Worker-Owned Meets the Moment

On March 16, 2020, Andrea Talley arrived for her shift at Oakland’s Mandela Grocery Cooperative to find a line of customers snaking down the block. The pandemic shutdown had just begun, people were panicked, and many items were in short supply.

Talley, a worker-owner at the co-op, describes the experience of those days in a surprisingly upbeat way. “It was a beautiful time to be a part of this team,” she says. “We all stepped up in ways we hadn’t before.”

Since 2009, Mandela Grocery has been a worker cooperative, meaning that it’s owned, operated, and democratically controlled by the worker-owners. Profits are distributed equitably to the owners based on hours worked or value of work provided.

As Talley describes it, Mandela’s cooperative structure meant that when the pandemic hit, there was no red tape to slow them down. If one supplier was out of eggs or paper towels, the team member responsible for that item could simply turn to a colleague and ask if any of their suppliers had the needed items. All worker-owners are empowered to make buying decisions, so pivoting among different suppliers was quick and easy. In addition, Mandela’s emphasis on local and regional sourcing meant that when large national suppliers ran out of certain goods, there were often local or regional suppliers who still had the desired items.

The general attitude, says Talley, was “let’s just help each other and figure this out.” With this mind-set and a democratic structure in place, the co-op responded to the pandemic by building an online store, establishing a delivery service and curbside pickup, and even formalizing services for unhoused people in their neighborhood.

 

 

Seeking Ways to Be of Service

Mandela is a Black-owned grocery, and community service is central to its mission. Many traditional businesses operate with company growth as a driving force, but Mandela’s worker-owners are looking for ways to help their neighbors. “Being of service to the community is built into the fabric of our business model,” says Talley. Priorities include passing savings on food purchases along to community members and seeking out Black farmers and food producers whose goods they can sell.

The mission doesn’t stop at the shop door. Before the pandemic, Mandela sold green smoothies and other healthy lunchtime snacks at West Oakland Middle School. At Prescott Elementary, they sold dinner boxes with healthy ingredients for parents to pick up at the end of the school day.

The commitment to service runs so deep among members that after the group decided to close the store on Sundays to give everyone a much-needed recovery break from the extra demands caused by the pandemic, some members started coming in anyway to cook Sunday meals for unhoused neighbors. This effort, called Sunday Service, has evolved into a grocery bag giveaway that also includes hygiene products and food donated by local restaurants. The bags are distributed twice a month to people living in the nearby encampments.

Worker-owner Bryan Daniels speaks about a sense of pride that comes with working in a cooperative and being able to curate a positive experience for customers. “We’re able to sit down with each other and create the culture of our workspace,” he says, noting the care they take in choosing everything from the products they sell to the music played and the art and paint colors on the walls.

Mandela has also been promoting the cooperative model throughout the wider East Bay community. During the pandemic, a group of 30 students from Castlemont High School’s Sustainable Urban Design Academy came to tour the store and learn about how co-ops function. Divided into four groups, the students heard about the store’s history, the needs it fulfills, and what it means to be a cooperative. “The more I spoke, the more questions they had,” says worker-owner Adrionna Fike, adding that the experience of being on site helped the students grasp the concept that the workers owned the store. “I felt like it sunk in,” she says. “They’re standing in front of a worker-owner who is pointing to another worker owner who’s maybe just 10 years older than they are.” Toward the end of the visit, several students asked how old you have to be to work at the store. One said she would soon be turning 18 and was planning to apply, and others asked about the process for possibly selling the produce grown at Castlemont’s farm in the store.

Mandela has also been serving as a mentor for the DEEP Grocery Cooperative, a group working toward opening a store in deep East Oakland. Daniel Harris-Lucas, a member of the DEEP, says that Mandela worker-owners provided 16 weeks of in-store training, teaching members of the DEEP about how to run a co-op, including specifics about inventory, restocking, and other aspects of operating the store. The DEEP also had legal coaching from the Sustainable Economies Law Center, which helped them form the co-op and set up their bylaws according to state law. The DEEP functioned as an online grocery for several months during 2021, using the same vendors who sell at Mandela. Currently, they’re not selling online, instead maintaining a focus on finding an affordable brick-and-mortar spot for their co-op. “Being an online store is great, but it’s not accessible to everybody,” says Harris-Lucas. “We know that there are senior citizens and other people who wanted to shop with us, but just don’t understand tech.” In addition to its work with the DEEP, Mandela is also mentoring a similar group in Vallejo that does not yet have a name.

 

 

A Surprising Time for a Transition

While Mandela Grocery found benefits during the pandemic as an established cooperative, a mom-and-pop store in Berkeley found that the upheaval created the right conditions to become worker-owned.

Monica and Aaron Rocchino opened the Local Butcher Shop in 2011 to provide environmentally responsible meat sourced from local farms and ranches. The shop quickly became a neighborhood favorite, but after the birth of their child in 2014, the Rocchinos’ work-life balance didn’t allow enough time for family. They began to ponder an exit strategy, but a solution wasn’t apparent.

The Rocchinos eventually found help through the City of Berkeley, which partners with Oakland-based Project Equity (PE), a nonprofit that offers hands-on consulting and support to businesses nationwide interested in transitioning to employee ownership. PE operates with the belief that employee-owned companies increase job quality, invest locally, positively impact job creation and worker retention, and also provide owners with a fair price and assurance that their business will carry on.

 

 

PE offers three programs to launch and support the transition to worker-ownership:

First is a feasibility assessment to determine whether the business has the financial stability needed.

Second is a transition period that allows PE to collaborate with a team of employees who represent a variety of roles within the business. During this time, workers are taught financial basics and how co-ops run. The team also sets up financing for the purchase of the business, writes legal bylaws, and makes key decisions about the co-op’s governance and profit sharing.

The third program, called Thrive, provides new worker-owned businesses with two years of support to help ensure that the business is healthy and still able to create quality jobs.

“The magic of employee ownership comes to life when you combine it with a strong employee ownership culture,” says PE cofounder Alison Lingane. This will be a culture in which workers take initiative, care deeply about the business, are highly engaged in their work, and are well-informed about the company.

Like many cities, Berkeley faces a “Silver Tsunami” of business owners reaching retirement age with no children or other relatives ready or able to step up and run the family business. According to a PE analysis, around 1,200 Berkeley businesses are at least 20 years old, but only 15% of those will be taken over by family members. These businesses provide about 13,000 jobs that could be at risk if the venture closes down or could be downgraded in quality if the company gets swallowed up by a large corporation.

When the Rocchinos first explored the possibility of transitioning to worker ownership in 2019, it wasn’t financially favorable for them. But the picture changed dramatically at the start of the 2020 Covid lockdowns, when local residents started stocking up on food and cooking all meals at home. As restaurants closed, suppliers suddenly had excess product to sell, and the Local Butcher Shop was pleased to have more meat available for a sudden rush of consumers. The shop’s revenue was 50% higher in 2020 than in 2019, and suddenly the idea of worker ownership made financial sense.

“We had unknowingly set things up for an easy transition,” says Monica Rocchino. “We’d had open books since day one, and an all-ideas-matter, open-door policy. It was seamless; the business model changed on paper, but you didn’t feel it in the shop.” The staff was enthusiastic, and a transition team of five (four longtime staff and one newer employee) met with Project Equity weekly, got a crash course in business and finance, and worked to secure a loan with a fund for this purpose that PE had recently launched. PE set up the purchase agreement and rules of engagement, and the shop became worker owned on October 31, 2021. The original five team members became immediate owners and the rest of the staff had until February 1, 2022 to decide whether to buy in.

The Rocchinos will remain involved as board members, mentors, and founders, but will no longer be running the business day to day. “We feel fortunate about handing it off to such a committed group of employees,” says Monica Rocchino.

 

 

Bakers Step Up

Dedicated employees also made the difference at Niles Pie in Union City, which transitioned to a worker cooperative in 2017. Founder Carolyn Berke had planned to stay on as a worker-owner, but family priorities caused her to move to Portland in January 2020. Her initial plan had been to travel back and forth monthly to provide training, but the pandemic kept her away for 10 months.

Meanwhile, the other workers “took it and ran,” says Berke. Although it was a stressful time, she believes it would have been much harder if they hadn’t already been a co-op. “Our staff was able to bob and weave really well because the management was already distributed,” she says. “Everybody knows the business and the financials, and the process of becoming a co-op made us define all the parts and pieces of the business. Everything that was just in my head as a small business owner had to be documented and codified in the process of becoming a co-op.” Quick decisions to switch to online ordering and cut back temporarily on selling at farmers’ markets helped the business continue. Berke adds that she thinks the workers benefited by her being off site. “As an owner, it’s hard not to grab the reins,” she says.

During the process of going co-op, Niles Pie got help from Project Equity, and Berke is pleased that PE is now working with several city governments to help them support business transitions to employee ownership.

“Economically, the power of the cooperative in the community is keeping jobs local,” she says. “When the pandemic hit and I had to leave, we didn’t lose those jobs. Our workers became local business owners, and that’s great for Union City and the Bay Area. So many people left food service jobs, but this gives people a reason to stay and keep jobs in the community.” ♦

 

Rachel Trachten writes about local food in connection to social justice, education, business, and the environment. View her stories at racheltrachten.contently.com.

Shannon Kelli’s editorial and commercial photography studio in Berkeley specializes in still and moving pictures that tell a unique visual story about the person, product, brand, or business they represent. shannonkelli.com