'It's been a learning year': The Oshkosh Food Co-op opened amid a pandemic. It's looking to grow after a rough first year.

Editor's note: An earlier version of this story incorrectly spelled a previous Oshkosh Food Co-op general manager's last name. The co-op's first general manager was Jeffrey Thouron.

OSHKOSH – Perhaps it was a bold move to open a food cooperative in the middle of a worldwide pandemic, but Oshkosh Food Co-op's board president thinks the struggles have been worth the effort.

Brenda Haines, president of the co-op's Board of Directors, said the store had to change a lot of plans in response to COVID-19 restrictions, not to mention staffing shortages that followed.

It's also faced, and continues to face, some early financial struggles. Still, Haines is optimistic about the future of the member-owned grocery store as it moves into its second year.

"It's been a good year," Haines said. "It's been a learning year."

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First year sees below-expected sales, staff changes

According to the co-op's financial reports, its net operating expenses for the year ending Jan. 2 were $584,734 more than its income. The shortfall was offset by the co-op's other sources of income came through grants from organizations such as Greater Oshkosh Economic Development Corp. and the Oshkosh Area Community Foundation's Oshkosh Food Co-op Fund, as well as membership fees.

That additional income added up to just over $1 million for 2021, leaving the co-op with a end of year balance of $441,281.

The co-op's board may have been overly optimistic about sales for its first year, but Haines said that is not atypical for a start-up.

"They were not what we thought they'd be," she said.

As a result, Haines said, the co-op adjusted this year's budget, which includes expenses and equity, from $2.7 million to to $2.2 million.

In order to meet that adjusted budget, the co-op needs sales to hit $43,250 per week through the end of the year.

Haines declined to discuss specifics about the co-op's sales or weekly income, but weekly emails to member-owners in June and July from the store's general manager, J.D. Gildemeister, suggest it has struggled to hit that mark this summer.

For example, in a July 7 email, he said sales were down from the previous week and remained 30.25% below the budget, though sales had increased 15.5% from two weeks prior.

"Our member transactions ... have continued to go up, but nonmembers, people who just show up to grocery shop, has been a little more difficult," Gildemeister said.

The store also has faced staffing challenges.

The board undertook a six-month, nationwide search in 2020 to find a general manager. It hired Jeffrey Thouron, who ran Breadroot Natural Foods Co-op in Rapid City, South Dakota, in December 2020. Thouron resigned less than a year later on Oct. 28.

The board named Ryan Rasmussen, who had served on teams that helped bring the co-op into existence and joined its board in spring 2021, as acting general manager on Oct. 30.

Gildemeister took over as general manager on May 9 after being recruited for the position. He brought more than 20 years of experience in the hospitality field.

Co-op adapts to customer feedback in its first year open

The store's location was chosen in part because of its visibility and also because it is in what the U.S. Department of Agriculture defines as a food desert, a low-income area where a "substantial number or proportion of the population has low access to supermarkets or large grocery stores."

"For low-income individuals (and) those who lack transportation and funds, this is a big resource because its within walking distance," he said. "They're able to get everything, including organic products, things they wouldn't be able to get at, say, a Kwik Trip or other places nearby."

However, some customers have complained that the co-ops prices make it unaffordable. In response, the store introduced the Co-op Basics program, which offers savings on around 300 staple pantry and household items.

In addition, the co-op has added and removed some products and even re-vamped the entire store this spring to make it easier to locate items.

Gildemeister believes the co-op's prices for other items are on par with local grocery stores when it comes to quality, or an "apples to apples comparison" of organic products.

"The pricing is very competitive compared to any of those grocery stores as well, but you also have a longer shelf life because we’re getting it from local farmers right here," he said.

The co-op set a goal of sourcing about 20% of its food from northeast Wisconsin, and Haines said they have met that goal.

Having a downtown grocery store is also a draw to people looking to move to downtown Oshkosh, he said, and its location allows the co-op to be a hub and community gathering space.

Community events, inclusion are Year 2 priorities

As the co-op marches into its second year, it's already been faced with another challenge: A July 23 storm knocked out power for more than 10 hours. The co-op is filing an insurance claim, but Gildemeister estimated more than $5,000 worth of product was lost.

Staff contacted local suppliers, who were able to get new products to the store by that Monday. With that quick service, and volunteers who stocked shelves the following Monday, the store was able to reopen quickly.

"We had numerous volunteers step up to help (and) we have been able to bounce back pretty quick," he said. "It was a true showing of what a co-op can be."

It's that support that makes Gildemeister optimistic for year two.

The Food For All program launched in June in response to rising at-home food prices and general inflation. According to its website, the co-op "wants to help ensure shoppers don't need to choose between healthy food options and ... paying their bills."

The program allows people who enroll to receive a reduced membership rate of $10 and a 10% discount on most store items.

"It gets them access to being a member, being able to have voting rights, be part of discussions and community projects," Gildemeister said. "And then it also gives that discount to try and make it more accessible for all."

The co-op in May also debuted a new Food Justice program and Belonging Statement to further its mission to be a place where everyone can shop and hang out.

"The Oshkosh Food Co-op aspires to initiate and support actions that are antiracist, justice-oriented and developed through co-creation, which remove identity-based barriers and help create new systems," the statement reads.

Gildemeister said that inclusion extends to co-op staff, member-owners and customers. The co-op has a committee focused on making sure the store has diverse products that meet the dietary needs of people of different backgrounds.

But perhaps what excites Gildemeister most is the prospect of being a community gathering space — something the pandemic limited in its first year. This year's annual meeting at the end of May was the first big event the co-op held in person.

"That part of the co-op we really haven't been able to do, having that community involvement," he said.

The co-op now has several recurring events including live music on Sunday afternoons on the patio, Pups on the Patio with New PAWSibilities and a weekly "Grocery Gad" walk around town.

Folks can also rent the co-op's new community room for private events. The room opened earlier this spring with options for catering.

All of that has Gildemeister and Haines optimistic for the second year.

"Throughout this, one of the most wonderful pieces has been the way the community has come together to make this project happen," Haines said. "It's continuing to be driven by and for the community."

Contact Katy Macek at kmacek@thenorthwestern.com or 920-426-6658. Follow her on Twitter @KatherineMacek.

This article originally appeared on Oshkosh Northwestern: Oshkosh Food Co-op's bests COVID, financial tests as it looks to year 2