The Power of Buying Clubs
Small scale farms, ranches, and food producers only have so much buying power by themselves. But buyers with similar interests can pool their buying power. Buying power means a stronger negotiating position with sellers. Several food producers can come together, and join forces to purchase anything from compostable bags to machinery. This means lower prices for each business, and the ability to aquire technology that would otherwise be prohibitively expensive. Like robots that pick strawberries and number crunch the health of fields with lasers.
The Florida Legislature specifically recognized the ability of growers to pool their buying power “in connection with the purchasing, hiring, or using supplies, machinery, or equipment.” To qualify as a buying club, there need to be (at least three food producers).
To see the strength of buying clubs in action, (look at Ace Hardware Stores). Ace got its start in 1924, when four individuals decided to pool their buying power. Now, in addition to buying power, Ace’s individual store owners have the benefit of the Ace brand and advertising. Ace’s advertising budget in 2015 was $100 million. The benefits of buying clubs are not limited to advertising and equipment. Members of another cooperative, CCA Global Partners, pool their buying power for insurance and financing.
Buying clubs represent an excellent opportunity for farmers, ranchers, and food entrepreneurs to come together as a community, and to get deals on equipment, supplies, marketing, insurance, and everything necessary for a local food system to thrive. If you need further guidance in forming a buying club, contact me. Your first consultation is free.