Find other case studies that share these features:
Enhanced distribution channels   |   Cooperative   |   Southern ON

http://cultivatingfoodcoops.net/

Hannah Renglich, LOFC Animator,  with Randy Whitteker, ONFC General Manager

In person interview and site visit May 25, 2011 (Irena Knezevic), phone interview September 1, 2011 (Irena Knezevic), photos courtesy of ONFC

• In existence for 35 years, ONFC is a model of a sustainable operation that has over the years managed to resist being absorbed by transnational distribution giants
• While relatively large, ONFC continues to work based on principles of cooperation and sustainability (economic, social and environmental)
• The Local Organic Food Co-operatives, as one of the ONFC projects, is aiming to create collaborative networks and one of its mandate’s pillars is the creation of regional food hubs

Return to Case Studies

Organization Overview

History

ONFC was founded in 1976 as the Ontario Federation of Food Co-ops and Clubs, Inc (OFFCC). The organization’s vision is “Living in a sustainable world from seed to plate.” The Local Organic Food Co-operatives emerged in February 2009 at a meeting co-hosted by Russ Christianson and Denyse Guy on behalf of the Ontario Co-op Association (this is one of the four strategic directions of the Ontario Co-op Association’s work). The initial meeting brought together several local organic food co-ops who decided to work together – whether the group will interact as a loosely affiliated network, a membership category at ONFC, or as a co-op of co-ops is yet to be determined.  Within months of launching, the LOFCs came under the umbrella of ONFC and became one of ONFC’s nine strategic initiatives. In March 2010 baseline market research was completed followed by the second meeting in April of that year. This meeting helped create shared vision, mission, values and purpose documents. Shortly after, the research results report, and business and marketing plan, both developed by Russ Christianson, were published.

 

The Co-op

ONFC is not-for-profit, consumer co-op. There are 1400 members “across eastern Canada (Winnipeg to the Maritimes).” Most of the member/customers are independently owned retailers or foodservice establishments, but the co-op also sells to almost 400 food buying clubs and a number of food co-operatives. ONFC also has a private label, ‘Ontario Natural’, which is produced and distributed only in Ontario.  Renglich and Whitteker also identified a “wide range of affiliations, memberships and linkages in the co-op, organic food, food security and local food communities.” ONFC is also somewhat of a hybrid as it still very much focuses on small-scale initiatives, but also distributes to chains like Whole Foods and Loblaws.

 

Context

ONFC is one of two remaining independent natural food co-ops in North America, as most have demutualized or  been absorbed by UNFI (United Natural Foods). With the continued trend of ownership concentration, ONFC is increasingly concerned with preserving and supporting independent initiatives and small-scale production. The overarching goals of ONFC are to support and scale up the existing organizations, create synergies to foster values-based supply chains, create local food hubs, and create awareness and education. ONFC is in favour of thinking of local as trusting relationships (e.g. fair trade) in addition to geographical distance. ONFC emphasizes the ethic of co-operation and collaboration, and is involved with many groups while also seeking to expand the networks. However, it sometimes has to rely on products from outside of Ontario and it ultimately has no overarching limitations on products. Instead, theiraffiliates create their own rules and the ONFC carries products that align with its values.

The LOFC project is intended as support to those small-scale and independent initiatives. Right now, it is a loosely linked network of co-ops (see complete list below). Its purpose is to create a strong network, to educate about and promote sustainable farming and food co-ops, and to connect and scale-up local and regional food hubs. In terms of food hubs, their purpose is to both support existing initiatives^[1], and to assist in creation of new regional hubs. Creating incubator kitchens and clusters of producers and processors is also being considered by the ONFC as a part of the LOFC work.

Whitteker also added that creating a community of thought around sustainable food was one of the underlying aspects of ONFC’s work and its LOFC project, in addition to facilitating creation of actual physical hubs.

 

Human Resources

ONFC has 90 employees and 9 volunteer directors on their Board. Whitteker explained that those numbers also include “a strong, long term core group of employees and board members.” LOFC has one Animator (Renglich) in a temporary full-time position. However, the coordination team for LOFC includes support from ONFC – with the general manager, purchasing manager and member relations and education manager all on the team – as well as representation from the Ontario Co-op Association, and Russ Christianson as an independent consultant. The two dozen individual co-ops that are officially participating all have a contact person who also provides input and support. Additionally, there is an advisory panel forming in the larger community with people like Mary Lou Morgan from the Carrot Cache, representation from Sustain Ontario, Everdale, and others, as well as participation from universities in the Greater Toronto Area and beyond (including a link to St Mary’s University’s Co-operatives program).

 

Physical Infrastructure

ONFC has a 53 000 sq ft warehouse located in Mississauga, ON, and it uses 7 trucks as well as some common carriers. Those resources will be made available to the LOFC project as needed.

Natural Resources

While ONFC has no natural resources, the land of LOFC partners can be considered natural resources that matter to the organization and the project. Hence, dedication to the agroecological principles is more than just a moral statement for LOFC.

 

Financial Resources

With 4000 products carried by the ONFC, the projected sales for 2011 are at $37 million “generating about $800,000 in operating surlpus that is allocated to carry out the initiatives identified in our operational plan for 2010-2012. Members contribute an additional $140,000 in equity, in the form of a member loan, based on 1% of invoice. These financial resources, coupled with the occasional grant program are generally sufficient to help us achieve our operational objectives. Surplus does fluctuate from year to year depending on a number of factors”  (Whitteker). Whitteker also added: “We seem to have adequate resources to carry out the occasional grant application, but are fortunate that we are very self-reliant.

In addition to the financial support from ONFC, the LOFC project has received seed funding from the Carrot Cache, Ontario Market Investment Fund, ICP (Innovative Co-op Project through the Co-op Development Institute), and the Co-operators. The Ontario Co-operative Association (through the Co-operative Internship and Experience Program) is partly funding Renglich’s position for several months. They are still trying to figure out how to make LOFC economically sustainable: “Most of the groups we work with are assets rich but not cash rich, so membership fees are not the most feasible way of creating revenue.” Instead, LOFC will be looking to create a values-based supply chain with groups funnelling their raw product through LOFC, where LOFC could be participating as processors and distributors and either creating a new LOFC label, or working with the existing ONFC label. So far, producers are very receptive of these ideas.

 

Community Resources

In addition to the wealth of community resources already noted under “human resources,” Renglich pointed out that the LOFC project has been fortunate to draw on the knowledge and experience of those working with the Organic Council of Ontario and Local Food Plus. Moreover, the work of FoodShare has been instrumental in this work, albeit in more indirect ways.

 

Policy and Program Resources

Outside of the OMIF grant, there seemed to be few government programs or policies that could be identified as resources. Nevertheless, Renglich pointed out that there was a palpable growth in attention to local food: “General public policy embracing of local food in Ontario has sort of normalized it, it’s more mainstream, it is now more recognized as important and valuable… I can’t tie that to a specific policy but in general the trends are changing.”

 

Desired Assets

Renglich indicated that she would like to see more representation in OMAFRA of small scale production that straddles both environmental and social sustainability. More public education around co-ops, local and organic food, and labour practices was also needed.  Renglich also noted that the continued success of ONFC was necessary for LOFC to flourish: “ONFC is one of the last remaining co-op distributors in North America and it definitely feels the pressure of the big natural food distributor, UNFI and its subsidiaries…” She also indicated wanting to see government  put their support behind small innovative initiatives, and pay attention to community/grassroots work, and not just the already recognized and/or commercial initiatives.

Whitteker added: “We need to invest more in developing a strong group of volunteer board and committee members and could benefit by governments of all levels supporting co-ops throughout Ontario and beyond” and also noted that “we have a well developed network within the ‘alternative’ food system, but could benefit from wider public knowledge.”

 

Constraints/overcoming them

Despite ONFC’s continued success, Whitteker was humble about its non-material assets: “Though we continue to grow and adapt both professionally and personally, we are constrained somewhat by skills and training challenges at all levels of the co-op. We are steadily increasing budgets to address these areas.”

With respect to LOFC, Renglich identified several current challenges: “The geography we are working with sometimes makes it difficult to connect the groups with the limited time and money for in-person meetings.” She also added that part of the challenge was “working with groups that have difficulty thinking about profitability… to accept that making initiatives economically sustainable does not have to include compromising values.”

Whitteker added one more concern – a sense that Canada Revenue Agency is “preoccupied with searching out not for profits that they may challenge for legitimacy of status.” ONFC has already dealt with that on the municipal level when their status was unsuccessfully challenged by the City of Etobicoke in the mid 1990s.

More generally, in terms of local food initiatives as whole, Renglich identified the following barriers: lack of local processing and distribution capacity, lack of government support, divided resources, loss of farmland, zoning, and access to appropriate space (for processing, warehousing etc).

 

Successes

ONFC’s longevity and success gives it a reputation that is an asset in itself, but it also provides an example that co-operative food work can be economically viable while still upholding environmental and social justice principles. This despite operating in the shadow of UNFI (United Natural Foods), which has over the years absorbed nearly all natural food co-ops in North America. Whitteker also noted “Our structure makes us unique amongst privately owned distributors. Our triple bottom line and social entrepreneurial approach to the market is also a differentiating factor.”

Renglich added that “the fact that local organic food is being recognized as a priority for ONFC is a success in itself… the ONFC’s desire to support farmers directly and play a role in strengthening small-scale production [should be recognized as a success].” Renglich also thought that the scale of engagement with LOFC is already a success as was LOFC’s ability to already bring all the different groups together, “to be able to reach out to isolated groups and say ‘you are not alone in what you are doing, there are 25 other groups in other communities doing what you are doing’.”

 

Relevance

ONFC’s continued success and province-wide reach makes it uniquely positioned to assist in the development of a ‘local organic co-op value chain’ in Ontario. As Renglich exlains “Through co-operative development and network-building, I think it’s possible to create an alternative affordable system in support of local food procurement and access.” The LOFC project has already created connections and clusters of producers and other food initiatives: “These clusters are then able to link into similar clusters in other locales, strengthening and scaling up the local food programs and activities into networks with larger reach and influence, but which still maintain their ‘small is beautiful’ principles/operations.”

On a more ideological level, Renglich thought that both the ONFC and the LOFC project carried a great deal of relevance to communities across Ontario:  “It’s just this basic thing of co-operation. We are all in this together, so we should be sharing resources and connecting around ideas and willing to bring other people in with us, rather than protecting our individual projects.” ONFC is in the process of putting together a set of co-op related resources including a toolkit on how to start a co-op.

 

More information about ONFC can be found at www.onfc.ca

 

The LOFC member co-ops:

Worker-Owned Co-ops

The Big Carrot, Toronto

La Siembra, Ottawa

Agri-Cultural Renewal Co-op, Durham

Your Local Market, Stratford

 

Eater-Owned Co-ops

The London Co-op Store, London

Karma Food Co-op, Toronto

ONFC, Mississauga

Eat Local Sudbury, Sudbury

 

Farmer-Owned Co-ops

Organic Meadow, Guelph

Fitzroy Beef Farmers Co-op, Fitzroy Harbour

Quinte Organic Farmers Co-op, Picton

Sexsmith Farm Co-op , Ridgeway

 

 

 

Solidarity Co-ops (Multistakeholder)

Ottawa Valley Food Co-op, Pembrooke

Niagara Local Food Co-op, Niagara Falls

West End Food Co-op, Toronto

By the Bushel Community Food Co-op, Peterborough

True North Community Co-op, Thunder Bay

Eastern Ontario Local Food Co-op, Hawkesbury

The Village Co-op, Kingston

 

Co-ops on the Horizon

On the Move Organics, London

Karma Marketplace, Penetanguishene

Lunik Co-operative Café, Glendon College, Toronto

Sustainable Business Co-op Café, York University

Campus Co-op Food Co-op, University of Toronto

123 Farm! Co-op, Hamilton

Wellesley Mill Redevelopment Project, Wellesley