May 7, 2020
Thank you for joining us this evening for our semi-annual member meeting. It strikes me as interesting that for the first time, in lieu of coming to us here at the Co-op for this meeting, I’m instead coming to each of you in your homes. The healthy, local and organic foods that you purchase at the Co-op make their way to your homes, especially right now, so it somehow feels appropriate to be here with you. I hope each of you have been keeping safe and have what you need to weather this situation.
This meeting is typically an update of what the Board and the Co-op staff have done on your behalf as member-owners since our last meeting, which occurred in mid-October. Obviously updates on the last 10 weeks are top of mind, but I don’t want to lose sight of everything that has happened, discuss challenges and celebrate successes. This is the fourth time I’ve delivered one of these updates at a member meeting, and each time I look back on everything we accomplished in the previous 6 months I think that we’ve reached some kind of pinnacle of success and achievement. But the staff of this store, our community of shoppers and supporters continually push us further and higher.
We had a tremendous holiday shopping season with strong sales and steady new membership numbers. In January the Board and I began the first step in our strategic planning process by designing a shopper survey for the first time since 2014. In six weeks, the Co-op got over 1000 responses from shoppers on a variety of questions related to the Co-op including operations, mission and demographics. I am grateful to everyone who helped get the word out to generate this tremendous response, and I still intend to close the loop on that survey with a report to membership about its findings.
We put a tremendous amount of time and energy into planning our five-year strategic planning process, which was going to kick off at this very meeting. While that has been temporarily tabled as we deal with the current crisis and operational changes, it remains an important part of planning the future of this co-op, perhaps even more so now. Robust member engagement and input is a huge part of that process, so know that we will call on each of you to participate when the time comes.
I remain active in many community organizations on behalf of the Co-op. I still serve on the Old Takoma Business Association Board and the SEEC Business Advisory Council helping expand job opportunities for those with developmental disabilities. I was proud in February to be nominated for an Azalea Award, an honor I said at the time I considered to be shared among the entire staff and TPSS community. I also proudly represent TPSS on the Montgomery County Food Council, as co-chair of the Food Economy Working Group and on the Policy Committee helping to inform and advocate for policy decisions at the local and state levels.
I ran the Food Council’s subcommittee on lessening licensing burdens in the county for businesses and non-profits, and I can happily report that a recent change in state laws will bring about tremendous change to allow non-profits in our county exemption from licensing requirements and fees provided they follow basic food safety procedures. Through the Food Council, I have met with the Thrive Montgomery 2050 staff undertaking updating the County’s General Plan for the next 30 years. I was also able to meet with members of the county council to advocate for short term and long-term planning to include intentional consideration of our valuable food sector.
I was also thrilled that after years of advocacy, Montgomery County announced this Earth Day that they will begin a composting pickup program for businesses throughout the county. As a Montgomery County Certified Green Business, and a store that has been paying to have compostables picked up for years, this change will both benefit the Co-op, and our entire county to divert organic material from the waste stream and give it a second life as usable compost. Lastly, I am extremely proud that the Food Council has led the County’s Food Security Task Force during the Covid-19 pandemic and is connecting resources to those in need. This work is more valuable than ever, and the leadership shown during these trying times will help to reinforce the essential role that our food system plays in everyday life even when things return to normal.
But things aren’t normal right now, and that’s a big part of what we’re here tonight to discuss. In late February the Co-op began receiving our highest level of foot traffic and sales ever. Americans were told to stock their homes with two weeks of supplies in the event of a quarantine, so grocery stores were the logical recipient of a huge increase in business. At the same time, the pandemic grew both nationally and locally with confirmed cases starting to rise.
TPSS took steps many other stores took in the subsequent weeks or months, by having employees wear gloves, installing a handwashing station outside, putting in plexiglass shields at the registers and limiting the number of shoppers in the store. We removed endcaps and displays to create distancing space. Even with these procedures, it became clear the pandemic was just getting started, and that every recommendation available cautioned against having a large number of people in a confined space.
On March 24th, TPSS made the difficult decision to become the first grocery store in the country to shut its doors to the public and develop an online only shopping model. As we’ve shared through various communications since then, we built an ordering platform and to date have filled thousands of contactless pickup orders. The Co-op was recognized for our leadership and innovation through national press coverage in the Washington Post, CNN Business and on Good Morning America.
While this system represents a dramatic shift in the way we operate the store and each of you shops for your groceries, I’m so proud of the strides we’ve made in what feels simultaneously like one week and 100 years. The nature of an online shopping platform is that it will always be a work in progress. Since we launched, we were able to add discounts, expand our selection, add new departments and integrate EBT/SNAP shopping which we’ll talk more about in a bit.
Recently we worked to improve the sidebar navigation by adding sub-departments if you click on the department name like Grocery or Wellness. We added prepacked products from Bulk, and offerings from our Beer and Wine department. We’re adding new products all the time, and keeping a closer eye on what popular items are unavailable to remove those from the site when they can’t be obtained.
On that topic, I will give you my views on our food system, both national and local. I can’t speak for other stores, just what we have experienced here in the last two months. I’ve been invited to attend calls with the large nationwide natural food distributors, and I receive regular updates through the National Cooperative Grocers Association on these issues as well. The pantry stocking period of early March put a tremendous strain on distribution systems- basically warehouses were running well beyond capacity and food producers saw half a year’s worth of canned products they had already produced purchased in 4 weeks.
Any company that creates products for wide distribution has a facility they produce and package at, either one they own or a co-packer where products from many companies are made. Time is allocated based on your typical sales level, and how perishable the product is. So again, Eden knows exactly how many Garbanzo beans of different sizes they sell in a typical 6-month period, and they procure facility time, the packaging and the product to fill those orders and get them into distribution channels. What has happened is that that process has been completely upended for almost every large company throughout the food chain. Companies that typically sold some beans in 10lb containers to restaurants for food service, and produced those back in December, suddenly have almost 100% of their business coming from retail packaging.
So throughout April, we saw tremendous disruption to the food system. Had the store been open, customers would have seen a large number of out of stocks, just like many saw on their online orders in early April. We have monitored our fill percentage – the amount of product ordered that we’re able to fill – and I’m very happy to say it has risen dramatically in the past three weeks as stock levels have improved and more popular products are coming back into distribution.
The local food system has actually held up much better because small producers are not reliant on nationwide distribution, on procuring huge amounts of product, and many are producing in smaller scale facilities. Issues for small farms and packaged goods producers are coming more on the human side. Small companies are exercising more caution with their workforce, which is the right thing to do. Locust Point Farms for example, which produces most of the chicken we sell, is running with a much smaller staff at all times to create distance not present at the large facilities we see on the news having issues with positive COVID cases running rampant. I foresee less ongoing issues with the smaller local companies that are prepared to fill the needs of their smaller customer portfolios, and are being smart about their operations to minimize disruption and promote safety.
Long story short, there is not nor will there be a shortage of food in this country. What there will be are complications for a huge number of brands to secure the materials and time to replenish their typical distribution channels. All made more complicated by unpredictability and the patchwork nature of the nation’s restaurant businesses reopening. My advice as a grocer is to understand that certain brands or products will be in and out of availability possibly for a long while, and wherever you are doing your shopping, to be as flexible as possible in what you’re looking to buy.
My two pieces of advice along those lines when it comes to our online shopping is to allow substitutions and to use the comment box. Our staff have been instructed for substitutions to only substitute the same product with the same attributes from a different brand. We have thousands of products and we’re not perfect so if a substitution does not work for your needs you can always email and we’ll process a refund. You can be even more descriptive in the comments section, saying “we’ll take any milk” or “we only want grassfed beef.”
You give up some individual choice in our online shopping system, I won’t pretend you don’t. We may not have the specific item you’re looking for available. Our special ordering system is not available. We’ve used prepacked produce boxes and wine bags to simplify our operations. I am aware that these changes are not ideal for everyone. But realize that the individual choice you are giving up, goes to serve the greater good, which is the exact reason we all shop at a Co-op to begin with. You’re helping us efficiently serve groceries to hundreds of families per day. You’re helping keep our staff and customers safe. It’s a grand sacrifice we’re all part of in our own small ways, which is beautiful.
Speaking of beautiful, I’m so excited we have partnered with Crossroads Community Food Network and their Fresh Checks program to double spending on fresh fruits and vegetables for SNAP (formerly Food Stamps) recipients. Our website has a section for the Fresh Checks produce boxes and you can select pay at pickup with EBT/SNAP card to receive the benefit. Crossroads has been doubling SNAP spending since 2007 at their Wednesday market, and we are thrilled to help increase that impact to all 7 days of the week. We are continuing to work with our local elected representatives and Maryland DHS to push for online SNAP sales within Maryland so that our neighbors who are food insecure or most in need have the same rights as everyone else to shop from home and avoid crowded grocery stores in order to spend their SNAP dollars. I’m glad that TPSS has figured out a contactless way to make this work, but every store in the state should be able to as well. A change in the law is required, and I will keep you all up to date on our progress.
The question of every hour, but specifically as it relates to the Co-op is when will this end? The short answer is I have no idea. The absence of widespread testing of any kind, and the known asymptomatic spreading of the disease create an ongoing level of risk. I have said from the beginning that I am unwilling to put our staff or customers at increased risk of contracting a deadly disease. I continue to monitor recommendations of both health and industry organizations, but ultimately the decision to reopen the store will require a positive change in conditions locally. I commit that we will be open and transparent with any new information that informs this decision.
The Co-op has significant cash reserves built up over years and remains on very solid footing financially. We are in a lucky position even compared to other co-ops throughout the county, which is always worth remembering. While we certainly want to avoid dipping into those reserves by continuing to operate profitably, they do exist if the situation changes.
Lastly before we move on, I’d like to express gratitude. I’m thankful for every member of our staff who have embraced new roles and responsibilities, learned tasks far outside their normal departments and been as flexible as Gumby and Stretch Armstrong combined. I’m thankful for everyone who has placed an order on our new system, and especially to those that then placed a second. Your patience and understanding as we’ve improved this process has been so important. I’m thankful to everyone in the community that has helped amplify and promote our communications along the way. I’m thankful for everyone’s support of all businesses, non-profits and organizations who are figuring their way through this situation and having to adapt the way they operate. They all deserve our understanding, and I know this community is here for them. And I’m thankful for my health as well as my family’s. It’s the most important thing to me, and it’s possible because everyone I just listed has been supportive of a tremendous change in our neighborhood co-op.
I certainly didn’t take a cashiering job at a natural food store in Brooklyn in 2009 thinking that grocery workers would one day be viewed as quote “essential personnel.” A national conversation about our food systems will be with us for long after this crisis has ended, and TPSS will always be a strong voice for positive change. Or at least we’ll be there after the staff takes a nice long vacation. Thank you all for your care and concern about our co-op, I’ve never been more proud to be your General Manager.