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How Co-ops Are Changing the Business Game for Future Generations

Co-ops, worker-owned, cooperative business, WinCo, Innovative Business Model

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One of the most significant, society-shaking actions a company can take is to become a worker-owned and managed cooperative. Companies like WinCo, Organic Valley, New Belgium, and others are breaking the traditional mold by inviting employees to be co-owners rather than relying on the traditional top-down model that privileges the C-suite and department heads at the expense of the workers on the floor.

Worker co-ops are something of an old-fashioned notion, with roots in the labor movement of the late 1800s. Yet the co-op movement also has one foot in the future, since worker-owned cooperatives operate on a more sustainable, socially responsible business model that favors both the worker and the environment.

What Defines a Co-op?

You may have shopped at a co-op without truly understanding its definition and purpose. Co-ops eschew the traditional business model for a more even playing field when it comes to ownership.

Co-ops are a “cooperative business,” owned and managed by their members. This type of business must adhere to seven core principles, as set by the National Cooperative Business Association (NCBA), including voluntary, open membership, democratic member control, and a focus on localized sustainability.

You might have the impression that co-ops are, by definition, small businesses, but that couldn’t be further from the truth. Numerous large corporations operate under sustainable practices and are worker-owned, including New Belgium Brewing in Fort Collins, Colorado, and the food company Organic Valley.

New Belgium rewards employees with membership after one year of employment, and produces 12 percent of its energy needs on-site. The company’s core values include environmental stewardship and a balance between the needs of the company and its employees. New Belgium rakes in more than $225 million annually.

That number pales in comparison, however, to the estimated $1.1 billion in annual sales reported by Organic Valley. The company is the largest organic farming co-op in North America. The company is based in La Farge, Wisconsin, and employs 932 people, many of whom are millennials looking to make a positive impact on the planet.

The Millennial/Co-op Connection

Millennials are effectively changing the global workforce, demanding more job flexibility and seeking out employment that also promotes social justice. A whopping 90 percent of millennials say that they support brands that align with a social justice cause rather than a competitor. They’re even willing to switch to a lower-paying job if it offers flexibility and a sustainable approach to daily business.

More than generations before them, millennials are conscious of how their daily lives impact our planet. Therefore, sustainability is a major player in millennial employment choice. In their employment search, millennials also prioritize purpose, diversity, and social responsibility.

And more businesses than ever are aligning their mission statement with social justice and sustainability ideals. According to the National Co+op Grocers, there are more than 29,000 co-ops in the U.S., with more than 350 million holding a membership with those co-ops.

The Co-op as an Innovative Business Model

Co-ops are vastly different from traditional companies because they exist for their members — not corporate executives and other higher-ups. These types of businesses are also aware of the impact their company has on the environment, and they strive to reduce their carbon footprint.

Cooperative businesses also tend to “give back” to their communities through various programs and philanthropic activities. This brings us back to New Belgium, which allows employees one hour of PTO for every two hours of volunteer work they perform. Few companies can match that in terms of philanthropic effort.

Corporate social responsibility applies not only to sustainability policies that help heal the natural world and the environment through eliminating excess waste and preventing the expenditure of fossil fuels in the first place, but it also applies to the way companies treat their employees.

Employee wellness is also a big point in the mission statements of cooperative businesses. New Belgium has an on-site wellness clinic and doctor.

The grocery co-op WinCo offers medical benefits to all employees who work more than 25 hours per week. Typically in America, part-time employees are not offered benefits. But giving a generous benefits package to employees is just part of the innovation of the company. If you’re on the East Coast, you’ve likely never heard of the grocery giant, but in the Mountain West, WinCo is a household name and one of the best spots to pick up groceries on the cheap.

WinCo’s employees have been making headlines for years. In 2014, Forbes profiled the “millionaire grocery clerks“ who are among WinCo’s more than 18,000 employee-owners. The company’s employee stock ownership plan means that employees receive a large chunk of the Idaho-based company’s more than $4 billion in annual revenue.

Final Thoughts

Worker cooperatives are blooming in the 21st century, as more and more people realize how sustainability and corporate responsibility intersect. Worker cooperatives are leading the charge of social responsibility, offsetting their carbon emissions while also paying their employees a living wage and securing their future with generous benefit and stock plans.

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