PFC - Co-op News January 2016
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Cash is King
by Brad Salmon
In my recent articles I have been sharing with you the fiscal realities facing our cooperative. Those articles can perhaps be distilled down to cash is king, and our king has been noticeably absent.  Cash for the cooperative comes from external lenders, profitable operations and member-owner equity payments. Borrowing from external sources is a short-term fix and we must create opportunities to raise capital through achieving profitability and increasing member equity capital. I have been reaching out to our member-owners to support the coop by maintaining your equity payment pledges.  Towards reaching profitability we have reduced operating expenses and implemented new internal structures & systems, things that should result in cost savings through more efficient operations.
Our task has been and continues to be finding ways to relieve the pressure on our cash flow.  The situation was complicated by our primary supplier who in mid-August called in an $80,000 debt.  Being unable to write an $80,000 check we had to negotiate a payment arrangement that was acceptable to this supplier and that arrangement has been indescribably difficult for us to manage in terms of cash flow.  But we have managed to meet those terms and as of the first week of January we will have fully paid back that debt. Having such a significant portion of our cash flow diverted to paying off aged invoices prevented us from maintaining inventory levels that kept the shelves full.  Despite these challenges we have been able to maintain more than 8% sales growth.  We have also slowly added dozens of new products while lowering prices on many items that had been inflated over the past couple of years.  Our accounts payable has fallen from more than $140,000 to our current $70,000 in only 20 weeks and all of our key indicators are improving.  
As we enter a new calendar year we are also entering a new phase of the coop’s evolution. This phase should see us operating at a near break-even point. Profitability will allow us to begin cultivating the resources we need to focus on being a better retailer that offers our customers a more sustainable shopping experience.  I feel that the coop is about to turn a corner, we have resolved our accounts payable pressures and we have most operating expenses in manageable ratios.  But having adequate cash will continue to limit our ability to move forward as our greatest challenge will be replacing antiquated equipment which of course will require a significant amount of cash.  We are optimistic about our future and as always we greatly need your continued support of your coop.
Dear Patronage, 
My name is Kyle Schildman and I am the purchasing manager for the Placerville Natural Foods Coop. I was given this position shortly after Brad Salmon took over as General Manager. Through conversations over the past few months we have developed a pretty solid game plan for the coop. We look forward to the opportunities that lie ahead. I write this entry in an attempt to give the customer an idea of what we are looking at for the next few months. 

The coop is a business with great potential. We have the opportunity to be the number one food source in Placerville. As a cooperative we are focused on quality and integrity. Our products attempt to represent the highest standards in food. We are fully committed to bringing the consumer the best options available. With this commitment comes the ever diligent process of discerning. We are constantly looking at the market to see ways in which we can improve and offer an even better selection to our customers. The coop has always identified itself as a natural foods store but has not fully grown into the thriving food epicenter that it could be. We have had pricing image problems, out of stock issues, unorganized shelves and misguided product mixes. We are looking to change all of these things. It is a daily goal for us to address each and every one of these issues. 

Customers may have noticed that our pricing is a lot more competitive these days than it ever has been. We are working on pricing things in a manner that seems fair. We are looking for new product options as well and are trying to incorporate a wider variety of products within our store. We want to have the items that you want. We want to be a viable option for people of all income levels. Feedback is a great tool for us at this point as we have an idea of where we want to go but ultimately we are here for you. We need the coop to be a symbiotic living entity in which all parties are involved. The more that the store is shopped the more opportunity we will have to grow. We as a staff are trying to become more organized over a common goal. As we develop into a more sustainable model we hope that our customers will notice and we will continue to grow.
Produce Notes
It’s the middle of December, the cold is coming in with great ease, and almost all of the leaves have turned color and fallen from the trees. Missing leaves are a normal site this time of year, and so is the contrast of the evergreen trees; with their vibrant needles keeping the winter months cheerful with color. If you were to step into your local Co-Op here in Placerville, you might find a similar contrast; more and more produce is creeping in from the outer realms of what we describe as “local”, and in turn, the local farmers have somewhat receded, as the sun does as we get closer to the winter solstice. This time of year, some of us may ask: where does the local produce go? And, if not locally, where does our produce come from?

Currently, we deal directly with nine different local farms who supply us with various fruits and vegetables. We do our best to work with these farms to provide an outlet for their produce in every season, even in winter. Winter is also citrus season, so we will see some local citrus fruit coming in. There are some crops that do well in cold weather,such as carrots, beets, and kale. Most root vegetables tend to get even sweeter as the weather gets colder. However, here at the Co-op, we start to see a large gap in what our local producers supply to us.  The cold weather tends to slow down crop growth, the frost kills uncovered plants that have been left outside, and the shorter days deliver far less sunshine that is needed for plants to photosynthesize. It’s a tough season for local produce, and I know we all miss the sweet and flavorful produce from the farms and farmers that we love, but until next spring, we all still need to eat.

No matter how we slice it, large-scale organic farming is a presence in almost all grocery stores. During the winter, most crops move south to places like the desert and equatorial climates, and you may notice that most of our summer crops are now coming in from places in southern California, as well as Mexico. When local supply starts to fizzle out, our Co-op works with Earl’s Organics, who is based out of San Francisco, for all of our “other” produce needs. Earl’s supplies us with high quality organic produce from regional and worldwide farms. They only sell certified organic produce, and they do their part to partner with farms that have exceptional business practices. They offer many fair trade options when supplying products from Mexico, including tomatoes, mangoes, and even bananas. So when local is out of the question, there are still options out there that fit into the conscious lifestyle that many of us are trying to achieve by shopping at the Co-op.

Winter is here, and local produce seems to be scarce. And since we are looking at a limited local offering, more produce is coming from south of the border. Luckily for us, we are able to work with great organic farms just a little further out of our direct reach with the help of other suppliers. We are looking forward to working with our local farmers as soon as possible, and just as the we start to settle into the winter rhythms, we’ll soon see the local bounty again in spring. So enjoy the winter, the rain, and the cold weather while it’s here, and be sure to ask what’s local!
Greetings from the deli!
Have you noticed all the changes in the deli? Of course you have! The sandwiches and the salad cases are in the tall case and the baked goods are all in the coffin case in front of the deli. This is a move we decided to make because we needed more space for deli items.
Our goal is to have a consistently stocked cooler with more variety and availability to continue our growth spurt.
Since switching the display cases we’ve already seen an increase of sales. Throughout the coming quarter we will be monitoring sales of specific items and creating a cooking schematic that will be followed by the Deli Team in order to keep your favorite snacks and salads fresh and available. We're looking forward to the New Year and we hope you are too.
Deli Team
New Special Order Policy

We are pleased to continue offering our customers the opportunity to place special orders for products not carried in the store or to accommodate larger quantity purchases however we need to adjust our pricing to more appropriately reflect our costs for processing these orders.

Orders placed after January 1, 2016 will be priced as follows:
  • Members will receive regular retail prices minus a 10% discount for full case orders.  Orders of less than full case quantities will be priced at the regular retail price.
  • Non-members will be charged regular retail prices for all special orders regardless of the quantity ordered.

Please feel free to contact me should you have any questions regarding these changes.

Brad Salmon
General Manager
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