Looking back, 1972-1978
-by Chris Laning

I was pedaling routinely down L Street on my bicycle one day in the fall of 1976 when I saw an open garage door in the block north of the Friends Meetinghouse. Inside, several people were busy with saws, hammers and wood, building shelving. The sign said "Davis Food Co-op" so I stopped. "Hey, glad to see you're opening a store front," I said. "Yes, want to join?" they said. "That's all I was waiting for."

The Co-op had been around for about four years in 1976, but I first became involved with the store then, at 415 L Street. I've been a member ever since. I've been on the staff in one job or another since 1979. In this "Looking Back" feature, I'll be giving you more of a reminiscence than a real history. I've checked facts where I can, but please bear in mind this is one very personal view. Anyone who was around in those times is welcome to supply corrections. [N.B.: the offer still stands, ten years after the most recent publication. Send 'em to dwalter[at]davisfood.coop]

Back in time: 1972
Like most food co-ops, this one started as a buying club. It began in the spring of 1972 when several student co-op houses-including the Agrarian Effort on campus-informally started ordering cheese, produce and bulk dry goods together. By combining their food orders they could get one big enough to buy direct from wholesalers.

The group, mostly students, faltered over the summer, but Ann Evans, a member of one of the original co-op houses, called about 40 people and got enough orders to keep it going. Orders grew rapidly and soon became too big for the few people who were doing the ordering. Ann remembers one herb order that was "just a disaster." So several people got together to try to work out some kind of structure. 

"We called everyone we knew to come to a meeting," recalls Ann. "There were four of us: Neil Adams, who had experience with a buying club in Boston; Bob and Sue Holland, who had been members of one at Antioch; and I. Neil and I stayed up writing all one Saturday night. The next day there were about 15 people at the meeting and they accepted the structure we came up with. It actually proved to be a workable structure for three or four years. That was also when we chose a name-the 'People's Food Conspiracy.'"

The buying club was organized into "blocks"-eventually 14 of them. Each block had 10 to 12 households. Work was rotated, with one household each week taking charge of compiling the orders for house-holds in their block, then receiving and dividing up the food. (That was a lot of work for a household of one person, which is why I hadn't joined.) One block each week was also "master block," compiling all the block orders into a master order. Volunteers made the trips to wholesalers in Sacramento to bring back the goods, which were divided up in someone's garage. Cheese came from Tony's in West Sacramento, produce from local growers and Abdallah Produce Company, and dry goods from Westbrae Natural Foods. This was before the days of the Davis Farmer's Market, so the buying club was one of the few ways you could get organic produce, or produce from local growers.

The buying club operated out of various places including Diogenes House (then downtown), the Methodist Church on Anderson Road, and people's front lawns. It continued to grow rapidly.

As is always the case, a few dedicated members put in more work than anyone else-but many people did contribute large amounts of time and effort, and in return received joy, backaches, community spirit, and food at 20% to 30% below retail.

Even in those days, there were disagreements. "Not so much about food," recalls Ann: "We were pretty much all natural-food people. But one group of about twenty households did split off because they felt the co-op was getting too big. There was also a lot of controversy when we hired our first paid coordinator." That was Dwight Patterson. Several others also took a turn as coordinator, including Alice Swan and Mary-Ellen Hennessey (Maynard). "The pay was pretty nominal," comments Ann, "at first, just an extra discount on food."

1976: The first store
Like many buying clubs, membership and interest peaked at about four years, then began to decline as fewer people were willing to put in a lot of time. A group of core members, including Henry Esbenshade (then a fruit grower in Winters, now in Australia), Kathy Cerna (Grant), Martin Barnes, Dave and Judy Scott, and Ann Evans, decided the co-op could have a storefront for about the same time and energy.

They got a lot of members together for a potluck at the 5th and J Street house, and asked Morrie Lippmann and Jerry Kresy from Associated Coopera-tives (which then had a wholesale business with a warehouse in Richmond-it's now a food broker) to come and talk to them about how to open a store.

"We were really enthusiastic and had over $4000 in loans and pledges from members," recalls Ann. "They told us there was no way we could open a store with only $4000. But the energy was so high at that meeting that we decided to go ahead anyway and formed committees. A lot of people put in incredible amounts of time-just gave their lives-to open that store."

Henry Esbenshade was the one who found the place. 415 L Street had been a bulk dog-food store that was going out of business. Ann painted the sign and oversaw all the city processes, including getting the sign approved by the Design Review Commission, which she later served on. Many people pitched in to build shelves and counters. The folks at Associated Co-ops were really helpful. "They couldn't believe it when we came down for our first order of canned and packaged goods only two days before the store was due to open. But they helped us make sure everything got there on time." There was a big party when the store opened on December 18, 1976.

The L Street Store
The whole store was only 600 square feet, about 1/20th of our current aisle area. Imagine a space about 2 of our aisles wide and 12 of an aisle long. Into that we put a cash register and scale, a standing cooler with doors, with cheese and dairy products on one side and produce on the other, a row of produce boxes down the middle and two very small side aisles of bulk dry goods and canned and packaged goods. There were also bulletin boards (of course!). Two people could pass each other in the aisles if neither one was pushing a shopping cart or had a backpack on. I used to tell people at orientations that "we cut the cheese in a closet." Actually it wasn't a closet but a very small passageway between the tiny office and the tiny bathroom in the back of the store. It had a wide doorway, and we put a narrow counter across the back wall.

Shipments from A.C. had to sit outside on the sidewalk until they got stocked on the shelves inside. That was all right because they had to be brought up here in two or three trips in the co-op's trusty (?) white van, a gift from Peter Keat (who is now [former] president of Sacramento Natural Foods Co-op). We had a policy that we would not carry a packaged product if the product was also available in bulk. All products were priced at 15% over wholesale for members and 35% for non-members.

When I joined, there were no shares. You paid a non-refundable $10 for a "lifetime membership" for your household of 1 to 5 people. All households were required to work 2 hours per month, either in the store or on one of the Co-op's committees. There were no paid staff. The store was run by "Day Co-ordinators," volun-teers who worked a half-day shift every week. There was no Board of Directors. Co-op policies were decided at "Policy Meetings" open to all members, held once a month. Weekly Store Operations Meetings were held for DCs and the Orderers' Collective every Tuesday night at 7:30. The store was open 12 to 8 Monday through Friday and 10 to 6 on Saturday. It was closed Sundays; the Saturday night closers donated any produce that wouldn't keep over the weekend to the Community Meal.

Probably the experience I had was typical. I went to an orientation meeting, after hours in the store one evening, where we all sat on the cold concrete floor and went around the circle introducing ourselves and saying why we were interested in the Co-op. About half the people said "because I can get my food cheaper" and the other half said "to destroy the capitalist system." For my first two years as a member I did my 2 hours a month by providing an "herb of the month" display.

The time was right and the prices were right. The co-op membership grew rapidly. When the storefront opened, there were about 200 member households. Within two years it was 750. About 70% were students. Inventory nearly doubled, from around $4,000 to $7,000. Early "mainstay" members included-besides those already mentioned-Mary Tappel, Eric Hiaasen, Jackie Lundy, Peter Rosenthal, Linda Morgan (Morgan Richardson), Deidre Busacca, Miles Merwin and Libby Hise (Merwin), Steve Uhl, Rhonda Smith, and Bud Bliss. These are only a few names out of many. Interestingly, many of our "core members" wound up on the co-op board or on committees. In some other co-ops starting about the same time-most notably Arcata-"core members" tended to gravitate toward being on the paid staff instead.

The Co-op had a very close relationship with the Davis Farmer's Market, which also began in 1976. A lot of the same members were involved in starting both, including Jeff and Annie Main. The Co-op helped attract farmers to the market by guaranteeing that the Co-op would buy anything that didn't sell at the Saturday market.

1977: Remodeling and revision
The store space was remodeled in August and September 1977. Although the demand for both more packaged foods and more bulk foods was recognized, the net effect of the remodeling was to increase the shelf space occupied by packaged foods, but not the space for bulk foods. This produced arguments about whether the co-op was remaining true to its commitment to "emphasis on basic foods." We have always carried both health foods and some standard grocery foods, and the disagreements about product line and emphasis have been perpetual. One member "was just about ready to lay down and die" says Ann, before he would agree to the co-op's carrying white sugar.

Member support for honoring boycotts was strong. The co-op honored all UFW boycotts, which then included Campbell's products, and we also boycotted Nestlé, Del Monte, and Dole products, and all yellow-fin tuna. A collecting can for a "voluntary tax" on Third World-produced products such as bananas and coffee stood on the cash register. The proceeds were donated to the American Friends Service Committee.

Discussion about incorporation as a "cooperative corporation" (a special type of corporation, newly authorized under California law) had begun in 1976, about the same time as discussion about opening a store, but it took a lot longer to accomplish. In fact, the process wasn't completely finished till 1981. The advantages of incorporating include increased credibility, the possibility of reducing taxes through patronage refunds to members, and limited liability-the protection of members' personal assets if the co-op were sued. Members voted at the March 1st, 1977 Policy Meeting to begin proceedings to incorporate the co-op as a cooperative corporation. Proposed bylaws were drafted during the year and went through many revisions-no one knows how many.

One problem that we wrestled with at the time is the fact that incorporation requires you to have a board of directors. Some members resisted that, because of their strong commitment to the system we were using-monthly Policy Meetings where all members present could vote. Ways of compromising with this requirement were discussed, but eventually the bylaws did provide for a board, though it had very little power.

1978: The move to Fifth Street
A New Store Committee was formed late in 1977 and in the January, 1978 issue of OEKOS, the co-op newsletter, it advertised for suggestions. Things moved fast. The decision to lease space in the new building going up at 1403 Fifth Street-just a couple of blocks away-was made February 15th. It was a bit rushed because another tenant wanted the space. A crash campaign began to find member loans to finance the move and new inventory, along with trucks, lumber, refrigeration equipment, dollies, paint, ideas and help with construction and moving. The move was made April 1st, with a long line of shopping carts trundling up and down L Street carrying everything imaginable from the old store to the new. Many members turned out to help. (Carol Shearly, later to be General Manager, helped; I didn't.)

We began with just one large room-Suite "A," 2160 square feet-at the end of the building furthest from Fifth Street. We built a walk-in cooler for produce, dairy and cheese, with three glass doors on the front. Member artists did a series of four posters for the space above these doors, with the themes, "Working Together," "Volunteer Work," "Organic Produce" and "Direct Marketing" (for the latter two illustrations, see pages 15 and 14 of this issue). Behind the cooler was storeroom area. Just prior to the move there was a 2/3 to 1/3 vote not to begin a proposed phase-out of certain canned and processed foods. But it was decided to double the bulk foods selection in the new store, while not increasing the space for packaged foods at all, as members felt packaged foods had received too much emphasis in the 1977 remodeling of the L Street store.

While considering other sites for a store, previous to finding the 1403 Fifth Street site, the Policy Committee had discussed very positively possible inventory expansions in the following areas: expanding books, going into some basic hardware and garden supplies, and possibly into some basic clothing such as jeans and shirts. One of the floor plans for the expansion at the 1403 Fifth Street site showed a hardware and garden supply section.

The first paid staff
With the move to the new store, the work requirement-which had been 2 hours a month per household regardless of size-was raised to 4 hours a month for households of 3 or more adults. (It's still 4 hours for households of 3 or 4.) In May 1978, attendance at an orientation became a requirement for all new members.

Around this time the famous carrot-and-fist logo made its first appearance. Several logos had been used before this, including two pine trees in a circle, the "twin pines" being a well-known symbol for co-ops around the world. The carrot and fist, however, won a member contest and was adopted as our particular trademark (which it remained until our new "fields and sky" logo was adopted in 1988).

Many members have always loved the carrot and fist, and find it amusing and irreverent. "I always saw it as a clever and mildly jovial image," says Evan Sugden. Other members have always been embarrassed by it.

Serious consideration was also given to hiring some paid staff. The Administrative Subcommittee proposed hiring a 3-person "managerial collective"-a bookkeeper, a "Day Coordinator Coordinator" (!) and an "Orderer Coordinator" to provide some continuity and fill in gaps when volunteer workers didn't materialize. There was considerable debate, some members being concerned that paid people would become a "hierarchy" and discourage volunteer involvement, or acquire a disproportionate share of power. Proposals were made that paid jobs be rotated every few months so no one would have too much of a stake in the job. The need for skilled help with bookkeeping was most urgent, and Lois Richter was hired in August 1978 as the Co-op's part-time bookkeeper for $3.75 an hour.

In the meantime, we were able to get two temporary staff members through the CETA program, a federal program designed to give job training to the unemployed. Mary Ellen Hennessey (Maynard) and Linda Morgan (Morgan Richardson), both long-time Day Coordinators, were hired and worked for the Co-op full time from early spring through August, when Proposition 13 cut off CETA funds.

Morgan, by the way, was respon-sible for the first "junk food" the Co-op carried, Mystic Mints cookies, a favorite of hers. We still carry them, and while they are sweetened with white sugar, in fair-ness it has to be said that they are made with real cocoa and peppermint oil rather than synthetic substitutes.

When Mellon and Morgan left, Day Coordinator Jim Havert proposed another solution. He had been volunteering 20 to 40 hours per week as a DC and DC Coordinator, and submitted a proposal that he be hired as an all-purpose "Resource Coordinator" for $70 per week. He proposed to take on a long list of responsibilities, from receiving shipments, handling special orders, and setting up a filing system to recruiting and training DCs and setting up a publicity committee.

His proposal was approved late one evening at a Policy Meeting, without much advance publicity-which drew the predictable protest from a number of members. "This issue has been one of the most divisive issues within our co-op," charged a letter to the Co-op newsletter. "The reasonable manner in which to make a decision of this sort is to present alternatives along with the arguments, or allow other interested parties to submit responses and/or proposalsThe job description which Jim submitted is clearly that of a managerwe are not opposed to paying people for specific skills, buthiring a manager has historically been the death-knell for active member participation in contemporary, open-membership co-ops." Nevertheless, Jim must have proved indispensable, as he continued in the job from early November 1978 through April of 1979.

It's getting ahead of the story a bit, but in April 1979 something like the original "managerial collective" was finally put in place when Jim-who by that time was burned out and ready to leave-was replaced by two half-time "Resource Coordinators," Lisa Vittori and myself.

A step toward incorporation
Incorporation took another step forward in 1978 and then tied itself up in a knot, where it remained for almost three more years. There is a record of the Policy Meeting's original vote to incorporate in 1977. Several people remember clearly that in February 1978 the Policy Meeting re-affirmed this decision and authorized Incorporation Committee to pay the filing fees and file the incorporation papers. Others dispute the terms of that authorization, and the minutes of that meeting no longer exist.

As chair of the Incorporation Committee, Ann Evans recruited eight other members to serve as an incorporating Board of Directors, and on August 24, 1978, they filed incorporation papers for us with the State of California. Besides Ann, the other original Directors were Bud Bliss, Martin Barnes, Jackie Lundy, Mary Tappel, Jim Havert, Deidre Busacca, Robert Burney and Evan Sugden.
The filing created a "paper corporation," the Davis Food Co-op, Inc., which had only its directors and owned nothing. The Co-op's real membership, and the business with its assets and liabilities, still belonged to a separate organization, called "The Davis Food Co-op, An Association" to keep the two straight. An association is legally very much like a giant partnership, with all members jointly owning the business. An association has none of the liability protection or other special privileges of corporations.

What remained to be done was to "merge" the DFC corporation and the association. A proposal was made to do this at the September Policy Meeting. Unfortunately the proposal mentioned "transferring the assets" of the corporation but didn't mention the liabilities.

Maxine Heffner, a retired publicist and chair of the Co-op newsletter committee, immediately took alarm when she heard this a few days before the meeting. Taking the proposal literally the way it had been worded, she believed that the association would be giving away its assets, but would still be stuck with all the liabilities and open to lawsuits. She charged that this amounted to an attempted "take-over" by the corpor-ate board. Maxine deposited the Co-op's mailing list in her bank safe-deposit box and prepared a four-page special newsletter to inform members of the situation as she understood it. When board members prevented the newsletter from being printed, she called the media, and an article appeared in the next day's Davis Enterprise. This probably increased attendance at the Policy Meeting considerably!

The meeting was later described as a "4-hour marathon" of "heated discussion." Many members attending were confused about incorporation; others understood the basic issue but disagreed with the decision to incorporate, or were angry at the way they felt it had been handled. The benefits and drawbacks of incorporation were again debated, as well as the relative powers of the Board of Directors and the Policy Meeting if the merger went through. In the end, the meeting agreed that three directors from the "DFC, Inc." would negotiate with three members appointed by the Policy Meeting for "DFC, Association" to come up with a set of bylaws under which the Association would be willing to transfer everything to the corporation. These would be voted on by the members of the Association.

Maxine resigned or was fired as newsletter editor and wrote an 8-page, single-spaced typed letter defending her actions. The Co-op recovered its mailing list and began working more closely with lawyers, but the merger of the corporation and the association didn't take place until February, 1981. One reason was that every time a new lawyer offered to help, it took twenty minutes to explain to the slightly incredulous lawyer how things had gotten into such a tangle. There were also several issues in the bylaws that took time to resolve.

Tony Mendoza took over the Co-op newsletter and within a few weeks put out the first issue since April-Maxine, rather than publishing each month, had embarked on an ambitious expansion of the newsletter with a new name, "Omega," but had not completed this when the trouble began.

This was not the first co-op controversy, of course. Nor was it the last. Things did go a little more smoothly after this embarrassment, however, though a number of members mistrusted each other for a long time afterwards.

An optimistic time
Two fairly successful projects that were gathering momentum around this time were a regional association of co-ops and farmers called REACH, and a statewide California Cooperative Federation.

REACH stands for "Research, Education and Action for Cooperatives and Health." The original purposes of the regional and statewide organizations included not only sharing between consumer co-ops, but combining co-ops' buying power, providing group health insurance, and coordinating growers who needed markets with co-ops that needed produce. The name of REACH's newsletter, "On the Market" (abbreviated OM), stemmed from its original hope of serving as a regional market.

Organization of CCF and REACH had begun in 1976 with members of several consumer co-ops. As might be expected, many of the same people were involved in both, as well as in the founding of local co-ops and Farmers' Markets. Ann Evans was on the first Board of Directors of REACH when it filed for incorpor-ation as a non-profit corporation in August, 1978.

Member co-ops had high hopes for organizing a regional food warehouse. Natural and bulk foods distributors were fewer and farther between than they are now, and many in Northern California did not deliver outside the Bay Area. The Sacramento Valley was and is an agricultural area, and what could be more logical than for co-ops to buy from local growers? Member co-ops included the still existing Sacramento Natural Foods Co-op, Grass Valley Briarpatch Co-op, Chico Homes (a housing co-op) and Chico Natural Foods (a food co-op). Several others are now gone: Tree of Life (Auburn), We the People (Kings Beach), Washoe-Zephyr (Reno), People of Progress (Redding), and Lassen Natural Foods (Susanville). [Washoe-Zephyr was still operating when Chris wrote this; they persisted at least until May 2000, but died out during the next several years.]

In general, optimism about the co-op movement was high in 1978. "Co-operation-working together to benefit ourselves and others-is a beginning for us," says a flyer about the co-op produced around this time. "A beginning? It is the start in what we all eventually want-control over our own lives. We do more than just provide ourselves with cheaper food. We choose the kinds of food, assuring ourselves good quality food. We choose whom we will purchase food from-promoting the purchase of food from alternative food groups, especially the buying of produce from town gardeners and small farmers in this area. A lot of our produce is still 'alive' when it reaches the store. We choose whom not to purchase items from-trying not to promote companies that exploit people or our planet. We choose how it is to be purchased-supporting buying in bulk so useless packaging is not promoted. Also we may buy the quantity we need and are not forced to buy extra because of the size package it comes in. We support all recycling and ask members to re-use bags and jars in their shopping."

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[A version of this article appeared in the Davis Co-op News in October 1987. This version was published in 1992.]

Looking back, 1979-­1981
-by Chris Laning

Somehow the story that comes to mind when I think of my first three years on the Co-op staff is the story of what we found in the Co-op attic. I was living in a house with four other people, one of them a volunteer firefighter. One evening in 1979 his 'squawk box' went off and announced a call for all volunteer firefighters to 1403 Fifth Street. The Co-op address. My stomach sank.

Fortunately Tom was only gone about an hour, and when he came back, he told me everything was fine. They'd been called out as a precaution because someone doing repairs had occasion to go into the crawl space above the ceiling and found up there a can of black gunpowder. Almost certainly it had been up there for years, left behind by some carpenter using a nail gun.

Whether the presence of gunpowder in the attic had some deep karmic significance, I don't know, but I remember this and the next two years as years of really horrible co-op politics. As I've said before, this is in many ways as much a personal reminiscence as a history, and all I can give you is my own view, though I think I've been a pretty fair observer. It's hard to write about this time, though, even ten years later, because I was right in the thick of it. I don't think it's a time anyone can be proud of.

The store ran reasonably well-with one major exception which I'll get to-and showed a steady growth in sales, from $30,000 per month in April of 1979 to $97,000 at the end of 1981. (We do $30,000 in about two days now.) Membership grew with the move to the Fifth Street store, then leveled off for about eighteen months, and began to grow again towards the end of 1981. But philosophical disputes, ideals, and personality conflicts racked the co-op, splitting the Board and staff and confusing the membership.

Controversy centered around three major issues, and probably all of them will sound familiar natural foods, member work, and expansion. All three have roots going all the way back to the buying club and the co-op's founders. Each in turn came to dominate the co-op at some point, and to some extent they still linger today, though hopefully we're better at dealing with them.

Growing into the 5th St. store
In early 1979 we had been in the Fifth Street store for almost a year, and when Yesterday's Records and Books moved out of the two suites next door, the Co-op agreed to lease them. This increased our space from 2,100 to 3,300 square feet (including storeroom and office space). Frozen foods headed the list of products we hoped to add, along with more grocery and bulk items, garden supplies and housewares, and health and beauty aids. In March we bought our first electronic cash registers and scale; until then we'd been using the old mechanical kind. In April, when I was hired, remodeling of the new space was proceeding slowly. Partition walls had been knocked out, but we had to re-tile the floor, do plumbing and electrical work, and build a new walk-in refrigerator. This was financed by several thousand dollars in interest-free loans from individual members.

Kelly Cordner had been hired as the new bookkeeper in January, replacing Lois Richter who was leaving town. Lisa Vittori and I were hired as half-time "Resource Coordinators," replacing Jim Havert who had been working for the Co-op since November and was burned out. It was impressed upon us that our primary responsibility was not to "run" the store ourselves, but to coordinate the member volunteers who did, including orderers, cashiers, and the Day Coordinators who worked as volunteer floor managers one half-day a week. We were to recruit and train member workers, coordinate schedules, substitute for people who didn't show up, manage the office, keep records, and make reports to Policy Committee. ("Resource Coordinator" doesn't really convey this, but the title "Coordinator of coordina-tors" had been considered and rejected!)

Associated Co-ops (AC) in Richmond was a cooperative wholesale warehouse owned by consumer co-ops in Northern California, including the Berkeley and Palo Alto co-ops (which then had several stores apiece). In the spring of 1979 they hired Fred Stapenhorst, former manager of the Arcata Co-op, as their Development Officer. AC offered to send Fred to study our co-op and suggest ways we could run more efficiently. Fred was friendly and competent, though I think we amused him a little-he said it had been a long time since he'd sat on a grocery pallet to do paperwork.

In July he issued his report, which made several suggestions. He pointed out that with an almost all-volunteer and very part-time staff we didn't have much financial accountability: no one person or group was responsible for making and sticking to a budget. Inventory control, pricing, setting markups, cash secur-ity and cash flow control were disorgan-ized and dif-fuse. As a step toward regularizing our status he recom-mended empowering the Board of Directors-which up until now had been mostly a figurehead-to become the Co-op's policy-making body. He also pointed out that our expansion was stalled.

We didn't have enough volunteer help to get the remodeling done, yet we were still paying rent on the space though it wasn't bringing in anything. He recommended we get that done as soon as possible. These ideas were well received.

He also infuriated a number of Day Coordinators and other volunteers, however, by saying it was "unrealistic" to expect volunteers to perform store functions adequately and that dependence on volunteers was the source of most, if not all, our problems. He recommen-ded that all ordering, pricing, budgeting and scheduling be done by paid staff. That advice we didn't take.

1st annual August crisis
We thought things were going fairly well, though, until August. Then two things happened. First, Kelly's first complete financial report showed that, rather than making $1300 in the fall of 1978, we had actually lost $500. Winter quarter we had lost $1300 and a further $150 spring quarter. This explained why our cash flow was so tight. Then on August 10th we bounced a $5000 check to Associated Co-ops.

There were rumors at the time, none ever confirmed, about just how this happened. AC informed us they would make no further deliveries without COD payment unless we demonstrated "significant progress" toward meeting our financial obligations. Fred Stapenhorst told the Board he would recommend AC extend credit to us, but only if "a competent and knowledgeable manager" was put in charge, and he named Kelly. The Board agreed and hired Kelly as interim general manager, with full powers including hiring and firing staff.

Kelly acted quickly to start requiring record sheets for each cash register, sell off some excess inventory, ask for credit from our other suppliers and draw up an "austerity budget" for finishing the expansion. This averted any more immediate crises.

Within the next month Kelly had accepted the Board's Management Committee's proposal to reorganize and expand the paid staff to five: the General Man-ager, a Produce Manager, Grocery Manager and two "Evening Managers." Day Coordinators and other volunteers would continue to be used, although paid staff took over much of the ordering and receiving. The Resource Coordinator jobs were abolished; I was re-hired as an Evening Manager, but Lisa wasn't, which she resented (though the Co-op later settled with her). Chuck Kasmire was hired as Produce Manager, Mary Tappel (a longtime member) as Grocery Manager, and John Wagoner as the other Evening Manager.

The Woodland Food Co-op was being organized around this time, and at one of our August Board meetings, amidst all our own crises, we found time to grant them "co-purchase" privileges so they could buy food at whole-sale to sell at the Woodland Farmer's Market. The Blue Mango restaurant, a workers' collective several of our members were involved in starting, also opened on October 1st. October also saw our first newspaper advertising of the Co-op. The new store area was finished by the end of the month. I was given the job of "Communications Coordinator" and began putting out the Co-op newsletter OIKOS, which hadn't been published since about May.

By the new year, Chuck had been hired to replace Kelly as General Manager. Kelly knew when he accepted the job in August that he would be leaving town soon, and had asked both Chuck and me if we were interested in the job (I said no way). Fred Stapenhorst had offered to spend six months with us as a consultant to help train the new manager, since none of us on staff had ever run a grocery store before. Sales were running at $54,000 per month and we had about 575 active members-and at this time, remember, to be active you had to be a working member. In January for the first and only time we had a "member work glut" where more people wanted to work in the store than there were slots for.

Whatever happened to incorporation?
If you remember, at the end of 1978 we had formed a "paper corporation", the Davis Food Co-op, Inc., but it didn't actually own the co-op. It took us until February 1981, two-and-a-half years, to work out the "merger" and become incorporated. Part of the problem was that we kept having to fix things in our bylaws. In February 1980 we had the first of a long series of elections to amend the bylaws; we needed to add such things as a provision for replacing board members who resigned. We had had four Board members resign in the past six months, and needed to elect people to replace them at least until May, when we would have our first regular Board election. An amendment was also passed allowing one paid staff member to serve on the board. Rather than sending out a mail ballot as we do now, these decisions were made at a membership meeting, though we did have to ask people to go telephone their friends so we could get enough voting members at the meeting to have a quorum (about 40).

In order to incorporate, we also had to clean up our membership files. Since we didn't have a computer, the current membership file was kept as a card file. Each household had a card which had all household members listed and was stamped whenever someone from the household worked. The cards were kept at the cash register, and when you checked out, you removed your card and showed it to the cashier. Of course the cards were easy to lose or get out of alphabetical order. We had files of membership applications and receipts (from the days before applications) in the office, but no one had ever compared these with the card file up front until now. About 25% of the cards had no membership application on file; probably most of them represented membership transfers or households splitting without the proper forms being filled out. Membership at the time was in the name of everyone in the household, not just one person, so when a household split up, one membership sometimes became two or three.

We sent a letter to everyone who didn't have an application on file, asking them to bring in some proof of membership such as an old receipt, and despite having to deal with some flak from offended members ("I've been a member for years; are you saying you don't believe me?") by the end of the year we had a membership list we were fairly confident represented reality. We still refer to that list occasionally when someone appears who's been gone a long time.

Spring and summer 1980
This year saw us continue to expand our product line and paid staff. Our first capital improvements budget, early in the year, listed shelving, bulk units, and shopping carts, all things that still turn up in capital budgets. In March the Board approved an exemption from the work require-ment for senior citizens and for new parents with babies less than six months old. (Disabled people could already be active members without working in the store.) Non-member price in the store changed from a flat 35% mark-up to "suggested retail," meaning the gap between member and non-member prices could vary from a few cents to a substantial amount.

My job of "Communications Coordinator" was split into three: Communications Coordinator, Newsletter Editor, and the Board Secretary, who was responsible for Board minutes and membership records. Greg Voss, recently hired as Dairy/Deli Manager, took over the newsletter and (unilaterally) changed its name from OIKOS to "Coop News." A cartoon pig saying "Oikos!" appeared in the margins occasionally for a while. Articles on food, cooking, health and nutrition made up a major part of the "new" newsletter (it had been mostly store news and announcements before). The type got bigger, too.

In May, "Women in Co-ops" held its second annual retreat. I didn't go, but Carol Shearly, who had just been hired as a floor manager, did. (I had trained her as a new Day Coordinator a few months before.) The Co-op also participated in a panel discussion with the Blue Mango, Sunwise Housing Co-op, Winds of Change alternative newspaper, and the justforming Cable TV Co-op on "The future of cooperatives in Yolo County." We also had our first Co-op-sponsored City softball team, complete with "Co-op" hats.

A real landmark in the summer of 1980 was frozen orange juice. We finally got a freezer big enough to start offering frozen orange juice and frozen fish, both from Associated Co-ops. Frozen OJ had been our #1 most requested item as long as I'd been working there. The problem was, the minimum order was something like 10 cases and we had nowhere to put it. In the meantime, members would go to another store just for that one item and -you know what grocery shopping is like-wind up spending $25.

Controversy rears its ugly head
I haven't said much about the three controversies I mentioned at the beginning of this article. The debate about natural foods had been simmering all along, going all the way back to the first store on L Street. In July an indignant member wrote in the newsletter,

"Since I arrived in Davis in September I have witnessed a steady progression away from goals and services which are considered alternative and an increasing supply of items which can be found in every supermarket in the nation. Organic produce is often not available. High quality vitamins have been replaced by the cheaper non-organic brandI question whether the majority of shoppers at the Davis Food Co-op want to be able to purchase there the same products that are available at Albertson's or Safeway. These products feed that corporate entity that is responsible for black genocide, Rancho Seco, and Napa State Hospital among other ills in our society. If consumers really want to support these people, I suggest they do it at Safeway and leave the Co-op for those who really want an alternative."

Others were pleased by such landmarks as frozen orange juice. We finally got a freezer big enough in the summer of 1980 to start offering frozen orange juice and fish. Frozen OJ had been our #1 most requested item as long as I'd been working there. The problem was, the minimum order was something like 10 cases and we had nowhere to put it. In the meantime, members would go to another store just for that one item and wind up spending $25.

Member work also remained controversial. Unlike the "Resource Coordinators," most of the later staff were hired more for their experience in managing and moving groceries than for any particular desire to work with volunteers. Both sides found this difficult. "Members can descend upon the store armed with twenty-six instant demands, regardless of the workload staff already has," says an opinion article in the newsletter around this time. "Staff can become so involved with a hundred things that must be done that they can't take the time to talk to mem-bers. Members get sore because things they expect aren't always done for them. Staff get sore when mem-bers take forty-five minutes to get a bucket of mop water." Various co-op "experts" disagrees publicly over whether member labor in the store actually saved money or whether it cost more in supervision than it was worth. Yet members in this co-op have always valued being able to work in the store, and we're one of the few co-ops anywhere near our size that still has a member work program today.

The Woodland Food Co-op was being organized around this time, and at one of our August Board meetings, amidst all our own crises, we found time to grant them "co-purchase" privileges so they could buy food at whole-sale to sell at the Woodland Farmer's Market. The Blue Mango restaurant also opened on October 1st. In May, "Women in Co-ops" held its second annual retreat. The Co-op also participated in a panel discussion with the Blue Mango, Sunwise Housing Co-op, Winds of Change alternative newspaper, and the just-forming Cable TV Co-op on "The future of cooperatives in Yolo County." We also had our first Co-op-sponsored City softball team, complete with hats.

Looking Back, 1981-84: A lightening of the air
-by Chris Laning

There was a noticeable lightening-up of the atmosphere in the Davis Food Co-op towards the end of 1981. Part of the reason was that the membership voted that November not to move into the empty Safeway building on G Street. Larry Pavey, another supermarket operator, signed a lease for that site, and so that option was no longer available to us, at least for the present. That took off some of the pressure.

The other reason for the new atmosphere, I think, was the new General Manager. Carol Shearly had taken over in June from Chuck Kasmire, who had been having increasing difficulty-it shows up in the Board minutes-dealing with Board and committee members who often didn't agree with him. Co-op membership had also stopped growing during Chuck's eighteen months as manager, though sales continued to increase.

Carol showed an immediate talent for conveying to people on all sides of a controversy that she was listening to what they said. Feeling that they were being heard made even the most vocal critics calm down and start to consider how they might work with each other, rather than trying to out-shout or manipulate each other.

Carol was someone who had come "up through the ranks." She started as a volunteer Day Coordinator (equivalent to today's SuperWorker), was hired in 1980 as a floor manager, took a summer off to backpack the length of California with her two sisters (their T-shirts said "Slowly but Shearly"), and became dairy/deli manager before being hired as General Manager.

Hopeful times
For those who see co-ops, not just as individual businesses, but as parts of a comprehensive co-op way of life, the early 80s were hopeful years. The Blue Mango restaurant, a workers' collective, opened in October (Co-op Month) 1979. A food co-op was being organized in Woodland. A cable TV co-op, the nation's first, was bidding for Davis's cable TV franchise. In the summer of 1980 we co-sponsored the first of several annual panel discussions on "The Future of Cooperatives in Yolo County," with Sunwise cooperative housing and Winds of Change alternative newspaper. David Thompson comments these are the only years he really felt like part of a "co-op movement."

1981 saw the completion at long last of the Davis Food Co-op's incorporation. In 1978 we had formed a "paper corporation", the "Davis Food Co-op, Inc.," but it didn't actually own the Co-op. Then we had to negotiate a merger, or "asset transfer" between the Co-op and the corporation. Every time we consulted a new lawyer, we had to spend at least twenty minutes explaining this peculiar situation. We also kept having to fix essential things in our bylaws to make them legal and functional. And we had to clean up our membership files, which had mostly been kept as a card file and never cross-checked. Finally on February 2, 1981, the Board signed the transfer papers, to the accompaniment of speeches and champagne.

These years also saw our struggles to organize member workers into "teams," a concept that worked well for some other co-ops but never caught on here. The theory was that you chose a team to sign up for- say, the "Monday Night Food Ball"-and showed up on the third Monday of every month at 8pm to stock the grocery shelves. Unfortunately, the number of Davisites who have schedules regular enough to make this work can be counted on one hand. Teams also take somewhat more effort on the part of staff.

Member work in the store-which was still a requirement for everyone except senior citizens and the disabled-was itself still controversial. "Stocking shelves, cutting cheese, and mopping floors teach little of the cooperative spirit," said Grocery Manager Tom Merrill in the newsletter. "Minor social benefits aside, the current volunteer system costs more than it benefits. Products are constantly mispriced, mislabeled, and improperly stocked."

Others disagreed. "Having members work in the store means people from every household have regular contact with the inside workings," said another writer. "Like the city kids who think milk grows in bottles, we usually don't get to see this side of things. Here, members' arms and backs learn what fifty pounds of rice feels like. We open cartons. We see invoices and sales journal tapes and handle money. Many members who work want to know more about how the Co-op runs, and we want a say in how things are done and why."

Besides ongoing political controversies, we had our share of other excitement. We began selling beer and wine in summer 1981 (58% of members voting in the spring election approved). Bulk spring water arrived in September. The first annual Co-op Halloween Party, held in our parking lot, drew 350 people. November saw the first annual Davis Wine Festival, organized by member worker Ed Blonz, who still comes by the Co-op on occasion when he's in town. (The Board voted him a "Golden Carrot" for his many hours of work.) The day before Thanksgiving-which has always been our biggest sales day of the year-the deli walk-in broke down while filled with turkeys.

And then, of course, there was the November vote on the move to G Street, which produced lots of heated rhetoric, active campaigning by all sides and eventually a 55%-45% "no" vote.

1982: from down to up
The bad news hit early in 1982: though everything looked like it was going well, and sales were continuing to increase, the Co-op was losing money. An audit by Lynn MacDonald from Associated Co-ops showed we had actually been losing money for about two years. Some of it was "paper losses," from not calculating depreciation and accruals correctly, but that still had an impact on our cash flow. Also our lack of capital-each member at this point had only $10 in shares-meant we were trying to pay for long-term things like remodeling entirely out of current cash flow.

To our credit, we immediately tightened our belts. Margin was raised, staff hours re-organized, a leafletting campaign was started to boost sales, and the Board suspended share refunds for departing members until the situation eased. (People got their money about a year later.) Carol also started monthly inventories and began calculating the margin separately for each department to try to locate areas that weren't doing well.

The Co-op's strength showed clearly in how quickly we began to recover. In the first quarter of our fiscal year (October through December 1981) we had lost $6,000. The next quarter we made $6,000, and by June 1982 our shares were no longer "impaired" (worth less than their purchase price).

Looking back on the year, Ann Evans, then the Co-op's Board President, commented, "Given what we now know about the finances of the store, I'm glad we didn't move [to G Street]. I hope we will continue to find a common mission to work towards together."

More money measures
To improve financial control, Carol came up with a new category of member worker: cashiers became "Super-Workers," members who work 4 hours each week and get a bigger discount, rather than working just once a month. The Board also authorized Carol to hire paid cashiers for busy times when even Super-Workers' improved skills couldn't keep up.

Another taste of financial medicine was the Co-op's first share drive. Actually, we had tried a voluntary share drive the previous fall, proposed by Jon Li, but only $890 was raised. The Board reluctantly decided it would use its powers under the bylaws to "assess" a share for the first time, and announced that all shareholders were required to invest another $10 in shares by April 30th. As with any innovation, this provoked howls of protest from some members, who claimed their initial $10 in shares, plus the $5 membership fee, should be a "lifetime membership." ($15 is still our starting investment-it hasn't changed since 1978.)
The net effect of all these financial measures was positive. Carol Shearly announced at the November 1982 membership meeting that we were one of only two co-ops in California to have made money in fiscal year 1981-82. In one year we went from being $21,000 in the hole to only $7,000, and by the end of 1982 we were completely recovered.

We also won a bet we had on with Sacramento Natural Foods Co-op that we would break $1 million in annual sales before they did. In mid-August 1982 we passed our millionth dollar for the year.

The Co-op and the community
1982 was also a year when we became more conscious of our interaction with the community. We began doing regular price comparisons and publishing the results in our newsletter. (Member prices were 6% cheaper than a composite "basket" of the lowest prices anywhere in town, 15% cheaper than any other store.)

Education Committee announced a contest for a new Co-op logo late in 1981. Some members had always loved the irreverent humor of the "carrot and fist," our logo since 1978. Others were embarrassed by it, feeling it labeled us as self-righteous idealists, or conveyed a dated, "sixties" image. An in-store ballot early in 1982, however, with a dozen entries to choose from, yielded an overwhelming victory for the carrot and fist -it got nearly twice as many votes as the "circle of wheat", the next runner-up.

In August of 1982 we started a new tradition that lasted several years, the annual Tomato Festival, held in our parking lot. Activities included Best of Show tomato judging, bobbing for tomatoes, tomato juggling, door prizes, musicians, truckload tomato sales, specials on Co-op tomato products, member prices for all shoppers that day, and (for the brave) hand-cranked Tomato Ice Cream. ("It was much better the second year when we left out the cinnamon and nutmeg," says Carol Shearly. "The first year, it tasted like ketchup.")

The Co-op had been boycotting Nestlé products for some time, but in the summer of 1982 we began boycotting Coors products after a presentation to the Board by a group of concerned members. We also carried Coca-Cola- for about two weeks; it was dropped when many members protested.

The Safeway in Davis opened its "bulk natural foods section" in the fall of 1982 with considerable fanfare. A former Co-op employee, Ron Coleman, had actually gone to work for Safeway when they announced they would begin featuring "natural foods," though he says he became discouraged very quickly over how little he was able to get them to do.

We sent "spies" from the Co-op Price Comparison Team to check Safeway out. They reported the "bulk section" consisted of 42 items, half of them carob- or yogurt-coated. Of the rest, 5 were salted, and 9 were dried fruit; only 10 were plain, unsalted beans, nuts or grains. The Co-op at the same time had 294 bulk items, including about 150 herbs and spices.

1983: it was a very good year
Financial reports continued positive all through 1983. There actually isn't as much folklore to report as in previous years, because on the whole things ran fairly smoothly.

We got awnings for the front of the store in March, which earned us a PG&E rebate for energy savings. The whole front of the building was glass and faced west, which meant it got full summer sun, and the awnings cut down on our need for air conditioning. There were very few buildings on that side of Fifth Street then, and I remember we got to see some great views of double rainbows over Sacramento.

In April we hosted a regional co-op conference on education (with some great workshops, if I do say so) that drew about 65 people from all over California. In May, Carol Shearly went to the Consumer Cooperative Management Association conference where a group of successful co-ops founded in the 1970s (including ours) decided they had moved beyond being the "third wave" of co-ops founded in the U.S. and renamed themselves the "permanent wave." (The first two "waves" of co-ops were started at the turn of the century and in the 1930s.)

In June the Co-op softball team won a game for the first time ever. In July our refrigeration failed, ruining a lot of produce and all our ice cream. In August the Board voted to assess shareholders another $10 share, due November 30th.We started buying our herbs and spices from Frontier Cooperative Herbs in Iowa. In September the newsletter ran an article asking members "What does Co-op Label mean to you?" "Applesauce," members replied, not meaning their opinion, but naming the most popular Co-op Label product (we still carry it, along with Co-op Label sliced peaches, pears, albacore tuna and laundry detergent). A group of hard-working members published our co-op cookbook, Meatless Meals in Minutes.

But there was really only one issue in 1983, one that outweighed all others: G Street.

The return of G Street
The old Safeway building at 620 G Street had never really gone away as a possible future site for the Co-op. The Co-op was continuing to grow, both in membership and sales, and while some members maintained we could do a lot more with our Fifth Street store, Carol's comment was that "historically, the DFC has responded to growth in membership by moving into more suites in the building, but this option is reaching its limits." By this time there was only one suite left, the one facing on Fifth Street. And we had heard that Pavey was having trouble at G Street.

A Futures Subcommittee (Jim Gray, David Thompson, and Jackie Lundy) was formed in February, and in June they reported to a special membership meeting on "Co-op Futures." They found only four possiblities: expanding the current store; an old Subaru dealership on Olive Drive next to the underpass (now Design House furniture); the location that is now Farmtown; and G Street. "Satellite" stores might be possible in Senda Nueva or Village Homes, but the available sites were very small and not very attractive.

Expanding the current store seemed less feasible the more it was looked at. Our landlord was not interested in expanding the Fifth Street building, or in building on the vacant lot next door. The building had never been designed as a grocery store, and we were already "maxed out" in terms of electrical load. In fact, Peter Rosenthal, the electrician who put in a lot of volunteer hours our first couple of years at Fifth Street, had done some fairly creative things to balance the electrical load so all the refrigeration units would not come on at the same time and blow all the circuit breakers.

The Olive Drive site wasn't designed as a grocery store either, and would have the same problem. It was also hard to get to by car, and very hard on a bicycle, and we would have to get a zoning variance from the City (which we already had at Fifth Street). The Farmtown site was still a couple of years away from being ready for development. A "satellite" store at Village Homes would be only 600 square feet, about the size of our first tiny store on L Street.That left G Street. The membership meeting authorized Futures Subcommittee to pursue "non-binding negotiations."

Expansion has always been a sensitive subject at a Co-op many people have loved in ways you don't usually feel about a grocery store. Every expansion we've ever had-all the way back to buying club days-there have been a substantial number of people, sometimes as much as a quarter of active members, who have felt we should stay just the way we are. Every time we expand, a few people leave, and often they are people who cared a lot about the co-op and contributed a lot to it. On the other hand, every time we expand, we gain a lot of new people. Is it worth it? It must be.

In September the rumors became reality: Pavey's Market at G Street went out of business. Futures Subcommittee stepped up its negotiations. Finally in December they had a tentative agreement, and the Board held two emergency meetings to hammer out the terms and approve putting the proposal to a member vote.
"I think this is an unbelievably good offer," Carol said. "Due to an unusual set of circumstances, we would have an opportunity to move into a store, already remodeled and set up with excellent equipment and shelving, for about 1/3 of what those improvements originally cost." Produce Manager Carol Johnson was particularly impressed with the produce coolers: not only did they sound an alarm when something went wrong, but-rumor said-they could even be programmed to dial the manager's phone number!

"Why should the Co-op consider moving this time, when the move was rejected two years ago?" Carol Shearly asked in her newsletter article. "Very briefly, (1) The Co-op is in a much stronger financial position than before, (2) The equipment and remodeling costs would be low, and (3) The interest rates on bank loans would be much lower." In 1981 the prime lending rate was running around 20%, a figure that seems almost unbelievable now; in 1983 it was 11%. And the Co-op had gone from being $20,000 in debt to having more than $20,000 in net earnings.

The big vote
The information packet and ballot for the Pavey's move was mailed out to members early in January 1984, with ballots due the 23rd. The proposal read:
"The membership of the Davis Food Co-op authorizes the Board of Directors to do the following for the purpose of moving the Co-op to the former Pavey's Market: (1) Sign an agreement to purchase inventory and lease equipment(2) Borrow working capital up to $30,000provided that (a) the Board finds the move financially feasible, and (b) the plan for operating the store does not differ substantially from the proposal mailed to the membership, and (c) any changes in the plan do not substantially change the nature of the Cooperative as it relates to member work, member-worker control, commitment to present merchandising practices, or sales predominantly to members."

With those provisions, the measure passed, with 76% voting in favor and the biggest voter turnout in the Co-op's history. At its February 27th meeting, the Board signed the lease. "I am allowed to describe this as a historic moment," Carol said.

The Board minutes also record that a preliminary inspection of G Street revealed that the roof leaked. .

(I welcome factual corrections or other reminiscences. Looking back will continue in the April Co-op News.)
[But it did not - DW 12/94]