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By Andrew Kessel, Natural Foods Sales Representative
New Leaf Market in Tallahassee, Fla., is a long-time Equal Exchange account and ally. Given that the entire state of Florida has only a few well-established consumer food co-ops, it is remarkable that New Leaf has been a part of the Tallahassee community for nearly four decades, boasts a membership of over 10,000, and continues to see strong growth.
The co-op was recently a finalist for the Small Business of the Year (31-99 employees) by the Tallahassee Chamber of Commerce. Hopeful start-ups and co-operatively minded foodies look to New Leaf Market for inspiration (Bread & Roses Co-op, also in Tallahassee, which just opened its doors last December as a member and worker-owned non-profit business, is a good example) and as a model of how consumer food co-ops can be successful in Florida. There's only one catch – New Leaf co-op, at least on paper, is not based in Florida – it's in Minnesota.
Florida is one of a number of states that does not have specific co-operative incorporation options. For example, Good Foods Co-op in Lexington, Ken., is legally based in Vermont, and Three Rivers Market Co-op in Knoxville, Tenn., is incorporated in Minnesota. According to Stuart Reid of the Co-op 500, a non-profit that works to support start-up co-ops, "Many states are like this and co-ops can generally form under other statutes (not-for-profit being common, although these co-ops do not qualify as charities for tax-exempt status.) The IRS will give the business cooperative tax status as long as their articles and by-laws are clear and they do, in fact, operate as a co-op."
Power, farmer, and utility co-ops can incorporate in Florida, but for some reason, consumer co-ops like New Leaf Market have to incorporate in other states to receive the legal recognition as a co-operative. What does this mean? New Leaf, like Sunseed Co-op (Cape Canaveral) and Everman Co-op (Pensacola) - also important, long-time Equal Exchange allies in Florida - was run co-operatively and theoretically “owned” by its members. When members voted to change their system from a register discount program to patronage rebate (for more on this see this), the legal necessity of becoming a co-op sparked their "move" to Minnesota (as well as Good Foods' and Three River's "moves" for the same reasons). Why Minnesota? "Minnesota has laws that are very friendly to consumer co-ops, lawyers who are familiar with co-operatives, and who could help them to work on their by-laws," said Cristin Burns, New Leaf’s marketing and promotions coordinator.
New Leaf, unlike some food co-ops, has a very diverse customer base when it comes to political opinions. "You see radical liberals shopping next to hardcore Republicans on an everyday basis at New Leaf," Burns said. This is one reason they haven't gone after the state seeking to change the law and create controversy or discontent amongst co-op members. But a new co-op in Orlando is doing just that. The Homegrown Co-op, based in central Florida, is receiving help from lawyers trying to incorporate as a hybrid consumer, farmer, and worker co-op.
According to Michael Tiner, board member, employee, and driving force behind the Homegrown Co-op, "If one of our big priorities is sourcing locally and working to improve the local communities, why shouldn't we also be a Florida based business?" Additionally, Reid notes that if you do not incorporate in the state that you will be operating in you can run into problems with the SEC with member-loan campaigns. The benefit of incorporating in the state of operation is exemption from filing requirements assuming your member loan campaign is funded 100 percent by those state's residents.
At Equal Exchange, we believe in democracy in the workplace and ownership through all steps in the supply chain. This includes consumer food co-ops where co-op members are important stakeholders who have a voice that influences how the grocery store runs. The connection between these two different ownership models is strong and Equal Exchange tries to support food co-ops whenever we can. As there are so few food co-ops in the South, we especially hope to see the alternative food movement (independent and co-operative natural food grocers) thrive and expand there. The difficulty of incorporating as a consumer co-op in Florida is one added expense to a list of obstacles that may answer the question, "Why aren't there more co-ops?" We hope this can change so that more co-ops like New Leaf Market could someday sprout – and thrive.
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