Whole Farm Cooperative

April 1999
Interview with: Tim King
Goal: Market value-added products for diversified group of farms.
Date Established: December 1997
Area Served: Central Minnesota
Number of Members: 25
Key Challenges: Securing purchase agreements, financial planning, group goal setting
Helpful Resources: Minnesota Department of Agriculture, and Sustainable Agriculture Research and Education program

"The secret to our success has been diversity," says former Whole Farm Cooperative manager and farmer Tim King. Unlike most cooperatives, which specialize in single commodity or product marketing, the Whole Farm Cooperative markets a large range of products that represent each of its 25 family farm members. This unique approach means that members produce and process individually, but come together under a single label to market collectively. Although the diversity of the group often creates goal setting challenges, King says it has generally enabled members to pool resources and market to a wider range of customers.

Why market collaboratively - identifying a need and an opportunity

The Whole Farm Cooperative evolved as an idea following informal market research by members of the Sustainable Farming Association (SFA). "We were looking for new marketing opportunities to increase profits," recalls Whole Farm Cooperative board member and SFA grower Phill Arnold. "Growing sustainable products was not enough." At the same time, King, who was employed by SFA, raised a plan to market products collectively to local universities and colleges. "I was talking with someone from St. John’s University about sustainable development over coffee," recalls King. "It gave me the idea to start marketing products grown by SFA members to the University and other institutions."

Exploration of an idea

In August 1996, a steering committee formed to explore what King calls "institutional" marketing. Shortly thereafter, King began making phone calls to food service managers at colleges, universities, and churches to inquire about their interest in locally grown food. He and other steering committee members soon realized that financial assistance would be needed to sufficiently build marketing relationships and a long-term plan. With help from the SFA’s central chapter marketing committee, King developed and submitted a grant request to the federal Sustainable Agriculture Research and Education (SARE) program.

In September 1997, SARE awarded $9,500 for SFA’s "Feed the Saints" project, as it was called, to cultivate food sales with St. John’s University, St. Cloud State, and The College of St. Benedict, as well as several Twin Cities churches. King was hired to manage the project and eventually secured sales of locally produced beef and carrots to St. John’s University. But, he says, sales were progressing slowly with other institutions and St. Cloud State eventually decided not to move forward with planned purchases.

Out of frustration, King started marketing SFA farm products on the Internet to Twin Cities buyers, advertising on a sustainable agriculture electronic mailing list and to customers to whom King had been selling imported coffee for another project. "I was getting impatient," King recalls. "I wanted to start marketing products so that we could get more farmers and more buyers interested." The Internet was a success. Using the established customer base from coffee sales, it didn’t take long before King was marketing garlic, beef, and vegetables to Twin Cities residents who agreed to pick up their orders at pre-arranged drop-off sites.

Whole Farm Coop Logo

Membership recruitment and responsibilities

Based on the Internet marketing success, King and 24 other farm families decided to incorporate as the Whole Farm Cooperative in December 1997. Sharing common values and trust (a result of previous SFA interactions), the group developed a long-term business and membership plan over the following few months. Cooperative members contribute $5 annually and 15 percent of all sales. In return they are guaranteed voting rights and the potential of an expanding Twin Cities customer base. Members are not obligated to deliver a specified volume of products to the Cooperative. Instead, based on market demand for particular products, such as cheese, meat, or vegetables, King contacts members individually to identify supply availability.

Thus far, according to King, all members who have products available are able to market them through the Whole Farm Cooperative. "The Co-op is challenged to keep up with demand," says King. Asked about a "contingency" plan to deal with potential oversupply in the future should new members join the Cooperative, King says it is something that members are considering. "The Co-op is growing fast and is beginning to encounter new issues that none of its members has experience dealing with yet," says King, recognizing the need for continuous planning throughout the Cooperative’s early growth stages.

Although they are not actively seeking new members, the Whole Farm Cooperative is continuing to build networks with other producers. In 1998, for example, the group began advertising products available from the White Earth Land Recovery Native Harvest project, which sells Minnesota-harvested wild rice, maple sugar, buffalo sausage, and dried hominy corn in an effort to recover land and promote sustainable development.

Beginning operations

Since the Cooperative’s inception, members have pooled resources and expertise. King’s wife, Janice, developed a bookkeeping system for the Cooperative, while he and other board members undertook a lengthy filing process to meet requirements for a food handlers license (required by the Minnesota Department of Agriculture to market meat and processed products). One of the Cooperative’s members offered the use of a building that Co-op members renovated in accordance with food handling regulations. The building is now used as a drop-off and distribution site for all of the Cooperative members’ products. Next, the Cooperative built a walk-in freezer and cooler to store meat cuts and other perishable products. Members, who take turns delivering to Twin Cities drop points each month, are reimbursed by the Cooperative for mileage. "What has and continues to make a difference in the Co-op is a strong board and their families who volunteer tremendous amounts of time and energy," says Arnold.

Grants awarded by SARE and the MDA Value-Added Cooperative Grant program provided financial "breathing room" as the Cooperative developed. It enabled the Cooperative to reserve membership and marketing fees for necessary equipment purchases and operating expenses, such as freezers, building renovation, and delivery expenses. Eventually, King says the Cooperative plans to purchase a delivery truck and hire permanent staff to assist with bookkeeping, deliveries, and marketing - goals that will require careful financial management and additional Cooperative revenue to avoid future financial constraints.

Processing decisions are made jointly among individual members, meat processors, and King as the Cooperative’s manager. For example, when a pork or beef producing member agrees to deliver an animal, it is sent to a local meat packer who makes slaughter and processing recommendations, whether it be steaks, chops or sausage, based on animal quality. Final processing decisions are made by the producer and Co-op manager based on processor recommendations and market demand for particular products.

One year after its incorporation, the Whole Farm Cooperative is thriving. It far exceeded its 1998 marketing goal of $10,000 with gross sales totaling more than $25,000 for the first three quarters of 1998. "We’ve turned a $9,500 grant into $25,000 for farmers," says King. The Whole Farm Cooperative now markets a wide range of products including grass-finished beef, free-range chickens and eggs, pasture-raised lean pork and lamb cuts, as well as vegetables, processed cheese, baked goods, and flour. Products are delivered monthly throughout Minnesota in the Twin Cities, Brainerd, and Wadena.

Future opportunities and lessons learned

The Whole Farm Cooperative remains committed to its mission: creating farms that nourish families spiritually and economically, sustain the environment, and provide customers not only with safe wholesome food but with a clear sense of who and where their food came from. These values will remain the heart of Whole Farm Cooperative’s marketing efforts as they expand on their original goal of institutional marketing and cultivating consumer demand with churches, low-income communities, non-governmental organizations, and most recently, restaurants. The Cooperative recently developed a "Whole Farm" label that members and associated producers attach to products. "We hope that the label will make it easier for consumers to recognize our products as our marketing network grows," says King.

The success of Whole Farm Cooperative is largely the result of its continuous networking and consumer education. "A lot of our business is the result of word-of-mouth communication and the willingness of friends to promote our products within their churches and communities," King says. "MFA (Minnesota Food Association), for instance, invited us to set up a mini-farm stand at low-income housing complexes where staff had been working with residents." Low-income residents buy Whole Farm Cooperative meats and vegetables using Minnesota Grown food vouchers supplied by the MDA. For many families it is their first opportunity to purchase and learn about locally grown food. The Cooperative is now taking orders from low-income residents and has begun promoting consumer education as part of its marketing strategy. "We do more than just sell food," King says. "We help the consumer understand what kind of food they’re buying, what kind of cattle their beef came from, and how it was produced."

December 1999 update (with Phill Arnold)

Sales volume for the Whole Farm Cooperative has continued to increase to a level where the group decided it was necessary to hire staff. In the fall of 1999, a full-time operations manager was hired to make sure there is adequate inventory, oversee the filling of orders, supervise volunteers, and keep financial records. A half-time marketing manager also was hired to serve as a liaison between the Co-op and its customers and to increase the number of drop sites and customers the Co-op serves. These two hirings have helped the Co-op catch up with the business it already had and leaves them poised to expand in the future. The Co-op received a grant from MDA to computerize their business so they were able to purchase a computer and software to manage their inventory, product orders, and financial records.

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