Fredericksburg Food Co-op, located in Fredericksburg, Va., opened its doors in April 2021, during one of many COVID spikes. The start-up cooperative had already experienced several construction delays and increased material costs due to supply issues as a result of the pandemic. However, with some help, the co-op staff, board and community were able to weather all of this and are now enjoying a successful new co-op that has brought jobs, increased local food access and a community resource to the area.
Plans for a new co-op in Fredericksburg go back several years, when a group of residents began discussing the idea in 2015. Rich Larochelle, Fredericksburg Co-op board treasurer and founding board member, said the inspiration for the start-up came from the desire to create “a place where people and ideas come together, making available healthy food for everyone.”
To make their plan a reality, the board — made up entirely of volunteers — began seeking out resources. Larochelle recalls visiting other neighboring co-ops for inspiration and support (he specifically calls out Friendly City Co-op General Manager Steve Cooke for his help) and talking to Food Co-op Initiative (FCI) about the services and resources available to new co-ops.
“We followed FCI’s guide to starting a food co-op and what it takes for a co-op to be successful,” Larochelle said.
They also began working with NCG. Larochelle had worked in electric and finance co-ops for 40 years and had served on the National Cooperative Business Association (NCBA) board, so he was familiar with several NCG staff, including Senior Director of Membership and Cooperative Relations Karen Zimbelman and Retail Support Director Michelle Schry.
Soon the Fredericksburg board was working closely with NCG Senior Director of Store Development Dave Blackburn, who helped the new co-op with the negotiation and signing of its lease agreement. The site selection committee had found a site in a visible location near downtown with good parking and reachable to all areas of the community.
“Dave was instrumental in getting us through that phase,” Larochelle said. “We had the funds and a location, and we were just beginning our search for a GM. We reached out to Dave, and he was all on board with helping us with the lease agreement.”
Funding the Project
In addition to procuring a site, the board also had to secure financing for what was expected to be a $4.3 million project. The co-op had been signing up members over the course of two years in anticipation of the store opening. Larochelle said they averaged a new member a day in 2017-18. They then exceeded that rate in 2019 and, with 1,000 members in sight, made the decision to launch an owner capital campaign. The campaign was a success: The co-op set a campaign goal of $1.6 million and ended up raising $1.7 million from more than 200 owner loans. Later, closer to opening, the co-op launched another capital campaign, which led to an additional $750,000.
They looked to banks for the remaining financing. In 2020, Fredericksburg sought the aid of National Cooperative Bank (NCB) to work on an approach to get a loan. With NCB’s help, they were able to secure a Small Business Administration (SBA) loan — the first and only for a food co-op — in the amount they needed. When all was said and done, the NCB loan accounted for 33% of the project cost, with the co-op financing the remaining 67%.
Fast forward to the spring of 2021. Fredericksburg Food Co-op opened its 9,630-square-foot store (with 6,429 square feet of retail). Since then, they have continued to add members (passing 2,000 earlier this year) and have become an NCG member co-op.
“Dave [Blackburn] and the NCG Store Development team were extremely helpful, as were NCG staff in taking the pro forma forward and working with UNFI on store design,” Larochelle said. NCG staff also came to help with the store opening, along with staff from other co-ops, such as Roanoke Co+op.
“We are grateful to the staff of NCG for the support they provided in so many areas, and particularly to Dave for holding our hand during the opening phase,” said Larochelle.
Community Impact
The co-op is the only grocery store in downtown Fredericksburg, and now employs about 30 staff — all new, local jobs, as Larochelle points out. They make it a priority to buy from local farmers, as well as local bakers and artisans. Sales on local products make up 15 to 20% of total sales, with that percentage expected to grow. The co-op also has already become an important resource in the community, offering gardening classes, local music on the outdoor patio, and events like a 5k run to raise funds to reduce the cost of groceries for SNAP/EBT users.
Larochelle describes the new co-op as “a place that’s welcoming, whether you’re a member or not; a place to have a meeting or just a cup of coffee.”
He recalls talking to a member recently who said he couldn’t believe the improvement in the quality of life in the town since the co-op opened. Fredericksburg Co-op’s blog, “Why I Shop at the Co-op,” is filled with similar testimonies from members praising the co-op.
“It’s a beautiful store and an uplifting place to be,” Larochelle said. “And people appreciate that.”
