What are Cooperatives?
Cooperatives are businesses that—
- are owned and democratically controlled by their members—the people who use the co-op's services or buy its goods—not by investors.
- return surplus revenues (income over expenses and investment) to members proportionate to their use of the cooperative, not proportionate to their ownership share.
- are motivated by service to their members, not by profit.
Types of Co-ops
Cooperatives fall into four categories: consumer, producer, worker and purchasing/shared services.
Consumer-owned Co-ops
Consumer cooperatives are owned by the people who buy the goods or use the services of the cooperative. Consumer co-ops include credit unions, child care cooperatives, electric and telecommunications cooperatives, food co-ops, health care co-ops, housing cooperatives, and many more. Example:
- Community Mercantile (The Merc!), Lawrence, KS — a consumer-owned grocery co-op serving the natural and organic food needs of Douglas County.
Producer-owned Co-ops
Producer cooperatives are owned by producers of farm commodities or crafts that band together to process and/or market their products. Example:
- Land O'Lakes, Inc., Arden Hills, Minn.— a food and agricultural cooperative owned by 7,000 farmer-members and 1,300 local community cooperatives.
- Other well-known farmer-owned cooperatives include SunKist, SunMaid, Blue Diamond, Ocean Spray, and Riceland.
Worker-owned Cooperatives
Worker co-ops are owned and democratically governed by their employees. Example:
- Equal Exchange, Boston, Mass.-a worker-owned, fair trade products buying and distribution cooperative that pioneered fair trade in the U.S.
Purchasing Co-ops
Purchasing cooperatives are owned by small, independent businesses, municipalities or other like organizations that band together to enhance their purchasing power. Example:
- ACE Hardware and TruServ, Chicago, Ill.-national buying cooperatives of independent hardware store owners that use a national co-op brand.
Co-Op Facts & Figures
- U.S. co-ops serve some 120 million members, or 4 in 10 Americans.
- Cooperatives operate in every industry including agriculture, childcare, energy, financial services, food retailing and distribution, health care, insurance, housing, purchasing and shared services, telecommunications, and others.
- Cooperatives range in size from large enterprises, including U.S. Fortune 500 companies, to single, small local storefronts.
- About 30 percent of farmers' products in the U.S. are marketed through 3,400 farmer-owned cooperatives.
- More than 30 cooperatives have annual revenues in excess of $1 billion, including such well-known names as Land O' Lakes, Inc., and ACE Hardware. The top 100 co-ops have a combined $120 billion in revenues.
- 10,000 U.S. credit unions have 84 million members and assets in excess of $600 billion.
- Nearly 1,000 rural electric cooperatives own and maintain nearly half of the electric distribution lines in the United States, cover 75 percent of the land mass and provide electricity to 36 million people.
- More than 1,000 mutual insurance companies, with more than $80 billion in net written premiums, are owned by their policyholders.
