From the GM: August 2018

by Gary Taylor, General Manager

Happy August fellow Co-opers!

Some of the questions we get here at the coop concern the high cost of groceries these days. I think it is time we talked about this elephant in the room. I will tackle this in two parts, the first being the effects of inflation on food cost and the second being our unique situation as a small independent co-op.

First, while the article I am pulling data from (http://www.visualcapitalist.com/decade-grocery-prices/) seems to be missing some additional information I would like to see, the basic facts show the overall price of food has indeed risen substantially over the last decade. But it also shows we are spending a smaller percentage of our income on food. Housing and transportation take up a larger percent of our income than in the past. There are a lot of tangents I can go on with the information in this article (e.g. the fact that the people of other countries spend a much larger portion of income on food just to survive, and lower income families in the US spend over twice as much of their incomes on food than the average family) but the purpose of this piece is to point out that inflation causes an increase in the cost of food.

Second, even though we understand that inflation is bound to drive up the cost of everything, why is food more expensive at the co-op than other traditional grocery stores? There are a multitude of reasons I will address.

1.) Here at the co-op, we don't pay minimum wages like other grocery stores do. We pay the "living wage" as established by Champaign County. In short, our labor costs are substantially higher than our competition because we value our employees and the work they do

2.) We are one store, not a large chain. We do not have the economies of scale and the buying power that large chain stores have. While our relationship with NCG helps, the price we pay for our products is generally higher than our competition.

3.) It is much more expensive to produce the small batches of our Co-op Made from Scratch items. The items we sell in our deli are made right upstairs in quantities we think we can sell before the expiration date, whereas large companies buy mass produced "fresh" items from a central kitchen. Also, because we use products from our local farmers (who by the way, have similar issues we do where higher costs are concerned when compared to the "Big Ag" competition that they face) the cost of goods that go into our food are more expensive than what is used by the large chains.

4.) We aren't selling cheap products that are mass produced in the cheapest way possible using pesticides and GMO's. Our meat products aren't loaded with hormones and antibiotics, nor were the animals raised in filthy, cramped conditions. I am not saying that all of our competitors support these methods of producing food, but here at the co-op we can tell you exactly where your food comes from and we have been to the local farms to verify that your food was properly raised.   

As you can see, there are many reasons for the price differences between the co-op and traditional chain stores. Each reason adds a little more cost. However, we must look at the value of what we are buying instead of just the retail price. The money we spend here directly supports our small local farmers who are using ethical, sustainable, and responsible methods to produce our food. The quality of the food we purchase is generally higher than food purchased elsewhere.

Let's face it, as the price of food increases because of inflation, the overall quality of it has been declining. Conventional grocery store prices could, and should, be much higher. One of our farmers told us during a visit that he was approached by a poultry buyer who was looking to buy chickens for $8. Our farmers cost to produce a chicken? Around $12-$13 each. If a healthy, ethically produced chicken costs $12 I don't even want to imagine what has to happen to get that price down to $8. If a buyer is asking for that price, though,I am pretty sure he found someone willing to try. That's kind of scary if you ask me.

This is a good time to plug our Food for All program. While we do understand that our prices are higher, we are trying our best to give access to healthy food to everyone. I highly encourage anyone who feels they can not afford to shop for healthy local food to check out Food for All. Stop by the co-op and ask any of our changemakers about how to qualify for food discounts, equity grants, and education grants!

Thanks for reading and if you ever have any questions please feel free to contact us!

Co-operatively yours

Gary