A message from our board of directors
The Co-op’s board of directors would like to recognize and congratulate all of you, fellow Member-Owners, for contributing to the growth and success of our Co-op. Since opening as a full retail store in 2014, we have seen continual increases in both sales and the number of Member-Owners. We will likely end 2019 with over $5 million in sales and over 5000 Member-Owners. Nearly 40% of our sales are from foods and other goods produced right here in the state of Maine. In 2018, we purchased over $1.3 million dollars from Maine producers and farmers. We work with over 200 Maine businesses, which includes over 80 Maine farms. We are playing a significant role in the growth and development of the local food economy. None of this would have been possible without your ongoing support.
After only four years of growth and development as a retail store, we are thrilled to announce that our Co-op made a small profit of $14,180 in 2018. This was the Co-op’s first profitable year. Many new businesses plan and budget to lose money in their first few years but we are happy to report that after only four years as a retail store, we have reached a level of profitability. The board’s attention has now turned to how to manage our first profit.
Many of you may know that co-ops often return a portion of profits to Member-Owners in the form of patronage dividends. In this message, we want to explain what a patronage dividend is, what we the board—as the Member-Owners’ representatives—have decided to do with the profits from 2018, and how future profits will be dealt with going forward.
What is a patronage dividend?
In years when a co-op makes a profit, tax law allows the co-op to return a portion of those profits to the Member-Owners. This amount is based on the portion of the co-op’s profits that are attributed to Member-Owner purchases and excludes profits earned from non-Member-Owner purchases. Therefore, the patronage dividend for any given year will be less than the Co-op’s total profit.
What has the board decided to do with the 2018 profit?
It is the General Manager’s responsibility to create and implement a patronage dividend system, but the board decides how much of the Co-op’s net income should be allocated as a patronage dividend to the Member-Owners. The board, after reviewing the Co-op’s financial position, as well as its future loan repayment obligations, has chosen to reinvest this small profit back into the store. This small amount, if divided out among all the Member-Owners who shopped in 2018, would have amounted to less than a dollar for almost every Member-Owner. The board decided that the staff costs involved in distributing all of these “less than a dollar” amounts were not in the best interest of the Co-op.
What will happen with patronage dividends going forward?
Inspired by the experience of dealing with our first ever profit, the board is forming an ad-hoc committee, the Patronage Dividends Review Committee, to investigate best practices regarding patronage dividends moving forward. How much do we distribute in the future? This is new territory for our Co-op. This may involve some changes to the Co-op’s policies and/or proposals for changes to the Co-op’s bylaws. If you are interested in learning more, or potentially joining the committee, please let us know by emailing email@example.com.
Our board meetings have educational sessions, as our meetings allow, to help us understand issues related to co-op governance, the grocery industry, and how to further involve Member-Owners in the Co-op. We welcome your participation and attendance at these meetings. Board agendas are always posted a week in advance on the Co-op’s website. Upcoming topics will include food co-op profitability and serving all in the community.
Board meetings are held on the fourth Tuesday of each month from 7-9pm at 409 Cumberland Avenue. Please check the Co-op Calendar to make sure a board meeting has not been moved or rescheduled. There is no board meeting in December. Board meeting agendas are often very full, so if you would like to speak at a board meeting, please email firstname.lastname@example.org so we can make ample time for you.