Minutes for July 22, 2020 Board Meeting

Vision: A better food community - local, sustainable, connected.

Meeting ID: 876 4754 5212
One tap mobile: +13126266799,,87647545212# US (Chicago)

Board: Anthony Todd, Bob Kunze, Dana McKinney, Grant Kessler, Lee Herman, Sofia Jouravel
Guests: Kaye Kirsch, Jacqueline Hannah
Owners: Adam Matsil, Amin Shawki, Becky Reimer, Benjamin Corpuz, Carolyn Kessler, Chris Ahearn, Dana McKinney, Deborah Mann, Donna Curtin, Edmund Talideh, James Gignac, Jason Harris, Jeffrey Shaknaitis, Kate Grimm, Kerri McClimen, Lauren Thomas West, Mary Beth Williams, Matthew Ruffi, Michelle Schutz, Nikolas Hove, Steve Heller, 
Suzan Pinsof, Victor Corder, Wendy Anderhous

Time: 7:00-9:00pm
Minutes: Lee Herman

Required pre-reading:
(As part of Board members' 
Duty of Care, preparing for Board meetings means reading and understanding the pre-reading listed below in advance of each meeting.)

Zoom notes to Board Members
  • Please turn your video on so you are visible and representing to Owners
  • Please also click the button upper right in your video box to edit your name; edit it to read: Your Name - Board member + your pronouns, so people know who you are in the meeting

5 min
TOPIC(s): Housekeeping 
PRESENTER: President
OUTCOME: connected, inspired, ready for productive meeting
ACTION/INTENTION: clarify meeting protocols

Zoom mechanics briefing for Owners:
  • It's wonderful to have so many of you joining us today.
  • We've muted all participants upon entry to minimize background noises that will allow everyone to clearly hear the current speaker
  • Board meetings are the opportunity for the Board to do its work and for Owners to observe that work. We have two presentations today that each have limited time and will no doubt lead to your having questions and comments. Please either post those in the chat or email us with them at [email protected]. We will not be able to answer them in real time during today's meeting, but will follow up with you on them afterward and will review them and pass along questions to the Firebrand team as seems necessary. (Be sure to change your screen name to something we'll recognize or include your full name in your chat comments so we know how to reach you.)
  • Time permitting, we do have an Owners Forum section planned in the meeting, so we may be able to get to a few questions in that section of the Agenda.
  • Turning your video on is not required, but in this time of disconnection, we would love to see your faces and we encourage you to use the video tool if you are able.
Owner Growth Check-in
  • Owner number: 1859
  • Dana - Elections (1 min)

Dana: Annual Owners meeting August 30
We will announce candidates then
It is owners right and responsibility to run for the Board
We have dwindled to a small Board, 5 agreed to run (3 incumbent), 13 open slots
Email me if you are interested at [email protected]

45 min
TOPIC:  Firebrand presentation
PRESENTER: Kaye/Jacqueline
OUTCOME: Board awareness and any concerns expressed, questions answered
ACTION/INTENTION: presentation of general direction (firebrand presentation to Board 7-22-20.pdf)
Project overview - previous store design didn't work operationally and financially, the team is doing a reassessment with a view to looking at it with fresh eyes and creative ideas.
Team introduction (see presentation)
Project plan - now in the creative development process. No firm conclusions yet. Cautiously optimistic but no guarantees. Have to get through the whole process to get done at the end of August.

Jaqueline - most co-ops are pretty standard. most fit best practices. one thing really different is dense urban areas. that's a minority of food co-ops. we looked hard to find co-ops in similar places. did site visit, also visited 12 competing stores, pricing, parking spaces, etc. while in Chicago for our site visit. 
The team has space use ideas developed with better entrance/exit, loading, etc.
Programming concepts - different ways co-op can look at role they want it to fill:
very organic, local, full-service, grab and go, etc.
The team has two programming concepts we are vetting and analyzing. 
We started with the Chicago Market market study. The market study is the basis for everything. The Chicago Market study is off the charts good. Dakota Worldwide did a meta analysis to look for other sites that would perform as well as Gerber and couldn't find any that were better. That literally means there isn't a better site for sales or to meet the needs of the organization. Sales projections per square foot for this store are better than 95% of all startup projections for startup food co-ops. Kaye found that the study shows 75% of all sales will be to walk/bike/use transit. Even so, the parking ratio is on target with the competition (the team did the counts during the site visit).

Kaye - there are challenges with the site: receiving and customer ingress/egress
It was great to see the space in person. 
In the previous design, receiving was impacting labor and bringing down profitability of the whole store.
We don't have to have two cash registers as in the previous plan. Having only one allows more space for sales.
We think we have solutions to both of these challenges, still easy for customers but staff still has visibility with one cash register set to monitor the store.
We will have recommendations for questions for CTA coming in a week or so.

Jacqueline - we usually try not to have food co-ops be special snowflakes, but you are. Urban food co-op, you are high-density, comparison data for co-ops in urban dense areas is very different than other co-ops. We think this was not considered in previous Chicago Market feasibility assessments. We went and talked to a bunch of urban co-ops and found it really is different. 
Labor is higher, but margins are higher due to product mix, and yet these stores have a reputation for reasonable prices, really high quality and unique things but mixed with affordable options.
Cultural fit is key - different concerns, competition, etc.
Comparing Chicago Market to college towns ro suburban areas doesn't work.

Kaye - Two programmatic directions under consideration both have: 
- local food including meats
- robust deli/prepared foods
- price accessible options so everyone is served
We were really surprised to find no one in the area is doing a good job of local
Grab and go is becoming more important in grocery generally, but even more so with your location.

Jacqueline - we looked at where is the nearest pastry, where's the nearest coffee, where's the nearest beer/wine, so we have some clear ideas of what is missing in your area.

The Board submitted a question regarding what concerns the General Manager (GM) will have to address. We can't answer that yet but will put it together for report.

Every startup food co-op needs a good GM, some have gotten someone who was poor fit and pivoted. For Chicago Market to succeed, it will need to be really well run at the beginning. The store will be opening at 2-3 times normal sales volume of a startup co-op. The GM needs to have urban experience and co-op experience. Local food is so key, which means many vendors that GM will have to work with. Lots of them, much broader, more challenging project to get them, need to bring unique things that have appeal. The GM has to have marketing expertise, ability to hire top talent, ideally co-op experience. 
They will have to communicate to owners. Chicago is a world class city with world class food, so the GM hire will require a hard search and need to pay them to get the best.

Kaye - Right, GM is a passion project for both of us, we are working on a book 

Dana - thanks, as GM Search Team Chair, I appreciate that slide!

Jacqueline - I'll help when you get there.

Kaye - The team is excited and looking forward to finishing up the study.

Jacqueline - When I heard board was looking at a reassessment of the Gerber site, I thought it was a good idea. Now that I got involved, I think this was a excellent leadership decision. I'm a volunteer so I can say that neutrally [Jacqueline is the Assistant Director of Food Co-op Initiative, a national  501(c)3 nonprofit whose mission is to support creation and growth of food co-ops].
The whole team is far more optimistic about a plan that can work than we expected to be.
This comment is addressed to Owners: there are smaller communities that have raised multiples of what Chicago Market has - can it happen here? Yes, but it's going to take your time, money, and talent. This is yours - you're going to have to grasp it and make it work. You have an opportunity. The availability of local foods in Chicago compared to other cities your size is low. Chicago Market could take Chicago to a new level. This is on your shoulders. 
Kaye - I agree with all that

Board Q&A:
Anthony - will we have significant asks of CTA for building changes or just tweaks around the edges. 
Kaye - probably some significant asks.
Dana - No surprises on GM slide given my research, if we move forward, have to hit the ground going really fast. Is there a head-start for us to do some of the research to get going. 
Jacqueline - yes, start with identifying all the local vendors in local and regional, contact,  what do they sell, wholesale, your GM likely is not going to have that list if from out of town
Grant - should her GM team be working on things?
Dana - not just GM search, but more generally getting ready. next question about labor costs, hear about things missing in the market, local was always part of the vision, those seems like high labor (e.g. meat)
Jacqueline - lots of ways to deliver those things that are not as labor intensive as the original Chicago Market program. I think there were assumptions about how to deliver things that were very expensive. There are lots of vendors in Chicago who could supply to deli without high labor. 
Dana - how do you insure clarity around hitting the mark when there aren't comps? 
Kaye - We went into the pro forma to change the comps. We used Central in Seattle and Flatbush in NY
Jacqueline - There are probably 5 comps like Chicago Market, plus looking at all the co-ops at same size nationally. There's a risk there, but there is also a risk comparing to general co-op numbers. We are dividing the comps up to compare like for like at detail levels.
Sofia - Your report was incredibly validating. It was good to hear we are special, as we have thought all along.
Jacqueline - The first design started with trying to fit standard, it didn't work so that got us to this approach.
Kaye - we're having fun, excited to work through the project and get to the report.
Jacqueline - I'm really impressed with the professionalism of the Board.
Grant - thanks, we are very impressed with the professionalism of your work and report.

15-20 min
TOPIC:  Owner Survey results
OUTCOME: Board awareness of Owner feedback
ACTION/INTENTION: Sharing the results and analysis of the recent Owner Survey; this should inform the Board and Capital Campaign teams' understanding of Owner interest in financial support of the Co-op (Note: Out-of-Scope for this meeting - strategic planning to address the results)
Report: Chicago Market Owner Survey Results - July 2020
Dana - learned early on, we have had a lot of challenges with owner engagement, participation, especially financially, and other places with less people have gotten much more money. If we come up with an amazing store, we have to be able to raise the money to make it happen. Decided to do a survey to understand better about what owners are feeling and thinking broadly as well as financially. Becky is a professional doing surveys and analysis.
Surveyed both owners and household owners, 331 completed the survey, 17.8 percent. Lots of the narrative comments came from "why" questions after negative answers. A bit depressing but a lot of insight into what Owners are thinking.

Becky - great intro. Like Dana said, we talked a lot about easing in. People who responded were often lenders. 
Chart 2: respondents were double the rate of people who made a loan (only 7% actually loaned) Mix of more engaged and concerned.
Dana - it was really important for this to be completely anonymous. These breakdowns gave us more idea of the respondents relation to the co-op.
Becky - Chart 5 most people thought Ownership was a small or medium expense
Chart 6 - enthusiasm
Chart 7 - surprised me that volunteers weren't more enthusiastic but it was pretty similar to overall in Chart 6
Chart 8 - loaners are more  somewhat or better enthusiastic than those who haven't loaned
Chart 9 - for people who were not satisfied, asked why, chart is coding from the open ended comments. Probably should have asked why for everyone
Biggest complaint is how long it's taking, some joined 5-6 years ago, some more recent
Represents about 80-85 of the people who responded
Dana - Probably need a Board discussion of how we get Owners re-engaged.
Becky - Chart 10 - perceived enthusiasm for people for whom it was a big investment is lower, not too surprising
Chart 11: Willingness to offer financial support in the near future, 60% total said yes or maybe
Chart 12: compare enthusiasm with willingness to offer financial support, as expected more enthusiastic people are more likely to say yes to offering support
Chart 13: what types of support? Donations most popular, leveling up to Cultivating Owner was second, Owner Loans far less popular, we didn't spell out dollar amounts
In the comments, several mentions of not knowing how much financial support was being asked for
Chart 14, 15: willingness to provide support in the next 3-6 months, yeses stayed but others not as much based on Chart 13 and overall population
Chart 16  - interest in new ways to provide support, some options Board was thinking about, split donations, split level up to payment plans were the most popular
Dana - some of the questions were driven by Capital Campaign team, meeting with them on Saturday afternoon
Becky - Chart 17, top reasons people were not willing to provide support; uncertain future, already contributed, being cautious, other priorities
Chart 18 - most people not willing to help with fundraising work
Chart 19: same concerns from why question as the earlier one.
Anthony - context on how people tend to respond to these? tendency for respondents to be at the edges (1 star or 5 stars)
Becky - that's a classic problem, hoped for a higher response rate, enthusiasm responses are mostly in the middle, I think this is pretty helpful, but it is somewhat bi-modal
Anthony - really useful to know what we need to tell people
Lee - thanks, want to recognize Becky and Dana for this work
Dana - it was mostly Becky
Anthony - best survey ever in time I've been involved with Chicago Market!

10 min
TOPIC: Team Meeting Reports/Notes
OUTCOME: clarity; Board is informed across teams
ACTION/INTENTION: confirm everyone has read them; questions? follow up?
Dana - putting comments in the reports once they are shared to Board, thought it was useful to have some of those conversations on Basecamp
Grant - that's great, the agenda item for the meetings is just a chance to talk about them.

10 min
TOPIC: All Are Welcome Ownership level
Anthony: simple proposal - All Are Welcome Ownership level at $25, one tenth of regular ownership, same as one payment on 10-payment plan. Co-ops around the country range from $10-15 or up to $50. Vetting processes vary across co-ops. Many use self-identification using broad categories, experience is that this option is not abused much. Once the $25 is paid, they are fully an Owner. If it is to be inclusive, it needs to be full ownership. One exception about patronage refunds. 
Model for patronage refunds based on spending once co-op is profitable. The interesting thing is patronage refund is applied to the rest of cost of ownership. The full ownership is a legal issue, it's just a different way of paying for ownership, just longer payment period. Fully vest once their refunds get them to the $250. Could also have people donate to scholarship to sponsor ownerships. Sponsoring a co-op ownership could become tax deductible by setting up a co-op 501-C(3) foundation for people to donate for sponsorship. Even that is possible but will take a little time and work to set up.
Dana - I think that Sugar Beet does something like that. 
Anthony - this will take a while to implement, can lay ground work without moving forward to market this
Grant - we can vote on Basecamp. I'd like to see the list of categories for people to choose as part of what we vote on.
Anthony - think that's mostly done, can find what others are doing 
Dana - I think Outreach and Inclusion team put together a list
[] - Anthony - for next Wednesday will put up on Basecamp for discussion prior to vote

15 min
TOPIC: Diversity, Equity and Inclusion
ACTION/INTENTION: discussion of 'doing'
Several folks attending Chicago related seminar tomorrow
Grant - working on getting Stacey Sutton from University of Chicago, could give presentation on history of Black Co-ops
Sofia - I've seen a number of 21-day challenge type things, seems like an easier way to keep us engaged with a little activity all the time
Dana - think we have food inclusion version 
Grant - launch that and encourage Board and Owners to provide
Kudos to artist Bojitt in the space, Chicago Market is listed on Uptown Arts walk for both installations
Dana - thanks, Matthew for blog post! 

TOPIC: Owner Forum
ACTION/INTENTION: Hear owner thoughts/concerns, answer questions.
Dana - Kerri - saw your comments in the chat earlier about having more encouraging and positive messaging, we have done that in the past, but now we are trying to balance a positive tone, with being frank about our challenges. We've gotten burned by people feeling we aren't being open enough or looking at things too optimistically. So need to show the reality of the situation and not gloss over it with too much of a positive slant. It's a balance we need to strike. If we go with Gerber, there will need to be a lot of positive encouragement to join, lend, donate, etc.
Shout out to James for posting in the chat about the event: Let's make some chocolate truffles :) We've got 36 RSVPs but would love to hit 50 for July 29 at 6pm: https://www.chicagomarket.coop/chocolate_truffle_creations
Kerri - know it takes a long time to do what we're doing, thanks for your work. Having a timeline would be really helpful.
Lee - When/if we get to feasibility, will build a schedule overall.
Dana - we've used a project plan with a timeline for all the elements in the past and paused it when we decided to leave Gerber. We would need to restart that if we made the decision to stay at Gerber.
Matthew - if you haven't had a chance to interact with Bojitt do! Stop by and look at the art. She and the dancers loved the space and used the whole store, huge enthusiasm about what we are doing and the space. Art work will be for sale, all proceeds benefit Black Lives Matter Chicago. Picture below. 
Matthew - haven't seen minutes yet for three meetings... when will they be posted?
Lee - I'm behind, goal is to get approval of minutes from Board and then post by Sunday after Board meeting, trying to get caught up with at least this one and previous this weekend. 
Matthew - Thanks, Lee. Question for Grant: The cost to exit Gerber went up $100K in a week - what's the change?
Grant - the first time we gave a number, we overlooked that they are deferring rent, which they won't go after if we have a new contract but if we leave they can demand it
Anthony - think it's the most honest number we can provide, I think the Board has intentionally changed from truth with enthusiasm to brutally honest facts.
Matthew - appreciate the honesty, thanks for letting us be a part of this.
Bojitt's painting

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