THE MACOMB FOOD CO-OP:PAST, PRESENT & FUTUREMFC Owner MeetingApril 23, 2015

We’re Glad You’re Here!

Welcome Past: Where We’ve Been Present: Where We Are – and Where We

Aren’t Future: Where We’re Going and How We

Plan to Get There Your Questions

Past: Where We’ve Been – 1 Initial Discussions began in winter of 2009 Goal: Opening a Sustainable Retail Co-

operative Grocery Store Benefit Local Consumers Benefit Local Producers Benefit the Community and the Planet

Incorporation in May 2011 Food Co-op Initiative Grant

Marketing Analysis – feasible, suggests a 3000-4000 sq. ft. store

Financial Analysis – needs further refinement Suggests break-even in year 7, given projected loans

Internal Readiness

Past: Where We’ve Been - 2

Board Creation, Education and Development

Communication: Facebook, Website, Newsletter, Logo

Events: Fundraising and Owner Growth VISTA Workers Community Outreach Macomb Online Market

Present: Where We Are - 1

Macomb Food Co-op Organization: 4 Committees, 12 Volunteers

(6 directors) Owners: 370 Income: $97,306 Expenses: $33,587 Equity: $62,796 Debt: $0

Present: Where We Are - 2

Macomb Online Market (through 4/15/15) Organization: 1 VISTA (1.5 until April), 10-12

Volunteers, 20 Producers (13 active), free rent Revenues: $41,809 Expenses: $40,193

Cost of Goods Sold: $34,075 Sales Taxes: $468 Selling, General & Administrative: $5650

Operating Profit: $1616 Yet to be recouped of MFC’s Investment of

$4173: $2557 Cash Flow over past 12 months:

Average Monthly Revenues: $3116 Average Monthly Expenses: $2555 Average Monthly Profit: $561

Present: Where We Aren’t

Historical Development Model – open very small Run on a shoestring, expand when market warrants

Contemporary Development Model – open larger, more secure Phase 1 – Organizing: 0-300 owners

Develop core group, shared vision, asses initial feasibility, incorporate

Phase 2 – Feasibility/Planning: 300-800+ owners Determine full market and financial feasibility Grow ownership to 400-3000, owner equity to ~$100-300K Secure contingent lease on a building

Phase 3 – Implementation: 600-5000+ owners Conduct owner loan campaign, secure bank & other loans

OE: ~$120,000 OL: ~$350,000 BL: ~$360,000 O: ~$25,000 Hire staff, beginning with a project manager Site design, construction/rehab, install equipment Open full service store of ~ 3,000-4,000 sq. ft. or larger

The Present, Summary - 1

After 6 years of effort, the Macomb Food Co-op continues to grow at a slow to moderate pace. Ownership is approaching minimum number

needed to conduct an owner loan campaign. Many co-ops wait until they are 800-1200 owners

Owner equity is ~ 50% of what’s projected we need Projections assume large owner and commercial loans

that have an uncomfortably long break-even period Much work is needed to make faster progress

Amount of work exceeds what current number of volunteers can accomplish; more are needed

How well does the contemporary model fit our community?

The Present, Summary - 2

The Macomb Online Market has been a success Over $35,000 into local economy Producers are expanding, numbers are growing Is now in black; small operating profit projected VISTA position ends in August Free rent from MDTC for an undetermined period Market operation is beyond the scope of volunteers Projected operating profit is not adequate to fully

fund staffing needs, even with free rent Board wants to maintain capital for eventual store

Board Visioning Session of February 2015 Reaffirmed basic goals, added “accessible to all

income levels” as a core value Vision for a store consistent with Owner Survey

results

Future: Where We’re Going

Continue to operate Macomb Online Market Create a “mini-store” at current location; will

build further awareness of and interest in the co-op Large selection of bulk organic herbs and spices Moderate selection of bulk beans & grains,

mostly specialty items unavailable in Macomb Modest selection of specialty ethnic ingredients Local dairy products Local “Grab and Go” ready to eat foods

Continue efforts to create a small-medium store Refine data for financial pro-forma, business plan Significantly increase number of owners Update market feasibility analysis if needed

Future: How We’ll Get There

Hire two staff members: market/mini-store operation, future store planning 1 full time (35 hours/week), 1 part time (15 hours/week) $12/hour = $31,200 for one year With taxes, insurance, and job creation credit = $34,200 In order to preserve capital, will fund half from capital,

half from new funds Staff the Store! Campaign

If each owner contributes $50, we would raise $18,500 Encourage owners to purchase 1 or more additional

shares Expand volunteer involvement

Specific projects for the mini-store and the long-term Increase the number of committees

Conclusion

What We Need Complete your Staff the Store! pledge card Complete the Expression of Volunteer Interest

(on reverse) Submit in the enclosed envelope Encourage other owners to do so as well

Your Turn! – Questions and Answers Working together with continued and

expanded involvement, we can make a multi-faceted sustainable cooperative retail grocery store a reality here in Macomb

Thank you so much for your support!