Consumer Food Co‐ops in the Age of Grocery Giants

• DOI: http://doi.org/10.1111/ajes.12338
• Published date: 01 May 2020
• Author: Jon Steinman
• Date: 01 May 2020

Consumer Food Co-ops in the Age of

Grocery Giants

By Jon Steinman*

abStract. As the primary purveyors of food within most neighborhoods,

food retailers—particularly grocery stores—are key determinants of

health. Grocery stores are also an important venue for food producers

to access their customers. Over the previous 100 years—and more

rapidly over the previous 40 years—ownership among grocery

retailers has become concentrated in fewer firms. As a consequence,

grocery stores have emerged as food system “gatekeepers.” On one

side of the gate are consumers, who depend on these firms to access

the food supply. On the other side are the food producers: farmers,

ranchers, fishers, processors, and manufacturers. As concentration in

the grocery retail sector increases, so too have the grocery giants’

practices enabled them to assume much stronger positions in the

buyer-supplier relationship. With a focus on the United States and

Canada, this article examines the history and rise to dominance of

the largest grocery retailers and the impacts this dominance has had

on the food system. Whereas most food retailers are structured under

private or publicly traded models of ownership, the cooperative

business model—specifically, the consumer-cooperative model—is

presented as an important alternative. Cooperatives are a democratic

form of ownership that enables the people who most depend on the

grocery store (shoppers) to become equal owners in the business

along with thousands of others in their community. The importance

of consumer-food cooperatives (food co-ops) is examined, including

specific case studies of small and large urban centers where food

American Journal of Economics and Sociology, Vol. 79, No. 3 (May, 2020)

DOI: 10.1111/ajes.12338

© 2020 American Journal of Economics and Sociology, Inc.

*Author of Grocery Story: The Promise of Food Co-ops in the Age of Grocery Giants

(New Society 2019). Producer and host of internationally syndicated radio show and pod-

cast Deconstructing Dinner. Writer and host of Deconstructing Dinner: Reconstructing

Our Food System—a television and web series. Elected director, 2006–2016, Kootenay

Co-op in Nelson, British Columbia; Board President from 2014–2016. Degree in Hotel

and Food Administration, University of Guelph. Email: jon@deconstructingdinner.com

834 The American Journal of Economics and Sociology

co-ops are providing substantial benefits to the communities they

operate in.

Introduction

Grocery stores are deeply embedded within the social, cultural, and

economic fabric of the West. In contrast to the other businesses that

consumers frequent, however, the grocery store is considerably differ-

ent as it retails a product that no human can do without—food.

For better or worse, despite its tremendous importance to human

life, the evolution of modern grocery retailing over the previous cen-

tury has produced a socioeconomic relationship to food that is almost

entirely influenced and determined by the same market forces that

influence the most nonessential of products. This trajectory remains

curious. In much of the West, there has been historical and continued

interest to place some of the most essential products and services to

people and communities in the hands of publicly controlled and/or

publicly regulated entities: first-responders, drinking water, libraries,

transit, and roads are but some examples. Food, however, despite

it being a product or service no human can do without, has been

treated markedly different than these other “essentials.”

In addition, many people today recognize that major changes are

needed in our food production systems. There is widespread interest

in farming methods that use less or no fossil energy, and methods that

might restore health to soil and to ecosystems more widely. Many peo-

ple believe that a revival of local and regional food production is an

appropriate response to both rising energy costs and the imperative

to reduce carbon emissions. Yet individuals who want to take steps

towards local food reliance are often thwarted by dominant grocery

chains that act as gatekeepers and give strong preference to large-

scale monocultural food producers. Thus we need major changes not

only in the way farming is done but in the way food retailing is done.

Grocery Stores and Community Well-Being

Despite the impact grocery retailers have on health, the environment,

the local economy, and the food system, this industry has received

comparatively little scrutiny from the media, from food system

835Consumer Food Co-ops in the Age of Grocery Giants

reformers, or from health professionals. Meanwhile, those watchdogs

have investigated other aspects of the supply chain for food, including

primary producers (farms, ranches, and fishing operations), food pro-

cessors (including storage, transportation, and packaging), and con-

sumption (including meat consumption and specific consumer food

choices). The grocery retail sector is an apparent blind spot.

All sectors of the food system are being hollowed out, leaving fewer

and fewer companies dominating each link in the supply chain. The

largest grocery retailers—the grocery giants—have emerged as the

dominant players in the system. These retailers have reduced farmers’

power in the marketplace, just as they have diminished the market

power of all food producers, processors, wholesalers, and transport-

ers. To simplify the language used to describe the myriad links in the

supply chain, we will narrow it down to three groups: producers,

retailers, and consumers. The term “producers” encompasses every

entity involved prior to the point at which a food item appears on the

shelf of a grocery store. Producers are being squeezed by the largest

food retailers, who use trade fees, long-term contracts, delayed pay-

ments, and the acquisition of smaller regional and alternative chains

to consolidate their power. Consumers are left with fewer options and

higher grocery prices (Volpe 2011).

Some local governments have acknowledged the need for more

public oversight. They are reimagining the role they play. After the

one grocer closed in Baldwin, Florida (population 1,600) in 2018, the

Town of Baldwin opened its own grocery store. All employees were

put on the municipal payroll. In this case, the interest in applying

public oversight or ownership originated from a need for food access.

How might a sense of urgency emerge in response to the hollowing

out of local food systems? The barriers to entry for food producers

are high at the chain grocers and the long-term reliability of regional,

privately owned stores is precarious. There is a strong need for local

food producers to have stable, supportive, long-term customers.

In this article, I make a case for assigning grocery stores with

greater responsibility in keeping with their influence. I also make a

case for a consumer-cooperative model as a way to demand public ac-

countability from grocery stores. Through the presence of food co-ops