The craft beer industry is a unique one here in the US. Brewers share and collaborate on recipes, trade ingredients, and most brewers even encourage their customers to visit other local breweries in the area. This sense of community has allowed the industry to thrive to over 7000 active breweries today. The co-op business model is becoming increasingly popular amongst start-up breweries that truly want to be connected to their communities.
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What is a Co – Op?
Co-op business models are most commonly associated with grocery stores. But a variety of businesses and non-profits take this more communal approach to running a business. If you’re not familiar a cooperative or a co-op is a business that buys and sells products and services just like any other. The difference is that a co-op is owned and governed by its members rather than solely by stockholders and managers.
While this definition might seem simple already there is a ton of grey area in how the business it to run. What counts as a member varies widely from business to business. Members can be workers, customers, producers, managers, investors, or any combination of those five groups.
Usually but not always members are required to make some sort of a financial contribution to the business. Co-op tends to focus on a wider set of values than a traditional business. Often times co-ops can be so focused on providing benefits to their members that they come at the expense of the larger non-member community or even risk the stability of the business.
Disadvantages of co-ops
It’s very important for co-ops to have a clear vision of how to balance their values. Membership has a variety of benefits that usually include some sort of say in the business practices and in the case of breweries members often get to provide input on the beer being created. The co-op model isn’t all positive.
Co-ops rely heavily on a loyal fan base which isn’t always a given in today’s highly competitive craft world. Without a steady stream of revenue coming in from members losing money is almost inevitable for a co-op.
It’s incredibly important for a co-op to offer enough great benefits so that their members stick around for the long term. Additionally, market conditions often dictate the decisions business owners have to make. But the democratic structures often employed by co-ops make executing these decisions a little difficult sometimes.