Bitcoin Carnivore Coops

Because my background is in the food industry, this tweet got me thinking about the intersection of bitcoin culture, food, and coops.

Here’s the TLDR of my thought process:

• Retail food grocery is a business that requires economies of scale and/or a niche location to succeed. Small grocery is hard, especially in towns and cities with competitors.
• Alternatively, an interesting model might be to form a coop to source regenerative beef in bulk, and distribute it to coop members at lower prices (thanks to economies of scale).
• ‘Community’ is a backbone of strong food coops. How can it be achieved without a permanent retail space? Maybe we focus on pop-up events like BBQs, butchering classes, fermentation seminars, permaculture talks, and bitcoin related stuff. These could be exclusive for coop members or not. And it would be an exploration of Bitcoin culture.
• The Austin area is probably a good region to try this as the density of bitcoiners there is higher than average. This would make delivery by truck (or pickups) possible, meaning the operation could start smaller and in profit. Thinking forward…I’ve set up a nationwide perishable frozen food operation before, and with the right economies of scale it’s doable! E-commerce could come later.

Here’s some more info on the concept of cooperatives:

What are Coops?

Cooperatives are C Corporations (in the US) that are owned by shareholders, also known as member owners. Coops can return profits to shareholders as non-taxable patronage dividends. In the case of consumer coops, member owners who receive the patronage dividend are not required to pay taxes on it if the coop supplies everyday family goods like food, furniture, etc.

There are 4 types of coops (source):

Purchasing cooperatives are formed by members that pool their purchasing power and negotiate with suppliers as a group.

Producer cooperatives are formed by members that produce goods individually but pool their goods together to receive preferred treatment in (or access to) a market.

Worker cooperatives are formed by employees who collectively own the company and work for it.

Consumer cooperatives are formed when members pool their collective purchasing power.

Why do consumer coops exist?

Historically, consumer cooperatives have existed for one major purpose: to serve a niche group of people that the market otherwise wouldn’t.

In the 19th century USA, African Americans formed cooperatives to source and distribute everyday goods, which they otherwise struggled to acquire fairly- overcoming one of the daily challenges of living under racism and discrimination. In England, around the same time, the Rochdale Pioneers formed a consumer coop with the intent to source less expensive food for their community. They were the first to establish “patronage dividends” and are the inspiration for many natural food coops today.

Food Coops in 2021

The majority of food coops today provide “natural” and organic products just like Whole Foods or… Walmart. Twenty years ago, natural food coops enjoyed little competition albeit with a smaller market to serve. Not any longer. Mainstream grocers are increasingly stocking natural and organic foods, and in my forecast, independent Coops will struggle to beat the cost of capital and economies of scale achieved by the big players if operating in their markets. With Amazon and online grocery, it only gets harder.

In markets that have all needs met (like grocery), community and identity increasingly become a driving reason for why one would partronize a food coop.