Hawaii's oldest grocery cooperative has launched a fundraising campaign to save itself from closing. At the end of 2018, Kokua Market was on the brink of financial insolvency. The company’s governing board elected a new chairwoman who has launched a last-ditch effort to reorganize the business for survival in the highly competitive market for health food.
That woman is Laurie Carlson. She’s best known as the publisher of the local news publication Honolulu Weekly, but she’s also a founding member of Kokua Market. As a cooperative, or co-op, Kokua is owned and managed by those members, who own shares of the company.
By the end of 2018, a series of expensive contracts for mainland goods, combined with disruptions from a nearby high-rise construction project, had pushed the 48-year old store to verge of closure. At the time, the board was not even sure if they could afford the process of filing for Chapter 11 bankruptcy and reorganizing. An unsuccessful crowdfunding campaign was launched to raise enough money to keep the lights on.
Since assuming leadership on January 8th, Carlson has launched the Kokua 2020 initiative to reorient the market for success in an increasingly crowded local grocery market. On January 23rd, the entire body of Kokua Market members voted to begin selling membership shares to raise the capital required and alleviate the current cash flow crunch. They are seeking to raise $150,000 through the sale of 1,500 shares.
The shares do not fluctuate in value like stocks in a publicly traded company. The Kokua board has set the value of each share at $100. Currently, all members have an equal vote in company decisions, regardless of how many shares they own.
Despite the challenges, Kokua still has several assets that Carlson hopes to leverage for future growth. A certified commercial kitchen allows the co-op to operate a popular deli and hot bar. It’s storefront is located in a section of the Honolulu neighborhood of Mo’ili’ili that Carlson describes as a food desert, with few other grocery options. The recent completion of a new high rise, and the opening of several new fast food restaurants, may attract new foot traffic to the area.
While the rest of the grocery business is going big, Kokua Market is going small. A major part of the Kokua 2020 plan is to hyper focus on niche local products, many of which are not produced in large enough quantity to be stocked in chains like Whole Foods or Costco.
But that is a long-term play. In the immediate future, Kokua Market needs to raise enough capital to restock the shelves and rebuild its customer base.
Find out more information at the Kokua Market website.