Nourishing rural markets

The grocery stores that lined Main Street were always key to the little farm town of Anita, Iowa.

At one time, four groceries met the needs of the large families who lived in the town and surrounding areas.

Maxine Christensen recalls the horses that farmers once hitched behind her family’s general store.

“Grocery stores were a staple of town,” the 85-year-old Christensen said.

Times have changed. Anita’s population dwindled and larger competitors arrived, but the final market remained so important that its pending closure spurred residents to buy shares and create a grocery cooperative.

Co-ops are old hat for most Midwest farmers, but experts believe that only a dozen or so across the nation have been created to hang on to community grocery stores. It’s a move some think will spread to other rural areas beset by similar problems, but they caution that such efforts carry risk.

In Anita, residents felt they had no choice -- losing the 90-year-old Main Street Market would virtually clear downtown of traffic to the detriment of the businesses that remained. And many wondered what would become of their town without a gathering spot.

“I know quite a few people in town really just because of the store,” said Don Norris, 40, who buys all his meat at the market.

In creating the Anita Grocery Cooperative, residents formed a board and sold about 300 shares at $200 apiece. The co-op board also took out $150,000 in public and private loans.

On Dec. 1, the market opened its doors under new ownership.

Although most residents could have managed the inconvenience of a longer drive for groceries in the regional city of Atlantic, rural towns lose something when fixtures such as grocery stores close.

A domino effect kicks in and other businesses begin closing, said Kimberley Zeuli, a visiting professor of economics at the College of William & Mary in Williamsburg, Va.

“At some point, it’s no longer a town,” said Zeuli, who studies rural cooperatives. “It’s just a gas station.”

Townspeople understand this shift and often try to fight it, frequently by embracing the very chain competitors that put Main Street shops out of business. But many communities can’t entice a Wal-Mart or a Target, and in the last decade more have turned to innovative approaches such as co-ops, Zeuli said.

Of the roughly 300 food-store cooperatives nationwide, 5% or fewer are conventional grocery stores, said Stuart Reid, a food co-op development specialist at Food Co-op 500. The private organization grants money to cooperatives through sponsors such as the National Cooperative Bank.

Most of the grocery co-ops are in the upper Midwest, including Fontanelle, Iowa; Houston, Minn.; and Iron River, Wis. The Scottsbluff, Neb.-based Panhandle Cooperative System runs conventional grocery stores in Scottsbluff and Torrington, Wyo., and plans to open a third next month in Wellington, Colo.

Reid, based in Dennison, Minn., has been receiving more queries about loans for small-town grocery co-ops as private markets edge toward closing.

Small markets are trying to remain afloat at a time of relentless competition within the grocery industry.

Even large retailers are facing more competitors as convenience stores, discounters such as Aldi and drugstores try to grab a share of the $500-billion grocery industry, said Bill Greer, a spokesman for the Washington-based Food Marketing Institute, which represents chain stores as well as independent markets.

“All companies are really in the same competitive situation, no matter whether they’re from a large chain or mid-size,” Greer said. “Who’s not going to be in the food business is the question as the industry continues to evolve.”