 The theme of this evening, and thank you for all coming, this is something that council is anxious to keep going. It's our member outreach. Or the council wants to reach out to the members. In the past, I think there's been some conversation about we don't know our council members and they're a little distant from us. So this is one of the ways that we really want to reach out and have you. So I think we'll be doing a whole series of deals, hopefully every few months. We'll have these, in addition to, we're always accessible and available and certainly have our monthly council meetings. A couple of other things. There's some material on some of your tables about the senior discount. There wasn't enough copies to go around. It is on our website. If you want to copy, you can just contact info at punditroundco-op and Stephanie will get you a copy. That's not for a safer conversation tonight. Though you certainly ask questions later. And after this session, we've got a few council members here and Kari obviously is here. And we'll ask the council and general manager any questions that you all have. The real goal that we're gonna have tonight is you guys are the members and we're up to 9,000 members division. Where do we want this co-op to go? From detail, from a philosophical and a 30,000 view, 30,000 foot view or things that are very, very specific. That's what we'd like to accomplish tonight. This is just the beginning of many conversations. Over a three to five year plan. Where are you envisioning and where would you like to see this co-op grow or not grow or what would be your vision? So here's the agenda. The Chapter Surveys, we've got many, many outreach things. A couple of things that are not on here. We've had Kari and I have had a couple of sessions have coffee with the president. I'm actually the president. Scott has some of the president to come up. We had coffee with the general manager and president and we had kombucha with the co-op and president. So we're really trying to get in tune and understand where you would like to see your co-op come from a ground level or from high above. We're gonna have, we'll have this discussion and Kari will give you some information. We'll have each table give us your, some of your very brief thoughts on where you would like to see this, the vision of the co-op that you foresee and then hopefully around 7.15 or so for maybe 45 minutes or so if you guys have questions we'd love you to stick around and have a little dialogue or ask the council some questions. And I think we've got three or so patrice's here, Steve with the council members, Jose. Okay, and Karo, thank you. So we've got an narrator, so we've got a nice representation and Lydia's here, she's our staff rep so she's also on the council, so. Thank you very much and I'll give her a minute. Hi everybody, thanks for coming. We've been doing these dinner and discussions here at the senior center, I think for five years and this is twice as many people as ever gotten to come to these, so thanks. I don't know what it was, good organic romaine lettuce or something, but thank you for coming. And there's still plenty of food. And there's a lot more food. All right, so we're gonna just jump right in and I'm gonna give you just a few slides about the results from our last shopper survey. We do this once a year in the winter and this year we asked some questions about demographics to get a sense of where the membership is, satisfaction and just different preferences that you have. This year we had 1,452 responses, a fair amount from last year and just to caveat that this is not a scientific study, it's not, we don't have representative samples we're selecting if you wanna take the survey, but we did have the equivalent of 14% of our owners take the survey, so that we're getting some good information from this. Just a couple of statistics, 44% of respondents said that they do at least half of their shopping at the co-op and that's actually down from 2012. And then 44% also have been shopping at the co-op for 16 or more years. We asked the question, how far do you travel to come to the co-op? And it's basically third, third, third in our different categories. We have zero to three miles right here in Montpelier Proper is a third and then three to 12 miles is 32% and more than 12 miles is 35%. And what's interesting about this is when we asked this in 2010 it was almost the same breakdown. And I would have guessed that by 2018 people have more options available and have less need to drive more than 12 miles to do their grocery shopping. But that apparently does not the case, we're still getting about the same. And we also asked you to commute to Montpelier for work and only 20% of the respondents said they do. We asked people to put themselves in age classes and you can see in the comparison of 2014 to 2018 or if you can't see basically what they're showing us we are getting older as a group, we knew that. But one of the things that's striking about this is that almost half of the membership is between, or you know of the respondents I should say is between the ages of 55 and 74. So just about 50% in that 20 year span. And what's interesting there is almost half of those are above 65 and half of those are below 65. Here's household income distribution, you can see a nice normal distribution with a peak in the 50 to $75,000 a year. This is not a normal distribution, this shows the rates of education amongst respondents. And this is interesting in that almost 80% of respondents had a four year degree or higher. Okay, so that was demographics not moving on to satisfaction. We asked a series of questions with a five point scale to what degree are we meeting your needs? Five is very well, one is very orlatable. And for the overall categories, overall store, overall products, overall service, you see that rated fairly high 4.3 or 4.4. And between 86 and 89% of respondents said that they were meeting their needs either well or very well. It's towards there. This is going a little bit deeper on the service questions. You probably can't see this very well. But the highest scores were knowledgeable staff and product returns, very high scores in that area. The lowest in this set of questions was for telephone and for website, but both have improved over the past eight years. And then the highest overall rating was for availability of national organic products. So almost everybody agreed that we do that pretty well. Lowest rating as per usual was prices. And then the biggest changes from 2010, we got a nice uptick in responsiveness to feedback. And then a decrease in the average score for satisfaction, we would check out some registers. And then these are questions that are not about the shopping experience, but more about the values that go up. And you can see that the average score range between 4.0 is the co-op of valued source of information about food and health issues up to 4.45 for co-ops to course the local food economy. So generally pretty good scores here. And then this is the bottom line question. How likely are you to recommend the co-op to a friend or colleague? 89% said likely or highly likely. And then just a few other questions to round this out. We ask people get a lot of concerns about parking and parking limiting, especially around lunchtime. So we ask what to what extent does parking limit your access to the co-op? And 54% said never, 5% said frugal. And we've also been giving some thought to e-commerce and online ordering, specifically with the option of ordering online and picking up in store, something that's become somewhat popular in the grocery world. And about 12% of people said they were very interested and 52% said they're not at all interested. And then this is a word cloud. We ask people, what do you think should be a recipient of our GiveChange program? So if you've been asked if you wanna round up at the registers for one of our local community partners, these were ideas that were not necessarily associated with each other, but food and bank, you can see are together. But basically the size of the word correspond to how frequently we got that response. So you see a lot of interest in food shelf, food pantry, food pantry. And one more, we asked about our prepared foods department in Delhi, it's been growing quite rapidly. A lot of interest in that department. We asked, what are the products that you really like in our Delhi? We would have some sense of that when we make that food. And then we asked, what else would you like? And this was the word cloud for what do you like? And a lot of interest in sandwiches and soups and salad. I thought it was really interested that Houdalmas and Greek leaves showed up on this. But vegan BLT and roasted soups. Vegan BLT, yeah, interesting. Okay, so just gonna pause there. Any questions about the survey before we move on to the next part? Peter. This isn't a question, I just wanted you to repeat. This is results of the people who fill out the survey. Right, it's not necessarily representative, it's the people that fill it out. Okay, one of the reasons that we do the survey each year is to prepare ourselves for business planning. We're on a fiscal year that starts in July. So right now we're putting together the business plan for next year. And it's nice to take the temperature of the membership, ask specific questions about online ordering or whatever is of interest, and then use that as a foundation for business planning. So now I'm gonna shift to talking about our planning and we'll end up with you giving some of your ideas. So I'm gonna refer us to our mission because business plan and everything we do is in service to this mission. So Hunger Mountain Cooperative exists to create and sustain a vibrant community of healthy individuals, sustainable local food systems, and thriving cooperative commerce. That's what we're all about. We think a lot about those words and we have ways to interpret and measure them and you're gonna see some of that coming up. So here's a few trends to give you some more information about where the co-op is at, where our trajectory. So membership trends, we've had a strong growth in the number of co-op member owners over the past decade. It's almost doubled in the past 10 years. And it's been growing about six, seven percent or more each year faster than the rate of sales growth, which is interesting. And I'm happy to say that last week we surpassed 9,000 member owners, so good milestone for us in our small community of something like that. This is a very different trend line. This is sales growth. Now this does represent growth, growth of sales over the previous year. So everything is above zero, which means we've been continuing to grow, but you can see that the rate of change, the rate of growth has been declining pretty steadily for the past eight years. And happy to see that we have a nice rebound this year to date because last year we were close to zero. Is that sales growth number dollar? No, it's a percentage if you can't see. Is it food items? All products, all sales, sales of all products. All, that's the number of... Dollars this year over dollars last year. Dollars sold. Yeah, as opposed to volume. Yeah, volume. Is there a volume? We do track that and I have some information about that. I don't know if it's going to be specific because you'd like to see what I can get. Because then sales can be whatever the price happens. Right, sales are a function of how many transactions and what's the average size. And the average size of the transaction includes things like price. And prices fluctuate, but the volume of products is important as well. All right, I've heard that this pattern is occurring throughout the country. It is, and I've got some slides on that as well. So I'll hold that thought. This is not unique to us. And just a little bit of detail about what's going on this year. We're seeing very strong growth in supplements. If you haven't heard of CVDOL, that is the leading category right now. Prepared foods continues its steady increase. There's just more and more interest in the convenience and having a healthy prepared foods option. And we've benefited from that. Also nice to see strong growth in produce. We have a large local component, obviously fresh and healthy food. On the negative side, we've seen decline in cheese, wine, and beer should be in there too, I don't know why. Working on that, thank you. Yeah, good question. If this were any other year, you would see bulk in the negative category. Bulk has had three years of sales decline, also not unique to Hunger Mountain. As prepared foods seems to go up, bulk has been declining. But we've actually seen some improvement this year, for whatever reason. So correlated with overall sales, is the sales of local products. We've defined local as grown or value added within Vermont and or 100 miles up there. And so that includes food and non-food products. It also includes foods that we make in our prepared foods department. And you can see that we've had nice growth over the past five years, except between 2016 and 2017, when we only grew a little bit overall, local product sales only grew. Yeah, but about 40% of our sales come from local and we do business with 500 and two Vermont vendors. A lot of relationships. We also are concerned with sustainability. One of the things that we measure is electric electricity usage. And we've seen a nice decline over time of that. And for the first time this year, we're generating renewable electricity, approximately 2% of our needs, pretty wise. So some social measures. This shows the number of donations and sponsorships where we're getting back to the community in various ways. And you can see that this number has improved quite a bit over time. One of the big factors in 2017 is the Baghdad bag program. So now when you're bringing in your usable bag rather than receive a five second credit for yourself, most nickels are being cooled. And last year we sent about $11,000 a month. Did you have one? That was the question. Yeah, yeah, so that was the lion's share of the increase, but a few other things as well. And just an interesting tidbit, we have a lot of food that is unsaleable. Most of it is either bread that's left over from, you know, day old bread or it's a piece of produce that's not gonna sell. And virtually all of that product goes to human use and capstone community action. That's basically picked up over 27,000 pounds last year. And then if you remember in the mission, thriving cooperative community, what does that mean? Well, one of the things it means is that we support our fellow co-ops. And one of the ways that we do that is we invest in co-ops. We are a member of other cooperatives. We are a member of cooperative associations. And we from time to time will loan other co-ops money for when they're doing projects, expansions and things like that. And you can see that over time, we've built up the amount that we were investing in co-ops. These are investments. We do expect to get a rate of return on these, but it's a way to use our assets in a way that supports the mission. We also sell products from other co-ops and we measured that for the first time this last year. And I was surprised that almost 5% of our store sales come from co-ops, products from other co-ops. Does that include Cabot? Yes. And Organic Valley, big, long, small. Full-off fish. Okay, another conversation. And then a few bullets on employees. Where are we at with employees? It's probably, many of you are aware that it's been a challenging year in terms of employee relations. So here's a snapshot. We have about 164 employees. You may know that we put a high value on employee compensation and allocate quite a bit of our resources towards compensation. So when we talk about price, we also have to talk about employee compensation and vendor compensation. But for example, all of our employees are at least the Vermont liveable age and we have an excellent benefit package. However, there has been a fair amount of dissatisfaction that's been voiced over the past year. One of the ways that was expressed and we had union contract negotiations which were very lengthy last year. It took about an extra two, three months longer than we really wanted to see. And so we did finally resolve that and hope to do better in future negotiations. Yeah. I noticed you have 22 grievances filed. Do you know what the resolved were of those 22? I do. I don't have the data right now. It's a mix of, grievances are when the employee files a formal grievance saying that they don't agree with a decision or a policy interaction. So the results of those are mixed. Some of them were agreed, you agree through a remedy that maybe they propose, maybe we propose, maybe we negotiate. In some cases, we declined their remedy and find that the agreements had worked. So it's a real range. How many of those are still outstanding? None of those. Those are all resolved. Those are all resolved. We do have new grievances that are in progress. It's declined. 22 is by far and away the largest number we've ever seen. And this year we're on track for far fewer of that. How many are coming out of it? I'm not sure. Maybe three? I wouldn't necessarily know about all of them. If they were planning on filing a grievance, I wouldn't know. The question was how many grievances are in process right now that are not resolved? I'm saying maybe three. I'm not exactly sure. How many terminations? Okay, so at the bottom of this, let me just get through the next two bullets. Another challenge that we have had, oh, I was gonna mention, staff satisfaction survey this year because of the dissatisfaction that was vocalized, we made, the council made the decision to have a third party do the staff satisfaction survey. So normally this time of year, I would have some data shared with you on that, but that consultant is still working through the process of the results of the staff satisfaction survey. Another area where we've had challenges is safety. Last year we had 37 workers' compensation claims. It's a high number. We've been over 30 in the last three years. It's an area where we struggled to improve. We have good years and bad years, but it's an ongoing challenge. I feel that we have a good program. We definitely talk about safety. We have good measures in place, but there's still something missing that we're not quite getting there. So we keep trying, which includes the efforts of our safety committee. All right, all right. Yes. With the staff satisfaction survey, I sat in on one of the council meetings and on the question relative to staff cutting trust in management, the numbers went really low. And I'm wondering what you might plan to do to bring those numbers up. Yeah, so maybe I can answer that when we get to what we're planning next year. Is there a pattern to the nature of the safety claims? It's a lot of repetitive motion. A lot of overuse kinds of injuries, especially in arms. The shoulder, elbow, wrists. So if you think about the actions, a cashier or a clerk do over and over and over again. A lot of the results are that. So ergonomics, we spend a lot of focus on what are the right equipment and dynamics and training to do those jobs. In the hospital, we had mandatory and service for things like that. Do you have? We do. We have mandatory training for us. So on a little more positive side, over the past year, this staff has formed a green team which is focused on environmental issues. A lot of good work with recycling programs and recycling more than just the standard things that you can put in our mixed use recycling. And as a retail store, we have a lot of that kind of material plastics and sorts of things. And then over this past year, we've started a new organizational development effort in an area called appreciative inquiry. And we're not really time to get into the details, but it's another way of thinking about the cooperative and what we do. And the appreciative part is really focusing on on what do we value in the club? What do we feel are the things that are the most powerful and how can we develop those further? And so out of that work, we have four initiatives that is really staff driven. And I'll talk about those in a little bit more. And then the last item is turnover. We have extremely low employee turnover in the retail world. Last year it was 16%, it's been below 20% for about five years. And the average tenure is right now nine years. So a lot of folks that have been with us for quite a long time and maybe related to some of that overuse injury. But what would be the... That's a good question. The answer to that, I'm not sure. So just for point of reference that grocery industry 60% is the normal and we have pure costs where 100% is calm. So shifting into external trends, people are well aware that the state has record low and employment right now. It's a very tight labor market. And we are hearing reports from costs that aren't able to hire the staff that they need, especially in terms of food service. So our low turnover I think is interesting in that context. Also an external trend that's not new this year, but we've seen pretty consistent, high growth of natural organic and local foods. And this is across the country. Some people are describing it as a wellness economy. People are increasingly interested in health and wellness of themselves and their families. Food is an integral part of that. And so we're drawn to natural foods. And this has led to a lot of competition and in turn consolidation in the industry. And the most notable over the past year was Whole Foods in Amazon. There's also a lot of innovation that's happening around the world, especially online. Michael, you asked about price. This is an interesting piece. This shows the consumer price index for food at home, which is the products we sell over the past 40 years. And you can see that basically what this is showing is inflation in grocery prices from 1970 on. But it appears that that has started to level out. The reason that's interesting is that for years, grocery, the producers had a built-in sales break, as you were pointing out. Because expenses are always growing, it's nice to have your sales always growing to try to match that. And if that's changing now, or if you're going into a deflation mode, then that can be trouble. It's an index. I can't really... Well, I mean, this is a... Yeah, there's a basket of goods that USDA employees will shop in different parts of the country. They'll put it together. And from that, they compare it to an index and show how prices have been changing for all different kinds of categories of food. How does that compare to the CPI in general? Good question. I can't tell you. But also, that says all is all urban. Yes. Yeah, so this is not limited to the importance of food. So here's some data about co-ops across the country. We share data, we know this. But the average co-op saw a nice growth between the period of 2000, 2008, when the Great Recession hit. And things have been fairly flatter even than negative in one average. Sorry. Are those numbers to the NCG co-ops? Yes, these are NCG data. And coupled with that, there is increasing pressure. As I said, the competition has led to downward pressure on gross margin. Gross margin is related to price. It's what's left or over after you pay for the cost of goods. And as there's more price competition, that means margins come down. At the same time, personnel costs have been coming up. Maybe in part because of the tight labor market, things like the movement for $15 an hour wages. And all that's brought earnings down. And we've seen six NCG co-ops close in the past two years. And there are 12 that are currently struggling. Garry, I'd like to address that if I could. It seems, I've been looking into the NCG, the relationship they have with NCG the last year. Seems like we're pretty well hooked into them for better or worse. But with the consolidation of Amazon and Whole Foods, I've heard it said that any co-op that's in that orbit of a Whole Foods is gonna be one of those co-ops that's struggling. And that those co-ops can expect to, or rather those numbers can increase. So my question is, just regards the wisdom of being hooked into NCG if it faces this problem of struggling the co-ops. Yeah, because I'm not quite following the question since you're saying that there's enhanced competition from Whole Foods now being under, having much deeper pockets, basically. So I would think that co-ops working together with a national association is only gonna be helpful. I mean, there are criticisms of NCG. I think highly of the organization, but we shouldn't be open about where it could be stronger. But at the end of the day, it's going to in general benefit the co-ops that are members of that. You wanna just explain that you're so much like NCG. So NCG is National Cooperative Grocers. It's a secondary co-op, so it's a co-op that's owned by food co-ops like us. There are 150 members across the country. And so we have a vote of the board of directors and other things. And one of the main things that they do is negotiate purchasing contracts for us. So our, everybody's, everybody in the natural foods world essentially is using United Natural Foods as its main distributor. And so we're achieving much better pricing as a result of banding together with other individuals. Yep. I understand, as you said, we're a member of NCG. And we pay them something to be a member. And we have a contract with NCG. A member agreement. A member agreement. And I've asked for a copy of it and you've told me I can't see it. It's confidential. And I just wanted to say, I find that really disturbing, partly because the Roche-Dale Principles, which have been incorporated by the council, say that any relationship with an outside organization has to be, I don't remember the exact language, basically it has to be disclosed. You have a contract. This co-op has a contract with another organization and I as a member don't have privy to what it says or what kind of commitments this co-op may be making. I find it very disturbing. And I don't know what else to say that you've said it's confidential and you said there may be proprietary information in it. And that certainly could be redacted. That could be redacted, which is a common practice. And then whatever isn't, but would be of interest to the members, I think really needs to be disclosed. So that concern has been noted. The reason it hasn't been shared is in fact, it includes information about our contracts with other entities like United Natural Foods and we don't have permission to share that with consumer members. The council is your representatives and managers have seen the contract and are executing it on your behalf. I understand the concern and you'd like to see it and there is in the works an update to the member agreements that will be an appropriate version to share with you. You're saying that you're gonna be revising? I'm not me, but NCG is in the process of doing it. I think I've shared this information with you that it's planned for the fall of this year. Exactly. Still it's very disturbing. I mean remember, we own this co-op and for the co-op to make an agreement with another organization that we can't know what it says, it's just very disturbing and I can only say it over and over again. I think it violates our bylaws and it violates the government's policies where books are supposed to be open, where membership is supposed to be privy to whatever everyone wants. Everything? Yeah, I think we disagree. I disagree. You can't look at the social security numbers of the employees. I mean, there are just some things in businesses, you enter into agreements, it's complicated, we're a multi... Well, Michael, I think there's a huge difference between personal social security numbers and an agreement between this co-op of which we are the owners and another organization and go read, go read the Rochdale principles, go read the bylaws, go read the government's policies. I was on the co-op council, I think you should run to the council. I was on the council for seven years, Michael. I mean, all I'm saying is that there's a vast difference. I don't think that's a very good analogy. Think of a better one. I agree. Okay, I agree. Point will take in and I'm gonna keep moving again. Just if you could give us a one or two, for instances of what is involved, that needs to be kept confidential. I'm not quite sure I... Like pricing, some of the specifics of our purchasing contract with United Natural Foods and other entities will be catered to contact. I mean, it's not the best way to write these member agreements and that's recognized that a lot of that information doesn't have, that specific information does not have to be in the document that Stephanie's request will see. Does that make sense? Not really. So the party is just trying to get a sense, is the overall concern that maybe Whole Foods or Amazon might get hold of our numbers and then use that to undermine NCG and... Well, not... No, I suppose that is a concern if our competitors get wind of our agreements with their suppliers, they're gonna use that information. Right. Well, I think, you know, just my perspective, if significant areas of this agreement which I didn't know about can be redacted, where there's not the concerns that you have and other people have, I would think that that would be a fairly viable option. I mean, I consider it to be impossible. We'll have something for you this year. You had a point. So on another note, on personnel costs, do you have any information about how many full-time and versus part-time jobs and how has it gone in the direction of less full-time jobs available and more people? We're somewhere around 110, 120 full-time and then the 40 to 50 some-odd or part-time or some, and less subs that don't have actual real hours. And over time, I'm not sure. I mean, I don't have the data, but in general, I think that number has been going up. We have a commitment in our union contract that says we will try to provide full-time jobs. It's not gonna happen. I'm gonna keep moving. Just point this out, is the general manager turnover rate has been increasing over time. It did go down this last year, but this is the number of turnovers at 150 co-ops. And I think this is an indication of a couple of things. One is that the job has just gotten harder over time, whether it's competition or discord within co-ops. It's not as easy as it used to be. And the other thing is that this is not just GMs. I think this is illustrative of other positions at co-ops as well, maybe even more members. So just a little bit of business theory, just to, there's counsel seen this before, but I think this is worth thinking about. There is a theory that business and industries go through cycles. And as there's a startup, a new idea is introduced. It's a sort of slow rate of growth until there's an efficiency that's gained and it hits the mass market and then there's more rapid growth. And then there's a flood of competitors enter in and pretty soon market share is hard to come by and rate of growth is slowed and then eventually you'll end up in decline. If you don't figure out what's next you've got to kind of innovate and keep your board cycle going. And one of the big points of discussion in the food co-op world is, is this us? Is this introductory period the 60s and 70s when co-ops were the only game in town when it came to natural foods? And then we all experienced this rapid rate of growth in the 80s and 90s and the 2000s. And we're definitely seeing slumming sales overall. So what's next? And this is probably the most interesting slide I think. What this shows is the lines are the number of food co-ops in this country. The shaded areas, the volume of sales associated with that. But if you just look at the lines basically it shows that there are three waves of food co-ops. The first one goes back to the 30s. Those are the co-ops that started in the Depression era where access to food period was the issue. And at one point there were, what, 600 plus of those food co-ops. And there's just a handful of them left now. We happen to have a few in our area. Adamant, Putney, Hanover are the old wave co-ops. Then there's the new wave, which was in the 60s and 70s where natural foods was the purpose of those co-ops. And at one point there were 700 of those and we're down to a couple hundred or so, something like that. So went through a boom bus cycle. And now we're actually in a third wave, if you haven't heard of this, there are new co-ops that are being formed. One of the newest ones is the Morseville food co-op. And a lot of those co-ops do carry natural foods, but they have a big focus on local foods. That seems to be one of the big drivers. And then they're often located in areas where there isn't enough food available, when we tell food available. So if you think about the very grand city grocery, one of the main businesses of that store is to have a downtown co-op. So this just illustrates, I think, that what's happening today isn't necessarily what's going to be happening tomorrow. What would the peak green and what is the volume of sales associated with those numbers of co-ops? They can see the same thing. And this just shows that it's not all of doom and gloom. There are, in 2017, there were a number of co-ops that did major growth projects, and five of them were in the Northeast, including Under River Co-op in Brownton and Middlebury Co-op. And Littleton Co-op. And this shows one of the ways that co-ops can be successful, I think, is focusing on multiple values, not just financial benefit, but also things like supporting the local and giving back to the community and ethnic diversity. So NTG and co-ops have set goals, impact goals to do better in certain bigger missions. So now I'm just going to give you a little bit of information about our business planning and what we've been thinking about. We have been dividing our work up into three key areas to meet that vision. One is focused on business success. Another one is employee well-being and workplace culture. And a third is member-owner participation in community relationships. This is like a three-legged stool. Obviously, the business needs to be healthy. The employees play a key role in that. And the member-owner role is, at the end of the day, what makes the co-ops unique is the one thing that can't be replicated by others. So here's just... I'm not going to have time to go through all these in detail, but we've been thinking about different things that we can do to improve our business. And here's a few of them. These are things that are already in process, such as enhancing our emotional programs, doing more with meat. We're having some good success with rotisserie chickens and they play on expanding that for next year. Employee suggestion program. An update to the employee game book. I'm sorry, I don't have time to go through this in detail. I mentioned that appreciative inquiry is something that the staff has been focused on different ways to make a workplace better in ways that we care about. So communication, professional development, major topics. And we're also thinking about some new things for next year. We had success with the reset or the changes that we made to the produce department this year and now we're looking at making some changes to the paper resection. We have a new communications plan that we're working on. Next year is another year for negotiating the labor contract. And some additional things we're thinking about taking on as well. So I'm going to pause there and see if there are any other clarifying questions before we break into table discussions. Any questions about the mission statement? When was that mission statement written and when was the last revision of it? Well those are sort of the same thing. There was a wholesale change to the mission statement. And Michael and Lydia might remember this. I'm going to say 2009? What did you say? I said 11. 11? 10? I'm going to say yes. Exactly. The background to that is that what's not in there is affordability and the people who need food and can't afford to come to the co-op to get it. And I just wonder if that was part of if that was considered when you were revising the last time you looked at the mission statement. And if it's something that can be brought to the next... It doesn't show up exclusively any mission statement, but it is something that we've been talking about and showed up in really coming out of the member discount question as well. A top priority. What can we do to be more accessible, more affordable, and part of that is outreach to others? Gary? Yes, come here. I just want the group to know in case they don't know that when I was on the board at MOLCO, that's the new co-op in Norrisville, our co-op here was so, so supportive. Kerry with other staff came down and actually most financially and especially professionally there's a major, major controversy. We would have not been open as we got open if we hadn't had the support here of this co-op. So it was really wonderful. So I think it's really good to be getting those. We're going to have criticisms, but it's also good to be able to show some of the positive things. The other question I have, and I just learned about this, is that I understand that a public relations person has been hired and I would be understandably interested as to why, what was the reason for that to happen? So that's accurate. We had written in the current year of business plan to establish a relationship with a firm and which we did this year and we selected Lee and I here in town and they helped us develop a communications plan so that I referred to that. And basically what that does, it helps us organize one of the messages that we want to communicate and what are our channels and how to communicate those. So we worked with them in January and February and we now have a plan and so we have basically the goal is to have a steady stream of news stories about how the co-op is meeting information. That was $5,000. I just want to make a couple of comments because some people are meeting a lot of Q and A for the council for whoever's left. I just want to just give you a little update on some of the things that the council was concerned about. Well, we're all concerned about but that we wanted to try to address. One of them was staff management relations. We held a series of five roundtables, four for staff, one for management and they were invited to come in for an hour and speak to or to address the council. I was there and Lydia was at most of them and I already saw the council members sat in and it was anonymous feedback and it was very, very productive and the comments were all recorded and given to Kari anonymously and that's going to be shared with staff. We're also working on debt reduction if you're the thing but I just want to tell you that the council really feels like we want to be very engaged with both the members that's why we're having this session and Kari and I have some and we're having more and also management staff relations is a high priority for the co-op and for the council. Communications plan with Lee and I so we just spent $5,000 to get a plan for public relations basically but we have people in-house in community relations some really good people there and I'm just curious why that can't be can't be done in-house rather than spending all that money outside particularly at a time when senior discounts are being considered for cuts would seem like there should be better priorities about how we're spending the money. So it's true we do have a talented community relations team we have as we do in other departments sought support where our staff feels they need that support so specifically in the community relations over the past years we've hired out help with our advertising plan and it was another area but basically these are disciplines that we could benefit from other expertise and make sure that we're doing a good job and in terms of the investment yes $5,000 is real money but this is a $25 million a year business and I think it's important to make wise investments in maintaining things like our public image you know there have been some negative stories about the co-op and we know that it's important to accept criticism but it's also important to tell the story of the good things that the co-op is up to. I just wanted to ask about you're talking about online shopping and I wondered if you might have some kind of a transportation for people that are seniors and other people not really meals on wheels but if you're sick or something that you could order meals and have them delivered. Yeah, so that's exactly the kind of feedback that we're looking for. This is why we want the suggestions and have this conversation. I had mentioned once before that I thought when you bring senior bags to the senior center to give to poor people that it should be for that and not for people who are more affluent that there should be some kind of a financial thing put on whether you can get a bag whether you're getting Medicaid or something. And it's not just for every senior who happens to walk through the senior center. What was that? One percentage of the members actually participate. 14% of the members. So considering how low that number really is how much weight decision-wise could in good faith be placed into the results of it? So I don't think I don't consider that to be that low and you can do sampling with smaller rates of that and have it be representative. But at the end of the day it's just a survey. There's nothing that's being there's no final decisions that are being made based on that survey alone. Okay, so it's 7.15 and we said that we would break it 7.15 so if it makes sense what I would suggest is let's take our five-minute break folks that are ready to go great thanks for being here if you want to stick around then we'll kind of get a sense do we want to do the table exercise with those who are interested or do we want to or we can have the council open session and then we have those forms so if people want to write or email me or whatever we'd love to figure it out. Gene. I don't know if this was intended part of your program but there's this multiple-page document I wonder if somebody can distill it down into summer. Sure, so yeah there were copies of the summary report from the third round of member engagement on the conversation series regarding member discounts. And so you know over the past year and a half we've been talking with members and staff about member discounts which have been growing rapidly over the recent years and so we've been sharing that information and getting feedback about what do you think should be done and basically that report summarizes the last round in which we the committee that we have brought forth some draft recommendations and we got feedback on that and now that has been given to our committee and the committee is in the process of finalizing the recommendations that it's going to make to the management team. So there's some good information in that but it sort of points the direction that we think we're heading. I watched an interview on national TV an owner of about a five billion dollar company was being interviewed and the interviewer asked him at the end of the interview one special question the question was with all of your years of experience the money, the success, the failures what do you feel the highest priority should be is or should be for your business or any small or larger business what is one highest priority and it was just very interesting to hear that and he said having the employees feel that they have a anxious and honest connection with the organization and if they have problems they trust that someone will be there genuinely listening to them and I just thought that would be interesting okay so why don't we break and then if you would like to stick around we will continue five minutes and thank you for coming so if you haven't signed in please do get a good hand hello everyone I'm Park Sergi and I'm on the council and I'm on the committee we're two council members so we're always looking for new members and I think there will be three seats, is that correct at least three is coming available and so definitely go online check it out there is some information here and I think it's sent out in August is that correct the applications will be available in late July this year okay so definitely check it out online there's information there you're always welcome to come to a meeting they are usually the first Monday every month but it is definitely in July right yes so definitely go online and check it out anyone have any questions about that of course it is and you know people really have some interest and some questions so they will definitely come more involved it's a great learning experience I've never I think of it I think of it like I think the best volunteer opportunities you get more out of it than you do alright so thank you for staying we have two things that we can do one is we could work in small groups to discuss these questions and then report out and or we could do the open session and talk about whatever people want to talk about so who's in favor of the first which was a small table I did a discussion about these questions so just tell them in and we can open it up my name is Paul Olson and I have been a member of the co-op for 45 years and I just want to say that one thing that was not said earlier is just how fortunate we are to have this organization in this time and to have it be led by people like this I just think you guys are doing a wonderful job which does not imply there are not lots of challenges but I think we are very very well served and I very much appreciate what you do who's making off the wall kind of suggestion we heard that M&M is closing and that means there's going to be no redemption center is this something that the co-op could pick up have you looked at the costs of it but that's a vision okay because it will in fact start to bring new customers to the co-op well things that you don't want to sell but nonetheless things that you want to sell and it might it would be a community service because there is no other place to redeem bottles and cans I know that there will be costs the question is are there benefits for these people that have exceeded and would contribute in some sense to the community obviously we haven't looked at that particular model we've talked about having a swell satellite location didn't necessarily but obviously that's something I need that M&M is going to have very shortly Peter Kalman I've been a member of the co-op three different curies in my life starting when there was no building to group buying out in I think it was out in Plainfield I can't remember now it was so long ago but anyway, I'm back and I actually think it's a good idea to invest $5,000 for communications but I think it's a good idea to hire professionals who really know how to do something and one of the things I'd like to see you consider is to get a statistician in to do some more sophisticated statistical analysis than you get from these surveys and in particular just for example of the 9,000 members it would be great if we could get a per household which is tricky in itself because she's just identified people by individuals but per household buying and what is the distribution for both in terms of what's the average mean but also what's the median how many people are buying very little how many people are buying a lot and this kind of analysis can teach you something about when you make decisions about discount programs or any kind of decision where you think you know who your customer is or who your customer is with a more sophisticated statistical analysis which will cause you some money I'd just also like to comment on I was a treasurer for numerous years before this year and this is the Toblingay is our CFO and parties this is a very very conservative a fiscally conservative organization between their budgets and every dollar that they spend and it is not a spent through an organization that will spend $9,000 on this and $10,000 on that quite the opposite I think it's very very conservative 9000 members that are in good standing that are current members about 70% of the business is from from members they're the 30% constitution people that are not members of the co-op we know that about half of them have made their full equity investment and they have already been in the process of payment plan and we also know that roughly 98% of them shopped in the last year so there's a couple percent out there that haven't been at the co-op but remain members fully invested yes we do rely on people if they move or if they pass away pass on and folks have to request their equity back that does happen so they would be but we know it's about somewhere around 2% that didn't shop last year we're not going to let those people vote for Trump because we're in a good financial position we just had a finance committee meeting the other day and we're going to have a proposal to the council to retire I think it's $130,000 of our debt either pre-paying partially pre-paying our mortgage and we also have I think a 4.5% loan that's still outstanding for five years so we're continually trying to manage where we can save money and what's the most benefit use of our capital I apologize for not knowing what figures mean because there are only 14% that's represented in the shopper survey well there are ways of getting those kind of numbers to be representative of the membership population and it's going to cost a little money but it can be done I just wanted to offer an appreciation for the co-ops commitment to local producers and going forward I think that supporting our money and supporting local purchasing especially with these broader trends with Amazon Hopefully for weekend control I think would be a real priority in this to focus on One of the concerns I remember in the presentations was the projected growth of the online food retailers like Amazon Venture and I imagine and Google is venturing into that as well what are the thoughts that are being discussed to address this it's pretty scary I don't think I referred to the presentation but there was a bullet saying online grocery sales represent 2% of the industry and could be as high as 20% by 2025 so in terms of what we're doing currently we did an analysis a few years back on delivery wasn't necessarily an online study of online grocery but what that told us was we could probably run a delivery service but we wouldn't be doing it for as a profit seller it would be an investment it would be a service to the community and it would be limited to you know mob healer and you know the near environs in terms of I'm just talking about staying competitive I'm not even preparing to try to do it right so we've identified doing basically another study about online and what are our options we've also asked NCG to also do a white paper and provide us with an overview of what should we be considering I don't think it makes a lot of sense for independent standalone stores to reinvent the wheel and try to go head to head with somebody like Amazon it's just it may be that we feel we need to sorry it may be that we want to do something like have an online ordering pickup option as a service to play sort of defense but I don't think it's ever going to be a strength of ours and I have this sense that strategically we should really focus on the things that we can excel at and differentiate us from the mass market that's my sense I think Billy was next one of the questions on the slide and on the sheet of papers what else should we call to improve in advance our plan and Mr. General here mentioned the mission statement earlier and I'm wondering in conjunction with the council's work on putting forward a vision statement coming year if we could include in that some kind of a review or rehab of what the mission statement is because when I look at it I just don't see it it's it could be more complete than it already is so that's his suggestion for the council kind of on the long lines of delivery have you given any thought to maybe teaming up with the likes of Atomac Co-op and where people could do their ordering and then that could be dropped at a certain time of the week or certain days a week you could do that kind of like the library footmobile yeah because I see people drive up in Calisthenics I see people drive to Montpellier to go to Co-op and they can drive back and it makes no sense and it seems like it might help in a big way Atomac as well yeah we have had some discussions of that in the past and it's interesting we could actually if if Hunger Mountain were ordering the product and having it delivered to our store United Natural Foods doesn't care where it ends up so we could actually Atomant or Buffalo Mountain or Plainfield could actually have the same pricing as us which would be a major benefit if you talk to the staff of those that would be a major boom but the logistics are not that we have I don't know if you've been in our back room but there's no room there's no room for anything so product can only go through immediately that's the only way things flow and so we've never been able to work out logistics other than we have experimented with it at chocolate sales so when we have that big tent and we are able to store products outside and say hey why don't the Co-op participate in this and we'll sell products at our cost and then you can pass along that savings to your members and we've done some success with that but I think it's falling off recently How are prices set? Are they a percentage is it the same percentage for everything over what you buy or is it how do you determine how you're going to set the prices? That's a really good question we could spend an hour on that it's not the same it varies by department and within department's categories and within categories there's even some lines that we typically will favor things like local products or things that we want to support but essentially the market sense it and we have a sense of if it's a similar or identical product we're selling four down the street we know we have to be comparable we can't be ridiculous can't look terrible or else it just won't sell and the other thing I would say is that that is part of the planning, part of the budgeting and we're saying listen produce we need X from you next year and they say well we think we can only do Y and then we say well what are we going to do about that because it all needs to fit together and what we haven't talked about is while the comp is on sound financial footing we walk an incredibly tight margin our net income is 1% or less and we typically give half of that back as a Patriot tree fund so there's very little room for error but we benefit from this incredible stability in our community and support and I can pretty much gauge what next week sales are going to be based on in the same week last year within a plus and minus of the percent or so and it's just amazing the support and dedication that folks in this community have for natural foods with my low income I'm not one of your biggest customers but I did try to come in with a sale on some cheese and I thought oh my I can get some cabbage cheese at a really good price and I came in and I had to get by two things of the cabbage cheese to be over $20 and it was about the same price as the regular price at Shaw's or Price Chopper with your discount so I'm just saying do they not give you do they make you pay more for your cabbage cheese than they do at Price Chopper or Shaw's is that a competitive thing that they're doing for you know they're a co-op right supposedly and I had another thing I wanted to mention too I grew up during World War II and during World War II we had out in Watesfield in the valley we had a truck that came from the local store delivering groceries all over there you could do some truckload sales you have your bulk things you could take it to Atomant or you know to East Montpelier or Plainfield or somewhere and maybe spread out that way and it might be a good way to get some bargains and also help you help us ok so thanks for the suggestion and then the question about pricing of Cabot that is an interesting one there are certain products that are relatively local where we struggle to get the same pricing as some of our regional chains like Shaw's or Price Chopper Cabot definitely comes to mind Ben Jerry's in that category where Ben Jerry's have basically negotiated a contract with a chain of law stores of course the pricing is going to be better and we don't sell Ben Jerry's anymore but with Cabot we raise that concern with them is that we're a co-op you're a co-op this is Cheddar cheese this is what the community wants and so you know what they offered us was I bought a pretty good deal in terms of the eight ounce blocks I believe we are competitive especially if you shop on Mondays oh I get the three pounder oh take a look at the eight ounce blocks on Mondays it's it's a very good deal they're much more expensive than to get it Nancy then Stephen I'm Nancy I just wanted to say that the redesign of the produce department is absolutely splendid it's so attractive you can't walk through without buying too much or more than you intended and I also wanted to say that the samples that are served in the co-op are generous and wonderful and they are great contributor to sales because you taste this and you think I need this thank you very much and I'll pass that on over to you you know the answer to this question anyway the prevailing narrative in what we've been hearing for the last I guess 18 months or so regarding the new competitive landscape is that the natural food sector has become lucrative and attractive and popular and also the big stores are getting into the business hence the competition and hence the slowing of our growth and I'd like to know if there's some kind of a mirror thing going on if you know there's some kind of a mirror thing going on in the commercial sector are some of the big stores maybe reaching into this organic market because they're running out of places to expand and maybe there's a similar carnage going on there with their growth going down just curious if we're all in the same boat or if we're just kind of kind of a sitting duck for these big monsters that are coming in to get the best of us yeah I'm not an expert in the conventional food industry but you know a little bit and one of the things I'd say is that for years conventional grocery is essentially stagnant there wasn't much growth there and we were all surprised how long it took the shawls and the price choppers in the world to notice Walmart to notice the growth that was happening in natural organic and for a while they were sort of dabbling and what we've seen over the past 10 years is they've gotten in whole hog and I have a slide that I didn't bring but two years ago it shifted and now more natural inorganic foods are sold by conventional retailers than by the natural segment and I don't expect that change that trend to change anytime soon as far as how they're doing I think it's totally a mixed bag I think that there are some chains that are doing very well and expanding rapidly especially in urban markets and there are others that are filing for bankruptcy and we're seeing it fairly regularly I think there is there's a type of competitor out there that's caught in the middle that they're not the big box lowest price leader and they're not able to compete with Amazon Walmart and Kroger and they're not necessarily on our end of the spectrum where they can store where you can offer an authentic experience with real food and real people and that's such a great service and I think that the future is probably not great for those people whenever you talk about growth really make clear to people that greater growth in growth are two different things and that for example we continue to grow every year but the rate at which we grow is declining this is very common when the business hits a certain size it's much harder to grow by a greater percent at a higher size and I think that that's an important distinction but that's not what I'm talking about it's also relative it's also relative to your population that's not growing watching the county is not growing so Brand Vermont is not so that again that's a part of the more sophisticated statistical analysis but what I really would like to just say something about and it's related to the senior discount the last couple years I think that we as a co-op we as a community and a pillar need to recognize that we have three kind of distinct populations and we do very well with two of them but not so well in the middle the wealthier of us do very well here whether we're seniors or not the poor get a lot of attention by a lot of things in the state people in the middle are getting chaffed I really believe that when we talk about discounts some of us who don't need the discounts need an affirmative way to say take my discount and give it to people who are at the lower end of the middle I'm a senior, I'm 75 years old but I don't need a discount and it's not enough for me to just say oh, okay, I won't collect it let's figure out a way to affirmatively contribute there's plenty of wealthy people in this town who could give their discounts to the people who are on that bottom edge I said this to you before I need it to work this talk about market has made me wonder about CSAs it seems like they could be a competitor but is it not necessarily? we've seen a large growth in the direct sales from foreigns including CSAs and essentially we just don't view that as competition at different times in our history we've published lists of where you can purchase direct our role is to be the marketplace every day for those local products on CSAs but generally we are supportive of the state's farm to play plan we want to grow the whole system thank you Billy regarding the CSAs and our local farmers I think that's an opportunity area of our sales 40% of local growers and manufacturers just to point a reference there's a local farm here in CSA actually at the market last year when they moved the market the few days that they moved the market from the parking area to state street their sales doubled which tells me that there's obviously interests in our local farms and supporting our local farmers and maybe there's a way to increase that interaction and that relationship with our local farms so it's an opportunity it's wonderful that they're doing great and that they're growing like a convention I just want to be mindful of time because I'm supposed to leave at 8 and I'll be back just a quick question Billy was the co-investment policy was mentioned and I just wondered what that is what's the portfolio and specifically I'm curious about climate change and investments in fossil fuel industry so the investments that we have are really in cooperatives and the co-op fund in New England the rest and the policies actually if you look at it it's actually our excess cash how are we going to spread out the co-op has about 2 million in cash and it's basically spread out amongst local banks at the FDIC limit or below and we're not screening for their business practices and how environmentally conscious they are they are local banks and the goal there really is to keep certain amount of liquidity and protect it with the FDIC limit of 250,000 we do have an employee 401K program that we manage and by popular demand we have added over time various options so that if someone wants a socially screened fund or specifically it's got to help me out but it's carbon free so we have a number of options and the challenge there is as fiduciaries are we offering options that provide a reasonable rate of return but also meet the values something we think about ok when we first built here 30 years ago there were almost a worker requirement and I know in some cases in some co-ops where we had been before we did have to work and I know that there is a worker discount and had to participate for the structural sale but I'm wondering if there were opportunities there are for workers and maybe it would be it might shift some of this group of discount people if there were more opportunities and if they were better advertised so that people know that that's an opportunity as opposed to the seamen it's a great topic and if you look over the 40 year history of the call 45 years now that's one of the biggest shifts going from member to employee operated and so when it comes to the actual work in the store we are now a union shop that's what we are we've carved out a certain amount of hours for members to do bagging and cheese and things like that but it's going to be limited in the near future we do have some other options like truckload sale, event supporting events those kind of things all that are support worker if we're not doing enough to advertise that we'll try harder and we'll say that we have struggled mightily in recent years to fill some of those openings like truckload sale if you've experienced that it is fun we've got a discount for three months if we're actively looking for truckload volunteers now there's a sign up in the exit way and then if you're interested it's for every two hours you work you receive a 6% discount for two weeks so it's a good deal there's a third category that we've been trying to develop over time which is called outreach worker so members working on our behalf out in the community in exchange for a discount we've hit a stack with liability because if someone is receiving compensation they're in a sense an employee and we're responsible for anything that might happen to them on the job or to and from that job so we need to work that out and hopefully develop that program but we've been allocating hours to things like gleaning and working in schools there's a lot of opportunity here it just needs more can we give Paul the last word that sounds wonderful we all want to be better tomorrow or next year and most businesses want to grow they want to make more money they want to see the bottom line and for all the years that I've watched this come up and been part of it the membership has grown the volume has grown it's been very exciting one of the things I would like to charge the council the management to look at is a slightly different model of business success where we could be just thrilled to be at 9,000, 10,000 12,000 members and understand that we won't get any bigger than that and figure out maybe there are other things that we could really look at like loyalty or other things to measure our success then continually hoping to grow because I think at some point we won't and if we don't change how we look at it then all of a sudden we're up here announcing but we're failing and I don't think we are I think level off could be just wonderful so I wanted to say that thank you very much for the last word I wish my wife would let me do that thank you I'll let you be the last one absolutely the last one I have always had even though I come I'm a psychologist, non-traditional I'm coming from a somewhat less perspective I've had both positive and negative of unions open to ears the large unions, small unions and I know that there's been some challenge here at our co-op with the unions and could you give us an idea now as to whether there's any balance coming or whether there's more open communication what how do you feel about the status of the unions as a co-op well thank you actually from the council's perspective I know it's been a major effort and he's been keeping us surprised in both of his GM evaluation I'm not supposed to really talk about it but one of his points has been he's very very concerned and really wants to work for better union negotiations or union thank you so I don't know where to start it's one of our biggest challenges as a co-op is making sure that to the best we can the union and the management are on the same page and cooperating I think we have way more shared interests than we have separate interests somehow the differences get magnified and emphasized and I'd like to see less of that I'd like to see more cooperation because I do think the purpose of the union is to protect the employee specific interest that is exactly the co-op's interest as well yes there are places where we will we will not agree but I think that there's all the opportunity in the world to work together towards to our mutual benefit and it's a personal challenge it's a collective challenge and I keep trying and I think it's right at the top of the list of priorities and so things like housekeeping meetings where the union leaders and senior managers get together and work proactively on whatever the issues are of the day not grievances, not contract negotiations but just people cooperating 759 thank you for coming and in your your vision, statements, sheets whatever your suggestions are thank you very much the council is always interested to hear what you have to say come to a council meeting run for election and give us your feedback