Cooperatives: A Trip To The Market, Together

Marketing is ideally suited for cooperative implementation among small businesses. Cost and time required are the two most obvious reasons that might make it harder for business owners to perform, hire, or contract for these tasks individually.

In fact, the U.S. Small Business Administration reports, according to a study by Marketo, that only 56 percent of small businesses (with fewer than 50 employees) have a marketing plan.

---

One other important, but often overlooked, benefit of cooperative marketing is shared branding. A marketing cooperative can be used for any product or service, though its most popular utilization is in agriculture among growers who sell together under a single brand name. Well-known examples include Sunkist citrus, Cabot Creamery, Land O’ Lakes dairy, Ocean Spray Cranberries, Blue Diamond nuts, Organic Valley, and Sun-Maid raisins. In Central New York, we have Dairylea (now merged with Dairy Farmers of America) — which at its height had over 100,000 farm member-owners united to increase their bargaining power as suppliers.

As we know, there is power in numbers, pooling resources for cooperative marketing can grow and stabilize an industry by supporting the growth of small producers and businesses. We are seeing a resurgence of interest in small, local, organic growers while at the same time seeing the number of working small farms continue to decrease according to research by FiveThirtyEight’s senior science writer, Maggie Koerth-Baker.

Specialized professional marketing services for a local or regional collection of producers such as our local farmers or growers could provide a more affordable and efficient budget line for supplier and sales activities of these producers. The third industrial revolution that we find ourselves in may hold the key to this next generation of small-scale producer marketing cooperatives, whether in agriculture or another industry.

This revolution has led to the evolution of digital platforms as a key component of business operations. An Accenture.com report found that “81 percent of executives say platform-based business models will be core to their growth strategy within three years.” Now, with a $1 million grant from the Google.org Foundation, the Platform Cooperative Consortium at The New School, a university in New York City, will be able to take leaps and bounds towards supporting the development of cooperatives in the digital economy. This will be done through the “development of open source platform tools specifically for cooperatives that are owned and democratically governed by workers and/or users.”

Beyond developing a cooperative platform for marketing from producers and service providers, marketing professionals themselves can join together to operate a worker cooperative on the alternate side of the cooperative business spectrum. With this possibility, we see the potential development of a cooperative model value-chain in which cooperatively owned producers and service providers band together to create a platform marketing cooperative that is developed and managed by a worker cooperative of marketing professionals.

Article published in the BJNN on October 1, 2018

Frank Cetera is a New York State-certified business advisor at the Small Business Development Center (SBDC) located at Onondaga Community College. Contact him at [email protected]