The Oklahoma Food Cooperative

Because local and regional food distribution systems were largely scrapped over the last generation, it has fallen to scrappy, innovative entrepreneurs like Bob Waldrop to rebuild them. The Oklahoma Food Cooperative does this by taking advantage of one tool that many long assumed worked against local business—the Internet. At little cost, the Internet has enabled the Cooperative to put the best of the state’s homegrown producers on display in a kind of virtual farmers market. Producers maintain their own marketing identities and set their own retail prices. Consumers then choose as many or as few products from as many or as few producers as they like. The current revenue model charges producers 10% per sale and consumers 10%—a 20% total margin for each transaction.

On the monthly delivery day, producers bring all the items they sold online to a central location, marked with the Cooperative’s special order label, pick-up site, and member number. They are promptly paid, and the co-op volunteers take over from there. Items are packed into trucks, and delivered to pick-up sites across the state. Most customers go to the nearest pick-up site and grab their items. Through the Oscar Romero Catholic Worker House, Bob also organizes several hundred deliveries each month outside the Cooperative for low-income people who don’t have transportation.

The co-op generally operates within a 160-mile radius of Oklahoma City (one of its producers is from the Panhandle, which is about 300 miles away). “We have,” explains Bob, “people in the most expensive zip codes and in the lowest income zip codes. So as a result we serve upper-, middle-, and lower-income people.”

Not only do they sell fresh fruits, vegetables, grains, and herbs, they also offer value-added products like breads, casseroles, cookies, and cakes. “Plus,” says Bob, “we have a lot of choice in meats: grain-fed and grass-fed beef and lamb. Bacon. Buffalo. Lot of cuts of pork. Sausages. Venison, although now less of it is available because restaurants are buying up supply. We also sell non-food items like body care products, soaps, some clothing. We could almost call ourselves the Oklahoma Food and Mercantile Cooperative.”

The producers are a diverse bunch. Some are tiny, hobby operations. Another vegetable producer just doubled his production to 30 acres as a result of the co-op sales. Some producers have teamed together. “If it’s a vegetable product,” says Bob, “we have an instant market. It’s going to sell.”

Not every product, however, is allowed to be sold through the co-op. Raw foodstuffs must come from a grower who lives in Oklahoma. Value-added products must be processed locally, though they can have ingredients from out of state. Locally roasted coffee, for example, qualifies. But a processed food item with sausage has to use a locally made sausage. Nonorganic items also are permitted, but meats from concentrated animal feeding operations (CAFOs) are not. Anything using pesticides or herbicides must be duly labeled on the website.

A big part of the Oklahoma Food Co-op is educating producers and consumers. For producers, this means getting them to tell their story. “Farmers often balk at first,” says Bob, “but they typically have really interesting stories. I tell them the more they share their stories, the more they will sell—which is borne out in their co-op sales.” Teenage kids of farmers are helping their parents get the stories down. Bob helps too. He also encourages farmers to offer recipes on how to use their products. And he pushes farmers to come up with new products consistent with their story—soup bones, for example. “I had to encourage producers to get these back from the processor, that they were leaving money on the table. Now they are all are offering soup bones. During the depression, people used every part of pig except squeal, because they had to.”

That the Oklahoma Food Cooperative actually works at all is a marvel. The company flow chart contains 300 jobs, and up to now, none has been filled by a single full- time employee. Says Bob, “It has grown organically, and we make things up as we go along. I’m personally not an organized person at all.” Bob convinced the board to hire part-time mid-level managers in 2008.

Delivery day now occurs in a 10,000 square foot warehouse. “We found an old warehouse that was in really bad shape, with really low rent: $250 per month. We will have to spend $35,000 up front to fix the roof and electricity. This figures out to $1000 per month over five years, so we’re saving money, we just had to pay up front.” To finance this, they ran a “capital campaign” selling T-shirts and posters. “It’s ready now, and not a moment too soon.”

The flip side of Bob’s militancy about keeping expenses bare bones is his commitment to making the business self-sufficient. “The danger with grants as free money is that you develop overhead before you need it.” He’s proud that the co-op has received only two grants so far, a small one during the organizational phase, and a recent USDA Community Food Security Program grant to buy trailers and develop their financial and product tracking software. “Other than that, we have been 100% self-supported through the sale of membership shares, commissions we receive on the products we sell, and some donations from members.”

The bottom line for the Cooperative has been slightly negative for several years. Bob notes that some of this reflects their accountant’s decision to expense most of their capital investments. But there are positive trends too. Gross revenues for 2008 were 52% higher than in 2007, with some individual months improving upon past year figures by more than 80%. “If this kind of growth continues, in four years we will sell one million dollars’ worth in a month. Thus far, our growth is accelerating.”

Bob knows the co-op has had an enormous impact on his members, but he’s unsure how to measure it. “The thought of the Cooperative collapsing fills people with dread and despair because it’s increasingly how people are getting their food. We’ve had a real major impact at the micro level on members who buy regularly.” And, of course, it has been critical to the survival of small- and mid- scale farms and food businesses in Oklahoma.