Improve bargaining power– Combining the volume of several members leverages their position when dealing with other businesses.
California: The California Canning Peach Association is a cooperative bargaining association based in Lafayette. Peach growers contract their production to processors. The grower-owned cooperative bargains with the largest processors for grower price and delivery schedule. Members realize significant additional money per ton for their peaches than growers who market on an individual basis. The cooperative also keeps growers advised on projected market volume and other conditions that may effect their operations.
Reduce costs– Volume purchasing reduces the purchase price of needed supplies. Earnings of the cooperative returned to individual members lower their net costs.
Maine: St. Mary’s General Hospital in Lewiston, a 230-bed rural health care facility, is a member of Synernet, a cooperative that serves 20 hospitals. In one year, St. Mary’s saved more than $479,000 by purchasing fuel oil, medical supplies, laboratory products, food, film, pharmaceutical, and services through the cooperative. These savings helped health care providers stretch limited resources.
Obtain market access or broaden market opportunities – Value is added to products by processing or offering larger quantities of an assured type and quality to attract more buyers.
Oregon: Tillamook County Creamery Association was organized in 1909 as a quality control organization for 25 cheese factories operating in Tillamook County, an area 30 miles wide and 60 miles long between the Pacific Ocean and the Coastal Range Mountains. During the past years, the 25 cooperatives have consolidated into a single cooperative. Tillamook produces and sells more than 45 million pounds of cheese a year. Sales are mainly in the Pacific Coast States of Oregon, Washington, and California, with an ever-growing volume going to all parts of the United States. Due to the emphasis the cooperative places on family farm operations, young dairy producers have been encouraged to stay on the farm and continue to build on the foundation laid by earlier generations.
Improve product or service quality – Member satisfaction is built by adding value to products, competition the cooperative provides, and improved facilities, equipment, and services.
Iowa: Frontier Cooperative at Norway started out in a van in 1976. Its mission was to provide low-cost organic herbs and spices to its members. Today, with 5,400 members, Frontier is a solidly managed cooperative that’s become the Nation’s premier distributor of organic seasonings. Developing new products rates high on the cooperative’s list, such as Frontier Pure Lager, an organic beer, as well as encapsulated herb products.
North Carolina: Watermark Association of Artisans was formed in 1978 by 35 rural women near Elizabeth City. They pooled their efforts to sell baskets, quilts, and other handmade gift items. Today, the 750 member-artisans produce decorative wooden products, rocking horses, antique quilts, rag dolls, teddy bears, duck decoys, wreathes, and baskets which are marketed around the world. About three-fourths of the members are from low-income backgrounds. Many are single, unemployed mothers with few job skills.