Ends Policy Statement East End Food Co-op exists to enhance physical and social health in our community. To these ends, we will create: A sustainable member-owned business open to everyone An ethical and resilient food infrastructure A vibrant, dynamic community of happy, healthy people A creative vision to transform the future
Table of ContentS Presidentâ€™s Report Operations Report Finance Report Ends Metrics
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Board of Directors
Eddy Jones, President
Finance Manager Shawn McCullough*
William Warnock, Treasurer Emily Deferrari Sarah Trafican O.E. Zelmanovich
Human Resources Manager Jennifer Girty* Front End Manager eric cressley* Grocery Manager Maura Holliday
Marketing & Member Services Manager Kate Safin IT Manager Erin Myers CafĂŠ Manager Amber Pertz Produce Manager Evan Diamond *Designated General Management Team
PRESIDENT’s REPORT by Eddy Jones, Board President On behalf of the Board of Directors, I am happy to share with you news and updates about our Co-op. Reported herein are metrics from fiscal year 2017-18, which ended on July 1, 2018. In addition to fiscal information, the narrative in this report highlights activities occurring since our last annual meeting, which took place in February 2018. First, I want to thank our staff, memberowners, and other shoppers for their dedication to our Co-op during a time of transition at the board and management levels. It is through teamwork, collaboration, and commitment to shared values that we are moving forward as an organization following a period of conflict and turmoil. Progress is reflected in our financial performance. In fiscal year 2017-18, after six years of losses, our Co-op had a positive net income. This is the first step towards strengthening our Co-op for the future, and it is immediately beneficial for employees too. This past fiscal year, our Co-op was able to give back to employees in the form of profit sharing. You can read more about this in the Operations Report on the next page. These financial metrics are indicative of our potential but there are additional factors to be mindful of. Positive net income was achieved by controlling expenses, not through increased sales. Annual sales continue to hover around $11-12M per year, a metric that has been stagnant for three years. As the cost of doing business naturally rises over time, we cannot expect the 2017-18 numbers to be a formula for future success. Rather, we will have to pursue growth while simultaneously making investments in our organization. One component related to growth is the physical space in which we operate. Earlier in 2018, the Factory building where we have operated since 1986 was sold. The board
continues to dialogue with the new owners and explore opportunities for growth that can be enabled through an improved and expanded physical space. This past year, the board continued its due diligence with respect to identifying a model for store leadership. Building on the “listening tour” that began in late 2017 whereby we engaged with staff and member-owners around the desired attributes for a general manager, we subsequently explored various team management models, getting input from both our staff and experienced cooperators around the country. Through this process, we determined that the model of a single general manager in increased cooperation with our management team will best serve our Co-op at this time. To accelerate the next steps, the board has engaged with Pennsylvania-based The Carlisle Group to lead the executive search. Board sustainability is an area that we are progressively strengthening. At our last annual meeting, the average tenure of board members was five months. Now it is thirteen months. Having more experience in our roles enables us to operate more efficiently. When planning our 2018-19 governance calendar, for example, we made thoughtful reductions in the number of extra meetings. The board is passionate about strengthening member engagement. Through our efforts in this area, member-owners are now making meaningful contributions on committees. The annual election is another way for members to be involved. We encourage all members to participate in the 2018 election, which runs through November 30, 2018. In an effort to reduce the use of appointments, we will seat five member-owners to the board this year and the slate of nine candidates is the perhaps the largest in our Co-op’s history. Your vote matters! Thanks for being a part of our Co-op! I am excited about the future and look forward to building on the progress made during the past year.
Operations REPORT by Shawn McCullough and Kate Safin In October 2017, our previous General Manager Justin Pizzella resigned. As a result, the Co-op put an interim Designated General Management Team (DGMT) of eric cressley (Front End Manager), Shawn McCullough (Finance Manager), and Jen Girty (HR Manager) in place to maintain store operations. Through the efforts of all staff, the Co-op marched on without skipping much of a beat and had one of the most successful financial years in a long time, allowing us to pay out ~$45,000 in profitsharing to our staff. The Co-op’s DGMT successfully re-negotiated a three-year Union contract in March 2018 with a new wage scale, which went into effect in July 2018. The Co-op now also absorbs a greater share of employee health care costs. We changed a few things here at the Co-op during fiscal year 2017-18. Some of them you may have seen; some not. We kicked off the fiscal year with a refreshed and rebranded street sign along Penn Avenue. Our Produce Department completed a reset of coolers and wet racks to maximize available space and ensure a fresh and relevant product mix. In August, we roughly doubled the size of both our perishable and Café walk-in coolers. This allowed us to keep more perishable product on hand to better service our customers and provide a safer and more efficient workspace for our staff. In September, our Grocery Manager Maura Holliday commissioned an HBA/Supplement aisle reset. All of the reset labor was done inhouse which allowed us to save some costs (and enjoy being at the Co-op until the wee hours of the next morning). In October, we became the first grocer in the area to offer kombucha on tap. In the Café, updates were made to reflect increasing food costs for hot bar and
select grab-and-go items. Café Manager Amber Pertz focused on creating a cohesive, seasonal hot bar menu offering a variety of dishes to meet the tastes and dietary needs of our customers. The Co-op’s Marketing Department collaborated with Grocery and Produce for three big sales events--two bulk sales and a “Plant Something Day” seedling sale. Our Earth Day Bulk Sale nearly set a record sales day with a total of ~$67K. It was one of the highest customer counts we’ve ever experienced for our store, and we were thrilled to share a great deal and zero waste shopping experience with so many people in our community. The Plant Something Day sale took place along our sidewalks with local growers offering 50% off organic seedlings and a gardening resource fair with free soil tests and gardening advice. Hundreds of seedlings sold, and it was truly an inspiration to know we played a part in helping people enjoy growing their own food. This sale and the bulk sale were our two largest sales days for 2018. In September, the Co-op, in collaboration with Pennsylvania Association for Sustainable Agriculture (PASA) and the Pittsburgh Food Policy Council, hosted a firstever Pittsburgh Urban Farm Tour. Thirteen urban farms across the City opened their doors to 162 tour participants, showcasing creative solutions for improving food access in our region. We know that even in the face of growing competition, nobody has the passion for good food and our community like the Coop. This fiscal year saw amazing member growth, and we thank all our members for their support and dedication to our alternative, independent business model. Our success--and relevance in this market--is possible because of you.
FINANCE REPORT by Shawn McCullough, Finance Manager First and foremost, before diving into the numbers, I feel that an acknowledgement is due. I would like to thank everyone, and I mean everyone – from co-workers to members to the board for the effort that went into making 2018 a successful financial year. None of this was possible without cooperation at all levels. To all, thank you. Fiscal year 2017-18 ended as the most successful year financially since 2011 when the Co-op had net income of $113,576 (our 2018 net income was $107,988). The Co-op’s year-end cash position is also the strongest it’s been since 2012. Additionally, the Coop paid its first profit share since 2011, distribuiting $44,744 back to it’s employees. (The profit share for 2011 was $47,203.)
Co-op sold slightly more product, but got more out of what was sold; category management, shrink management, sales events and the commensurate marketing of those events all played a part in achieving this figure. Looking at the balance sheets, again the Co-op’s position is fairly solid. We have not had long-term debt for approximately two and a half years. Current assets, of which cash is our largest component, continues to increase dramatically. Current assets increased by $265,586, or 24% over the prior year, while at the same time, our overall liabilities decreased by $15,554. Our total members’ equity (essentially our net worth) increased by $165,988 or 12.3%. Again, it was a very successful financial year for the Co-op; I look forward to working with you all in the coming year to make fiscal year 2018-19 a successful year too.
For 2018, the Co-op had nominal sales increase of $125,975; this amounted to a percentage increase of 1.1%. Though this sales increase is on the slender side of things, the Co-op did realize an additional $107,814 in margin dollars. In short, the
And again, to all, thank you.
Annual Sales $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $-
BALANCE SHEETS YEAR ENDED 7/1/18
YEAR ENDED 7/2/17
Net Property & Equipment
Total Members’ Equity
Total Liabilities & Members’ Equity
INCOME/EXPENSE STATEMENTS YEAR ENDED 7/1/18 (AUDITED)
YEAR ENDED 7/2/17 (AUDITED)
Cost of Sales
Net (Loss) /Income
LOCAL PRODUCTS & VENDORS Shopping at the Co-op keeps money in the local economy and helps build an ethical and resilient food infrastructure.
24.3% $2,723,129 of sales, a total of
of local products sold
PLANET & SUSTAINABILITY Embracing zero waste and a reduce, reuse, recycle philosophy is part of our creative vision to transform the future.
Our partnership with 412 Food Rescue helps put fresh food into the community.
We give 10 cents for every reusable bag, which means we gave back over $12K to our shoppers!
Pounds of food diverted from waste stream
bag credits issued
PEOPLE & COMMUNITY Healthy food, a welcoming environment, educational opportunities, community giving, and accessible prices help us build a vibrant, dynamic community of happy, healthy people.
raised through Register Round Up
given in General Donations
including $1,000 Farm Aid Sponsorship and $1,965 Pittsburgh Urban Farm Tour Fundraiser
In February, East End Food Co-op received an Award of Excellence for exemplary dedication to principles of zero waste at Pennsylvania Resources Council (PRC) third annual Zero Waste Events and Business Awards ceremony. Photo courtesy of PRC.
PEOPLE & COMMUNITY
SNAP & Senior Discounts - To help make healthy foods more affordable and accessible to everyone in our community, East End Food Co-op offers a 10% courtesy discount on all transactions for which a customer uses SNAP benefits. Seniors receive a 5% courtesy discount every Tuesday and Thursday.
of total sales to senior and lowincome shoppers, for a total of
$55,075 dollars saved
Senior defined as 62+; low-income defined as those who use SNAP/Access card for their transaction. Numbers are approximate. Sales are estimates.
27 community events hosted by 12 co-op members and 39 partner organizations
4 co-op orientations 103 hours of outreach to connect with 17,943 people in the community
MEMBERSHIP Members are the heart of the Co-op and key to our sustainable member-owned business open to everyone.
The third-highest member growth in a 12-year span.
of sales to members
members joined during our member drive Our most successful member drive to date.
Printed by: Banksville Express with vegetable-based inks on recycled paper. Design & photography by: Molly Palmer Masood