Berry Road Food Co-op Newsletter

Update from Berry Road Food Co-op

Berry Road Food Co-op is moving closer to opening week by week! We have secured our space, and commitments for multi-year funding support. Our Purchasing and HR Committees have been busy working on the policies and procedures we need to open, and our business plans are all in place.
We are still seeking additional funding to enable us to purchase store equipment, shelving and initial stock, as well as to make sure we have the resources to pay our staff once we open! Our community partners are working hard to connect us to potential institutional donors, but any community member can help out by spreading the word about our Founders' Credit program! We are just 750 Founders' Credit purchases away from being good to go!
Our current position is stable, and there are currently no risks or barriers to our opening after we have obtained the funding resources needed. BRFC will open eventually, no matter what. But your support will help it happen sooner!

Founders’ Credit

You can help the Co-op get off to a financially healthy start by purchasing some Founders' Credit!  Founders' Credit is basically just buying groceries at Berry Road Food Co-op in advance.  For every $200.00 unit of Founders’ Credit you purchase, we will slowly over time, as the Co-op's finances permit, return that $200.00 to you as Co-op Credit associated with your membership.  When you shop at the store and you have Co-op Credit on your membership, it will automatically be applied to your bill at the checkout!  The rate at which Founders' Credit will be returned will be determined quarterly by the Co-op’s Finance Committee.  Since Founders' Credit purchasers must also be Co-op Members, anyone who is interested in how the rate of return is determined is welcome to attend the relevant committee meetings and participate in the discussion.
As an added bonus, when you use redeemed Founders' Credit to pay for groceries at the Co-op, we will give you a discount on your entire purchase as a way of saying thank you for helping us to get started!  And if it so happens that you don't use your redeemed Founders' Credit within 12 months, it will automatically be transferred to one of our Grocery Support Programs where it will be converted into reduced food prices for community members who need a helping hand!

Margin Trading

Berry Road Food Co-op is going to provide quality, organic, local, and responsibly produced food to South Etobicoke.  But we also recognize the income diverse nature of our neighborhood, and have committed ourselves to providing a range of products at or very near bargain grocery prices.  Many people have asked how we are going to be able to do this!
One way is through Margin Trading   Before we explain Margin Trading, we just want to clarify what "at or very near bargain grocery prices" means.  We know that many people in the Stonegate area are without personal vehicles, and take TTC to purchase their groceries.  Our goal is to have our Basic Basket of income accessible products priced such that the cost of two grocery bags of Basic Basket items will be less expensive than if you took transit to and from a bargain grocery store and purchased equivalent items there.  For example, two grocery bags of Basic Basket items at Berry Road Food Co-op should cost less than six dollars more than purchasing the equivalent products at No Frills.  The Co-op’s Finance Committee will conduct periodic reviews to make sure we are meeting that goal. In terms of dollars and cents, our prices for Basic Basket items are expected to be within 10% of the cost of equivalent products at bargain grocery stores.
So how will we be able to bring quality products to our shelves at near-bargain prices?  By trading "margin" between different products that we sell.  Margin is the difference between what the Co-op pays for an item, and what we sell it for.  That difference helps pay our staff wages, and pay our rent and utility costs. 
Traditionally, grocery stores decide on a margin, and apply the same margin to almost all products (often using different fixed margins for different product departments).  Meanwhile, many of our natural food suppliers have top-tier products that sell for top-tier prices, but they also have quality products that sell for much less (but still more than no-name brands at traditional grocery stores).  In situations where we buy both top-tier products and less costly products from one supplier, we can make a deal with that supplier to trade margins.  We agree to let them charge us a little bit more for their top-tier product if they agree to charge us a little bit less for their less costly product.  Since the mark-up we apply at the Co-op is based on the cost to us, we will get more return on the top-tier product and will charge less for the more cost effective product. 
If the reduced price isn't enough to bring the cost of the cheaper product down to where it meets our Basic Basket goal, we can further trade margin on our own shelves.  Adding $0.50 to the cost of a top-tier product has relatively little impact on members who can afford to purchase them, but subtracting $0.50 from the cost of a Basic Basket item can have a significant impact on the cost of a week's groceries for someone on a fixed income.
Has this ever been done before, and how do we know it will work?  To our knowledge, this kind of margin trading and double shelving of income accessible products next to products priced similar to most natural or organic food stores has not been done before in Canada.  However, we are confident it is achievable. In the U.S.A., particularly Vermont, large co-ops use this method to satisfy their obligations to be accessible to everyone in the communities they serve.  Interestingly, informal research shows that very few members at these co-ops purchase only the cheapest products.  Almost every sale includes at least one organic or local product despite that product not being the cheapest on the store's shelves.  This shows the true value of margin trading and double shelving in that it maximizes the ability of everyone in the community to make the healthy food choices that are most important to them.

What you'll find at Berry Road Food Co-op

Berry Road Food Co-op's Purchasing Committee is committed to a process for product selection that is compliant with our established policy.  Purchases follow a basic set of criteria that require products be natural, contain whole ingredients, and are made locally.  For product purchases that are not locally sourced, we make our best effort to locate ethical and affordable producers. The Purchasing Committee's most significant endeavour is to consistently strike a balance in choosing products that are of high quality, sustainable, clean and budget-friendly.
The Committee has partnered closely with Stonegate Community Health Centre to create a community driven basic basket of important foods that not only fulfills these criteria, but also competes with other grocers in the local area.  In addition to foods, the Stonegate staff has identified 35 basic household items that will be stocked and priced comparatively.
At the BRFC, we are working diligently with local vendors to bring you affordable, quality, healthy products in the very near future.