business corporate responsibility

The cooperatives behind the brands

One of the key steps to making our capitalist society work better is to reform the corporation model of business. Corporations are focused very narrowly on delivering returns to their shareholders, and can easily neglect long term planning or the needs of other stakeholders, such as local communities or the environment. There are lots of alternative models, and the cooperative is one of the best known.

Some companies are well known cooperatives and trade on that basis, like John Lewis or The Co-operative supermarkets. Others have a cooperative behind the scenes in the production chain. Here are some of the ways that coops function in some of our well known food brands.

  • One of the most direct ways for farmers and producers to get a fair deal is to set up a brand that will market your products. Danish dairy farmers did this in 1901 when they created Lurpak. The brand set a quality standard for Danish butter, and the company now sells products in 80 countries. It is owned by 8,000 dairy farmers in Denmark, Sweden and Germany. Danish Bacon is a similar cooperative. Ocean Spray is a brand specialising in cranberry products, and is owned by 600 cranberry growers across the US and Canada. In 2004 they voted down a take-over bid from PepsiCo. There’s also a cooperative brand for grape products, Welch’s, owned by the National Grape Cooperative Association.
  • Another way to safeguard local producers is to control the product designation rather than the brand. This is often done for local specialities, such as Parmesan. You can’t call your cheese Parmigiano-Reggiano unless its actually from the specific region of Italy around Parma, a tradition closely guarded by the artisan producers of the Consorzio del Formaggio Parmigiano-Reggiano. Champagne is produced in a similar fashion. Like Parmesan, around 90% of Champagne is produced by co-operatives.
  • Brands are fluid things today, and many small successful brands are coveted by major corporations. Sometimes new owners source their ingredients internationally to try and increase profits, other times the traditional supply chains remain intact. Colman’smustard is an interesting example. The Mustard Seed Growers cooperative have supplied Colman’s with mustard seed since the brand was created in 1814. Unilever now owns the company, but the historical relationship with the growers of Lincolnshire and Cambridgeshire is still in place. Similarly, the Ribena brand is owned by Glaxo-Smithkline, but behind the product itself is the Blackcurrant Growers Association, a co-operative that supplies almost all the fruit for the drinks.
  • Many of these cooperative networks go back a long way, but it’s still entirely possible to set them up from scratch. Most of the potatoes for McCoys crisps have been supplied by local Yorkshire farmers since 2009, through United Potato Farmers Ltd. The coop was set up at the suggestion of United Biscuits, who own the McCoys brand, as a way of localising production and safeguarding supply. Also based in Yorkshire is the Green Pea Company, a cooperative formed in 2006 to supply peas to the Bird’s Eye factory in Hull.

For more, see Co-operative UK’s annual review for 2012.


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