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Bisman Community Food Co-op shuts its doors after six years of operation

The cooperative faced challenges, including financial difficulties, for much of its existence.

3762491+Bisman coop.jpg
The Bisman Community Food Co-op has announced it is closing after six years in business.
Tom Stromme / Bismarck Tribune file photo
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BISMARCK, N.D. — Bisman Community Food Co-op is liquidating its inventory and will permanently close once that is completed.

The cooperative said on its website that it is insolvent. The mission of the cooperative was to make local, organic food available to the communities of Bismarck and Mandan.

On Tuesday, Jan. 10, 2023, a post on the organization's Facebook page said that the cooperative would be open from 10 a.m. to 4 p.m. that day for a liquidation sale.

The cooperative also sent a letter to its members on Dec. 31, 2022, that the board, which is made up of eight members, had been meeting several times a week to discuss the cooperative’s future, according to a Jan. 8, 2023, Facebook post.

An email to board members asking for an interview was answered by a board member who said they were busy and didn’t have time for individual interviews. The board member emailed a copy of the questions that were asked by another media member and the answers to them.

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According to one of the emailed questions and answers, the cooperative on Tuesday, Jan. 10, 2023, had not yet received a foreclosure letter from Shared Capital, its primary lender, but expected that it would soon.

While answers to questions were short to come by, board minutes and general manager's reports on the co-op's website made it clear that the co-op had been struggling financially for some time. An August general manager's report indicated a minimum of $200,000 per month in gross sales was needed to meet the debt ratio and maintain inventory. Sales for May 2022 were listed in reports as $139,795.34, June's as $125,755.14, July's as $125,240.03 and August's as $128,703.93. No GM reports were posted past August.

Bisman Community Food Co-op declined to answer a question about the amount of its total debt and to whom it owes the money. The cooperative did say that accounts payable to local and non-local vendors totals about $60,000.

There are four regional vendors listed on the Bisman Community Food Co-op website. About 70 North Dakota producers, most from the Bismarck area but also some from eastern and western North Dakota, are listed as local vendors who supplied products to the cooperative. Products included meat, produce and baked goods.

The cooperative has faced challenges, including financial difficulties, for much of its existence. In the fall of 2017, for example, several producers said publicly that they were not getting paid in a timely manner and that their contracts with Bisman Community Food Co-op had not been fulfilled.

In 2018, then-Bisman manager Carmen Hoffner said the ups and downs the cooperative had with local venders had began to turn around and that it was working to promote its local food by informing its customers about where its products were produced and who produced them.

Since then, the cooperative has tried more initiatives to make it financially solvent, the cooperative said on its website.

The initiatives included reducing prices in 2020 so it would better compete with natural food stores and, in 2021, working with Columinate, a consultant that specializes in food cooperatives, to develop a plan for sustainability.

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The co-op’s board in 2022 submitted an application to join National Co+Op Grocers , which was declined because there were several parameters for sustainability that Bisman Community Food Co-op would have had to accept to be considered, the cooperative said in a question and answer section of its website. Before the national group declined to accept Bisman Community Food Co-op, a GM report posted to the website in August noted that, "NCG stated that they were very surprised that the co-op was still open after 6 years of fiscal struggles. Their recommendations are listed at the end of this report and would require a large influx of funds." Benefits of membership in National Co+Op Grocers would have included affording the cooperative ability to buy products at lower prices.

On June 9, 2022, Erin Oban, U.S. Agriculture Department Rural Development state director for North Dakota, announced that the department had partnered with Reinvestment Fund to invest $200,000 in Bisman Community Food Co-op as a way to improve access to healthy foods in North Dakota.

The investments were being made through the Healthy Food Financing Initiative , which helps bring grocery stores and other healthy food retailers to underserved urban and rural communities.

Bisman planned to use the money to increase its cool storage, light processing and transportation to local farmers, expand light processing activities and offer delivery of locally grown fresh vegetables to retail customers, the news release said.

“Projects like the Bisman Food Coop are a shining example of a community working together and increasing opportunities to enjoy fresh produce, and we’re thrilled to support their efforts," Oban said in the news release.

Minutes of the co-op's June meeting said the money would be used for a walk-in cooler and 2.5 more employees for a farm-to-school program and to help rural communities get more fresh produce.

Board member Jenna Hoffert Johnson said in a Jan. 10, 2023, email to Agweek that the co-op did not receive any of the money.

"We ultimately chose not to complete the final submission for the grant knowing that the co-op was likely in its final stages," Hoffert Johnson said in the email.

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The August GM report indicated that the co-op learned the funds could not be used for farm-to-school programs because there were separate farm-to-school grants available.

"The funds have to be used for purchases that will build sales and revenue and can include things like inventory. Once the direction of the co-op is decided the budget and project timeline can be finalized," the report said.

The cooperative encourages anyone with questions to reach out to the board members, who are listed on its website: https://bismanfoodcoop.coop.

Ann is a journalism veteran with nearly 40 years of reporting and editing experiences on a variety of topics including agriculture and business. Story ideas or questions can be sent to Ann by email at: abailey@agweek.com or phone at: 218-779-8093.
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