Raising millions from small donations, and starting a business with no boss: Why it can take years to open a co-op grocery store

Peter Frank remembers when he and his fellow board members secured a location for the Kensington Community Food Co-op. It was the spring of 2014, and it seemed like the project, then six years in the making, was nearing the final stages.

Opening day finally came last week, five years later and several weeks after Frank and his family moved to Chicago for work and family reasons. Frank is cofounder of the Philadelphia Area Cooperative Alliance, a nonprofit that helps cooperatively owned businesses get off the ground. For the decade he lived in Kensington, he devoted much of his time to launching the KCFC.

“I couldn’t be more happy that it’s open,” Frank said, “though I’m sad I can’t buy groceries there myself.”

The 11-year journey of opening the KCFC isn’t unusual when it comes to food co-ops, which have no private owners and are designed not to make money, but to sustain themselves through group ownership by member-customers who invest in the business. Co-ops typically are governed by elected boards of directors who oversee operations of the store, and are funded by a combination of grants, loans, and donations. Opening one typically takes at least five to seven years, according to the national Food Co-op Initiative.

But members say the payoff is getting a place that feels more like a community center than a grocery store, where they can have a say in what is sold and how it’s managed. And around the region, more communities are asking for them. In 2017, Weavers Way Co-op opened its third and largest location, in Ambler. In Kennett Square, Bethlehem, and West Chester, community members have formed boards and launched fund-raising efforts to open their own co-ops. The South Philly Food Co-op is expected to open later this year.

Jon Roesser, general manager of the Weavers Way stores, which now have about 7,500 members, said he was thrilled by the growing interest.

“We hope it’s a reflection of what today’s consumers want and a reaction to the desire to make thoughtful choices with our dollars by supporting local markets that are as transparent as possible about where their products come from,” he said.

The KCFC, at 2670 Coral St., has 3,000 square feet of retail space that includes produce, bulk foods like rice and flour, baked goods, coffee, frozen food, and pantry items. There’s a 30-seat cafe with grab-and-go food and a bar with local beer and kombucha. As in most co-ops, products supplied by local farmers and companies share shelf space with major-label brands.

The $2 million project began in 2008 with a handful of Kensington residents who began pulling together funding from a city grant program and loans from a handful of family foundations. For years, Frank and other board members set up tables at community events and coaxed $200 sign-up donations out of neighbors.

“It’s a challenge to convince people to invest in a theoretical business,” he said. “To try and convince them to hand over $200 for something that might never happen.”

After finding a location — a former bar owned by a landlord who became a co-op member himself — construction began in May 2017. Mike Richards, who formerly worked at the now-closed Creekside co-op in Elkins Park, was hired as general manager by the KCFC board in January 2017 with the understanding that the store would open that year. But by that fall, the co-op was facing a budget gap of several hundred thousand dollars, and it took one last fund-raising push to raise the money needed.

“The challenge that co-ops have is, you kind of have to string people along, tell them it’s going to open," Richards said. “And you do that to everyone. The banks, everyone.”

The area has changed in the decade since the KCFC idea was born. A booming commercial corridor developed on Frankford Avenue in nearby Fishtown, property values rose in Kensington, and new construction and rehabbed homes have sprung up around the store.

“In a way, it’s worked against us,” Richards said. “People don’t understand why it’s taken so long. They think the money should be here already. This place was next to a vacant lot, and now people have been living in condos there for five years.”

But North Philadelphia, including parts of Kensington, also ranks among the hungriest areas in the United States, with 25.9 percent of people who live there relying on food stamps. At the KCFC, there will be a food-for-all program with discounts for those who qualify, and there are plans for other programs. Construction was done by local and minority-owned and women-owned businesses, Richards said, and most new hires are from the neighborhood.

On opening day, board president Kae Anderson crouched on the patio, painting the building’s sign before it went up. She said the lack of a clear hierarchy in a co-op model can slow the process of opening the business initially, but that eventually it works in the co-op’s favor because residents know they have a voice.

“Community-building doesn’t happen overnight,” she said. “But this model of business can also make people feel very empowered. Members don’t feel like they’re customers in the same way. They can feel they’re part of it.”

The goal is for KCFC to make enough to pay the bills, pay the staff a living wage, and eventually pay dividends back to its members — who, as of last week, numbered about 950.

The South Philly Food Co-op, a $1.14 million project that has been in the works since 2010, has more than 1,100 members so far, board member Emily Wyner said. She said she hoped to open the store at 2031 S. Juniper St. by late summer or early fall.

The closer the co-op gets to opening, Wyner said, the harder fund-raising has become. But on the other hand, the board beat its goals for membership drives last fall, and there has been a steady uptick in new members since last month’s groundbreaking, she said.

“That tells me that people really want this," she said. “It tells me that they care where their food comes from. That they want to find more ways to connect more deeply with their neighbors through food.”