THE BULK STOPS HEREBUMMED-OUT CO-OPERS FEEL THEY'RE BEING MUSCLED OUT AS GENTLE STRENGTH GETS DOWN TO BUSINESS
Like organic tomatoes, natural peanut butter and tofu hot dogs, controversy has always been a hot commodity around Tempe's Gentle Strength Co-op. Let someone suggest anything more substantive than "Have a nice day," and you can be sure some disgruntled faction inside the member-owned cooperative will squawk that the organization is selling out and losing its soul.
That's been the story for 23 years, a turbulent but prosperous period in which the alternative grocery store has grown from a seat-of-the-pants storefront operation to a slick natural foods boutique and vegetarian deli that currently does $6 million in annual sales. Because many of its most vocal members see the store as a lifestyle rather than just a place to restock their larders, the co-op's history is defined not by annual reports but by battles over progress.
Way back when, co-opers argued whether they were compromising their principles by carrying vitamins, now one of the store's main stocks in trade. Since then, members have waged internal war over such issues as the ecological ramifications of a patio mister, the health versus hipness dilemma of coffee and the karmic consequences of forcing customers to wear shirts and shoes.
So when management announced plans to install a computerized cash register system earlier this year, there was the predictable flap. Some members complained the computers were unnecessary. That Gentle Strength was going the way of Big Brother. And that records of their purchases of Fruitopia and Rainforest Crunch would somehow come back to haunt them.
As it turned out, their last concern was right on the mark. With its computerized cash registers, co-op management opened a Pandora's box. And some now fear that all the gentle strength in the world won't be able to slam it shut.
Rumors about big changes in the way Gentle Strength did business had been floating around the store for months. But it wasn't until a front-page story in the June issue of the co-op newspaper that members had those changes laid out for them in black and white.
In soy ink. On recycled paper.
The question at hand is a controversial proposal to drastically restructure the co-op's long-standing discount structure--a big draw for many of the co-op's 4,100 members. Under the current system, everyone who pays the $25 annual membership fee (equity that's returned should a member drop out) automatically receives a 7 percent discount on all purchases at the co-op.
In addition, members who have the time and inclination can earn even bigger discounts by bagging groceries, stocking shelves, working in the co-op's garden or performing other volunteer labor at the store. At present, members who work just two and a half hours a week receive a 12 percent discount. Highly committed members--"core workers" who're able to work either 20 hours or 32 hours a month--receive top discounts of 25 percent and 30 percent respectively. The co-op also gives discounts to its paid staff, as well as to community workers around the Valley.
But according to Gentle Strength's coordinating committee, the natural foods co-op is in serious danger of cannibalizing itself. Thanks to the new cash register system that finally made it possible to learn exactly who was buying what, the committee came to the stunned--and belated--realization that members' deeply discounted purchases were actually costing the cooperative money.
Projecting backward, the committee estimates that during the last fiscal year, the co-op took a $118,200 loss on member sales, versus a $301,800 profit on nonmember sales. While that still results in a $183,600 profit (money that the co-op plows back into the business and distributes to charitable causes), management fears that the nonmember buyers who've been keeping the co-op afloat are bound to jump ship as the already competitive natural foods market heats up even more.
Ironically, in light of its alleged altruistic goals, the co-op might have folded years ago if it was not for the store's nonmember clientele, a semicaptive market segment that once had little choice but to pay the co-op's heavy markups.
But the days when Gentle Strength had the lock on the Valley's natural food market are long gone. Jumping on the $7.5 billion annual health foods bandwagon, supermarkets routinely carry low-fat, no-preservative products that were once the co-op's meat and potatoes. In recent years, Reay's Ranch Market and the California-based Trader Joe's chain have also cut into the pie. And on the horizon is the threat of regional chains like Whole Foods, Wild Oats, Fresh Fields and Alfalfa's--large "supernaturals" with the buying power to undercut the co-op's inflated price structure.
Looking ahead to the day when Gentle Strength will go head-to-head with one of the supernaturals, the committee called a meeting last month to discuss restructuring options. For hard-core co-opers, the proposal was only slightly less inflammatory than if management had announced plans to open an in-store Kentucky Fried Chicken kiosk or install a cigarette machine next to the recycling bins.
"The shit is really going to hit the fan," forecast one longtime member upon learning of the June 25 confab at ASU's Memorial Union. "It's going to be organic and very colonically cleansed shit. But it's going to hit the ol' fan, just the same."
As predicted, the winds of change wafting through the upstairs meeting room at ASU Memorial Union were decidedly foul.
Facts, numbers and market trends appear to mean little to the impassioned throng grousing among themselves as they leaf through a nine-page agenda not of their own design. Operating on emotion, frustration and abject distrust for anyone sitting on a dais (a position of "empowerment," anathema to co-op principles), the 100-odd owner-members suspiciously eye the handful of committee members comparing notes onstage.
The meeting hasn't been under way ten minutes when the first volley of dissent is fired.
As the onstage speaker attempts to make a point using some overly simplistic visual aids (the outline of a human body represents the co-op, with red blood droplets representing the discounts "bleeding it" to death), he's interrupted by a dark-haired woman in a peasant dress.
"Liar!" she hisses defiantly. "This is propaganda, not information!"
From around the room, a rumble.
Though taken aback, the speaker ignores the hubbub and forges ahead with his overhead projector presentation. Using colored markers to sketch the nonmember "blood transfusion" said to be keeping the co-op alive, he drones on in the condescending tone of voice one might reserve for a group of dimwitted children.
"Yes, teacher!" wisecracks someone in the crowd, triggering mass snickering and another outburst from the dark-haired woman.
"I am deeply insulted to be portrayed to the membership as `bleeding the co-op'!" she lashes out. "You are devaluing us as human beings! My contribution is valuable and worthwhile!"
Like villagers storming the Bastille, her comrades egg her on with an enthusiastic round of applause. Several people shout, "Hear! Hear!"
From the dais comes a plaintive, "I can't share when people are talking to me like that."
Feeling their oats, others join the vocal fray. Although a small group of members thinks the committee's ideas are worth listening to, the cooler heads are quickly outshouted by their more radical colleagues. What follows quickly degenerates into a free-for-all worthy of the Ricki Lake show, a high-decibel debacle that, ultimately, has less to do with the future welfare of the co-op than it does with the respective lung power of all involved.
At one point, the proceedings come to a dead halt as two members holler at one another, while three or four other well-meaning members loudly try to restore order. Adding to the confusion is the one-woman Greek chorus near the front of the room, a grandmotherly type who interjects her own running commentary on the chaos. ("Thank you, Lucy. That needed to be said.")
A natural foods salesman attempts to put the co-op's problems in perspective by describing industry trends, but he's cut off in midsentence as angry members stage an impromptu debate about whether they even want to listen to him. Deciding that they do, there is yet another debate as they argue exactly how long they should listen to him.
As soon as he resumes speaking, he's drowned out by someone yelling from the back of the room. Reaching the breaking point, a distraught woman announces that she's going to burst out crying if people don't stop screaming at one another.
A young woman tells the group that she quit her job because she could no longer work for an organization that did not respect her right to wear a nose ring.
Four long hours later--by which time the group has reconfigured all the chairs into a giant circle and the real purpose of the meeting has been abandoned in favor of "sharing" personal concerns about Gentle Strength--even the co-op's staunchest supporters have a hard time arguing with one longtime member's shrewd take on the organization. Knowing laughter fills the room when he refers to the store, only half-jokingly, as "The Harvard Case Study in How Not to Run a Business."
The business that's somehow succeeded in spite of itself began life in 1972 as a tiny storefront operation at 32 East Fifth Street, Tempe, a onetime plumber's shop recalled with varying degrees of charity as "a hole in the wall," "a hippie den" and "a cockroach pit." A far cry from the store's current streamlined incarnation, the funky alternative to mainstream supermarkets quickly found favor with the Valley's counterculture consumers.
More than just a place to score organic produce or bag some mung, Gentle Strength served as a general store for the granola gang. Along with such bygone gathering places as the Casa Loma bar, underground movies at the Valley Art and the Earthen Joy restaurant, the cooperative helped define the Mill Avenue Zeitgeist of the early Seventies. Unofficial scout headquarters for many of the subculture causes that have swept the campus town over the past two decades, the co-op was genuinely community property.
But in 1985, the community turned into a virtual metropolis almost overnight. And with it came the growing pains that continue to plague the co-op into its maturity.
Forced out of their old home by downtown redevelopment (a site now occupied by the south parking lot of the Radisson Tempe Mission Palms Hotel), co-op members purchased a building at 234 West University, a 15,000-square-foot property that had formerly housed Dr. Munchie's restaurant.
"Prior to moving into the new place, we didn't even have a manager," says Lare Clark, Gentle Strength membership coordinator, whose affiliation with the co-op dates back to its inception. Recalling how membership figures soared after the move--4,100 today versus 600 in 1985--Clark reports, "We were really not ready for that kind of growth. Looking back, we were pretty lucky we made it through that time."
Describing himself as "kind of militant" during the co-op's salad days, Clark confesses, "I kind of miss those days when we were pretty casual and cozy in the way we proceeded. But this is big business now," he adds. "We got to keep our eye on the ball."
Mark Fischer, secretary and "budding gray-hair of the co-op," agrees that Gentle Strength members can't afford to live in the past--even if it means giving up some of the discount perks they currently enjoy.
"Twenty years ago, it was a strategy of ours to soak the nonmember shopper to provide benefit to the members of the market," explains Fischer, who remembers when the co-op was still "the spiritual navel of the universe. Back then, we controlled the market, we sat in the [cat]bird seat, we were the only natural foods outlet in the Valley."
"Well, `That was Zen, this is now,'" says Fischer, who warns that the co-op's unwritten marketing cornerstone--"Let the nonmembers cover our butts"--no longer makes sense in today's aggressively competitive natural foods marketplace.
Whether a lone holdout or a slow learner, Gentle Strength is just now wrestling with the sort of problems with which most co-ops came to grips years ago.
Dave Gutknecht, editor of the trade magazine Cooperative Grocer, characterizes elimination of deep discounts to member-workers as a "strong trend" in cooperative circles. And to the best of his knowledge, Gentle Strength is one of the very few co-ops of its size that still engages in the practice. The majority of co-ops, he says, now offer annual membership rebates based on purchases.
"Most co-ops have realized that professional staffing, supported by prices paid by everybody and managed by management, really provides better service than the volunteer system," reports Gutknecht, whose Athens, Ohio-based publication monitors the activities of 300-plus natural food co-ops around the country.
By continuing to offer deep discounts to member-workers at the expense of nonmembers, Gutknecht claims the Tempe co-op is not only seriously out of step with the rest of the industry, but is doing a disservice to the majority of its members, as well.
"[Co-ops] are about service to everybody, not just those that have the time to participate," explains Gutknecht. "Most people want the co-op to reach out to more people who will become members-owners. To do that, you need a rational pricing structure. From the point of view of being a co-op, it's contradictory and irrational to build in a long-term reliance on member sales." Members intent on having hands-on input can continue by doing community service work or by donating labor to off-premise projects like the co-op garden, adds Gutknecht.
Another industry observer suggests Gentle Strength co-op members should enjoy those discounts while they can because the cut-rate prices aren't going to last.
"The fact of the matter is that Gentle Strength is a business and has to operate according to 1995 business conditions," says Karen Zimbleman, an Arcata, California, cooperative consultant. "And if the members don't let managers make these changes that nobody wants to make, it will die."
Calling the co-op's current discount structure "unsustainable," Zimbleman suspects many of Gentle Strength's current problems can be traced back to bad decisions made "eons ago," mistakes that have found their way into the bylaws.
"In the '60s and '70s, it was very common for co-ops to say, `Oh, yeah! Everybody gets a 10 percent discount--no problem. Hey, let's make it 15 percent! Give us two bucks a year and you'll get these big huge discounts.'" Says Zimbleman, "When they didn't have staffs, when they didn't offer health insurance, when they didn't have homes and families to support, these discounts were easier to pull off."
Zimbleman claims that if the arithmetic doesn't convince members to reexamine the co-op's structure, the threat of an audit by the Department of Labor and tax agencies usually does the trick. "Is the co-op paying payroll taxes on these discounts they're giving members?" she asks. "Are members claiming these discounts as income? It's a hard thing to argue against. This is essentially compensation for hours put in."
For some cooperatives, like Albuquerque's La Montanita Co-op, costly labor and tax audits are the "final kicker" in convincing members to do away with member-worker discounts. "It's a lot harder to take when someone external comes in," reports Zimbleman. However, she adds, "It makes the passionate meetings go a lot easier."
When it comes to co-op-directed passion, it's hard to ignore Jo Ellen Doney. Easily one of the most outspoken participants at last month's membership melee (she was the woman who cried "Liar!"), the depth of her confrontational ardor is all the more remarkable upon learning she's been involved with the cooperative for all of two months. A by-the-book member fond of quoting the co-op's "people before profits" principle, she's highly offended by any change that would prevent her from "sweeping the floor for my sandwich."
"This is all terribly, terribly distressing to me," says Doney, a clinical psychotherapist who recently moved to the Valley from San Francisco. "I have to consciously make an effort to put it out of my mind or I can't go to sleep. It just breaks my heart to see this beautiful organization changed from something that was good for the people who worked there to something that's good for corporate capitalism."
Able to quote chapter and verse on how proposed changes in the co-op's operation run contrary to the group's bylaws, Doney is unimpressed by the argument that the restructuring trend may be necessary for the survival of food co-ops.
"Child abuse is a trend, too," she counters. "Does that make it right or mean that we should do it?"
Right or wrong, dissension among the ranks is one trend that will probably never disappear from cooperatives.
"Instead of having one boss or ten bosses, you've got however many members there are," says Barb Dagger, Gentle Strength's general manager for the last two years. "And there ain't no way you can keep them all happy."
Pilloried during last month's meeting when a handful of insistent malcontents demanded that she reveal her "bloated salary" (less than $16 an hour) to the membership, Dagger didn't take the attack personally. "Our administrative assistant went over to our record-storage area and pulled the minutes of some old meetings," she says. "Same stuff, same people, different dates."
"The same dynamics that are present now were present ten, 15 or 20 years ago," echoes Mark Fischer. "They might have had little claws and little fangs then; now they've got bigger claws and bigger fangs."
Of course, it's important to remember the co-op wouldn't have gotten off the ground in the first place if hadn't been for some founding members' antiestablishment natures.
"You have to remember that the co-op was basically originated by activists, people who didn't believe in the way that businesses are normally run," says board member Beate Arndt. "A lot of what I was hearing at the meeting is, `We don't want to make a profit. This is not a business, this is a community.'"
But what some of the most vocal members fail to understand, says Arndt, is "that the environment where we do business affects us and we must act accordingly. They seem to think that we're separate and apart from our surrounding community."
Continues Arndt, "It seems that the membership that attends these meetings is more concerned with personal issues rather than the overall issues facing the co-op"--bigger problems she feels could well sink the store if they're not resolved within the year. "Yet, few of these people want to focus on that. They want to focus on nose rings and other things that are more tangible to them."
While conceding that attendees at the meeting were "understandably" upset about possibly losing their discounts, Arndt says that the 4,000-odd members who didn't show up was also a message. Given all the other stresses of everyday life, Arndt concludes, "Most members don't want to spend their Sunday afternoon talking about the place where they buy their groceries."
Nearly three weeks later, although tempers have cooled, the sides are still far apart. Contrary to wildly unfounded rumors circulating through some camps, the committee has not filed any "charges" against agitators at the meeting.
Those opposed to the proposed changes have formed focus groups to discuss their solutions: ousting nonmembers, seceding to form a new co-op and turning the whole place into an organic restaurant. According to a member who attended one of those meetings, participants broke down into smaller groups based on their birth dates, then reconvened in a large circle representing the Mayan calendar.
But no matter what happens, at least one member firmly believes the combative nature of the meeting bodes well for the future of the world.
An outspoken co-oper who nevertheless does most of her shopping at Trader Joe's because "the prices are better," Nori Muster says, "It shows what could happen in the bigger society, and, of course, that's what all the mainstream people fear."
And what might that be:
"A hippie takeover.
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