SITUATION ANALYSISPaige Eubank

Catherine JohnsonCameo Jonas

Matthew RoelofsLeighAnne Self

Introduction………………………………………………………………………………….3

Industry Overview

What is a Food Co-op?…………………………………………………………...….3

Seasonality…………………………………………………………………………...…3

Societal and Cultural Conditions……………………………………………..…....3

Other Food Co-ops……………………………………………………………………4

Client Profile

About Three Rivers Market…………………………………………………….……..5

Background and History……………………………………………………….……..6

Target Consumer Segment……………………………………………………….....7

Four P’s of Marketing……………………………………………………………...…..7

Member Benefits……………………………………………………………….….…..8

Competitor Profile About Earth Fare…………………………………………………………………..…..8 Background and History……………………………………………………………...8

Target Consumer Segment………………………………………………………….9 Four P’s of Marketing………………………………………………………………….9 Shopper Benefits…………………………………………………………………......10

SWOT Analysis…………………………………………………………………….………..11

References……………………………………………………………………………….….12

2

Table of Contents

Three Rivers Market is the first and only food cooperative in the state of Tennessee. Based out of Knoxville, it aims to attract residents who value the importance of sustaining the local economy through purchasing food grown by local farmers. Three Rivers Market exists to benefit its members by providing

healthy foods that will create a healthier environment and community.

What is a food co-op?

A food cooperative, or food co-op, is a group of members that democratically construct a grocery in order to fulfill a community need. The goal of a co-op is to meet that needs of its members. A person may become a member by purchasing a share and once a member the person is given the right to vote to construct the decisions of the co-op1.

Seasonality

By observing grocery stores and the food co-ops, it is clear that the stores receive more traffic during holiday seasons.

Societal and Cultural Conditions

Producer co-ops such as Three Rivers Market provide services that include products produced by local farmers. This aspect is different from a normal grocery store because grocery stores do not make connections with local farmers in order to sell fresh, organic, and local produce. The members in the community have a say when they pay for a membership on how the co-op operates and what the co-op sells2.

As said by the National Cooperative Grocers Association, “A cooperative is a business that is voluntarily owned by the people who use it, and operated for the benefit of its members. Co-ops give members the opportunity to become involved in the local community while making a difference by promoting health benefits.

3

Industry Overview

Introduction

Other Food Co-ops

In an article by the Organic Consumers Association, consumers are eating more organic, locally grown foods. The article states, “In the last four years in Washington we’ve hone from 290 farmers to 520 because of the increased demand.” People are also more concerned of the hormones and products that are going into the food. For these reasons, co-ops are successful in communities3.

City Market Co-op (Burlington, VT)

City Market offers cooking classes to locals. It has a community initiative and puts on several events.

Membership Benefits

• Free water from the Reverse Osmosis water machine• Discounts at locally-owned businesses through the Community Connections

Program• A Patronage Refund in profitable years, based on a percentage of each

member's purchases and the store's profit from member sales• The opportunity to do Member Work in the Co-op or volunteer in the

community for store discounts• Become the featured Artist of the Month in the Member Artist Café Gallery4

Ozark Natural Foods (Fayetteville, AR)

Ozark hosts special events, along with the Co-op Kids and Neighbors Programs. The co-op also gives out food recipes to its members. Membership Benefits

• Owner Appreciation Weekends• Senior Discounts• Student Discounts• Enjoy Owner Bonus Bay discounts • Enjoy Discounts at other local businesses • Share in Co-op’s profit • Receive coupon books • Take part in grassroots democracy • Receive The Nutshell newsletter • Special Advertising rates in the newsletter5

4

Briar Patch (Grass Valley, CA)

Briar Patch is unique for its co-op kitchen classes and patio tabling.

Membership Benefits

• Free Event Ticketing• The opportunity to be involved• Owner appreciation discount vouchers • Special order discount • Patronage dividends • Food safety alerts • Local business discounts • Newsletter ad discounts • Community room discount• Volunteer discount6

About Three Rivers Market

Three Rivers Market is a customer-owned food cooperative located in Knoxville, Tennessee. Three Rivers Market strives to serve and nourish its community and region through selling local, natural and organic foods. It is a 100% independent business that is guided by values and principles that emphasize fair and honest business practices7. Three Rivers Market is a part of Principle Six (P6) Cooperative Trade Movement, which is the sixth principle of the seven international cooperative principles. Principle Six, Cooperation Among Cooperatives, ensures that customers’ purchases directly support local or small farmers and producers and cooperative and non-profit businesses8.

Along with its great selection of local and organic food products, Three Rivers Market has a hot bar open daily for lunch and dinner with a dining area and patio for customers to enjoy their meals. Three Rivers Market has more to offer than its great food. To accommodate all customers that shop at there, the store offers areas for dogs, bikes, and electric cars. The Barking Lot is an area

5

Client Profile

equipped with dog beds, water bowls and carabiners to tether pets and make them comfortable while its owner shops9. Three Rivers Market also has Knoxville’s only bike Fix-It Station complete with bike racks and tools for small tune-ups and the store hosts two electric car chargers in its parking lot for cars to charge while customers shop10. Three Rivers Market is also the only participant of Knoxville’s Shop and Ride program where customers can get a free bus pass when they spend $10 or more at the store11.

Mission Statement: “Three Rivers Market, a cooperative center of sustainable commerce, exists to benefit its members by creating and nourishing a healthier environment, healthier people, and a healthier community”12.

Background and History

Three Rivers Market derives its name from the convergence of the Holston and French Broad Rivers on the eastern side of Knoxville. These two rivers from the Appalachian Mountains combine to form the Tennessee River. Like the three rivers that sustain fertile ground, Three Rivers Market stimulates the local economy by providing organic, local food.

The very beginning of the cooperative dates back to the late 1970s, starting with an ambitious group of people who formed a buying club to purchase healthy and inexpensive natural foods. In 1981, the buying club changed to a retail business named Knoxville Community Food Cooperative (KCFC), providing consumers with rare local, natural and organic food. Serving Knoxville as a major environmental influence, KCFC was the first recycling center founded in Knoxville.

In order to stay up-to-date and produce enough for the whole community, KCFC changed its membership structure from a dues-based club to an equity-based cooperative in 2005. This massive change included the renaming of the cooperative to Three Rivers Market. In 2011, Three Rivers Market relocated from its downtown location to its current location 1100 N. Central Street, less than a mile from the previous address.

In both 2012 and 2013, Three Rivers Market was voted Best Health Food Store/Grocery and Best Green Business of Knoxville.13

6

Target Consumer Segment

Three Rivers Market’s target consumer segment is people who wish to eat healthy and/or want to give back to their community by eating locally and organic foods.

Four P’s of Marketing

Product

Three Rivers Market sells produce, deli, meat and poultry, seafood, dairy,coffee, pet food, beer, body care, and nutritional supplements all of which is fresh, natural, organic, and high-quality14. Besides food, Three Rivers Market also carries quality-made products such as mugs, teapots, note-cards, calendars, magazines, books, and cooking tools and utensils. There are a limited number of books and magazines written and produced locally, but many are published by the Great Smoky Mountains Association. They cover topics such as food, economics, energy efficiency, bicycling routes, and poetry15.

Price

Three Rivers Market’s prices are matched against competitor stores to ensure that customers are getting the best quality food for the best prices.

Place

All products can be bought at Three Rivers Market’s store located 1100 N. Central Street in Knoxville, Tennessee. All food sold in the stores come from locally-owned, independent businesses. Local East Tennessee is within 100 miles of the store, local bioregional is within the Southern Appalachian Bioregion, and local regional is within 275 miles of the store and/or within the state of Tennessee. All products are labeled with which geographic area they come from16.

Promotion

Three Rivers Market mainly uses the internet and social media to communicate and reach out to the Knoxville community. The store posts frequent updates on Facebook about the hot bar menu, products in the store, and events happening in the community17. The store also has a twitter account, but it has not been updated since November 20, 201318. Three Rivers Market regularly updates its website with the same information that is posted on its Facebook page19.

7

Member Benefits

When you become a member of the cooperative, you become an owner the cooperative. Memberships interests purchased are equity in the business and gives the member financial and governance rights of ownership. A Fair Share Member, who has purchased at least eight Membership Interests, has the opportunity to share the cooperative’s net income in the form of a patronage dividend20. All members have special member-owner benefits. These include a 10% discount on Member Discount Days, special member deals throughout the store, a 10% discount on case purchases, the right to place a special order for items not carried by Three Rivers Market, the opportunity to advertise a business on the co-op’s Rooster Roster, a product recall notification service for items recalled at the co-op, and the opportunity to invest in the Knoxville community. Members also have the chance to vote in board elections that take place at annual meetings21.

About Earth Fare

Earth Fare is a grocery store that

has labeled itself as “the healthy supermarket.” Its vision is to be a trusted organic and natural food store where shoppers can easily make healthy decisions when purchasing food. Earth Fare differentiates itself from other food markets by the foods it does not sell. It has a

strict Food Philosophy creating high standards for the foods that reach its shelves. This Food Philosophy does not allow things such as artificial preservatives or sweeteners, bleached or bromated flour, and synthetic growth hormones.

Mission Statement: “Our mission is to connect communities and improve lives through food!”22

Background and History

In 1975 Roger Derrough opened up “Dinner for the Earth,” which was the first natural foods store to open in Asheville, North Carolina. The store remained at its initial tiny location for about five years before relocating to a bigger storefront in downtown Asheville. At the downtown location “Dinner for the Earth” thrived for

8

Competitor Profile

another 14 years. In1993, “Dinner for the Earth” was renamed to Earth Fare and moved to its current location in Westgate Shopping Center. The new location provided the space for Earth Fare to become a full-service supermarket. In 1997, Earth Fare opened up its second location in Charleston, South Carolina. Since then the store has opened up another 31 locations bringing a total of 33 Earth Fare locations throughout the Southeast23.

Target Consumer Segment

The target consumer are shoppers in Knoxville with an interest in eating natural whole foods.

Four P’s of Marketing Product Earth Fare only offers foods at its store that do not include: high fructose corn syrup, trans fats, artificial colors and sweeteners, synthetic growth hormones in fresh meat and dairy, and bleached or bromated flour.

Price Earth Fare provides customers with real low costs on certain items daily. The items on the low cost list do not change. These items include milk, orange juice, and eggs, as well as a number of other products.

Place

Earth Fare has 33 locations located throughout the Southeast, which includes the states of: North Carolina, South Carolina, Georgia, Tennessee, Alabama, Florida, Ohio, Kentucky and Indiana24.

Promotion

Earth Fare participates in community outreach through events. During the recent Knoxville Marathon the Knoxville Earth Fare set up a booth with free food and give-away bags. During the event Earth Fare also gave away coupons to runners so they would have a reason to come and shop at the store. Along with events that the store is hosting, Earth Fare also recognizes the events that the store will be attending in the Knoxville area. Earth Fare makes appearances on campus to reach students at the

9

University of Tennessee. The store also uses Facebook to promote sales, deals and events that the store is having. Since Earth Fare has two locations in Knoxville the Facebook page has split into two separate Facebook pages that are updated daily25.

Shopper Benefits Mobile Options Earth Fare offers an array of benefits for its shoppers. Right now the company is offering an app, which will provide on-the-go coupons for shoppers while also trying to promote shoppers to go paperless. Even with the app, the company still offers a coupon book on its website that shoppers can print off. Another mobile option that Earth Fare is offering to customers is text messages. All the customer has to do is text EAT to the Earth Fare number provided on the website and they will get on-the-run deals by text message.

The Tomato Bank and Get List Another program Earth Fare offers to its shoppers is the Tomato Bank, which is a program shoppers can sign up for to earn points every time they shop. The points translate that for every 100 points a shopper receives, they get a dollar off of any purchase. The point system works as follows: five points every time a customer types in their Tomato Bank ID or brings their own bag;10 points for a purchase of any of the following meals: Family Dinner Nights, Good Olde Days, and Burger for Bucks; 25 points for a purchase of any Get List Item; and 100 points for a purchase of all four weekly Get List Items.

Get List The Get List is a weekly list of foods that are worth more points at the time of purchase. The list changes every week and if a customer buys the full list they earn bonus points.

10

STRENGTHS WEAKNESSES

• Only co-op in Tennessee

• Sell only organic produce

• Compare prices

• Family of employees

• Locally bought food and produce

• Lacks advertisement for the store

• Poor communication with customers and potential customers

• Not many well-established goals

• They do not push memberships

• Only have local customers

• Doesn’t use its social media

OPPORTUNITIES THREATS

• People are more aware of the produce they buy because of GMO warnings

• It can create partnerships with other stores and restaurants

• People have become more health-conscious\

• People are more conscious of their local economy

o Participate in the day that people are encouraged to shop locally in their community

• Increase visibility/involvement at Farmer’s Market

• Co-ops are not well-known in this area

• People don’t understand co-ops and that they don’t have to have a membership to shop

• Other grocery stores in the area sell natural and organic foods

• Prices may be more expensive than at grocery stores such as Walmart and Kroger

11

SWOT Analysis

12

1 http://nfca.coop/definition

2 https://www.ncga.coop/what-co-op

3 http://www.organicconsumers.org/Organic/marketincrease73001.cfm

4 http://www.citymarket.coop/

5 http://www.ozarknaturalfoods.com/

6 http://www.briarpatch.coop/

7 http://www.threeriversmarket.coop/about-three-rivers-market/

8 http://www.threeriversmarket.coop/local-community/p6/

9 http://www.threeriversmarket.coop/inside-the-store/customer-services/barking-lot/

10 http://www.threeriversmarket.coop/inside-the-store/

11 http://www.threeriversmarket.coop/inside-the-store/customer-services/ride-the-bus/

12 http://www.threeriversmarket.coop/about-three-rivers-market/

13 http://www.threeriversmarket.coop/about-three-rivers-market/

14 http://www.threeriversmarket.coop/inside-the-store/product-standards/

15 http://www.threeriversmarket.coop/inside-the-store/general-merchandise/

16 http://www.threeriversmarket.coop/local-community/local-food-guide/what-we-mean-when-we-say-local/

17 https://www.facebook.com/threeriversmarket

18 https://twitter.com/3RiversMarket

19 http://www.threeriversmarket.coop/

20 http://www.threeriversmarket.coop/co-op-membership/patronage-refund/

21 http://www.threeriversmarket.coop/co-op-membership/current-member-benefits/

22 www.earthfare.com

23 http://earthfarecareers.silkroad.com/ERTHFRext/About_Us.html

24 http://earthfarecareers.silkroad.com/ERTHFRext/About_Us.html

25 www.facebook.com/EarthFareKnoxvilleBearden

References