Community investment in good food

This article by Andrew Bibby, in a slightly different form, was first published in the Observer, 2005

First it was the Sudan 1 health scare, then the campaign by Jamie Oliver against Turkey Twizzler-style school meals. The food industry is under pressure for serving over-processed meals produced through complex supply chains.

But a growing number of people are taking matters into their own hands by investing money to ensure that the sort of food they prefer to eat is readily available within their communities. Take, for example, Unicorn, an independent, co-operatively run grocery store in the south Manchester district of Chorlton. According to co-operative member Kellie Bubble, Unicorn aims to trade in 'wholesome foodstuffs' that have been subjected to minimal processing. Almost a third of its sales, says Bubble, comes from organic fruit and vegetables. 'A large percentage of it is local, and it's much fresher than the stock in supermarkets. A lot of it is half the price too,' she says.

Unicorn has been trading for nine years and now turns over an impressive £3 million a year. But the business had to ride out a potential crisis recently when the landlord of the shop it occupies put the property up for sale. Unicorn's response was to invite its customers to become investors and to help the co-operative to buy the building.

'We got an outstanding response from customers,' says Bubble. 'We had hoped to raise £100,000 towards the £1m we needed for the building. We got £350,000.' It meant that the premises could be acquired with a much smaller commercial mortgage than had been anticipated.

Unusually, Unicorn also invited investors to choose their own interest rate on their investment - anything between 0 and 6 per cent. While some chose the full 6 per cent, many were prepared to forgo interest altogether, which means Unicorn is now paying an average of about 3.5 per cent on the capital it raised in this way.

A world away in Middleton Tyas, a small North Yorkshire village close to Scotch Corner on the A1, another shop has tapped into local goodwill to acquire much-needed capital. The village shop had been a feature of Middleton Tyas life for well over a century, and for many years was run by one family. But when the last owners moved away two years ago, the building was sold as an ordinary house.

Nothing daunted, the locals took matters into their own hands. 'We had a meeting to find out if anyone wanted to have a shop. We got a huge response,' says Jill McMullon, chairman of what has now become Middleton Tyas Village Shop Ltd, a community business owned by its members. The village store reopened last autumn in what had previously been a Victorian reading room at the back of the village hall. Turnover has been running at over £2,000 a week, enough to ensure the long-term viability of the business.

'I don't think people wanted to see just a standard corner shop,' says McMullon. 'We have tins of beans and so on, but we also sell as much good-quality local produce as possible. We have Yorkshire Dales meat and there's a deli counter with very good hams and cheeses - they're all local.'

The community group behind the shop launch was able to access central and local government grants to fit out the store and borrowed from Co-operative and Communty Finance (formerly Industrial Common Ownership Finance), a specialist loan fund for co-ops and community businesses. However, some of the capital was also raised from within the village, with about 100 residents investing from £25 upwards in redeemable shares in the business. The shop is structured as a community co-operative which means, as McMullon explains, that 'it doesn't matter how many shares you bought, you still have one vote'.

Middleton Tyas's shop is one of a number of village stores to have benefited from Co-operative and Community Finance loan capital in recent months. Development manager Andrew Hibbert points out, however, that community-run village shops have to demonstrate their ongoing viability. 'The more they can raise from members in share capital, the more satisfied we are that there is a genuine commitment from villagers,' he says.

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