Potsdam Food Cooperative Annual Report 2015
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1 Potsdam Food Cooperative Annual Report 2015 Prepared by Abby Lee Board President February 3, 2016
2 The Co- op Board of Directors is an active and engaged group of member- owners. The Board has made significant progress in improving its internal processes this year. The Board has worked diligently to address three key issues identified last spring: Financial Solvency, Membership Engagement and Recruitment, and Increase in Sales. These three overarching goals informed our actions throughout the year. This report consists of the General Manager's Report, Treasurer's Report and a summary of the Potsdam Co- op's committee achievements in Member- owners and staff continue to be the most valuable assets the Co- op has. Our member- owners have worked endless hours to make the Co- op the place it is: whether it be volunteering to count (scan) inventory, packaging goods for our shelves, writing articles for the newsletter, volunteering on committees, creating new tools for understanding our finances, playing music at our events, baking for baking fests, painting faces, serving samples to our customers, or dedicating time, energy and resources to projects. Our staff is dedicated and we are fortunate to have staff members actively engaging the community in the store. Committee and General Manager Achievements In 2015, the Co- op Board and General Manager served member- owners through a number of standing committees: Executive, Membership and Marketing, Governance, Finance, Outreach and Education, Building and Grounds, and a newly formed IT Committee. The committees underwent a realignment and name revision to clarify their mission and goals. Each committee completed an action plan and assessment methods for the year. The charges for all standing committees are stated in the Co- op's Board Policies Manual, and the action plan is attached to this Annual Report. Additionally, an ad hoc committee was created to research information about the Dues, Shares and Subscriptions co- op business models. General Manager's Report Reporting: Eric Jesner Member- ownership Member- ownership is up 25 to bring us to an average of 986 member- owners for This is due to the staff being more diligent about offering member- owner forms to non- members, better outreach efforts at the events we attend, and everyone representing the Co- op being able to better communicate the benefits of being a member- owner. The percent of sales to member- owners is up 1.6% to reflect 61.8% of total sales. The sales per member- owner household is up $5.00 to $1,088 per year. Both of these numbers show that we
3 are able to provide more of what you are looking for and that you are shopping here more than in the past. Purchases While sales were up over $6,300, purchases were down $27,800 to $1,001,300 from Of our total purchases 54.1%, or $542,500, were made from UNFI and Albert s Organics, our largest distributor. Local sales, as we define as our surrounding counties, accounted for 15% of purchases, or $150,432. Regional sales, which we define as NY state, Vermont, and Western MA, accounted for 20.2% of purchases, or $202,611. Loans The Co- op paid off our last remaining member loan left from the reset; the loan was for $25,000. We are now long- term debt free. I would like to thank every member- owner who made a loan to the Co- op and enabled us to get where we are. Now we need to start thinking about what to do next. Inventory Our inventory procedure was further refined as we now scan our inventory with handheld scanners that are paired to smart phones or computers. We now have enough scanners that all counting, with the exception of produce and the Carriage House, is done electronically and links to our last cost for each item. Our new inventory process takes substantially less time and is far more accurate than it has ever been. The Finance Committee is able to analyze the financial results two weeks instead of two months after conducting an inventory. This quick turnaround allows us to react faster and ensures that we end up with a positive financial outcome at the end of the year. Product Selection Over the summer we used the capabilities of our Point of Sale system to help clean up our product mix. We analyzed sales of the preceding 12 months to discontinue items that we sold less than twenty- four of, or two per month. When going through the list, we looked for seasonal products or very special items that should remain even while sales are slower. We also stopped ordering from two of our smaller distributors as the cost of shipping was becoming too large for the small number of items we were receiving.
4 These updates have given us the ability to find new and exciting items. In addition to our regular searches for new products, every month when Andy organizes sales for the following month he searches the deals for new products. Andy will often introduce new items through the monthly sales flyer and keep items that sell well. Seating I would like to greatly appreciate the generous member- owner, who asked to remain anonymous, who designed and built our new seating area table from local wood for working credit only. A lot of time and energy went into this beautiful piece, which fits the character of the Co- op perfectly. This project was made possible by the reduction of slow selling items, which allowed us to open up enough shelf space to remove the last section of shelving towards Elm Street. After replacing the shelving with a perpendicular endcap, we were left with enough room to install this bar for seating against the wall. Use of the new seating area was slow to start, but the more we get into winter and the word is out that there is indoor seating, the more people there are enjoying the space and the view out the front windows. Building & Grounds Manager s Committee Reporting: Eric Jesner Thanks to the Building and Grounds Committee and the many working member- owners who painted the Carriage House over the summer. A special thanks to the committed few who came out on rainy days to finish painting the front of the building. Our next project will be refreshing the bathroom. It became necessary to make some repairs to the wood- fired oven this summer. The oven was shut down for a week, which allowed Chris Affre and Christoff Bemis to remove and replace the floor of the oven. Once the floor was complete they were able to repair the ceiling with the help of a group of member- owners. This was a large project that was completed through the cooperation of many people.
5 Treasurer's Report (Finance Committee Report) Reporting Chair: Robin McClellan In 2015, the Co- op did significantly better than in 2014 and While we lost money in those years about $20,000 in 2013 and $13,000 in 2014 this last year we had a positive net income of about $3,800. This net income comes despite 2015 Net Sales ($1.6M) being virtually unchanged from The two previous years showed increases of 3.5% (2013) and 4.6% (2014). What changed? Starting in 2013 we experienced both an increase in the minimum wage and continuing increases in the cost of health insurance. To balance that trend, the Co- op started cutting back hours and using attrition to trim the number of staff hours. Another measure, eliminating products from the shelves that didn t sell, also helped. As you can see from the figure below, these efforts paid off last year.
6 In addition to overseeing the Co- op s financial health, the Finance Committee has been working on ways to better understand financial information in general. We have developed a dashboard of a few critical numbers (gross sales, net profit, gross margin, etc.) that track the Co- op s financial health at the moment and how it has changed over time. A major task that commenced this year is converting our bookkeeping software to QuickBooks. In doing this, we hope to eliminate most of the manual entries, particularly the ones that transfer from our Point of Sale (POS) system to the General Ledger. This will save time and increase accuracy. I would particularly like to thank Jay Vega, who joined the Finance Committee this year, for not only helping us conceive and plan the conversion, but encouraging his students in the Clarkson Accounting Honors Society to actually implement the conversion. Without the generosity of Jay and his students, this important change would not have been possible. Other tasks that the Finance Committee worked on this year were: Document current bookkeeping processes (in case someone else has to do them and so we can automate as many as possible) Determine profitability by department Begin to establish capital reserve funds for expected future expenses (e.g., equipment repair and replacement, etc.) Implementing Perpetual Inventory that will help streamline the ordering and intake process Tracking Actual income and expenses against Budget Develop Policies for Internal Controls The Committee also reviewed the possible financial impacts of changing our dues and discounts. While the impact of changing those structures is unclear, the Finance Committee supported changing the Bylaws to enable the payment of patronage dividends to members which would allow the Co- op more flexibility in its financial management. This is a turnaround year for the Co- op. In addition to being in the black, there are number of new ways for the General Manager and the Finance Committee to evaluate the financial health of the Co- op. Streamlining bookkeeping processes through the conversion to QuickBooks and integration with the Point of Sale program (Catapult) will reduce the cost of labor for bookkeeping and provide more information. The establishment and capitalizing of reserve funds will further stabilize the Co- op s finances. All in all, it s been a darn good year!
7 Executive Committee Reporting Chair: Abby Lee The Committee met monthly with the General Manager to review issues related to personnel, store operations and the General Manager s performance and yearly review. The Committee consisted of Co- op President Abby Lee, Vice President Laura Cordts, Treasurer Robin McClellan, and Secretary Joe Andriano. The Committee worked with the General Manager to codify and document internal work processes. It is in the process of evaluating legal counsel for consultation regarding organizational documents, changes to wage and labor law processes, and dues, shares, and subscription models. Nominating/Governance Committee Reporting Chair: Laura Cordts The Nominating/Governance Committee is responsible for the Annual Board Calendar, the Board Policies Manual, periodic bylaw review, and other governance- related processes and documents to ensure that the Co- op Board functions well. We recruit and recommend prospective Board members, and oversee annual elections, Board orientation, continuing education, and evaluation. Much of the past year was dedicated to a comprehensive review and multiple revisions to our Board Policies Manual (which can be found on the Co- op website, for anyone who is interested.) Perhaps the most significant changes made were updates to the various committee descriptions, and new provisions for voting/proxy authorizations for Board elections. The Committee also significantly revised and updated the Board calendar, the questionnaire provided to prospective Board candidates, the Board nominee checklist, and the Board self- evaluation tool. The Committee recruited, interviewed, and recommended a nominee to fill an unexpired term, as well as two other nominees for the current elections. Our Committee is small but formidable! Members for the past year were Co- op President Abby Lee, Vice President Laura Cordts, Treasurer Robin McClellan, Secretary (and resident attorney) Joe Andriano, former Board President Vanessa Bittner, and former long- time Board member Ann McLaughlin. We welcome other Governance wonks to consider joining the Committee.
8 Membership and Marketing Reporting Chair: Erica LaFountain Erica LaFountain has been chair of the Membership and Marketing Committee since she became a Board member nearly a year ago. Two committee members have joined in the past year, including Maggie McKenna who is currently a candidate for the Board, and Catherine LaPointe, an impressive local artist and graphic designer. They have added to an already active and impressive committee, which has delivered on many prioritized tasks in The Committee s main accomplishments are providing content for a user- friendly membership page on the Co- op s new website, and creating a new member- owner welcome kit, which will encourage new member- owners to get involved and take advantage of all that Co- op member/ownership has to offer. The Committee is now working on updating and strengthening the Co- op s business partnership program. Several new businesses have been added, which means new discounts for member/owners. Watch for business partner badges in the windows of participating businesses that will remind you to take advantage of your discount. Look for updated information on the website as well as in the Co- op newsletter. Committee meetings are held the first Thursday of the month at 8:15 am above the Carriage House Bakery. IT & Web Committee Reporting Chair: Eric Ochranek The IT & Web Committee is responsible for evaluating and innovating the use of technology by the Co- op as well as being responsible for the management and development of the Co- op s website marked the first year of the Committee s existence. During 2015, we developed several new digital initiatives. We ve implemented new storage technologies that allow the Co- op to back- up critical data while ensuring its security. We ve also rolled out public WiFi for customers to enjoy. Listserves were created to facilitate
9 communications between Board and committee members. The Board migrated its archives and current files to Google Drive from Dropbox for ease of use and in an effort to coordinate with staff practices. The Committee also played a crucial role in the launching of the new PotsdamCoop.com website. The 2014 ad hoc Web Site Committee formally became the IT Committee in May Member- owner Eric Williams Bergen created the new site which was launched in September of The new layout communicates important information more effectively, and the new structure allows us to create many different types of content. The Committee is currently focusing on implementing a blog on the site that will provide users with a spot for all the latest news, events, as well as information regarding the Board itself. Members of the IT & Web Committee include Abby Lee, Robin McClellan, Joe Andriano, and Eric Jesner. If you re interested in joining the Committee, we welcome all! Meetings are held the second Wednesday of the month at 4:30pm above the Carriage House Bakery. Outreach and Education Reporting Chair: Pamela Maurer In the past year the Outreach and Education Committee created Newsletter Submission Guidelines, now available online, and also took on a much more active role in the newsletter. We attended events at all four area schools, Canton- Potsdam Hospital, Hospice Caregiver events, Frederic Remington Art Museum events, Health Fairs in Norwood and children s events in Massena. We travelled as far as the Mare s Wares Arts Fest (which is by invitation only) with outstanding success in sales of breads produced by the Carriage House Bakery.
10 We supported the North Country Children s Museum with the Carriage House Bakery and Deli s events for kids. We drew the community into the store with Fright Night and the Holiday Baking Fest. This year we raised over $1,200 for the Neighborhood Center. We created some procedures to better involve working members in outreach activities. We significantly decreased hours spent by paid staff on outreach. When a couple of packaging newcomers who found out about the Co- op through Literacy NY discovered the Co- op could also help them improve their English skills, they told the rest of their group. This resulted in the program administrator asking if someone would come and talk to the class. We hold regular Thursday events to draw the community into the store for tastings, combined with store tours during which the General Manager is available to answer questions. Many members are actively involved as outreach ambassadors on behalf of the Co- op. Some of our outreach activities require people who can sell the idea of the Co- op; listen to people; lift and carry lots of stuff; stand for hours; talk easily with people; and know when to say, I don t know, but I will find out. Other gigs demand a team who can handle money and the pressure of people waiting in a line. Some gigs require people with creative talents, from face- painting to setting up our display table to look its best. Others demand a youthful presence first and foremost. These "Ambassadors" have become a successful part of improving our "public" image, as attested to by the number of repeat invitations to events the Co- op receives. The Committee meets every first Thursday of the month above the Carriage House Bakery at 5:30pm. Committee meetings are often about planning and fine- tuning our procedures.
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