CUED

Market Analysis and Marketing Strategies for the
Greater Illinois People's Cooperative

In cooperation with GIPC staff CUED reviewed information on GIPC's current operations, the natural foods industry, and the cooperative movement. In addition we surveyed GIPC member and non-member cooperatives and analyzed the Chicago food distribution system. The recommendations were developed in dialogue with a Project Review Committee which included representatives of CUED, GIPC staff, board, and membership.

To operate without continuing losses in the natural foods industry, GIPC will need to increase its sales volume several times. This will require much greater responsiveness to customer needs, increased sophistication in marketing, and corresponding changes in operations and record keeping.

The initial increase in sales will have to come from the cooperatives market; after that, health food retail stores and institutional food buyers will need to be approached. Ultimately, these last two categories will need to constitute approximately 50% of total sales.

The recommendations proposed in this report from the basis for a detailed marketing plan. The main market strategies we recommend are the following:

1. Increase the number of cooperatives who are members. This should be possible because: Many coops are now not aware of GIPC. GIPC's product line matches the needs of coops. With effort, GIPC can compete with the main other suppliers.

2. Increase sales to current GIPC members. The main approaches are:

Help member coops increase in size.
Increase the amount individuals spend at their coop.
Increase the amount coops spend at GIPC.

3. Start sales to retail health food stores and institutional food buyers.

At a level of effort of one person year, this should increase sales by $330,000 in the first year.

For the pasta project, the recommended market strategies are, in order of priority:

1. Reapproach cooperative warehouses emphasizing new product additions, packaging, product information, and pallet discounts.

2. Make product presentations to Chicago area natural foods wholesalers.

3. Make product presentations to Chicago area institutional food wholesalers.

4.Approach selected supermarkets directly.

This will require one-half a year's worth of effort, and result in a $50,000 increase in sales. In the absence of data allowing an analysis of marginal costs, we are unable to determine whether greater emphasis on either warehouse or pasta would have a more favorable impact on overall operating results. We recommend a thorough review of GIPC's record keeping systems in order to provide this and other management information.

Finally, the report recommends the establishment of a marketing department, separate from the education department, consisting of 1.5 persons, to be in charge of implementing the workplan.

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UIC-Center for Urban Economic Development