Taking it to the next level: success of small Florida vegetable co-op leads to a network of similar cooperatives

Rural Cooperatives, Sept-Oct, 2002 by Glyen Holmes, Vonda Richardson, Dan Schofer

Editor's Note: The early achievements of the New North Florida Cooperative were featured in the July/August 1999 Rural Cooperatives. This article reports on the progress of the past 3 years, and how the cooperative has expanded the business beyond its initial scope

New North Florida Cooperative (NNFC) is a new-generation cooperative formed by small-scale vegetable and fruit farmers in the Florida Panhandle to create and expand marketing and processing opportunities for its members. NNFC members say that when they firmed individually, they were "price takers." The cooperative has enabled them to become "price makers" by taking greater control of their products and providing member-growers with bargaining power in the marketplace.

"Having a market, knowing where your products are going and when you need to harvest makes farming a lot easier," says Spencer Lewis, an NNFC member. "Working with the co-op saves me a lot of time compared to selling along the road, and it eliminates wasted crops in the field."

From its initial success helping members sell collard greens and other crops to a local school district, this Florida cooperative has now expanded its scope of operations to 15 school districts in three states, added product lines and increased the level of value-added preparation and packaging. It has also created a network of similar cooperatives in its region which are working together to expand value-added processing and marketing opportunities for small-scale farmers.

The cooperative recently built a structure to house its office and a classroom. A phone, fax, computer and answering machine located in a central office enables NNFC to easily communicate with its members and customers. Eleasa Varner, NNFC's office manager, notes, "Keeping files and records organized and secure in a central office has really helped with payments, bills and finances."

Putting customers first

The co-op management team made its first food service industry sale to J'Amy Petersen, food service director of the Gadsden County, Fla., School District. The presentation demonstrated the co-op's professionalism, courtesy, seriousness of purpose and accountability. It also stressed that the co-op is as a Department of Defense-certified vendor.

After its presentation, the co-op management team carefully listened to Petersen discuss the school district's needs. The cooperative then arranged to deliver free samples to Gadsden County schools to demonstrate product quality and the co-op's dependability. At that time, the cooperative did not have any processing equipment, so the participating Farmers washed, chopped and bagged the collard greens by hand.

The next day the deliveries were made on time. Petersen and her cafeteria managers were happy with the quality and freshness of the products and the timeliness of the deliveries. NNFC has been providing fresh collard greens to Gadsden County schools consistently ever since.

"The fresh peas and greens have really improved the meals we serve to the children," says Mitchell Williams, a cafeteria manager in Gadsden County. "The children love the fresh vegetables. I enjoy working with the co-op and look forward to working with them in the years to come."

Expanding to more schools

NNFC has kept Gadsden County as an important customer and expanded its market to schools in other areas, including Jackson County and Albany County, Ga. Regularly servicing several school districts has hell)ed the cooperative to acquire capital, invest profits in equipment and necessary infrastructure and develop a small amount of working capital. The cooperative applied for, and received, two small loans from the Jackson County Development Council (JCDC) to purchase refrigerated storage and a small processing machine. JCDC is a community-based, nonprofit organization established to increase local economic opportunity in Jackson County (a designated Empowerment Zone).

Ever since the cooperative formed, JCDC has been helping it acquire capital and develop a good credit history. By making its loan payments on a regular basis, the cooperative has established the foundation of a good credit history.

Profits from consistent sales have been invested in processing buildings and gradual improvements in transportation. The improvements from the acquired capital and invested profits greatly increased the amounts of product that could be processed, stored and delivered. This experience has created the groundwork for larger scale deliveries in the future.

It was important to develop a working capital fund to cover bills due between harvest and the receipt of payment from customers. Early on, the co-op established a policy of paying the farmer for the harvested produce at the time products were picked up for processing.

Schools as customers

Over the past 2 years, NNFC has delivered produce to 15 school districts in the region (table 1, page 23). Some of the school districts have been steady customers for years, while other sales were "pilot projects" consisting of one- or two-time sales to new school districts to demonstrate the co-op's quality and delivery standards. Building on these initial deliveries, NNFC plans to develop strong, sustainable business relationships with those "pilot" school districts as well.