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 President’s Report Operations Report Finance Report Ends Metrics
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Board of Directors
Management team
Eddy Jones, President
general manager Maura holliday
Sam Applefield, Vice President eva Barinas, Secretary larry meadows, jr., Treasurer karen bernard emily DeFerrari jona reyes O.E. Zelmanovich
Finance Manager Shawn McCullough Human Resources Manager Jennifer Girty Front End Manager eric cressley Grocery Manager ian ryan
Marketing & Member Services Manager Kate Safin IT Manager Erin Myers CafĂŠ Manager Amber Pertz Produce Manager Tyler kulp
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 2018-19, which ended on June 30, 2019. This was an exciting year for our co-op. In April, the board hired Maura Holliday as General Manager. This followed a year-anda-half period of operating the store under various team management models. Maura formerly was the Grocery Manager at our co-op and brings extensive knowledge of both our co-op as well as local food systems. I would like to extend many thanks to the staff and members who participated in various input-gathering sessions and who took time to meet with the candidates and share their feedback. One of the benefits of operating with team management during the transition period is that board, employees, and members had many opportunities to meet and discuss the future of our co-op. Operating with team management required a lot of time and energy, but helped to diminish silos in communication and foster increased collaboration. I continue to feel that we have more similarities than differences and must keep this perspective as we navigate issues in the future. The board remains committed to increased collaboration and confers regularly with Maura on this topic. Expansion remains an important priority for our co-op. We have operated out of the
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current location at 7516 Meade Street since 1986 and have completely outgrown the space. Things like the lack of a loading dock and insufficient parking make it hard for staff and customers alike. The board is working closely with Maura on this topic including seeking ways for members to stay informed. Fiscal year 2018-19 marked our second consecutive year of positive net income, following six years of losses. While financial performance is just one component of how we measure success, remaining profitable at this time is especially important given that we are planning for expansion and will need to secure loans. Details about our financial performance can be found later in this report. This year marks the completion of my tenure as board member and President. It has been an honor to serve over the past three years and interact with so many talented individuals who are so committed to our co-op. We have worked to stabilize and strengthen the governance of our co-op and return it to profitability. We now have better ways to measure and discuss our Ends, and our goals related to people and planet. We have re-established board committees and incorporated opportunities for members to be more involved in governance. Now, we are ready for the more bold and exciting steps of expanding. I encourage you to stay involved. At a minimum, please participate in governance by voting in the 2019 election, which runs through November 30th.
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Operations REPORT by Maura Holliday, General Manager For the first quarter of fiscal year 2018-19, our initial three-person Designated General Management Team of Shawn McCullough (Finance Manager), Jen Girty (HR Manager), and eric cressley (Front End Manager) was still in place. In October, our management team worked with the board to transition to a seven-person Interim Management Team (IMT) while our board searched for a new General Manager. In April, I accepted the General Manager position, and I have been transitioning into that role from my previous role as Grocery Manager. From January-June 2019, five staff members were promoted to managerial and supervisory positions: Amanda Stephen was promoted to Manager on Duty (from Cashier), Tyler Kulp was promoted to Produce Manager (from Assistant Café Manager), Frank Salati was promoted to Assistant Produce Manager (from Manager on Duty), Luke Rifugiato was promoted to Assistant Café Manager (from Café Supervisor), and Ian Ryan was promoted to Grocery Manager (from Grocery Department Coordinator). Our 2018 Staff Satisfaction Survey showed improvements in overall staff satisfaction and that our team is feeling proud to work at the East End Food Co-op. The fiscal year 2018-19 was a busy one on many fronts. We experienced considerable sales growth of just under 5%, which was more than what we had budgeted for, a pleasant surprise indeed. We welcomed 666 new members this fiscal year to grow our membership to 13,951 active members. In March, 795 members responded to our bi-annual Member Satisfaction Survey, an increase of 298 responses from our 2017 survey. Overall, the co-op’s member satisfaction ranks average to other similarsized cooperatives in the country, with 59% of members satisfied and 28% extremely satisfied. Our top challenges remain location, convenience, and parking.
In February, we went live with Mercato, an online shopping and home delivery option. We did a slow rollout to work out the logistics of the program, filling 22 orders in our first 90 days. In June, we opted to switch from next-day to same-day delivery and increased average monthly orders by 50%. We hope this service eases the inconvenience of our store’s location and parking. Our marketing department had a lively year full of events and big sales. We hosted 27 workshops and classes on various areas of health, sustainability, and food and co-hosted our 2nd annual Pittsburgh Urban Farm Tour in conjunction with Pennsylvania Association for Sustainable Agriculture (PASA) and the Pittsburgh Food Policy Council. We had two Bulk Sale days, with our April event topping the charts at $66,772 for whole store sales. It was also the most successful Bulk Sale day in terms of bulk department sales at $18,104! We also extended a 25% discount in our supplements department in January and offered local college students a 20% discount during August’s student move-in week. May marked our fifth Plant Something Day Sale, which was still successful despite the loss of two seedling vendors (Rick Contray of Wilmington Gardens retired, and Garden Dreams took a break from wholesale business). We ended the fiscal year with a waste audit conducted by Pennsylvania Resources Council to provide baseline information so we can improve our sustainability and waste diversion methods (read more about that on page 8). I am excited to grow in my role as General Manager and keep improving our store and our influence in the local food system. We have exciting adventures ahead, and I am grateful for the opportunity to be a driver of these initiatives. Thanks to the support of our members and shoppers we continue to make a difference in our food system with our independently operated store!
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FINANCE REPORT by Shawn McCullough, Finance Manager Before diving into the numbers, I feel an acknowledgement is due. Fiscal year 201819 was another year of transition at the uppermost level of the co-op. I would like to thank everyone, from co-workers to members of the board, for the effort that made 2019 a successful financial year. None of this was possible without cooperation at all levels. For the second straight year, the co-op had net income. The last time the co-op had consecutive years of net income were 2010 and 2011. And so far, 2020 is also looking profitable. Fiscal year 2018-19 ended as the co-op’s most successful year since at least 2001 (as far back as we have audited financial statements). The co-op’s net income for 2019 was $149,062 vs. prior year’s net income of $107,988. The co-op’s year-end cash position is also the strongest it’s been since 2012. Our year-end cash position was $1,151,895. The last time the co-op’s cash position crested above the one million mark was in 2011, which had a cash balance of $1,016,173. Additionally, the co-op paid a profit-share to staff of $56,502 vs. prior year’s profit share of $44,744. In two years, the co-op has paid more than $100,000 to its employees in the form of profit-shares.
Our 4.6% sales growth in fiscal year 2018-19 was the best sales growth since 2015 (which had 4.9% sales growth). In terms of margin dollars, the co-op realized $4,508,949 margin dollars vs. $4,369,322 margin dollars for 2018. Category management, shrink management, sales events and marketing all played a part in achieving this figure. Needless to say, but I’ll say it anyhow, the efforts of all co-op employees played the greatest part in the coop achieving its most successful financial year on record. Looking at the balance sheets, again the co-op’s position is very solid. We have not had long-term debt for approximately 3.5 years. Current assets, of which cash is our largest component, continues to increase dramatically. Current assets increased by $375,196, or 28% over prior year, while at the same time, our overall liabilities only increased by $76,689. Our total members’ equity (essentially our net worth) increased by $206,362, or 14%. I look forward to working with everyone to make 2020 a successful year, too. Thank you!
Annual Sales
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BALANCE SHEETS YEAR ENDED 6/30/19
YEAR ENDED 7/1/18
$1,729,545
$1,354,349
Current Assets
371,777
467,513
Net Property & Equipment
267,203
263,212
Other Assets
$2,368,525
$2,085,474
Total Assets
631,118
554,429
Current Liabilities
13,629
13,629
Non-current Liabilities
$644,747
$568,058
Total Liabilities
$1,435,051
$1,377,751
Member Shares
139,665
31,677
Retained Earnings
149,062
107,988
Current Earnings
1,723,778
1,517,416
Total Members’ Equity
$2,368,525
$2,085,474
Total Liabilities & Members’ Equity
(AUDITED)
(AUDITED)
INCOME/EXPENSE STATEMENTS YEAR ENDED 6/30/19 (AUDITED)
YEAR ENDED 7/1/18 (AUDITED)
$11,744,492
$11,228,344
Net Sales
(7,235,543)
(6,859,022)
Cost of Sales
4,508,949
4,369,322
Gross Profit
(2,848,782)
(2,710,092)
Personnel Expense
(1,479,605)
(1,491,437)
Operating Expense
180,562
167,793
Operating (Loss)/Income
(31,500)
(59,805)
Other (Expenses)/Income
$149,062
$107,988
Net (Loss) /Income
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LOCAL PRODUCTS & VENDORS Our commitment to local is unmatched by any other retailer in our region and helps keep more money in the local economy. Local Sales
22.3%
of sales, for a total of
$2,613,523.42 in local products sold from
150+
local farmers & producers Approximate % of product mix that is locally-sourced Bread Meat MILK Eggs Cheese Produce
70% 90% 64% 100% 40% 46%* Local defined as within 250 miles of Pittsburgh, including all of PA and excluding Canada. Produce fluctuates seasonally between 10%-46%
Fair trade
The Co-op carries 800+ Fair Trade products. Supporting a global movement that supports responsible companies, empowers farmers and workers, and protects the environment builds an ethical and resilient food infrastructure.
Pounds of food diverted from waste stream
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PEOPLE & COMMUNITY
Healthy food, a welcoming environment, educational opportunities, and community giving help us build a vibrant, dynamic community of happy, healthy people.
Community Giving
$23,851.38 in Register Round Up
$7,333.85
in general donations to
108
local organizations
Community events 11 free wellness classes and 10 lectures attended by 450 people; hosted by 15 co-op members and 19 partner organizations. $1,394.60 raised through ticket revenue.
Pittsburgh urban farm tour 14
Urban Farms
120
Participants
$1,400.00
for farm honorariums
$1,389.81
raised for Urban Growers Development Scholarship
The East End Food Co-op, Pittsburgh Food Policy Council and PASA Sustainable Agriculture hosted the 2nd annual Pittsburgh Urban Farm Tour on September 8, 2018. Fourteen small commercial farms and community gardens were included in the tour. Despite chilly temperatures and constant rain, 120 people (including some from out-of-state) participated in the tour, helping raise money for urban growers who are fighting food insecurity in our region. Each participating farm received a $100 honorarium and additional proceeds seeded a brand new Urban Growers Development Scholarship fund to help urban gardeners and farmers in Pittsburgh and Allegheny County access professional development opportunities including training, conferences, and workshops. Participating Farms: African Healing Garden, Ballfield Farm, Bandi Schaum, Black Urban Gardeners & Farmers Co-op, Braddock Farms, Burgh Bees Apiary, Centervue Gardens, Drew Mathieson Center, Garden Dreams Urban Farm & Nursery, Garfield Community Farm, Hilltop Urban Farm, Mt. Oliver Community Garden, Shiloh Farm, Steel City Soils. Photo courtesy of PRC.
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PEOPLE & COMMUNITY We aim to make healthy foods affordable and accessible to everyone in our community.
6.46%
of total sales to senior and lowincome shoppers, for a total of
$56,852 dollars saved
1,465
pieces of free fruit given out through Co+op Kids
$7,756 in Wellness Wednesday discounts
$242,738 in member discounts
MEMBERSHIP
Members are the heart of the Co-op and key to our sustainable member-owned business open to everyone.
13,951
active members
666
new members
62.1%
sales to members
Senior defined as 62+; low-income defined as those using SNAP/Access card. Numbers are approximate. Sales are estimates. Sales to member percent reflects average sales to members % and includes staff.
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PLANET & SUSTAINABILITY
by Kate Safin, Marketing & Member Services Manager
In response to the ever-changing waste management landscape and growing concerns from our membership, the East End Food Co-op prioritized sustainability initiatives as a key strategic focus in fiscal year 2018-19.
The audit’s purpose was to determine the composition of the co-op’s waste stream and provide recommendations for improving current waste diversion measures.
We eliminated plastic straws, switched to compostable take-out containers, replaced plastic produce bags with compostable bags, began providing organic cotton canvas bags in bulk and produce, ensured plastic containers were recyclable where available, trained our supervisory staff on changes in the recycling stream, updated signage, found an outlet for waxed coated cardboard, and provided consumer education about zero-waste shopping techniques.
A total of 1,767.7 lbs of material was collected from six points of generation and manually sorted by PRC and EEFC staff during the waste audits on Saturday, June 22 and Tuesday, June 25 (the dates selected captured fluctuations in waste generation). All material was weighed and recorded by point of generation and waste stream type to identify contamination and subsequent education needed for Co-op staff working in that area. Our baseline waste diversion rate was calculated at 84% with the potential to reach 92%.
These changes were implemented having no one person on staff dedicated to sustainability and with no specific expertise. To get a better sense of areas for improvement, we secured the services of our local experts at Pennsylvania Resources Council (PRC) to conduct a waste audit.
PRC estimated the amount of waste generated annually by the co-op to be: 72 tons of recyclables; 70 tons of compostable material; 4.5 tons of food recovered for in-house food preparations; and 2 tons of food donations to nonprofits.
Embracing zero-waste and a reduce, reuse, recycle philosophy is part of our creative vision to transform the future.
84%
waste diversion
waste diversion rate
144,219 bags saved
44,001 lbs
of compost collected by Zero Waste Wrangler
39%
16%
disposal
Compost
1%
food donation
44%
Recycling
(January 2019- June 2019)
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