Annual Meeting 2016: The Ghost of Tony White Returns

Yesterday’s annual meeting marked a great leap for the Co-op, away from being a “black box” cooperative and toward being a cooperative that forthrightly explains to its members what is truly what at the grocery retailer we own collectively as a community.

For years I have been listening to people complain that the Co-op is more expensive than its competition, while the Co-op has proclaimed itself a stalwart supporter of the local agricultural community.  At the annual meeting, the connection between those two things became plain for the first time.

The revelation came in the form of the farm owners’ descriptions of precisely what the Co-op does that differs from what the investor-owned competition does.  The supermarkets are willing to buy from local growers, but not on a consistent and reliable basis.  By contrast, the Co-op convenes what Jake Guest of Killdeer Farms in Norwich described as an “annual growers’ meeting” for the purpose of “deciding who provides what” for the Co-op and on what terms.

“It’s really an amazing model,” said Guest.  “”We get together and make all these decisions . . . the alternative would be a free-for-all.”

The purpose, according to Alex MacLennan ofMacLennan Farm in Windsor, is to “avoid head-butting competition.”

A key element, it turns out, is that not every grower in the Upper Valley gets invited to the meeting.  According to the farmers, the Co-op has made a conscious choice to limit those who can attend, and thus who will help the Co-op decide who will get to sell what when it comes to locally grown produce, to those who have attained a measure of legitimacy in the judgment of the Co-op’s merchandisers.

The alternative, according to Guest?  “I gotta go there and fight for my share.”  He said that’s the way it works in other parts of the region.  And to those who worry about this seeming exclusionary, he suggested that it is a necessary kind of protectionism if local farms are to survive and provide reasonable livings for their owners.

“We know and trust that the Co-op is looking out for our best interests,” said Pat McNamara of McNamara Dairy in Plainfield.  This kind of certainty, he said, is the reason his family decided to build a milk processing facility “instead of shipping out of state.”  Note that “shipping out of state” probably means something like becoming part of the Massachusetts-based Agri-Mark wholesale dairy cooperative, which owns the Cabot brand and acts a lot like a conventional business corporation.

What a tribute to the Co-op and its glorious 80-year history that farmers like Guest, MacLennan and McNamara, plus Dave Pierson of the Pierson Farm in Bradford, Barb Patch of Walhowdon Farm in Lebanon and Steve Fulton of Blue Ox Farm in Enfield, credited the Co-op with serving as the mainstay of the Upper Valley’s local agricultural economy.

But this record of heroism comes at a cost -- literally.  For example, yesterday my spouse and I dropped off our annual check at the small, mom and pop Vermont farm where we are members of the CSA program – and, without mentioning where I had just been, I asked the male half of the farming team whether he’d like to sell to the Co-op rather than being limited to his CSA and a booth at a local farmer’s market.  He emphatically stated most certainly would like it, a fact he made clear by way of describing how frustrating it is to be excluded.

Some cooperative caution, in these circumstances, is in order.  The Co-op probably controls too small a segment of the local agricultural economy for this to raise issues of antitrust law, but it is well to remember that free and fair competition is enshrined in public policy.

And of course it’s obvious that when wholesale deals get hammered out at an invitation-only meeting, rather than via old-fashioned competition, retail prices are higher than they would otherwise be.  Ours is a consumer rather than a producer co-op, which means that, the comment of Pat McNamara notwithstanding, the job of the Co-op is to look out for the customers’ best interests overall.

If I had to guess, I’d say the Co-op’s membership would endorse what the Co-op is doing to support local agriculture by limiting who gets to sell and then offering them the kind of terms they can live with.  It’s not just a matter of price, after all, but also consistency, prompt payment and product delivery terms.  The existence of businesses like Killdeer Farms and McNamara Dairy are what make greater metropolitan Hanover different, and arguably better, than greater metropolitan Cambridge or New Haven or Princeton or other paved-over towns with prestigious academic institutions.

But – and here’s my point – I think the membership and most certainly the Board want and need to understand how this works.  Surely the upward pressure this organized buying program exerts on the Co-op’s cost of goods has to be felt beyond the produce department.  In other words, I am speculating (without really knowing) that the Co-op is squeezing some margin out of other departments to help keep the produce departments amply stocked with high-quality local stuff that shoppers don’t spurn for reasons of price.  If the Co-op were to make this obvious, it would go a long way toward addressing the persistent criticism that it is oblivious to the needs of those who worry about the size of their grocery bills.

I spent a decade on the Board (2003 to 2013) and never once had the above laid out for me in the kind of plain terms offered up by Guest and his fellow farmers.  That’s true even though a presence at virtually every board meeting was the Co-op employee whom farmer after farmer singled out for praise at the Annual Meeting as the driving force behind the program.

Ironically, that person was not there to hear all this praise because he is former Director of Operations Tony White – who left the Co-op last summer in the wake of an election-related controversy he provoked.

The two things – last year’s election controversy and this year’s interesting disclosures about support for local growers – are, in fact, related.  Let me explain.

A noteworthy aspect of White’s commitment to helping local growers is that it predates his going to work for the Co-op in the late 1990s.  The farmers described the help White provided to them when he was a manager at the local store of a now-defunct supermarket chain, Purity Supreme, noting that it was only when White joined the Co-op that he was able to offer the local growers favorable prices and other buying terms.

Viewed through this lens, it becomes much more understandable why White, a year ago, would send his infamous e-mail to the Co-op’s local suppliers warning them not to vote for three candidates in the 2015 Board election.  White told the suppliers the Co-op was “under siege” because the candidates and their supporters were seeking “radical change” that included “shrinking the Co-op by closing stores.”  He warned that if the candidates succeeded in gaining election, it would “ultimately cost hundreds of jobs.”

The tactic backfired.  White’s letter found its way into the sunlight and critics charged that the Co-op’s management was unfairly taking sides in the election and circulating untrue statements about candidates they did not like.  The three candidates White criticized were elected to the Board but none of the “radical change” of which White warned came to pass.

Here’s where I think White and perhaps others on the management team went wrong.  They feared what would happen if the Board, and through them the membership, started asking too many questions about how the Co-op is really doing business.  As a longtime grocery guy with local roots, Tony White’s heart was with the growers and other local businesses with which he was doing business.  The old Board was not one to inquire about the details of how the Co-op has managed to make local products responsible for 20 percent of the Co-op’s food store sales.  (I say that with regret, because for ten years I was among those not asking the questions.)  A new and more inquisitive Board was a scary prospect to managers who had grown used to keeping the Board focused on vague discussions about cooperative values and principles.

The fear is understandable but unwarranted.  I believe that, no matter who is elected to the Board this year, both Board members and the membership at large will continue to support the Co-op and its strategic decision not to pursue low prices at all costs.  But the Co-op needs to embrace rather than fear member scrutiny – even skeptical member scrutiny – of the choices it is making on members’ behalf.  Tony White let the fear get the better of him, but yesterday’s annual meeting suggests that maybe the Co-op as an institution is finally learning its lesson.

If elected this month, I hope to build on that lesson by proposing a merchandising transparency initiative.  The survival of our Co-op turns on moving way from being a “black box” cooperative toward one with a membership that understands the food economy of the Upper Valley and what our cooperative is doing about it.

I'm really interested in what other Co-op members think about the above.  Something really "clicked" for me at this year's annual meeting about the Co-op but I'm not 100 percent sure I have it 100 percent right.  Please feel free to contact me to continue the dialogue.  And of course do not forget to vote between now and April 30 at mycoopvote.com!