Thirty-seven years ago a young woman moved to Ithaca from Chicago with her young family when her husband enrolled in graduate school at Cornell. She immediately joined the three-year old Ithaca Real Food Cooperative on Fifth Street in Fall Creek.

"Partly it was social," she said. "It was made up of other young families like my own, and it was part of the healthy food movement."

She was also attracted to the cooperative concept. Not only was she buying healthier food than was available in the mainstream supermarkets of 1974, she was also involved in the decisions being made about what to carry and what to promote.

"And because my husband was in graduate school," she said, "I also wanted to reduce my food costs."

The cooperative moved from Fifth Street to Cayuga Street, where it was located in an old grain store.

"I still call it ‘the grain store,'" this long-time member admitted. "We actually had a contest to come up with a new name, and the winning entry was ‘GreenStar.'"

Three decades later this coop member was elected mayor of her adopted city. Along the way Carolyn Peterson did a stint as a member of the board after being one of the founding signatories at its formation as a non-profit. She is still an active member.

The GreenStar Cooperative has over 8,000 members.

"They all own a share," said marketing manager Joe Romano. "Everyone gets only one share and one vote. No more. That's the cooperative model."

Romano has worked for GreenStar for a decade. He moved to Ithaca from New York City, where he had worked in the food business and then the film and television industry.

"When I walked into GreenStar and looked around," he said, "it was the tipping point. Once I saw this I said, ‘Yeah, I can live here.'"

He applied for and got a job in the kitchen. After three years there he moved into management.

"I got my legs under me over four years," he said, "and then three years ago started to change the image of GreenStar."

"When it first started, it was a renegade institution," Romano added. "'The Shot Way' was in Collegetown. It was started as a reaction to guys with yachts selling you food. It has grown through time from serving the underserved and people who wanted natural foods to becoming part of the fastest growing sector of the grocery market."

Romano said that GreenStar has had to change "where we sit in the picture and who we are in the public eye." Three years ago he suggested that the cooperative should move beyond its hippie image and make itself attractive to a broader segment of the community.

"We are in a competitive market," he said. "We will be driven out of the market if we don't appeal to [more people]. One of the things that we say in cooperatives is ‘No margin, no mission,' which means that we have to make money."

In 1983 the cooperative was a part-time operation run out of a space near Agway. It had hired Denny Hayes, its first paid employee, and needed to find a new storefront. A new place was found on Farm and Cayuga streets, and the inventory had to be moved.

"It started out as an idea to just move a few things symbolically," recalled Art Godin, who was a member at the time. "But we got a group together and ended up moving almost everything."

The membership formed a human chain between the two locations and passed food from hand to hand. The cooperative remained at Farm Street until 1991.

"The building burned completely," said Godin. "Amazingly, one of the few things to survive was the box of membership cards. This was before computer databases, and the membership names and addresses were on these 4-by-6 cards."

Their preservation insured that the cooperative would be able to stay in touch with its members during the search for a new store.

GreenStar found its new home in an old grocery store (formerly Super Duper and Payless) on the corner of Buffalo and Fulton, where it is today.

"It was in pretty bad shape and four times as big as the old place," said Godin. "And we could see that it would require a thirty-fold growth in personnel."

Godin was hired as the first general manager.

"It marked the transition from a non-hierarchical model to a hierarchical one," he said. "The manager began handling the business side of the coop. It was a real challenge because the scale of the expansion was so great."

GreenStar turned to the Northeast Cooperative in Brattleboro, Vt., for training and guidance. Godin also went to the Cooperative Management Institute in Madison, Wisc., and received two weeks of intensive training.

"We needed to learn benchmarking and what metrics to use," he said. "It was the major management challenge of my life."

Acquisition of the old grocery store building in 1991 was not without its complications.

"We signed a lease," Godin said. "The National Cooperative Bank, which was set up to help cooperatives, had promised us a loan for renovations and to purchase the property, and in the final hour they said ‘no' because it was such a big expansion. They told us that we shouldn't have signed a lease."

Godin scrambled to put together a pro forma profit and loss document and to justify the change in the scale of the operation. The bank then agreed to the loan, but with the condition that GreenStar also put together local funding.

"Bill Myers of the Alternatives credit union granted us a loan," Godin said. "It was their first loan to a business. They saved us from that crisis and became the adminstrator of the [NCB] loan. Jeff Furman [a GreenStar board member] told me at the time not to worry [about NCB's condition], that banks always test your mettle that way."

In addition to the loan from Alternatives, GreenStar raised $100,000 in loans from its own members.

"They were on a sliding scale and in the form of promissory notes," said Godin. "They were secondary to the bank loan and ranged in size from $100 to one for $10,000."

It took the cooperative five years to pay off all of its debt. It remained debt free until it purchased the building that serves as its administrative offices, a warehouse, and "The Space" on Fulton Street just north of the store.

"At Farm Street the sales were so high that we couldn't get from one delivery to the next without running out of food," Godin recalled. "Now we are bursting at the seams again. We're at the limit of sales per square foot for cooperatives or even for a conventional grocery stores."

In a more conventional business the decision to move to a new and larger location or to change the public image of the business would be made by the owner or by the board of directors. In a cooperative all decisions on this scale are made by the membership, all 8,000 of them.

After serving as both store manager and as interim general manager for several years, Brandon Kane was hired as the permanent general manager of GreenStar a year and a half ago.

"We have two membership meetings every year," he said, "one in the fall and one in the spring. The fall meeting is coming up on October 21. Tonight [October 6] we are holding our membership forum, where people can bring their individual concerns for discussion."

Kane said that the forums were introduced to keep the annual meetings down to a manageable length.

"They have to be concise, so people pay attention through the whole thing," he said. "By the time we got around to hearing from members not everyone was able to stick around, so we introduced the forums."

They are now held in advance of each annual meeting and on an as-needed basis when significant issues arise.

"We are always working to improve member engagement," Kane said.

Kane came to GreenStar after working for a privately owned natural food store in Hawaii.

"The decision-making process is so different," he said. "Things have to go to committee. Sometimes a decision can take a month. It was a cultural shift for me. The community drives where [the business] goes."

The staff makes decisions about internal policies, about equipment purchases and about where money will be spent in the store through the year. But all of the employees are members, so they are also part of the discussion of larger issues.

"The membership dictates the product line," said Kane. "In fact that is a big part of what they do. They said ‘We're not going to have anything in the store that uses high-fructose corn syrup, and all red meat has to come from within 50 miles of here.'"

So, that is the way it is.

Real estate purchases are also up to the membership. In spring 2004 the cooperative bought Oasis Natural Foods in the Dewitt Mall. In August 2010 they purchased the building that holds The Space.

"We were already operating out of 50 percent of the building," said Kane, "and we wanted build credit and equity. We bought Oasis outright, but that was a much smaller scale. We needed to expand the West End facility and to head off competition. There are some who thought we could relocate the store there."

Kane said that there are logistical difficulties with this idea, and it is an on-going discussion. What is certain is that GreenStar will be moving to a larger building as soon as possible.

"The co-op world shares its metrics; the average sales are about $1,000 per square foot per year," the general manager said. "Right now we are over $2,000. We are doing so much business that we are crossing over into inefficiencies, doing restocking more often, and also the parking is always tight, which drives some people away."

The rising popularity of the store could be part of the nationwide broadening of interest in "good food," or it could be due to the changing of the store's image fostered by Romano three years ago, but probably it is a little of both.

"We look different," the marketing manager said. "The previous message was not coherent. Now it is: ‘We sell you food with values.'"

"Who are we? What do we do? Why do we do it? Who do we do it for? I asked everyone these questions," added Romano. "I went outside on the corner and asked random people what they thought was in the building. One person said that they thought it sold tractors. People thought it was more like an Agway."

Iron Design created a new logo and Romano got a lot of feedback about it. He defended the change.

"A tomato is food, and it's one that most people eat," he said. "The previous logo had nothing about food in it. The star isn't green because it needed to be highlighted. The star wasn't green in the old logo."

Romano wanted to retain a germ of the old renegade image. "In the black and white version, it looks like a grenade ... vaguely," he smiled.

"We've grown from angrier to more inclusive," said the marketing manager. "We've got more people of color working in the store and more people of color shopping in the store. We've been working actively with black leaders in the community to make this happen. It was really a process of breaking the ice, of just getting a few hires. Before this we weren't really regarded as an option."

GreenStar put its first sales flyer in the daily newspaper about a year ago.

"It's bringing new people into the store," Romano said. "It's sort of like a foreign foods store for some of these people."

Many of the new customers are people who are going through some sort of transition in their lives, precipitated by illness, the birth of a child, a new awareness of allergies, or even retirement, anything that causes them to think about changing their diets.

GreenStar is a $15 million business with 175 employees, a large percentage of them full time. Employees are paid a livable wage, and everyone gets the same 401(k) as soon as they are vested, which is based on the number of hours worked.

According to Romano and Kane, the Oasis store was in part a pilot project to help the management learn what needed to change in their business model to operate a satellite store. GreenStar is not only planning to move to a larger store, but according to Kane, also intends to make that expansion serve as a central depot to serve satellite stores in the region.

"A market study showed that Collegetown is underserved," he said. "It has a population that has an interest in good food and doesn't come down the hill to this market."

Kane said that the price of real estate in Collegetown means it will be a smaller store.

"Oasis didn't turn a profit for years," he said, "but we tightened up how that store was run, and now we know what it takes."


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