2011 annual report

building a member-owned

grocery featuring fresh, local

seasonal food

Presented on May 24, 2012 to member-owners of the East Aurora Cooperative Market, Inc. from the East Aurora Cooperative Market Board of Directors, reflecting activities from fiscal year January 1, 2011 - December 31, 2011.

9 Letter from the Board of DirectorsDear Member-owners:

On behalf of the East Aurora Cooperative Board of Directors, I am pleased to provide this summary of the activities of the board for 2011.

The first new thing you may notice is that I am the interim president of the board. In September, in an effort to propel the endeavor forward more efficiently and strategically, the board appointed former board president Sheila Conboy as Project Manager, at which point she took a leave of absence from the board. She will continue in her current capacity until we hire a General Manager and will return to the board at that time. In the meantime, I am responsible for the duties of board president through this important phase, working with the rest of the board as a whole to lay the foun-dation of our governance of the cooperative. The change is significant in terms of process and is indicative of the strides we made in 2011.

2011 was a year of board development. We may be few in number, but the dedication each person brings creates a whole greater than the sum of its parts. Here are a few highlights:

• Consultants: In November we began working with CBLD – Cooperative Board Leadership Development – to focus our efforts and impact as a board. With their guidance, we are planning for board succession, including preparing for our first board elections at the 2013 Annual Meeting, and with the possibility of appointing two new board members in 2012.

• Good governance: CBLD is also guiding us on good governance, as the board’s role will continue to grow as the co-op grows. It is imperative that the foun-dation is set as the board is responsible for overseeing the fiscal health of the orga-nization and will ultimately be a forward-thinking body, representative of – and accountable to – you, our member-owners.

• Funding: We received a $10,000 Seed Grant in June from Food Co-op Initiative, which was a tacit endorsement of our viability. That money has enabled us to hire highly respected experts like Bill Gessner from Cooperative Development Services, who presented a two-day intensive work-shop for our board and key leaders last fall. His wise counsel has tremendously refined and improved both our structure and our process.

I would also like to take this opportunity to acknowledge the commitment of our community to the co-op, which was made evident in 2011 with a steady growth in our membership: we welcomed 224 member-owners in 2011 for a grand total of 584 as of December 31, 2011. In addition, I continue to be amazed by our volunteers, whether they serve on a committee, work in the Mini Market or conduct outreach outside East Aurora. They are to be commended for helping us to strengthen our position as a community hub, which is what we’d envisioned at the outset.

The coming months and years will not be without challenges, but we as a board are ready to take them on! As a member-owned business, we are obliged to conduct our work in a transparent way and share our highs – and our lows – with you, our member-owners, as we have since we began in 2009 and as we will up to the doors opening and beyond. We’re working tirelessly and with great care to build a business that is financially healthy and with a strong, passionate membership. Thanks to YOU, our current (and future) member-owners, we’re well on our way to turning this dream into a reality!

Sincerely,Mary AikenInterim President, East Aurora Cooperative Market Board of Directors

Work Session in September with Cooperative Development Services consultant Bill Gessner. From left to right, Jane Brewer, Andrew Layer, Bill Gessner, Terry O’Brien and Tom Hagner

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Our MissionTo cultivate a sustainable food co-operative that is built by and for the East Aurora community and vicinity through the maximal efficient use of our local resources. Meeting the nutritional needs of our members and customers is our highest priority and will be realized through access to natural, local, sustainable goods, a democratic governing process, and a focus on continuing community edu-cation and outreach that promotes a healthy, forward-thinking way of life.

Our VisionThe East Aurora Cooperative Market comprises forward-thinking individu-als who believe in and endorse the value of the local food movement. The market strives to be a dynamic community center where our member-owners and customers may obtain a variety of delicious, healthful products that promote a high quality of life and contribute to a thriving local economy. Through democratic governance and community cooperation, the market will be guided by member-owners who believe in education and community outreach.

Our ValuesThe East Aurora Cooperative Market:

9 Recognizes the connection between a thriving local economy and the food cooperative movement

9 Acknowledges the impact of the health of individuals on that of the community

9 Will include both organic and traditional options, to reflect the choices of its members

9 Will be governed by a democratic decision-making process

9 Values inclusivity by embracing both member-owners as well as all members of the community, individuals and families alike

9 Believes in access to a high-quality variety of food that can be traced to producers both local and national with similar high standards

9 Will strive for fair prices that reflect the quality of the food available

9 Letter from our Project ManagerDear Cooperators:

In September 2011 I transitioned from board president to project manager, and it has proven to be a thrilling and important time for our organization. In my new role, I am responsible for providing oversight of a very important time in our development, that is, the final stages of our “Four Cornerstone in Three Stages” model.

In addition to leading the Site Selection Committee, my other role is keeping track of the myriad working parts of this organization and reporting back to the board. We now have six well-formulated work groups with varying missions that comprise more than 50 volunteers. Just that fact alone is indicative of the volume of work we are conducting on a daily basis!

The question on everyone’s mind is: “Where are we in the process and how much further do we have to go?” To summarize, we are in stage two of our three-stage model. Sounds impressive, doesn’t it? Indeed it is! But, I must also note that there is much work to be done and member-owners to gain.

We are actively seeking to secure a site with contingencies, and at that point our member capital campaign will kick off and other funding will be sought. With those funds secured we will be entering the final stage, which includes any con-struction and/or development of the site. The timing of this phase will depend on where we are located, whether we’re building from the ground up or modifying an existing structure.

Today, and while we complete each phase, the behind-the-scenes work con-tinues, including member-owner growth, board development and governance and ongoing committee and volunteer work. To that end, I want to briefly describe the six work groups and the ways in which we are all living the the Seven Co-op Princi-ples, which are the guidelines that set co-ops apart from other types of businesses. As you read this, I ask you to imagine embracing these principles, and how you may become part of this genuine community effort.

• Membership and Marketing: Carefully crafting our messages and disseminating them via the website, Facebook, brochures, blogs, the media and numerous publications, their work demonstrates co-op Principle No. 5: Education, Training and Information.

• Events and Education: The “Food for Thought Series,” a gathering in the Elm Street Bakery, various health fairs and more are just a few of the events this group has executed. To be sure, these events are important for building membership, but also for the equally important task of building community. This is Principle No. 5 in action: Education, Training and Information.

• Finance: There is an abundance of financial expertise comprising this work group, whose members have been

working diligently to fine-tune our business plan and pro forma with the help of our cooperative consultant, Bill Gessner. Part of this team’s duties are to devise and manage the capital campaign, After we secure a site with contingencies, we will kick off a member capital campaign (as well as procure other funding), which is a demonstration of Principle No. 2: Member Economic Participation.

• Mini Market: This initial retail effort truly took hold in 2011, and is simply a taste of what is yet to come when we open. The market, which also houses our office space, helps us engage potential members, share our mission and vision, and begin to sell locally made products. While we provide fair compensation to our vendors, we are also building vital relationships with them as well as putting some money aside to help offset the many costs we incur along the way. The Mini Market

Alix Martin working with her contingent of young volunteers on the farm-to co-op-to table mural which now graces the outside of our office space.

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We’re Growing!Membership:In 2011, we welcomed 224 member-

owners, culminating in a total of 584

as of December 31, 2011.

Mini Market:In January 2011 we began a small

Winter “Farmer’s Market” in our

office space. By summer, the newly

dubbed “Mini Market” became a small

market whose purpose was to bring

in current and potential member-

owners and to provide a small array

of locally produced items. The

office also serves as a meeting

and education space.

Volunteers and Committee Members:Thanks to the efforts of our volunteer

coordinators, our volunteer base is

growing by leaps and bounds.

Our coordinators excelled in

identifying strong candidates to

take responsibility for the Mini

Market, events and to round out our

committees. By the end of 2011, we

have more than 50 committed

volunteers and committee members.

continued on page 5

Mary Aiken President and Membership & Marketing Committee member.

Mary is a graphic designer, having practiced since 1987 in a variety of capacities from advertising agencies, to college tex-book publishers, consumer products companies and finally her own freelance graphic design business, AikenDesign. Mary’s expertise has been integral to creating the co-op’s brand, from its Roycroft-inspired logo to the membership materials, advertisements, website and email campaigns. Through this next phase, her role within the East Aurora Co-op is focused on that of – with the board as a whole – laying the groundwork for good governance and implementing a solid foundation for the long term success of this endeavor. Mary and her husband, Brian, live in the village of East Aurora with their three children. She has a long-standing passion for food, as well, and is thrilled to be involved in this community-strengthening endeavor.

Mike Benzin Treasurer and Finance Committee member

Mike has more than 25 years’ experience in fundraising and management with local non-profit organizations. Through Mike Benzin Developments, a private practice dedicated to helping mission-focused organizations realize their goals and objectives, Mike provides fund & constituent development, marketing & promotion, governance and organizational plan-ning services and solutions. An active community volunteer beyond the East Aurora Co-op, the Canisius College gradu-ate is also a board member and Vice President with Adoption STAR and board member and President of the FBI Buffalo Citizens Academy Alumni Association. He is also a Leadership Buffalo graduate, a former chair and 20-year board member of the Taste of Buffalo, and was a Business First “40 Under Forty” honoree.

Mike is a believer in wholesome and locally-grown foods and also understands the dietary challenges faced by people with food allergies and sensitivities. The Eden native and former North Buffalo resident lives in the village with his wife and two children and is looking forward to helping bring a cooperative market to our community.

Jane Brewer Jane is a dentist (prosthodontist) and Clinical Associate Professor at UB’s School of Dental Medicine, and currently serves as Chair of the Department of Restorative Dentistry. Jane joins with local dentists to provide dental care and education to an indigenous population in Guatemala that does not have access to health care. Jane holds a long-standing be-lief that healthy, sustainably raised food benefits health, the environment and the economy. She has a strong desire to inspire the youth of our community to embrace the local food/co-op movement as well as promote personal responsibility as lifelong practice. Jane, and former board member Terry O’Brien, established the Health & Longevity Lecture Series.

Barbara A. Byers, APR Vice President and Membership & Marketing Committee Chair

Barb has a degree in communications from Penn State and is an accredited member of the Public Relations Society of America. She serves as associate director for communications in the University at Buffalo Office of Alumni Relations. As she does in her position at UB, Barb directs all print, electronic and web-based communication and social networking for the co-op. Barb is excited about creating and supporting a thriving local business environment.

Lissa Mann Board Secretary and Membership Coordinator Lissa has a degree in retail management/merchandising. Her background includes retail buying, store management, and regional sales office support. She has a degree in medical tran-scription and works as an independent medical transcriptionist. She is the senior trustee of her church and a member of the church council. Lissa’s passion for this project is very simple, “because good food is important!”

Debra Radziwon Deb has been employed as a Nationally Certified School Psychologist for the past 27 years in the Orchard Park School District. Prior to working in Orchard Park, Deb worked with young families in the WIC program through Strong Memorial Hospital, where she completed evaluations for children with nutritional and developmental disabilities. Deb is the mother of three children with whom she shares her passion for whole, healthy eating. In her spare time, she is an avid canner and has worked as a cook for a local caterer.

9 Meet the Board of DirectorsThe Founding Board of Directors was established in May of 2010. The six directors meet monthly and are ulti-mately responsible for ensuring a financially healthy, successful business during the startup process and throughout the existence of the co-op. The Board oversees the the Project Manager (and ultimately the General Manager), and is representative of and accountable to the membership. Plans are in the works for our first board elections in 2013.

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and other activities that occur at our office, demonstrate Principle No. 3, Member Economic Participation.

• Outreach: Our newest work group, the community outreach volunteers get the word out to important trade areas outside East Aurora identified in our market study. Principle No. 1 is at work here: Voluntary and Open Membership.

• Site Selection: Six fervent community members compose this work group, and their expertise ranges from real estate to commu-nity planning to village policy and finance. You’ve certainly heard the mantra frequently cited in home sales, “location, location, loca-tion.” It is no different for the East Aurora Co-op. Our site, and its impact for the long term, is the most important factor for this entire endeavor. There is more – much more – to selecting our site than merely occupying an empty building. Understand-

ing and appreciating the nuances is to under-stand and endorse the careful and deliberate process to select the location. We are striving for a site where we will be accessible to

as many community members as possible who will be inclined to participate because they believe in the Principles and want to be a part of this welcoming and exciting community hub.

• Harkening back to the original intent of our founding members is Principle No. 7: Concern for Community. In discuss-ing ways to increase the health of our community, whether it be personal or economic, we recognized that a co-op grocery would address both. This nugget of concern metamorphosed, and we are now proud to be supporting local producers while providing member-owners with healthy options. And this symbiotic relationship will only grow stronger when the store opens!

• We often say, this is “YOUR co-op, YOUR way,” which relates to Principle No. 2, Democratic Member Control. By nature, cooperatives are democratically controlled by member-owners who actively participate in setting policies and making

decisions, in a “one member, one vote” manner.

• I have spoken about the cooperative principles as they apply to the co-op and our community, but there is one more that has even a broader reach, Principle No. 6: Cooperation among Cooperatives. This is not a mere platitude; it is the living, breathing way coopera-tives work. Our greatest example is the generosity of our friends at the Lexington Cooperative Market on Elmwood Avenue in Buffalo. Without Tim Bartlett and his staff, we would not have been able to

learn what we have learned so quickly, not to mention the fact that they sponsored our professional market analysis (valued at $10,000). Other co-ops across the country have contributed invaluable advice and shared experiences that we have acted on or tucked away for the future. We, too, have been able to advise other start-ups with some of the things we have learned along the way. Sharing our advice has been so rewarding and is something we will continue to do. We have made tremendous strides since our first big gathering at the theater 2 years ago. Our board, many volunteers and founding members, have helped to lay solid ground for the important steps ahead. Now imagine where you might fit in to help complete the picture. We welcome your participation to help get us there!

Sincerely,

Sheila ConboyProject ManagerEast Aurora Cooperative Market, Inc.

9 Project Manager’s Report, continued

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Membership Drive at Elm Street Bakery, October 22, 2011

500 Member-owner celebration in May, 2011

New and future member-owner orientation, July 2011

9 Our Roadmap:A D E V E L O P M E N T M O D E L

F O R S U C E S S , B U I LT O N B E S T

P R AC T I C E S O V E R T H E Y E A R S

I S C A L L E D “ F O U R C O R N E R -

S TO N E S I N T H R E E S TAG E S .”

4 Cornerstones:1. Vision

• A vibrant community hub

• On or just off Main Street in the village of East Aurora

• Market study suggests 5,000 square feet retail/ 7,000 square feet total

• Easily accessible

• Will have positive impact on the health of individuals as well as the local economy and the environment

• Will be a community partner

2. Talent • Professionals in the fields of:

human resources, finance, accounting, fundraising, real estate, administration, art and design, public relations, retail

• Industry experts in cooperative development, leadership development, store design

3. Capital • Member equity

• Donations and grants

• Scholarships

4. Systems • Board of Directors in place

• Management and committees identified and strengthened

• Communications with member-owners and future member-owners via website, electronic mail and social media

• Membership office and Mini Market

• Membership materials and database

9 2011 Balance Sheet as of December 31, 2011

current assets Cash $ 83,950 Cash - restricted 1,415 Inventory 983 Prepaid insurance 986

Total Current Assets 87,334 property and equipment 598other assets Deposit 200

Total Assets 88,132

liabilities and member equitycurrent liabilities Accounts payable $ 2,557Accrued expense 25

Total Current Liabilities 2,582

member equityPaid in member capital 92,830Accumulated deficit (7,280)

Total Member Equity 85,550

Total Liabilities and Member Equity 88,132

Some Notes on This Past Year… In many regards, 2011 represented our first complete year in the effort to bring a cooperative market to our community. While we are still very much a start-up, we’ve realized great maturity in how our organization operates and how we manage that operation.

These financial statements show real progress for our team. While we haven’t realized a profit (we need the market open for that!) we have been diligent in how we manage your investment. We’ve enlisted support from national experts in starting co-ops and are following widely-recognized best practices in getting off the ground. We’ve sent our representatives to meet with and learn from other co-ops at regional conferences. And we’ve secured donations and grant monies to cover many of those expenses.

In 2011, more than 224 people demonstrated their belief that our community needs a cooperative market and became member-owners. Each investment bringing us one step closer to realizing that goal.

Our pledge to you is to build an organization that you can be proud of and to be accountable for every penny entrusted to our care. Thank you for your support!

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Some notes on this last year…

In many regards, 2011 represented our first complete year in the effort to bring a cooperative market to our community. While we are still very much a start-up, we’ve realized great maturity in how our organization operates and how we manage that operation.

These financial statements show real progress for our team. While we haven’t realized a profit (we need the market open for that!) we have been diligent in how we manage your investment. We’ve enlisted support from national experts in starting coops and are following widely-recognized best practices in getting off the ground. We’ve sent our representatives to meet with and learn from other coops at regional conferences. And we’ve secured donations and grant monies to cover many of those expenses.

In 2011, more than ?? 200 ?? people demonstrated their belief that our community needs a cooperative market and became member-owners. Each investment bringing us one step closer to realizing that goal.

Our pledge to you is to build an organization that you can be proud of and to be accountable for every penny entrusted to our care. Thank you for your support!

Michael BenzinTreasurer, East Aurora Cooperative Market

1%

13%

13%

10% 63%

Three Stages:

Stage 1 Organizational Phasestatus = complete9 Incorporated, established board

of directors, approved bylaws and membership documents

9 Identified developmental project manager and formed committees

9 Reached 300 member-owner threshold

Stage 2 Planning & Feasibility 9 Complete financial pro formas

9 Completed professional market feasibility study (thanks to Lexington Co-op who funded the study for us)

9 Reached 500 member-owner threshold

2b planning status = in 2b

9 Appointed project manager

9 Reached 600 member-owner threshold

9 Planning member loan campaign

9 Completing business plan

9 Preparing to secure site with contingencies

Stage 3 - Implementation 3a preconstruction9 Launch member loan campaign,

collect all loans

9 Hire general manager

9 Secure additional financing

9 Reach 800 member-owner threshold

Key decision point: do we have everything we need to proceed? Funding, membership, support? If yes, continue on to:

3b construction/renovation9 Construction begins!

3c preparation for opening9 Reach 1,200 member-owner

threshold

9 Open the doors!* Market study estimates first year sales to be in excess of $2 million 7

9 2011 Financial Operating Statement

Professional Advancement

Occupancy

Administrative

Operations

Promotions

Taxes

operating expenses Professional Advancement 10,219

Occupancy 4,293

Administrative 4,287

Operations 1,915

Promotions 1,590

Taxes 25

22,329

operating income Grants 8,489

Events 1,335

Mini-market (Net) 1,740

Donations 1,703

Interest 116

13, 383

Net Gain (Loss) (8,946)

Grants

Events

Mini Market (Net)

Donations

Interest

<1%

7%9%

19%

19%

46%

E A S T A U R O R A

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s t ay c o n n e c t e d :

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6 1 8 m a i n s t r e e t

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m a i l i n g a d d r e s s :

1 74 m a i n s t r e e t # 2 3 7

e a s t a u r o r a n y 1 4 0 5 2

w e b s i t e :

e a c o o p. c o m

e m a i l :

i n f o @ e a c o o p. c o m

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Our sincere thanks to each and every person who volunteers their time and talent, who serves on a committee or on the board, who has donated funds or items,

who is helping us in any way to bring this co-op to fruition. It’s a labor of love, fueled by the notion that the work we do together now

builds a strong community far into the future.

In the Community Ongoing • Food for Thought series March • Sally Cunningham event August • Mural projectSeptember • Fiber Festival October • Well Crafted Weekend • Membership Drive at Elm St. Bakery November • Fisher-Price Wellness Fair • Farmageddon

Membership Office and Mini Market January • Began mini “farmer’s market” March • Moved to 618 Main St. • Welcomed 400th member-owner April • Welcomed 500th member-owner May • 500 Member-owner celebration June • Began “Mini Market” with small selection of locally produced items

In the Media The Buffalo NewsBuffalo SpreeEast Aurora AdvertiserThrive magazine WGRZ

Grants and DonationsSeed Grant from Food Co-op InitiativeHoward Bowers scholarshipHyde Foundation Challenge grant donations from member-ownersDonated items from Tom Hagner, Alix Martin, Clarice & Phil Otminski, Kathy & Dan Castle, Dan Roelofs

Educating Board and Management February Up & Coming Up & Running

conference for startups and recently opened co-ops Bloomington, Indiana

JuneCCMA

(Consumer Cooperative Management Association) national conference San Diego, California

JulyCBL 101

(Cooperative Board Leadership) One day workshop defining a retail food co-op board’s roles and responsibilities Buffalo, New York

SeptemberWork session with Bill Gessner

Two day intensive session with the board and key leaders in the East Aurora Cooperative Market East Aurora, New York

9 Accomplishments & Milestones

Photos throughout, courtesy of Devin Aiken, Holly Layer and Lissa Mann