Ownership Differentiates Willy Street Co-op In A Changing Grocery Market
In Edible-Alpha® podcast #42 Tera interviews Brendon Smith, Communications Director for the Willy Street Co-op, a set of cooperatively owned retail grocery stores in Madison, WI. Founded in 1974, they now have 35,000 member-owners and about 400 employees across three stores. This last fiscal year, the co-op generated about $52 million in sales, making them one of the largest grocery co-ops in the country and one of the most successful in a challenging grocery market.
They have more employees per sales than other grocery stores in part due to a lack of warehouse space and the need to be constantly receiving new, local products from diverse vendors while managing/responding to so many member-owners. Willy Street has a high amount of engagement, loyalty and affection in the Madison community, likely due to their transparent actions when serving their member-owners.
All of their stores are in urban settings, with their east and west side stores being smaller format stores and their north side store being twice as large as the other two. To scale locally, they have had to expand who their demographic is. Income level can vary even within a store and they try to find the balance between consistency in product offerings vs. unique offerings to that store’s target consumer and price point. In expanding past their original store, they sought approval from their members and community input both before store opening and in stocking the shelves after opening. In addition to bank financing, the co-op financed much of the expansion with bonds available and accessible to members for as little as $500, further engaging with their member owners.
Willy Street Co-op has also been essential to provide a proving ground for vendors wanting to sell into grocery channels, getting deliveries 6 days a week from smaller vendors in addition to distributors. They recently opened a retail ready lab to help prospective vendors not quite ready for the store pilot their products and sales efforts, providing feedback from both potential customers and the store itself.
Brendon has found that the grocery market has changed with changing consumer tastes and habits over the past several years, with everything from store size to product mix needing to adapt. Retail grocery co-ops have struggled at times to find their niche in a marketplace where local and organic/natural products are now more widely available at traditional grocery stores and online than a few years ago. He has found that operating transparently and openly, emphasizing cooperative ownership and owner literacy, has provided a point of differentiation for Willy Street Co-op in the current marketplace.
Willy Street Co-op has approval from its members to open a 4th store if the opportunity arises and has launched a new e-commerce delivery platform they are testing with a small number of deliveries each week. In the meantime, the ownership and staff and Willy Street Co-op are encouraged by their leadership to change and adapt with the marketplace, tweaking and building on the success they have already had over the past 40+ years.