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BisMan Community Food Co-op struggling financially, seeking more community support

BisMan Community Food Co-op struggling financially, seeking more community support

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The BisMan Community Food Cooperative last Saturday celebrated five years of providing local food to the area, but financial issues put a damper on the food, live music and other festivities, General Manager Shirley Reese said.

"It should be a time of absolute celebration but we have to think through how we're going to get through another five years," she said. "It's a reality check for every member owner. Do we want to see this continue for another five years or do we want to say there are no more food co-ops in North Dakota?"

The food co-op is a member-owned retail grocery store that provides local and organic food. While everyone is welcome to shop there, those who pay the one-time $200 membership fee have access to discounts and financial dividends.

The co-op's history has been marked by financial problems. In 2017, it was behind on more than $236,500 in vendor bills, which was attributed to overstocking and other mismanagement. After years of working its way out of the red, Reese said, the co-op is again facing possible closure.

The co-op in the past year and a half has seen the introduction of national competitors such as Natural Grocers and Costco, along with the onset of the COVID-19 pandemic. The co-op's average monthly sales have dropped from $250,000 to less than $130,000. 

Reese said the co-op got through the last fiscal year thanks to a Paycheck Protection Program loan -- a form of federal coronavirus aid -- and early pandemic panic buying. But now that sales have slowed, she said, it’s a challenge to budget the payroll and product, and to purchase necessities such as toilet paper and gloves. 

Reese said the co-op has outstanding debt only with commercial and member loan holders. There are more than 70 individual member lenders, most of whom are co-op member-owners. They have loans ranging from $1,000 to $30,000. Total debt load between member owner loans and commercial loans is around $1.5 million, Reese said. All of the vendors are either paid up to date or within 30 days, she said.

To keep the shelves stocked and start paying back the loan debt, the co-op would need to see $230,000 of sales a month consistently, according to Reese. She said the commercial loan debt has to be dealt with before the co-op can start paying back individual community members.

“Your dollars matter here," Reese said. "The multimillion dollar companies have profited through the pandemic. The single-owned stores, the mom-and-pop shops and the boutiques, we’re struggling to keep our heads above water."

The co-op has been focusing on showcasing and supporting local farmers, according to Reese. The store’s vegetables, eggs, honey and meats are supplied by more than 70 different North Dakota producers. Around 60% of a sale goes back to the producers, she said.

"We’re putting significant dollars into families by having them sell here at the co-op," Reese said. "If we close our doors, it affects a lot more than just us here and our staff."

The co-op has 11 full-time and seven part-time staff members.

Jonathon Moser, owner of Forager Farm in Mandan, has been working with the co-op since it opened and appreciates how it has allowed people more access to his produce. Instead of waiting for a farmers market or ordering a special delivery, consumers can find his vegetables on the co-op's shelf seven days a week, Moser said.

The co-op's drop in sales has directly affected his business. Not being able to sell as much produce through the store has been a big hit to his bottom line. He said the loss of the co-op would mean the loss of a revenue stream for him and his family.

“It's such a nice and easy way for people to support its local farming community," Moser said. "Yeah, their prices might be higher but at the end of the day, I'm getting a bigger cut than I would if I were to sell through other avenues. It helps build the local economy and keeps money circulating here."

In the last business quarter, only an average of 900 of the 3,900 co-op members were regular shoppers, Reese said. Of those, only 200 members were spending $100 or more a month.

Reese said the co-op isn’t expecting people to get all of their groceries at the co-op. As a mom of six, she understands how much it costs to keep a family fed. Instead, officials are asking shoppers to spend $25 of their weekly grocery budget at the co-op. 

"If we had a couple thousand people spending $25 a week, we would not be struggling at all," Reese said. “It won't be thriving but we’d at least be able to pay payroll consistently and put a lot of nice products on the shelf."

Co-op board President Dina Baird said the anniversary event's turnout was a sign of good things to come. While the co-op is not in the clear yet, Baird hopes this is a turning point and the co-op can start moving in a positive direction.

"It felt like there was some wind in our sails again," Baird said. "It was validation that we have a place in the community, that people want us here."

For now, the co-op is operating on a week-by-week basis, contemplating every purchase and pinching pennies wherever possible. Reese said it is unclear how long the co-op can survive under these conditions. All she knows is that the management team will do everything in its power to keep the only North Dakota food co-op open. Both Prairie Roots Co-op in Fargo and Amazing Grains Food Co-op in Grand Forks closed due to a lack of revenue. 

“We have not given up," Reese said. "We’re just going to keep pushing forward and hope that we’re going to come out of this and develop a community of people that want to support North Dakota through the co-op."


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