C magazine

Shifting gears

Three gentlemen talking in a convenience store

Consumers Cooperative Oil Company CEO and General Manager Joel Marcott, middle; Board Chair Jerry Kaufman, left; and Store Manager Brook Morris recently updated the co-op's convenience store in Prairie Du Sac, Wis., to appeal to suburban clientele.

Jan 29, 2020

Two very different cooperatives use similar strategies to leverage suburban appeal and serve ag owners.

Located two minutes off Interstate 90 in Issaquah, Wash., The Grange Supply is a popular place for locals looking to fill up on their morning drive, both at the fuel pump and at the farm store’s complimentary coffee station. The colorful store draws a range of customers — it’s not unusual to see customers wearing cowboy boots side by side with commuters in designer suits.

Nestled between Lake Sammamish and a mountainous region known as the Issaquah Alps, Issaquah is a bustling, fast-growing suburb about 16 miles east of Seattle and home to nearly 40,000 people. Between 2000 and 2010, the area’s population nearly tripled, from 11,000 to 30,000.

The area’s vibrant arts scene and abundance of hip restaurants have attracted a somewhat young and wealthy mix of people — the median resident age is 37.

“The area has changed drastically in the last two decades and has become increasingly urban,” says John Mabbott, general manager of The Grange.

Change isn’t always easy for a retail location celebrating 85 years in business, but The Grange has embraced the community in transition and continues finding ways to serve its increasingly diverse clientele.

“We’ve reintroduced ourselves as a community resource to remain relevant in this market so we can continue to serve our long-standing customers,” says Mabbott. “We used to have a customer appreciation day, now we have a community appreciation day.”

This year, the annual event drew more than 3,000 residents. “Community appreciation day allows us to connect with our neighbors, but also gives us a chance to teach local residents about agriculture.”

Ag Roots, Suburban Demand

The Grange opened its doors in 1934, selling diesel to local farmers in nearby Renton, Wash. Today, fuel (gasoline, diesel and propane) accounts for half of The Grange’s revenue. Feed delivery and retail goods make up the other half.

Two men delivering feed
The Grange Supply Delivery Manager Nate Thomas, right, and Terin Tatum deliver feed to both traditional farms and residential backyards.

As the area’s population has grown, so have The Grange’s offerings. Today, The Grange offers lawn and garden products, pet supplies, home décor, hardware, and an eclectic mix of other supplies and knickknacks that appeal to suburban homeowners.

“We listen to the needs and requests of all our customers and they really value that,” says Michelle Banks, who leads the store’s operations.

“We pride ourselves on having staff members who are knowledgeable about our different departments so they can answer customer questions,” adds Mabbott. “Our lawn and garden department is managed by a horticulturist and our equine department is run by a champion rider.”

“The Farmer in All of Us”

The Grange employees

John Mabbott, general manager of The Grange, and his team meet the needs of a diverse customer population. Pictured, from left, are Kundun Sherpa, Vania Wright, Shane Thompson, Mabbott and Shannon Obbagy.

Customers who frequent The Grange take advantage of the store’s agricultural roots. And the store team sees value in sharing that ag expertise with everyone. A sign above the store’s entrance welcomes customers with the words, “For the farmer in all of us.”

“We’re all connected to farming in some way,” explains Mabbott. “In this area, an increasing number of consumers want to know where their food comes from and a growing number of suburban families are opting to raise their own chickens and can homegrown fruits and vegetables. We’re here to provide the knowledge and supplies they need.”

The Grange frequently holds educational events and classes in its community room to share food preservation techniques like canning and fermentation and to promote agricultural and sustainable practices.

“If we don’t focus on appealing to the next generation of consumers,” says Mabbott, “we won’t be here to serve our farmer-customers. We need to be compelling in an Amazon-dominated retail environment.”

Navigating the Crossroads

That same reality is driving action across the country at Consumers Cooperative Oil Company in Sauk City, Wis.

 Less than 30 miles southeast of Sauk City is the college home of the University of Wisconsin Badgers. Madison’s growing tech scene continues to fuel expansion of the city and surrounding suburbs. From 2000 to 2017, Madison’s population grew more than 22 percent and city planners expect to add another 15,000 people by 2030.

Consumers Cooperative is seeing some of that growth spill across county lines and into its trade area.

“Our co-op is at the intersection of rural and urban,” says CEO and General Manager Joel Marcott. Rather than bemoan encroachment on traditionally agricultural areas, he views Madison’s growth as positive.

“Urbanization adds customer base,” he says. “Cooperatives aren’t immune to the normal challenges and costs of running a business. The number of farms is shrinking, and we can’t rely solely on rural America to increase revenue.”

More than half of Consumers Cooperative’s cash flow is derived from retail sales and that percentage continues to grow. “We don’t view our ag and retail businesses as competing,” says Marcott. “Selling Snickers bars and fuel allows us to buy propane trucks so we can serve our ag producer-owners.”

Proactive Pays

In April, Consumers Co-op completed a $1 million remodel of its Prairie Du Sac convenience store and sold three other locations. Sales have increased 18 percent since finishing the project.

The co-op’s board includes three producers and two consumers who constantly challenge management to think about what’s next, says Marcott. “With urbanization comes new competition. If we want to compete, we need to be proactive and put our best foot forward.”

“When I joined the board, the mindset was, ‘This is the way it’s always been done.’ Underperforming assets were kept as a convenience for patrons and patrons were of the mindset co-ops didn’t need to make money,” says Board Chair Jerry Kaufman, who has served on the Consumers Cooperative board for 20 years.

“Today, our board understands that to be a leader, we have to run just like any other business and model ourselves for the younger generation or we won’t be here for any of our customers, rural or suburban.”

Community Connections

Cooperatives are vital members of thousands of communities, including those that are more suburban than rural. These two co-ops are meeting customer needs to build revenues and stability.

As the neighborhoods in Issaquah, Wash., attract more suburban families, finding ways to connect with the local community has been key to expanding The Grange Supply’s clientele.

Man driving orange tractor

The Grange Supply's orange tractor is a staple at community events.

From sponsoring the town’s Fourth of July parade and supporting schools, churches and animal rescue organizations to hosting educational events and opening its community room for group meetings, The Grange has found ways to get involved in the community and build awareness.

“Two years ago, we shifted from traditional marketing strategies to a more philanthropic approach,” says General Manager John Mabbott. “This approach makes us compelling communitywide, and in the age of Amazon, being compelling appears to be the most powerful approach to sustainable business health.”

The Grange’s involvement in community events has made a difference in the community. The retail location’s bright orange tractor has become a popular attraction in parades and at The Grange’s annual community appreciation day.

“People are hungry for positive human interaction,” says Joel Marcott, general manager and CEO, Consumers Cooperative Oil Company, Sauk City, Wis. “Companies that can provide that are going to succeed.”

Providing top-notch customer service is one way Consumers Cooperative attracts customers and employees. The co-op’s newly renovated retail store is also turning heads. Sleek laminate wood flooring, bright lighting, a seating area for customers and wall art customized to the community have refreshed the store’s image and increased sales.

“We wanted the store to have an urban look and reflect the local community,” says Marcott. “Creating a store with a local identity helps us stand out among our competitors.”

The seating area has been especially popular among high schoolers at lunch time. “We have created a destination in an urban neighborhood for people to hang out and enjoy a sandwich or cup of coffee.”

The co-op’s farmer-owners stick around a little longer too. “They like the energy from the younger customers,” says Marcott. “We’ve truly created a communal experience.”

 

Check out the full C magazine with this article and more.