Flatbush Food Co-op Article in Crain's NY

Flatbush Food Co-op will be opening up in the old Associated Grocery space around March 2008. Will be a great economic shot in the arm for our neighborhood. Here's a piece I helped get into Crain's New York Business about them, and Natural Frontier.

Crain's New York Business
11/5/07

Co-op hopes sales come naturally;
Organic food store in Brooklyn works to keep its 30-year edge as big rivals crop up

BYLINE: Shira Boss-bicak

For 30 years, the Flatbush Food Co-op pretty much had a corner on the market for healthful, organic food in its central Brooklyn neighborhood.

No more. Natural Frontier, an organic grocer with three Manhattan stores, moved into a 2,200-square-foot space just three blocks down the street in June. Whole Foods and Trader Joe's will open outposts in Brooklyn next spring, and Fairway debuted there last year, bringing its specialty foods and organic offerings to the borough for the first time.

``Co-ops started originally because of the lack of these goods,'' says Mel Braverman, a business consultant with Cooperative Development Services in Madison, Wis., who has worked with the Flatbush Food Co-op for many years. ``Now they're readily available.''

In response, the Flatbush co-op, run by Barry Smith, is scrambling to expand its offerings and to add and improve services. Mr. Smith was a pioneer in the area when he opened the store in his basement in 1976, and he doesn't want to be muscled out.

This past summer, the co-op took its biggest step ever: It signed a lease for a new site, just across Cortelyou Road, that had been occupied by an Associated Supermarket. The co-op will move into that location, which has three times as much space, by the end of the year.

``Space has been our biggest problem,'' says Mr. Smith.

The co-op is so cramped that shopping is hard, and making money is even harder. Store margins have been pinched, since it costs more to stock goods in small quantities. And there's little room to display products prominently, much less to add a potentially lucrative deli section.

Caught unprepared

``prepared foods have been a growth sector for a number of years, and the Flatbush co-op hasn't been able to take advantage of those opportunities,'' Mr. Braverman says.

That will change with the advent of the new store. Organic produce, the store's top category, will get plenty of prime space, and Mr. Smith intends to add more prepared foods and bulk items.

The co-op has pulled off one surprising coup: recruiting an expert from a Trader Joe's on Long Island to be its produce manager. Plans are afoot to hire 10 more employees.

Those moves come on the heels of earlier upgrades. The co-op has steadily expanded hours, which now run from 7 a.m. to 11 p.m., and it started a delivery service last year.

In addition, Mr. Smith enjoys a couple of key advantages in competing with far larger rivals.

Co-op city

he does much of his buying through the National Cooperative Grocers Association, which pools members' orders in order to get volume discounts and negotiate special promotions, and offers advice on new products and services. The general manager of the spiffy Natural Frontier down the street admits that the company has had to lower margins below the levels it enjoys in Manhattan in order to compete in its Brooklyn location.

The Flatbush Food Co-op also boasts an asset that none of its rivals has: its status as a community-owned and -run retailer. It has 3,000 members, up tenfold from when the co-op moved to Cortelyou Road in 1985.

Unlike some co-ops, the Flatbush store doesn't insist that shoppers become members, let alone require them to work at the co-op. Membership does have its advantages, however. Members qualify for full equity by making deposits totaling $200, which can be made in yearly installments of $25. In return, they get a discount on all purchases and a say in the running of the business.

Decisions are made by a board elected by the members. The process can be cumbersome: The move to a new store was discussed and sites were evaluated for several years.

Nonetheless, says Sander Hicks, a longtime member and the owner of the Vox Pop cafe and bookstore down the street, ``the co-op is run more like a commercial enterprise.'' He notes that Mr. Smith ``is a child of the '60s, but he is also an ex-Marine.''

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