Yahoo Finance Should you join a food co-op?
Across Britain, people are joining together to form food co-operatives and beat inflating prices. Sometimes it's a few friends sharing a cash-and-carry shopping haul, sometimes it's a highly organised community shop.
I wanted to find out if I could save money by joining a food co-operative, but I half expected that I'd have to drive into a city to find one. Fortunately, healthy eating charity Sustain has a handy gadget that shows you food co-operatives near your postcode.
Amazingly, there were five registered within just a few miles. Some were shops but others were clubs that met once or twice a month. So how do they work?
Pooled resources
The simplest type of co-op is a buying club, where friends by in bulk together and split the goods between them, in order to cut the cost. You choose what you want in advance and then the items are delivered to someone's house and you collect your share.
While that kind of system works well for stocking up on food with a long shelf life — such as rice or cans and jars — it's trickier if you want to order fresh fruit and veg.
That's when a more formal co-operative could help, although these need to be properly organised by enthusiastic volunteers. Some co-ops operate like home delivery businesses; others are based in shops or market stalls. Some let you show up and shop, others require you to volunteer a few hours' of work.
Because no-one's trying to make a profit, food can be substantially cheaper; the only mark-up will be to cover overhead costs like rent and volunteers' expenses.
Smarter shopping
How much can pooling your resources save you? Maresa Bossano, a project officer from Sustain's food co-operatives team, explained that different groups prioritise different things, meaning the discounts achieved vary.
"It all depends what type of food the co-op is selling, and who their suppliers are and what you are comparing it with. For wholefood co-ops buying organic food in bulk, they would be usually be at least 30% and up to 50% cheaper than shop prices.
"For fruit and veg it would depend if it is local and seasonal, and if they are getting it direct from farmers or not. Local and organic produce bought direct is generally much cheaper than at supermarkets."
For example, volunteers in Derby have set up Sound Bites, a co-op that sells local and organic food, and delivers to older people in the area. Its veg bags always contain potatoes, carrots, onions and at least three other vegetables, and cost between £3.50 and £6.
But Bossano warned that not all foods will be cheaper through group buying. "Food co-ops can't compete on some things, like bananas that supermarkets sell as a loss leader."
[See also: When buying in bulk costs you more]
Closed co-op
The Sustain search showed me that my nearest food co-operative is a volunteer-run shop with a mission to bring cheaper fruit and veg to the local community.
But when I got there, the cupboard was bare. It turned out there hadn't been enough local demand and the community shop had turned into a space for people to sell second-hand possessions.
The volunteer said it was a shame as their food prices had been "cheaper than at Aldi". I asked Bossano how often food co-ops fail.
"It's hard to tell as it depends on the type of food co-op — some food co-ops have been running successfully for years — but generally those that rely on external funding are not very sustainable and often close when funding runs out."
The legalities
If there isn't an existing buying group or community shop near you then you can set one up yourself.
But there's quite a lot to think about and discuss before you open for business. For example, in a food-buying club the suppliers will usually want one payment. That means passing your funds to one member to make the purchase on behalf of the group, which some people may consider risky.
Sustain has created a toolkit that talks through the different issues involved in setting up a new co-op. It also organises training days and meet-ups.
So should you join a food co-operative?
There are money-saving schemes, good money-saving schemes and money-saving schemes that tick every single box. Food co-operatives have price, community and environmental benefits, so they should only rise in popularity.
Of course, it is essential to find or set up a co-operative that suits your purchasing habits and lifestyle; not everyone can volunteer their time or wants to be limited to shopping once a month.
But once you've found one that works, you can dramatically cut what you pay, become closer to your community and cut food miles by supporting local growers.
Felicity is Yahoo! Finance's new money-saving columnist. If you have a money-saving scheme you'd like to see tried out then let us know in the comment box below.
