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The making of a market

Sun, Oct 29th, 2000
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A grocery store returns to HoustonBy Jill O’NeillMonday, October 30, 2000

When Red’s IGA closed its doors on the small community of Houston, MN, (pop. 1,020) residents were forced to do their grocery shopping elsewhere. The storefront remained vacant for several months until an innovative group of community members rallied in an effort to re-establish a hometown grocery store. Their ability to pull together as a community is a remarkable story.

An Idea

Early in 1999 the Houston Arts Resource Council (HARC) hosted two round-table discussions to talk about the vacant grocery store. Another group was simultaneously meeting to talk about forming a producer’s cooperative as a means to market locally produced food. The two groups’ shared interests crossed paths, and the idea of forming a cooperative grocery store was born. At the second round-table an interim board of directors was established and the group formally became the Root River Market Cooperative, Inc.

After preparing an extensive business plan, the board began selling $100 shares to residents of surrounding communities. By October 1999, the cooperative had over 200 members who had bought into the store. "The concept of a cooperatively owned conventional grocery store is fairly unique," says former board member Jodi Dansingburg, "but it is a strategy that more and more small communities might have to consider." Increasing consolidation within the industry has made it less efficient for wholesalers to service several smaller stores compared to one large store.

The Vision

In addition to opening a store that supplies a full line of brand name foods from a conventional wholesaler, the cooperative hopes to offer locally produced meats, fruits, vegetables, cheeses and bread at competitive prices. "We want to be part of a system that helps keep small farmers in business," says board member Peter Denzer. "We’d like to provide a model for other parts of the country that share the same goal of helping regional producers survive."

"There is some skepticism in Houston itself as to what kind of market there is for this kind of food," says Denzer, "But the cooperative doesn’t feel skeptical in the least. Many people we meet on the street are thrilled with the idea of getting good, Honest-to-God bread in Houston!"

The cooperative’s goal is to begin offering a small section of local goods and hopefully keep expanding. The list of locally raised products that the store looks forward to selling eventually includes: chicken, pork, beef, buffalo, lamb, eggs, cheeses, bakery goods, and a variety of produce.

It’ll Never Work

In May the cooperative hired Tony Denstad, former owner and operator of Albert’s Grocery in Caledonia, MN, to be their store manager. "If someone would have asked me a year ago if this store would work, I would have said ‘no way, it’ll never work’," reflects Denstad. "The store had been closed way too long, the competition is too strong and people get in the habit of where they shop. It is really hard to get customers back." But when Denstad saw the growing list of 350 store members who had purchased shares, he had a change of heart. "We have a strong customer base and we haven’t even opened our doors yet."

Denstad has had his hands full remodeling and setting up the store. The redesigned interior received a major face-lift, including a state-of-the-art compression system, new wiring, expanded meat and produce departments, a new deli area and an improved meat counter. The Rushford based Witt Pharmacy will take up half-time residence in the front corner of the store, providing a service that Houston residents have been without for over a decade.

Sweat and Tears

For over a year, the board of Root River Market has been spending their Thursday evenings hashing out details. The project faced some initial resistance but with planning and perseverance, the cooperative obtained Economic Development Authority approval and reached a lease agreement with the City of Houston. The board struggled to meet their next major challenge - raising $400,000 in necessary capital. According to board treasurer, Larry Connery, $320,000 of the cooperative’s operating budget is through commercial loan with the remaining $80,000 paid for in membership shares.

The cooperative worked hard to secure a wholesaler that would commit to serving a smaller store. They settled on Madison, WI based Cirtgo Foods, a supplier of the Sure-Fine and Sure-Fresh labels. "Cirtgo is a cooperative company itself," says store manager Denstad. "They have helped us though our situation in getting the store set up." Cirtgo does not require an exclusive contract, thus enabling the Root River Market to purchase other local foods when they become available.

"The reality is that there are two sides to this store - the traditional grocery store side and the locally produced cooperative side. My job is to take them both and put them into one building. And it’s not an overnight job. My main concern right now is to get the doors open so we can start generating some sales," says Denstad. After the store is up and running the next challenge will be to begin forming relationships with local producers who can provide the store on a regular basis.

Grand Opening

What can people expect when the Root River Market opens its doors? The newly stocked shelves boast a full line of brand-name products. But shoppers will also find bulk bins in the back of the store, allowing them to purchase a variety of spices, grains, flours, coffee beans and pastas in quantity. Another specialty item will be fresh baked bread from the Renaissance Bread Company. In time, customers will find a growing assortment of locally produced food.

With the staff hired, the non-perishables delivered and most of the interior work finished, Denstad reports that the Minnesota State Department of Health has formally approved the store. "There are a few corrections we need to make, and unfortunately, dealing with contractors and the state always takes more time than you think," says Denstad. "But the gears are rolling now, it won’t be long." Houston community members are anxiously awaiting the finishing touches.

A unique oval stained glass sign waits to be hung outside the store. The sign, which displays the market’s simple logo of three trees and a river, is in honor of Sharon Onsgard, a board member who passed away before she could see her contribution to the market realized and whose idea it was to adopt the universal three tree symbol of cooperation. The stained glass panels were created by Rushford artist Darrell Himlie and are encased in a metal frame crafted by Jack and Dave Borkowski of Ironcraft in Witoka. This same logo appears hand-painted by a volunteer in the store’s entryway. Wood worker John Jordan is constructing vegetable bins and wooden aisle signs. An employee has taken a decorative hand to the break room, adding artistic splashes of color.

The aisles of the Root River Market don’t look much different than any other grocery store, but there is something fundamentally different about it. A community, not a corporation, runs the store.

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