Co-op Public Forum Highlights Division over Product Mix and Target Customers

by Doug McClure

HARDWICK – On Monday, the management team of the Buffalo Mountain Food Co-operative hosted its second community forum on the proposed acquisition of the Hardwick Village Market. Co-op President Annie Gaillard, Vice President David Ludt, and General Manager Emily Hershberger presented the details of the planned merger of the two food retailers to approximately three dozen attendees.

The two main topics of discussion centered on financial details and whether the co-op would continue to carry products that the Village Market currently offers.

Several questions from the attendees addressed if and how the co-op would mix conventional and organic offerings. In his opening remarks, Ludt had described the Village Market a “store in this town that’s been serving people since it was Pete’s Meat Market, before I was born, and then that turned into Halls, and then it turned into the Village Market.” He said that “there’s countless relationships and family history, and life and love that’s put into this town, and so there’s a responsibility over there.”

An attendee spoke about what they said was the abstractness of the discussion about the different product lines, which they described as “some of these prophecies of matrixes and business that don’t seem to have anything in reality to do with feeding our community.” That person wanted “other information that deals with the relationship of the diversity of this community and the either/or that seems to have been here for many decades. My reality is a grounded real world where we’re dealing with a community that is looking to have food to eat to satisfy their nutrition and hunger.” 

Another attendee remarked that “we have no idea about the feasibility of the clashing of the two cultures of people who refuse to shop at Tops or refuse to shop at the market because they will only shop at the co-op and the people who are subjects, the lesser folks who shop at the [Village] Market. Forgive me for saying that, but I was a lesser folk once, where I had to shop at Wal-Mart. And when I first got involved with organic farming, I had to shut my mouth about what my practice was in consumerism so that I could survive to not be treated like an underling by other people until I establish[ed] some rapport with them. And then I could say, well, you know, in order for me to survive, I shop at Wal-Mart.”

Ludt stated that the feasibility study had a “gray area in terms of merging the stores” and said “the long history of that store … wasn’t baked in. [What] really emerged as this thing was being presented, [was that] the importance of that store, the importance of those unseen relationships, wasn’t front and center. You all are seeing that it’s not there. And I’m not going to pretend that is was.”

One member asked if it would be possible to sell the conventional inventory to another store once the sale was completed. The response was that this was not feasible due to the extremely low profit margin of provisions.

Another asked about keeping the co-op as is but dividing the building and renting that second space out “to the people who have business models that are more in line with ours. [We] don’t have to sell conventional food, but we can still make money.” 

Ludt responded by stating that if “we’re buying that store, we’re essentially shouldering a responsibility to feed our neighbors.”

An attendee suggested that the co-op could have gathered more opinions from existing Village Market shoppers and employees. Gaillard replied that “I think we did [that] job,” since 300 of the 700 respondents to the survey that was part of the feasibility study were not co-op members. Ludt added that gathering information directly from Village Market customers was a challenge because doing so would entail “a certain level of intrusion. That’s a functioning business that we don’t own yet. ” 

Asked whether the co-op had precluded sales of anything at this point in the process, the presenters said that the new entity would not sell tobacco products or lottery tickets. Beyond that, no decisions have been made.

Another topic for discussion was the level of transparency in the board’s decision-making process. The presenters explained that they were constrained in what information they could share due to signing a non-disclosure agreement (NDA) with the Village Market’s owners. 

Other attendees wanted more detailed financials, including asset valuations and the debt-to-asset ratio. The presenters explained that the co-op had only recently signed the conditional purchase agreement and that that information would be forthcoming.

The board has said they will not make the decision whether to proceed on its own, with Gaillard stating that “in signing that purchase and sales agreement, everything is contingent on the membership voting to do this. If the membership votes no, then all deals are off and we’re back to square one.”

The co-op will hold its annual meeting on October 10, followed by a two-week voting period for its estimated 1,200 active, paid-up members to vote on the proposed acquisition. Under the co-op’s bylaws, only five percent of the members’ votes are needed to make a vote legitimate. This means that, at a minimum, a majority of five percent of the membership is needed to approve a decision. Several presenters stated that they were hoping for a much higher level of voting participation by co-op members.