This story was produced with Next City as part of its Local Reporting Hub, with funding from the Kresge Foundation.
When Detroit People’s Food Co-Op asked the community for help keeping its doors open in September, the response came from across the city: churches organized shopping days, a local nonprofit awarded a historic grant and a group of Black women rallied to become member-owners.
The outpouring of support has offered a lifeline to the grocery cooperative, which opened its Woodward Avenue storefront on May 1, 2024, after years of fundraising. Despite a strong opening, the store’s recent financial struggles reflect a challenge facing food co-ops across the country: building a community-owned grocery store is one thing. Financial sustainability is a tougher battle.
Anthony Goodwin, who serves as chief executive officer of Development Co+operative at the National Co+op Grocers, told BridgeDetroit that it can take between 10 and 12 years for a start-up co-op to become financially sustainable.
“During this extended timeline, the market conditions that originally prompted the co-op’s formation may change significantly,” Goodwin said. “(And) achieving financial viability as a single-store operator is increasingly difficult in today’s competitive grocery environment.”
Detroit People’s Food Co-Op needs to generate at least $73,000 a week in order to sustain operations, food sovereignty activist and Detroit Black Community Sovereignty Network board co-op board appointee Malik Yakini told BridgeDetroit. But the co-op’s sales dropped below that benchmark over the summer due to dangerous air quality during Canadian wildfires and heat waves, which forced people to stay indoors.
Financial struggles like Detroit People’s Food Co-Op is experiencing are referred to as post-open stabilization struggles, said JQ Hannah, executive director of the Food Co-Op Initiative, a national nonprofit that assists communities seeking to create grocery co-ops.
“To have cash flow problems at this stage is really not uncommon,” Hannah said. “It’s a real opportunity to galvanize the community to invest in something that they can believe in, and I believe Detroit is making that case very well.”
The Detroit People’s Food Co-op launched its fundraising drive on Sept. 7, titling it the “Mframadan Campaign.” Mframadan is a Ghanaian word that translates to “a house built to withstand windy and treacherous conditions,” according to the campaign, which runs through Nov. 30.
At its inception, the co-op established a clear mission to improve Detroiters’ access to fresh food with a business model that allows shoppers to be part of the ownership structure and have a voice in their community.
Experts told BridgeDetroit that many residents don’t understand how a food co-op differs from a corporate grocery store, which can make its prices seem higher than they are and results in fewer people becoming member-owners.
“Most people don’t understand that prices are set to be fair to workers and producers, as well as cheap for customers,” said Molly Anderson, program director in Food Studies at Vermont’s Middlebury College. “They are thinking of it as a ‘regular’ grocery store, but it’s so much more than that.”
Detroit People’s Co-op uses an open store model, where anyone can shop. Those who choose to become member-owners pay a one-time $200 member-owner fee, which can be paid in installments. Member-owners receive discounts on groceries and have voting rights at the co-op’s board meetings, where policies are set.
When speaking with new customers and recruiting them to join the co-op, Yakini said he has found that many feel strongly about shelf prices being too high. This is especially apparent as grocery prices have increased 33% since 2019, according to U.S. Bureau of Labor Statistics data analyzed by the Associated Press.
For co-ops, Yakini said, it is important for affordability to be weighed against the value of creating an institution that centralizes power in the hands of residents over corporations.
“Our value proposition has much more to do with community empowerment,” Yakini told BridgeDetroit, “supporting a vibrant, non-extractive local economy, creating a democratic institution, and modeling how we can exhibit control over the food system that provides our food.”
Legacy co-ops advice
Across Michigan’s two peninsulas, there are 11 grocery cooperatives, not including Detroit’s. The majority of them were founded during a national boom in co-ops during the 1960s and 1970s.
Hannah said Michigan’s co-ops were part of the country’s second wave of grocery cooperatives following a large burst in the 1940s when the Great Depression motivated communities to move away from corporate structures.
“We lost most of those, but not all of them,” Hannah said, referring to the handful of surviving Depression-era cooperatives across New England. “Then the 1960s and ‘70s launched the natural food co-op movement that most people think of today.”
Michigan’s oldest co-op, Oryana Community Co-op in Traverse City, started in 1973 as a buyer’s club, a small group of residents who organized to purchase directly from wholesalers. Today, it operates three storefronts.
Cody Sovis, marketing manager for Oryana, said that a secret to sustaining a grocery co-op for decades is using the co-op as the starting ground for establishing roots in a community. From engaging community members with events and educational programming to incorporating local brands on shelves, a co-op needs, “an engaged base of customer ownership that is willing to stick with us no matter what.”
“We invest a lot of time and energy in supporting local brands and young brands because we know that when we support them, then they support us,” Sovis said. “It creates a circular relationship that we are all invested in the shared success of.”
Ypsilanti Food Co-Op, which opened in 1975 as a small storefront, has now expanded to include a full-service bakery, retail space and in-store eating area. Corinne Sikorski has served as the co-op’s general manager since 1981, seeing the store through decades of changes.
Sikorski said it’s vital not to conflate the financial bottom line with the cooperative’s mission.
“Their bottom line [as corporate grocers] is to make money for stockholders, and so our mission, even when we’re losing money, is still to make sure that we are serving our community with good food,” Sikorski told BridgeDetroit. “Staying focused on that good quality food has been important to keeping what we are alive.”
When higher bulk grocery prices nationwide, combined with fluctuating tariffs and high diesel prices, translates to higher shelf prices, Sikorski said the trick is substituting higher-end organic foods with more affordable natural alternatives.
“Our community wouldn’t have a grocery store if we hadn’t chosen to be there and stay there,” Sikorski said. “We want to serve, be part of the community that we’re in, and that makes it so the people want to support us and keep us there.”
Outside of the East Coast, the Midwest has the second-most dense grocery cooperative scene. In Minnesota, 45 grocery co-ops operate across the state, with 26 registered with the National Co+Op Grocers, a coalition of national grocery co-ops. Wisconsin has 16 rural and urban grocery co-ops, followed by seven in Illinois that are registered with the National Co+Op Grocers.
Hannah said her organization has found that in recent years, urban, rural and historically redlined cities have increased their interest in forming food co-ops as a way to improve access.
“Together, remote rural and the Black-led, historically redlined urban communities are now 50% of the 120 communities currently organizing food co-ops across the country,” Hannah said.
In Madison, Wisconsin, just over an hour west of Milwaukee, Willy Street Food Co-Op Marketing and Communications Director Brendon Smith told BridgeDetroit that the store has found great success in leveraging its location in a college town while also serving an urban, inner-city community.
“We really had to find that balance between change and consistency,” Smith said. “If you change too much, you run the risk of alienating people who have been with the co-op for a long time. Conversely, if you don’t, then there is always competition ready to swoop in and try to do what you’re doing better or cheaper or faster.”
A similar strategy is being utilized by Chicago’s Wild Onion Co-Op, President of the Co-Op’s Board of Directors Chad Curry told BridgeDetroit. Flexibility is the best tool to have for a co-op situated between Northwestern University and Rogers Park, the city’s most racially and ethnically diverse neighborhood.
“We don’t have the corporate budgetary assistance that traditional grocery (stores) have, so we have to be creative in the way that we take care of problems,” Curry said. “The margins for co-ops are very tight, and it’s important to educate the community so customers understand that it is a form of activism.”
Wild Onion’s story closely mirrors that of the Detroit People’s Food Co-op, with the store opening in 2024 after a decade of pushing to create greater access to fresh produce. Curry said it is this strong community foundation that has kept the store afloat in times of struggle.
“This type of grocery store is an act of resistance,” he said. “Co-ops are really a place for you to understand your food and be part of a different kind of future.”
Community to the rescue
Detroit People’s Food Co-Op announced on Oct. 18 that the store generated its highest weekly sales since the grand opening, bringing in nearly $98,000 between Sept. 28 through Oct. 4, a 60% increase from last year. The co-op’s grand opening week saw $111,000 in sales. Since launching the fundraising initiative, President of the co-op’s Board of Directors Lanay Gilbert-Williams has welcomed 260 new member-owners since launching the fundraising campaign on Sept. 8.
The difference between co-ops that survive and those that fail lies in their ability to plan quickly around changing conditions, Hannah noted.
“You need a good plan,” Hannah said. “And that is what makes me excited about Detroit (People’s Food Co-Op) because they have a multi-point plan that they’re speaking to very clearly in a way that I have seen historically lead to success.”
In order to ensure cash flow problems do not arise during a future drop in sales, Yakini said that the cooperative has implemented community feedback in “a full operational reset in the store.”
“We are retraining staff, restocking the store, thoroughly cleaning, stressing better customer service,” he said. “We are doing all of these things so that people have a positive experience in the store and want to come back.”
Just over one month since launching the campaign, Yakini said Detroit People’s is on track to meet its overall fundraising goal of $155,000.
In addition to the $35,000 raised to date through a GoFundMe campaign, the co-op launched a non-voting investment certificate drive for residents who want to invest between $1,000 and $1 million.
Yakini said the goal is to raise at least $75,000 from the non-voting investment certificates, and that “a substantial portion, more than half” of that amount has already been raised.
The community then did its part. Over the last few weeks, local faith groups and churches have organized shopping days for their congregations, podcaster Deante Kyle bought $2,500 in gift cards to distribute to shoppers and the co-op received a $25,000 grant from Black Leaders Detroit. It is the largest grant in the history of the organization.
On Oct. 10, the BLK GRL Conglomerate, a Detroit-based nonprofit dedicated to advancing Black women of all ages, hosted a “Black Girl Cash Mob,” encouraging 100 Black women to spend $20 and also become member-owners for $200.
“That was not something we planned and not something we coordinated,” Yakini said. “It just kind of happened spontaneously. People saw the call and responded to it.”
To keep the momentum going, Yakini said that the co-op will focus on expanding its educational programming to churches, fraternities and sororities, and block clubs and civic associations.
Mia Reid, founder of Detroit-based gun violence prevention nonprofit CWR Community Health Center, said she has been a member of the co-op since its inception. When the call for donations went out, Reid said she recruited her organization to join and make a monthly donation.
“There has always been a call to action for more Black stores in Detroit, and we finally have one,” Reid said. “And there is nowhere else in the vicinity you can find so many Detroit and Black-owned products.”
Reid said she has found two new local brands sold by the co-op — Stacey’s 2 Day Tea and 313 Urban Chips from Hacienda de Gutierrez — that have become pantry staples.
The bevy of local items also drew Boston Edison resident Megan Royal, who said she joined the co-op in its early days, inspired by its push for community-focused Black ownership in the city.
Royal said it can be difficult for new shoppers to overcome a negative or subpar first impression if they come in on a day when produce and items may be out of stock.
“The leadership recently has been amazing about overcoming those challenges, and I’m hoping that people who may have had some mixed experiences will be willing to give it another chance,” she said. “It’s still an amazing asset for the community.”
Trudy Satterwhite, 80, is a lifelong Detroit resident and stopped by the co-op for the first time after hearing about the fundraising initiative from her neighbors.
“I had always been meaning to shop, so I headed down, and I had such a good experience,” Satterwhite said. “What really surprised me was seeing my favorite organic juice brand that I get from Whole Foods. I have gone back to shop and plan to continue.”