Grocery Co-Op with Prepared Foods

Grocery with Person

Public Interest

As part of the public input sessions, there was a desire to see a larger variety of dining options in Pleasantville from Mexican to Italian. The current offerings in town include American food such as hamburgers, sandwiches and wraps, and pizza. Jessica Dunker, President and CEO of the Iowa Restaurant Association, was brought onto the project to conduct an assessment to determine the feasibility of another eating establishment in the community. While another restaurant could be successful, key challenges were identified most notably a lack of local labor to run a full-service establishment.

Local Need

The resulting recommendations are focused on addressing another challenge identified by the community: providing fresh meat and produce. The closure of Pleasantville Grocery two years ago has forced residents to travel to neighboring communities to fulfill their grocery needs. The recent opening of Dollar General and Casey’s General Store have helped supplement some of those basic needs for packaged foods, but there still remains a need for fresh produce and meats. A full-service grocery store would be difficult to support, but a grocery co-op with fresh meats and selection of produce could be marketable in Pleasantville.

Packaged Grocery

Pros

Low Staff Needs

Could be run by a mix of volunteers, a few paid part-time employees and contracted staff for accounting and other professional services.

Local Partners

Partnership with local butcher/meat locker, farms, and other food products

Fresh Food

Fulfills need of fresh food products

Fills Need

Provides specialty market for community

Fresh Food

Other Considerations

Menu

An additional opportunity to expand cash flow of the proposed grocery co-op would be to provide a limited menu of deli sandwiches and a daily special. When applied elsewhere, the daily special helped attract customers to the market which brought attention varied food options available.

Secondary Location

It also suggested this retail store should be a secondary location for an existing full-service butcher. By opening this location in Pleasantville, the existing business from a nearby community could expand its customer base with a minimal financial footprint.

Case Study: Great Scott!

After three successive owners failed to keep the local grocery store open, residents of Winchester, Illinois (population 1,500), had only a Dollar store in town and a half-hour drive to Jacksonville to get fresh foods. In March of 2017, community leaders called a public meeting to discuss how they could improve their grocery access and invited Sean Park from the Illinois Cooperative Development Center (ICDC) to talk about a co-op option. In addition to leading the ICDC, Sean had personal experience running a rural grocery store and was able to help organizers plan for a store that would meet their needs while still being affordable.

In Winchester, dry goods and frozen food were available at low prices at the Dollar store, and a popular local meat market existed, but produce and prepared foods were not offered anywhere in town. The co-op planned a small store that emphasized produce, perishables, and deli sales, and located next door to the meat market. Financial projections showed that the store could be viable with only $270,000 in annual sales and would require $80-$100,000 in startup capital. Using lots of local labor—some donated, some at discounted rates—the co-op built out 1,000 square feet of retail space, bought new self-contained refrigerated cases, had custom shelving made, and acquired an inexpensive POS system. They opened a doorway between the co-op and the meat market for customer convenience and increased foot traffic.

On August 25, 2018, Great Scott! Community Market opened for business with 120 owners. They employ a full-time manager and six part-time staff, many of whom only work one or two shifts per week. Even with limited cooking equipment, the deli is responsible for about a third of the store’s sales.

great scott
Great Scott! of WInchester, IL

Proposed Location

As part of this process, our team determined an ideal location for a co-op grocery store would be the former grocery store space. The building needs considerable renovations, but some of the refrigeration equipment remains which would help to reduce upfront costs. Below is an overview of the projected financial cost to renovate this space and outfit with the necessary equipment and inventory to open.

PROJECT ESTIMATE:  

  • Purchase Price: $160,000  
  • Renovations: $232,350  
  • Equipment: $100,000 
  • Inventory: $100,000 
  • TOTAL: $592,350

The Action Steps

ACTION

Convene community to gauge the public’s interest in a co-op grocery store and discuss pilot location to test local market.

WHO

Pleasantville Betterment Organization, Chamber of Commerce, City, People’s Bank (property owner), Dan Nieland (operator)

HOW

This meeting is the first step to determine the public’s interest in forming a task force to study the marketability of a co-op grocery store in Pleasantville. A pilot store model is suggested to get the business open for business with a minimal up-front investment. The public’s response will also help better identify the size and scope of the permanent co-op grocery store, should it prove a successful model. Use the Co-op Grocery Assessment Report (Appendix E) and the adjoining Starting a Co-op report (Appendix Eb) to help guide this process. The task force members could also participate in the Food Co-op Initiative’s (FCI) QuickStart Board Orientation, a six-week online course to help get a new board up to speed on the basics of running a co-op grocery business.

WHEN

Spring 2020 to convene meeting; open pilot location Summer 2020

ACTION

Make connection to existing local food proprietors in neighboring communities including, not limited to the following: DnS Groceery (Melcher-Dallas), Hometown Market (Knoxville), In’t Veld Meat Market (Pella), Kirkpatrick Locker (Winterset), Milo Locker Meats (Milo), B & B Grocery (Des Moines).

WHO

Chamber of Commerce, City, People’s Bank (property owner)

HOW

Phone calls and/or letters should be sent to each of these businesses identifying (1) Pleasantville’s desire for a retail butcher and produce sales, (2) available buildings to house this business, and (3) what incentives are available to aid in opening this business.

WHEN

Spring 2020

ACTION

Work with business owner to select business location and build out space.

WHO

Chamber of Commerce, City, People’s Bank (property owner)

HOW

There are a number of existing buildings on the square that could house this business. The most logical would be utilizing the former grocery store space. However, the entire 7,500 square foot grocery store is too large so it is recommended the retail butcher should occupy one-third or a single bay of the original three-bay storefront. People’s Bank is the current owner of this building and could help negotiate a sale of the property to the retail butcher shop owner or lease terms between the business and a new property owner.

WHEN

Spring 2020

FUNDS

USDA Rural Business Development Grants – $10,000 – $500,000 grant

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