Creating a Cooperative: The first and next 10 years

A note from founding member, Andy Mahler

Lost River Market and Deli, located at 26 Library Street in Paoli, Indiana, is a cooperatively owned grocery and cafe with catering services. It features natural and organic food, plus as many local products as possible on a seasonal basis. The store serves customers regionally and does business with nearly 100 local and regional vendors. Today, 1130 members own the co-op but everyone is welcome to shop!


In September of 2005 a notice appeared in the newspapers of Orange County, advertising a meeting at the Paoli Friends Church to discuss the possibility of opening a member-owned cooperative grocery store in our community. When the day and time arrived, the organizers were very pleasantly surprised by the more than sixty participants who showed up to voice enthusiastic support for the idea.

Two years later, in October, 2007, after countless meetings and plans organized by numerous committees and subcommittees — a truly remarkable team and community effort — a new kind of grocery store began to take shape in the town of Paoli: Lost River Market and Deli, a member-owned, natural foods cooperative grocery, opened its doors to the general shopping public and to the more than 300 community members who had already become member-owners. Many of those same member-owners had also lent money to the fledgling enterprise.Deli

We were guided throughout the process by friendly and helpful consultants from the natural foods cooperative grocery industry. We had taken on a lot of debt (more than nine hundred thousand dollars worth) to purchase the building, renovate it, equip it, and stock the shelves. We hired a general manager and a full staff, and of course we had to compensate the consultants. It wasn’t long before the first signs began to appear that the consultants’ sales projection for our first year were well beyond what we were likely to achieve. And then, not very far into that first year, the worst economic collapse in nearly a century – in which trillions of dollars worth of home equity and other forms of economic value vanished into thin air – brought the national economy to a near standstill and threatened to overwhelm our little experiment in healthy community, well-being, and local self-reliance.

Fast forward ten years: the global economy has largely regained its footing, though the benefits of that recovery have not been uniformly realized, leaving many poor, rural communities largely still struggling. But little Paoli is, to a significant extent, bucking that trend. We are showing real signs of vigor and community engagement, in significant measure due to the sense of connection, cooperation and mutual support embodied in our little store. While Lost River Market continues to face financial challenges from time to time, in terms of the larger vision of the role it might play in nurturing a sense of community well-being and contributing to the economic activity of the surrounding community, Lost River Market and Deli has been a phenomenal success.

So as we reach this significant milestone, it is useful to take the longer view and look at the first ten years of our existence as a form of on the job learning and preparation for the real GRAND opening as we prepare for the next ten years and many more after that.

We have a truly beautiful, highly functional store with a strong customer base and fully stocked shelves that is the envy of towns many times our size. We have been blessed with many fine staff members over the years, but our current staff is unequaled in terms of competence, professionalism, and service to our customers.

Our customers include nearly 1130 member-owners, which is pretty impressive for a town of just over 3500 residents and a county with fewer than 20,000 inhabitants. Even more impressive is that by far the largest component of our (substantially reduced) remaining debt is money that we the member-owners have loaned to the store. We truly own it, and there is no better investment than one that provides dividends of community connection and well-being every single day.


Bring your kiddos by for a personal tour and lesson about local economies! We had a blast with a Hoosier Hills Pact kids. Their favorite part, according to them, was the lesson on bulk-buying, particularly the taste-testing of peanut butter and yogurt pretzels.— with Terry Weaver.


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