Green City Growers Cooperative

A worker-cooperative, urban-farming business, sustainably growing salad greens for local and regional markets, Green City Growers Cooperative has created jobs and increased community wealth in a low-income, disadvantaged urban neighborhood while reducing food miles and increasing consumption of locally produced, healthy food. In addition to the benefits of employee ownership and investment in the local green economy, the case demonstrates the role that sustainable entrepreneurial ecosystems can play in sustainable business and economic development.

Green City Growers Cooperative (GCGC) is a worker-owned, sustainably-oriented, urban farming business in Cleveland, Ohio, that belongs to the Evergreen federation of worker-owned cooperatives. Evergreen, in partnership with a variety of public and civic organizations, and through leveraging the purchasing power of local anchor institutions, is transforming inner-city Cleveland to create green jobs and build community wealth through local worker ownership. Situated on a twelve-acre plot in the city’s Central Neighbourhood, the 3.25-acre, custom-built greenhouse opened in 2013 with fifteen employees. Today, GCGC employs 42 residents, the majority of whom are worker-owners, and has a turnover in excess of $3.6 million.

GCGC’s origins go back to 2005, when the Cleveland Foundation, a local economic development organization, began searching for a long-term fix to the multiple-deprivations facing Cleveland’s mostly black, inner city neighbourhoods. Forming a coalition with other local institutional stakeholders, including the city government, hospitals, and university, they engaged with the Democracy Collaborative, a progressive economic thinktank, for help in 2007. Taking inspiration from the Mondragon group of cooperatives in Spain, the Democracy Collaborative devised a plan for community wealth building based on the formation of a federation of green worker cooperatives, kickstarted by the purchasing power of large anchor institutions, such as the local hospital and university. The coalition’s connections enabled it to build a foundation on which they could move ahead with plans, including gaining the backing and participation of community leaders, advocating for and obtaining widespread support from local city, state, and federal politicians and other influential individuals and groups, drawing on expert advice for developing business plans for the cooperative businesses, and educating and training the many stakeholders involved on the concept. Meanwhile, the Democracy Collaborative painstakingly worked through details of having the US Inland Revenue Service approve the highly unconventional holding company organization, the Evergreen Cooperative Initiative.

 

In 2009, a participating community member recognized healthy food production as an opportunity for one of the first Evergreen cooperatives. The idea aligned with Evergreen’s mission, and with the anchor institutions’ purchasing requirements for large volumes of leafy greens and their active interest in localizing those purchases. Additionally, Cleveland’s well-established local food movement provided another potential market. Further investigation led the coalition to select hydroponics as the production technology for reasons including food safety, operational efficiency, and year-round production. An expert in hydroponics production and marketing was hired to conduct a feasibility study and, based on its findings, they were appointed CEO and tasked with developing the business.

 

Support from Evergreen was critical in the business startup. Through Evergreen’s extensive network, finance of over $16 million was lined up from multiple public and private sources, brownfield real estate obtained and prepared, necessary legal structures created, environmental assessment conducted, and the local community engaged. The latter point included conducting community outreach events and working closely with community integration organizations on recruitment of workers from the refugee population and people with non-violent criminal records. The financing included grants and a variety of loans, but in order to maintain the cooperative status, no equity was relinquished. The actual GCGC was formed in 2012 under joint control of worker-owners and the Evergreen group, with the latter controlling strategy and other major decisions. Operations began in 2013, after sales contracts were established with three anchor institutions, grocery store chains, and food service companies, all of which sold their products within 150 miles of Cleveland. 

 

From its initial sales contracts, the cooperative has continually developed new business opportunities. Sales were diversified to other markets, such as restaurant wholesale, regional distributors, and locally-based food processors, though still with a major focus on local to regional consumers (50% of output is consumed within 150 miles). After some failed attempts to find markets for the produce they were growing, the cooperative became more adaptable, finding out what customers need and responding accordingly. For example, local restaurants wanted particular types of salad leaves, and a local processor wanted large volumes of basil, so the cooperative switched tack to tailor production to meet the customers’ needs. Operationally, a major upgrade to LED lighting in 2018 decreased costs and improved growing efficiency. Operations were also diversified, looking to find new uses for the cooperative’s facilities and capabilities, resulting in a contract to do the packing for another local grower in 2020.

 

Despite being a worker cooperative, GCGC is run by a general manager, a paid employee, not a worker-owner, and operational decision making for the first several years was largely a managerial function. The emphasis of the business in these years was on consolidating the economic viability, developing new business opportunities, and moving towards profitability; a challenging task due to the ongoing debt obligations of the financing taken on, the highly-competitive market for salad greens, and the commitment to paying decent wages and benefits to staff. There were ups and downs in the business’s economic performance during this period, though it has been moving in a positive direction in the long-term. In 2018, after five years, and in response to the demands of worker-owners, there was a significant turn towards greater investment in the cooperative’s members and divestment of managerial responsibility. Training in cooperative operations and in general business skills was provided, enabling worker-owners to participate more fully in management decisions. Responsibility for strategy and other major decisions, however, is still retained by the Evergreen group.

Pathway maps represent the sequence businesses followed to implement successful sustainability practices and identify emerging ones within firms. The pathways also reveal the diversity of actors that begin to form sustainability enabling ecosystems for businesses to adopt, deploy or test sustainability practices.