2020 ANNUAL REPORT July 1, 2019-June 28, 2020
Board of Directors Sam Applefield '21 President Charlie Orr '22 Vice President Laura Valentine '22 Secretary Larry Meadows, Jr. '20 Treasurer Eva Barinas '21 Karen Bernard '21 Tom Pandeleon '22 O.E. Zelmanovich '20
The board meets online the third Monday of each month at 7 PM. Members are welcome to join virtually via WebEx.
Management Team Maura Holliday General Manager Amber Pertz CafĂŠ Manager Shawn McCullough Finance Manager eric cressley Front End Manager Ian Ryan Grocery Manager Jen Girty Human Resource Manager Erin Myers IT Manager Kate Safin Marketing & Member Services Manager Tyler Kulp Produce Manager
2
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.
Board Report by Sam Applefield, Board President On behalf of the Board of Directors, I am pleased to share news and updates about our co-op. The following information is from the fiscal year, July 1, 2019, to June 28, 2020, with a few additional updates up to the time of writing (October 2020). Our predictions and projections for this year were all completely upended by the COVID-19 pandemic. We are grateful for all the co-op employees’ efforts, responding to the disruption, panic, and uncertainty caused by the pandemic with patience and humility, allowing the store to stay open and safe. We especially want to thank Maura for her leadership in response to the pandemic, which has consistently been—and continues to be—proactive, thoughtful, and reassuring. The prioritization of support provided for our staff during this time demonstrates our cooperative values in action. Despite the challenges of the past year, the strong sales growth the co-op experienced throughout the pandemic and fiscal year as a whole positions us well to take on the project of relocating our store. The board and management have continued to move this process forward, working with realtors to identify possible locations, consultants to do financial projections of those sites, and learning lessons from co-ops across the country who have expanded or relocated. The process is guided by priorities identified by members and staff in previous listening sessions, which include more parking, a larger sales floor, a loading dock, proximity to our current location, and a community space. This year, the board also put significant work into proposing changes to our bylaws. If approved, we believe they will bring more transparency and enhance a culture of member participation in the co-op. Many thanks to Zoe and all the bylaws committee members, who researched, wrote, edited, and rewrote the proposed changes. Finally, the board is currently working to establish a supplier diversity program. These new proposed policies will help embed our anti-racist commitments into the co-op practices and ensure that our money is spent in ways that align with our values. When I joined the board two years ago, much of the initial focus was on creating stability after a period of turmoil. In continuing to reflect on and improve our communications, reporting practices, and other internal operations, I think we have built a stable foundation to guide the co-op through a period of growth and change. I am proud of what we have accomplished this past year and am excited for what our future holds. We invite your input, involvement, and feedback in shaping that future. Thanks for your membership and support!
Stay Informed
Subscribe to our e-news by texting EASTENDFOOD to 228328.
Be Social With Us Join our followers on social media.
EastEndCoOp @eastendfoodcoop @EastEndCoop
3
Operations Report by Maura Holliday, General Manager Fiscal year 2019-2020 was quite the year, to say the least, though it began in the most normal way. I was still getting acquainted as general manager, having just submitted the fiscal year budget to the board for approval. We forecasted a modest growth of 2.7% in sales and started crafting a new attendance policy with our UE Local 667 officers. I also began working toward creating a more inclusive and welcoming store. Additionally, throughout the fall/winter season, we were continuing the feasibility aspect of our relocation project. We were gaining traction and making good progress on all these initiatives through the holiday season. At the beginning of the 2020 calendar year, we were rolling out our new attendance policy, putting together a contract with a local diversity and inclusion consulting firm, tracking sales growth at 2.7%, and we had completed a market study and solidified a real estate broker to work with. Then March came, and the COVID-19 pandemic threw a wrench in our plans for the remainder of the fiscal year. Our staff were put to the test and showed an immense amount of strength and flexibility as we navigated the continuous changes caused by the pandemic. We implemented and installed safety measures throughout the store to keep our staff and our shoppers safe. We closed our coffee station, hot and salad bars, and converted the bulk section to limited, pre-packed selections. We endured the panic shopping surge and then the inevitable disruption in our supply chain. These were huge hits to our sales growth, but fortunately, we had increased sales in other departments to compensate. Through all of this, we remained in alignment with our Ends and retained all our staff. To show support and appreciation for our staff’s commitment, all staff members were given 40 hours of additional paid time off to use as they needed, provided with hazard pay of $2.22 per hour worked, given $100 in cash, and we paid out our largest profit share to date. We were fortunate to receive $456,200 from the government’s Paycheck Protection Program (PPP) loan, allowing us to lessen the impact of the significant changes to our operations and ensure continued support for our staff. Without their hard work, we would not have been able to continue serving our community, and I thank them all for every ounce of effort they have given through this. Despite countless challenges, we ended the fiscal year on June 28th with 4.6% sales growth. Now that we are in the new fiscal year, and things are relatively normal—for now—we are working from our new business plan that I submitted for board approval in July. In addition to the ongoing relocation project, my biggest goal for this new fiscal year is to establish more robust practices of inclusion and equity, striving to become an anti-racist organization that upholds social justice. Though there is much work to be done, as a co-op, social justice is at our core, and we are eager and energetic to play our part.
4
COVID-19 Response
On March 16, Governor Tom Wolf ordered all restaurants in Allegheny County to cease dine-in service for two weeks. The order would extend much longer and the Café Hot Bar and Salad Bar remain closed.
On March 25, plexiglass is installed at each register to ensure staff are protected when they are unable to maintain 6 feet of social distance.
On March 18, the use of reusable containers is temporarily prohibited and many bulk items are pre-packaged to ensure customer safety.
Online shopping with our home delivery service, Mercato, surged, especially in March and April. Staff filled orders daily to keep up with demand.
The co-op launched contact-free curbside grocery pickup for co-op members during three planned store closures (March 29, April 5, and April 12). Staff filled 200 curbside orders across the three dates. Pictured are U-boats stacked high with customer orders.
After taking some time to perfect the ordering and fulfillment process, curbside grocery pickup is available every day beginning May 2, 2020.
Ap M ar c 32 h ‘2 5 0
We were fortunate to have an established online ordering and home delivery system through Mercato. During lockdown, the use of online ordering surged.
r 48 il ‘2 1 0
Mercato Stats
Ju
AY 17 ‘2 0 0
M FE B 18 ‘20
JA N 34 ‘20
C 23 ‘19
DE
O V 20 ‘19
N
CT 14 ‘19
O
PT 25 ‘19
SE
G 21 ‘19
AU
Ju
ly 34 ‘19
July 2018-June 2019: 42 orders; $3,056.76 in sales July 2019-June 2020: 1,351 orders; $193,047.43 in sales
ne 18 ‘2 6 0
Online Sales FYE 2019 vs FYE 2020
*graph represents Mercato orders by month
5
Finance Report
by Shawn McCullough, Finance Manager There were many moving parts to the year, not the least of which were COVID-related financial and operational stresses. This subject merits its own separate analysis and commentary; Maura addresses most of this in her operations report on page 4. For this report, I’m going to stick to the mundaneness of talking profit, sales growth and margin, and note where we were materially affected by COVID. So, fiscal year end (FYE) 2020 is in the books; for the third straight year, the co-op had net income. The last time the co-op had three consecutive years of net income was 2009 through 2011. FYE 2021 is projected to be profitable as well. The co-op’s net income for 2020 was $118,521 versus the prior year’s net income of $149,062. The co-op’s year-end cash position is the strongest it’s been in the history of the co-op. Our year-end cash balance was $1,883,767 compared to last year’s balance of $1,151,895. A large part of the increase to cash resulted from the co-op garnering two loans for the year as a result of the COVID pandemic, both of which are ultimately underwritten by the Small Business Association (SBA). The larger of the two loans is the Payroll Protection Program (PPP) loan, which amounted to $456,100. Of this balance, $446,100 is expected to be forgiven during FYE 2021 and incorporated back into income. Additionally, the co-op paid a profit-share of $105,338 vs. the prior year’s profit share amount of $56,502. Sales growth for the year had a Jekyll/Hyde characteristic due to COVID. Our pre-COVID sales growth—roughly July 1st through February 23rd—was 2.62% (budgeted sales growth was 2.7%). Sales growth during COVID—roughly February 24th through June 30th—was 8.9%. The year’s total sales growth was 4.9%, the best annual sales growth for the co-op since 2015, when we also had sales growth of 4.9%. In terms of margin dollars, the co-op realized $4,513,587 margin dollars for 2020 vs. $4,508,949 margin dollars for 2019. Gross margin remained extremely consistent in the midst of all that was going on: 38.3% margin for the current year vs. 38.4% in the prior year. Looking at the balance sheets, again, the co-op’s position is very solid. Current assets, of which cash is our largest component, continues to increase dramatically. Current assets increased by $721,235, or 42% over the prior year. Our overall liabilities increased by $532,707. Again, of this amount, $446,100 is expected to be forgiven during 2021. Our total members’ equity (essentially our net worth) increased by $180,521, or 10.5%. The efforts of all co-op employees played the greatest part in the co-op achieving a very successful financial year. Given what’s transpired this year, this is an understatement. To all, thank you.
6
Balance Sheets Year Ended ‘20
Year Ended ‘19
$2,450,780
$1,729,545
Current Assets
$382,354
$371,777
Net Property & Equipment
$248,619
$267,203
Other Assets
$3,081,753
$2,368,525
Total Assets
$557,725
$631,118
Current Liabilities
$619,729
$13,629
Non-current Liabilities
$1,177,454
$644,747
Total Liabilities
$1,497,051
$1,435,051
Member Shares
$288,727
$139,665
Retained Earnings
$118,521
$149,062
Current Earnings
$1,904,299
$1,723,778
Total Members’ Equity
$3,081,753
$2,368,525
Total Liabilities & Members’ Equity
(Audited)
(Audited)
Income/Expense Statements Year Ended ‘20
Year Ended ‘19
$12,314,872
$11,744,492
Net Sales
($-7,601,285)
($-7,235,543)
Cost of Sales
$4,713,587
$4,508,949
Gross Profit
($-3,031,773)
($-2,848,782)
Personnel Expense
($-1,558,289)
($-1,479,605)
Operating Expense
$123,525
$180,562
Operating (Loss)/Income
($-5,004)
(-31,500)
Other (Expenses)/Income
$118,521
$149,062
Net (Loss) /Income
(Audited)
(Audited)
7
Number of Local Vendors by Category Bulk - 6 Frozen - 7 Grocery - 25 Health & Beauty - 8 Meat - 11 Perishable - 23 Produce - 16 Supplements - 3 Cheese - 16
Total Sales that are Local $2,503,017 % of Sales that are Local 20.43% % of all product Stock Keeping Units (SKU) that are Local 9% Local is defined as from within 250 miles of our store, including all of Pennsylvania, excluding Canada.
Membership
*graph represents number of new members by month
This fiscal year gave us our second highest net membership growth since we started keeping track of this statistic in 2005-06!
8
Ju n 74 e
M a 38 y
Ap 42 ril
M ar 48 ch
Ja 84 n De 43 c
N o 49 v
Fe 73 b
$271,546 in member discounts 62.63 % of sales to members $7.7 million in sales to members
O c 84 t
Se p 56 t
Au 58 g
Ju l 62 y
14,577 Active Members 711 New Members 91 Refunds 620 Net
Pittsburgh Urban Farm Tour 11
Urban Farms & Gardens
82
Participants
$2,000.41
The East End Food Co-op (EEFC), in collaboration with the Pittsburgh Food Policy Council (PFPC) and Pasa Sustainable Agriculture, presented the third annual Pittsburgh Urban Farm Tour on Saturday, September 14, 2019. The tour connects community members to unique and bountiful urban farms that work to increase fresh food access in underserved neighborhoods. The proceeds from the tour supported honorariums for each participating farm and replenished the Urban Growers Scholarship Fund. Featured sites: African Healing Garden, Ballfield Farm, Braddock Farms, BUGS Homewood Historical Community Farm, Burgh Bees Apiary, Community Garden of Wilkins Township, Duquesne Community Victory Garden, Homeplate Garden, Manchester Growing Together Farm, Sankofa Village Community Garden, Shiloh Farm Thank you to our Farm Tour Sponsors: Lady Moon Farms, Trellis Legal LLC, Farm to Table Western PA, and Grounded Strategies
Raised
About the Scholarship Fund
Proceeds from the 2018 Pittsburgh Urban Farm Tour seeded the Urban Growers Scholarship Fund.
The fund exists to help urban gardeners and farmers in Pittsburgh and Allegheny County access professional development opportunities, including training, conferences, and workshops. The PFPC Urban Ag Working Group administers the Urban Growers Scholarship Fund. Applicants for scholarship funds are accepted through the Pittsburgh Food Policy Council website (www.pittsburghfoodpolicy.org).
We established a new fundraiser to support the Urban Growers Scholarship Fund. For every seed packet sold at the Co-op, 25 cents is donated to the scholarship fund.
From February 2020 through June 2020, we raised $1,181.75!
9
Donations Register Round Up
$22,420.32
Register Round Up Recipients: Jeremiah’s Place, Humane Animal Rescue, Pasa Sustainable Agriculture, Play it Forward Pittsburgh, Reading is FUNdamental Pittsburgh, Preservation Pittsburgh,Animal Advocates, A Peace of Mind Inc, 412 Food Rescue, OMA: Art in the Garden, Dreams of Hope
Through our general donations fund, 84 local organizations received $6,015.33 in the form of gift cards, gift baskets, store product, and cash sponsorships, including $2,500 to groups dedicated to social justice: Bukit Bail Fund, The Black Mental Health Fund, 1 Hood Media, and SistersPGH each received $625.00.
Sustainability 143,801
bags saved
91,368 lbs of waste hauled by Zero Waste Wrangler 2,288 lbs post-consumer 77,155 lbs pre-consumer 12,289 lbs wax coated cardboard 2,431 lbs of glass
We were on track to conduct a second waste audit, which would show us how we were moving in our goal to reach a 92% waste diversion rate, when COVID-19 halted everything. The closure of our CafĂŠ hot bar and salad bar and in-store dining cut our post-consumer waste by about 1/3. We continue our relationship with Zero Waste Wrangler and focus on improvements and additional pathways to reduce waste despite challenges presented by the coronavirus.
10
Food Access Senior & Low Income Shoppers
$78,791 in senior/low income discounts issued (an increase of $21,939 from last fiscal year) In mid-March, as a response to the coronavirus, the East End Food Co-op extended the Tuesday/ Thursday 5% senior discount to include the first hour of business every day.
Food Bucks
$20,192 Food Bucks issued $11,254 Food Bucks redeemed In January 2020, the East End Food Co-op launched Food Bucks after months of planning, staff training, and POS software upgrades. Food Bucks is possible through a partnership with The Food Trust, a non-profit dedicated to ensuring everyone has access to nutritious, affordable food. Shoppers who use SNAP earn a $2 Food Bucks coupon for every $5 they spend on fresh produce, which they can use on a subsequent shopping trip for additional fresh produce.
Community Events This year, the co-op hosted 21 community events including 9 wellness workshops, 10 demonstrations, and 2 potlucks. Classes centered on plant-based eating, sustainability, and cooking. A popular new series called “Make & Take� featured a hands-on cooking demonstration of plant-based meals that could be prepared for $5 or less. In March, the Co-op cancelled all community events due to COVID-19.
11
Serving the community since 1980 7516 meade street, pittsburgh, pa 15208 412-242-3598 www.eastendfood.coop