckle when I saw your card there, Daniel), I took a walk down to HWFC because I had 5-6 hours to kill. I picked up some teas, some chia seed, some kombu, and other things you just can’t find at a grocery store. But I also laughed my ass off at the $15/lb sea salt, the beef prices, and many other price tags.

    I make a pretty good living, but let’s be real here. If you like your beef that much, call a farmer, buy a quarter cow. Done. The money you saved per pound will buy you a chest freezer.

    As to the new location, eh. Sure, the corner of Moo Cow and Vanilla would be more fun to drive to, but don’t let the street name be a thing. The finances seem to be the real problem. Do they really need to try to compete on a sq-ft basis with the big boys? Or should they focus on being better and keeping shopper loyalty?

    I like the idea of smaller satellite locations, where one can pick up staples on short notice. That’s what I loved about the (admittedly faulty) Troy Co-op. Between that and the weekly Saturday market, I didn’t hit Price Chopper for a whole year. I had everything I needed in walking distance. Now, I need the occasional grocery run for citrus and other things you don’t find locally. And BJs once every 2-3 months for large quantities of frozen things.

  12. Richard Lachmann permalink
    January 25, 2012 10:52 pm

    I lived in New Haven in the early 1980s. The small, beloved coop there bought a larger building with loans and was bankrupt and out of business in less than 2 years.

  13. Nino permalink
    September 27, 2012 6:18 am

    The Honest Co-op, for years enjoying virtually unfettered sway in
    the marketplace, ought to watch its backside-especially with a planned expansion to new digs. (The Troy co-op died on the vine).

    In its heretofore comfy niche Albany Co-op’s lofty salaries and sometimes bizarre operational practices have gone unchecked as sales have soared along with revenues. No longer.

    If it’s to survive, it must streamline its ops and reform itself and–cut the fat.

  14. Nino permalink
    December 2, 2012 1:12 am

    I have been a regular customer at the Honest Weight Food Co-op for 10 years now. Their prices are usually competitive, most people are friendly, and the bulk selection is the best in the area. I also appreciate the well-loved feel of the store and the concept behind it. It can be a bit crowded both inside and out (parking) although less so since the present location expanded. So when the original proposal for a new location was put forth I was excited.

    However some of that excitement was lost when instead of re-using the pre-existing structure voters instead opted for a brand new building. At the time much of the money for the new building was coming from the state (taxpayers) so a ‘free’ new structure made some sense to many. Still even with the free money the financing for the rest could not be raised and the state money went away as the economy soured.

    Now, instead of excitement I am left with annoyance and sadness. I see terms such as CFO (chief financial officer), board president, and figures including $11 million in costs and a large commercial loan. This sounds more like a big-business/corporation than a community owned grocery store.

    Given these figures, this means the primary lender (M&T Bank – not local) will be owed more than half of the investment making them the biggest partner in the Co-op. Who will have the most influence over the Co-op’s decisions? If things get tight will policy, prices, and people change to suit the biggest investor? Who would get paid back first if things don’t work out? I also wonder why this is being pushed so hard? Who stands to gain from the new building being built and what relationship exists, if any, between them and member/s of the Co-op?

    This is not the time (if there ever was one) to build such an expensive and expansive store. Where will the extra customers/sales come from to pay the loans and additional overhead? Do you really think people clamoring for a Whole Foods will go to the Co-op instead of the new Trader Joe’s and Whole Foods when it arrives at the Colonie Center (better part of town)? Further, every major grocery store in the area has a fairly well stocked health food department.

    In sticking with the co-op concept which has made the present store such a pleasure as well as placing viability over big dreams, I propose the Co-op do the following: Nix the M&T loan and use the $2.7 million in approved loans to bring the building at the new location up to code, move the inventory/equipment from the existing store and use any remaining loan money to do improvements. Keep the rainy day fund ($1.7 million) as a cushion to see how things go. If the new location succeeds and as the loans are paid back, improve what you have over time. This would all keep with the motto: reduce, reuse, recycle which would seem to be what the Co-op has been up until now.

    If you are as concerned as I am and have any influence, please speak up. The Co-op is ‘just about right’ now. A little bigger could be ‘just about perfect’. $11 million bigger would be ‘just wrong’.

    • Laura Northrup permalink
      May 22, 2013 4:22 am

      HWFC doesn’t own that building. If the owner of the building wanted to sell to them, they would own it by now. They don’t.

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