What is a Cooperative? What is the value in a Cooperative?
It is normal to be confused by what Cooperatives (Co-ops) are and how they contribute to the community. To put it simply, Co-ops are people-centred enterprises owned, controlled and run by and for their members to realise their common economic, social, and cultural needs and aspirations (ICA Website).
Let’s look at some Co-ops around the world with a social mission that may aid your understanding of the business model.
1. Fonterra Cooperative Group, New Zealand
Fonterra Co-op is an Agricultural Cooperative based in New Zealand. New Zealand is sometimes knows as the world’s “most cooperative country”, as Co-ops make up 20% of the country’s economy. Fonterra is responsible for 30% of the world’s dairy exports, and is New Zealand’s largest company. More importantly, they are owned by around 10,500 farmers.
Fonterra is also a good example of adhering to the aim of giving back and leaving the world in a better place for future generations. In 2020, Fonterra created “The Cooperative Difference” programme, where farmers will be compensated for more sustainable production of milk. Also, they pledged themselves to a $10 million a year Milk in Schools programme, benefitting more than 140,000 children each school day, which is the largest social responsibility programme ever driven by a Kiwi commercial business.
2. Crocus Co-op, Canada
Credit: Crocus Co-operative
Crocus Co-op is a non-profit, charitable, member guided cooperative that works on behalf of people with a mental illness diagnosis, where members can find companionship, understanding and support. Crocus provides safe and accepting drop-in centre for adults who have been diagnosed with a mental illness.
Unlike the typical rehabilitation centres for patients diagnosed with mental illness, Crocus adopts a Cooperative model. Crocus uplifts their members by engaging them in various programs. The Work Program is the main program offered to members, where members gain valuable work experience that ranges from yard maintenance to manufacturing job. Members benefit from gaining work experience, building self-esteem, and a hard earned pay cheque at the end of each week. True to the co-operative spirit, any surplus in income contributes to the self-sufficiency of the organization.
3. Evergreen Cooperatives, USA
Credit: Evergreen Co-operative
The Evergreen Cooperative Initiative was launched in 2008 by a working group of Cleveland-based institutions to create living-wage jobs in six low-income neighbourhoods. The initiative was launched with the intention of helping the poor in the area through the creation of Co-op businesses.
The idea of the Evergreen Cooperative Initiative was to leverage the wealth of anchor institutions like universities and hospitals in the community to provide employment opportunities for the people. This idea was conceived in light of the Global Financial crisis in 2008, where the tough economic conditions meant employment opportunities were hard to come by. Ultimately, the goal of this model was to distribute wealth more evenly within the community.
4. Sunkist Growers, USA
Credit: Family Stories Sunkist
Sunkist is the oldest citrus fruit cooperative in the United States. The members of this agricultural cooperative are fruit growers from California and Arizona. Formed in 1893 after a period of economic depression, these fruit growers organized themselves as cooperatives, with the goal of pooling their resources and streamlining processes so as to maximize their profits.
Today, Sunkist is a not for profit marketing cooperative that gives the growers greater clout to compete overseas and, in turn, grow the fruit supply business into a billion-dollar-a-year organisation. The enterprise is owned by each individual grower so that together, they can do many things that a grower alone cannot afford to do – develop a worldwide market and access a global transportation system – to name a few.
Co-ops are businesses that aim to serve the people. For Fonterra, Crocus and Evergreen, each are very different in terms of the scale and goal of business, but all are common in the fact that they aim to serve the people. Do you have an idea for a Co-op business that you think can help the people in your community? Share it with us by joining Creathon 2021 today!
This article was written by Tok Yin Jie, who is a second-year Accountancy and Business Undergraduate from Nanyang Technological University currently interning in SNCF, Campus and Youth team. He is passionate about travelling and learning about new cultures. He hopes to be able to make a change in society in the future.