Article
History of Co-ops

A Deep Dive into Co-op History
In early human societies, people learned to cooperate and work together to increase their success in hunting, fishing, gathering foods, building shelter and meeting other individual and group needs. Historians have found evidence of cooperation among peoples in early Greece, Egypt, Rome and Babylon, and among Native American and African tribes.
Early agriculture would have been impossible without mutual aid among farmers. They relied on one another to defend land, harvest crops, build barns and storage buildings and share equipment. These examples of informal cooperation — of working together — were the precursors to the cooperative form of business.
It took an Industrial Revolution and the institution of capitalism to bring about the modern cooperative business model, but today’s cooperatives are still organized by people to meet their basic needs and have been proven throughout history to be a successful way for people to reclaim economic power, freedom and independence.
The First Cooperatives Included the Underground Railroad
The earliest cooperatives appeared in the United States and Europe in the late 18th and early 19th centuries, during the Industrial Revolution. As people moved from farms into the growing cities, they had to rely on stores to feed their families because they could no longer grow their own food.
Working people had very little control over the quality of their food or living conditions. Those with money gained power over those without. Among white people, early co-ops were organized by the less powerful members of society — workers, farmers and producers — as a way to protect themselves and survive.
Meanwhile, in the United States, cooperatives and mutual aid societies were instrumental in the earliest efforts of the Civil Rights movement to end slavery. The first documented mutual aid society was the Free African Society, founded in 1787 by Absalom Jones and Richard Allen to aid newly freed Black people.
There were other forms of early Black-led co-ops, such as mutual insurance and cooperative farming, but the most famous is the Underground Railroad, a cooperative network of people of all races, classes and genders that worked together illegally to help enslaved people escape to freedom in Canada, Mexico, the Caribbean and Europe.
An Alternative Store: The Rochdale Equitable Pioneers Society
In 19th century England, people were frustrated by the abuses of store owners, many of whom adulterated products to increase their profits. In many cases, workers’ wages were paid in company chits — credit that could be used only at the company’s stores. The average consumer had very few choices and little control.
Groups of people began experimenting with various methods of providing for their needs themselves. They decided to pool their money and purchase groceries together. When they purchased goods from a wholesale dealer and then divided them equally among themselves, they were surprised at the savings and higher quality of products they were able to obtain.
In 1843, workers in the textile mills of Rochdale, England, went on strike. When the strike failed, the millworkers began to look for other ways to improve their lives. Instead of calling for another strike or asking charitable groups for help, workers decided to take control of one of the most immediate and pressing areas of their lives. They believed they needed their own food store as an alternative to the company store. Twenty-eight people founded the Rochdale Equitable Pioneers Society.
After saving money for more than a year, these pioneers opened their co-op store at 31 Toad Lane on a cold December evening in 1844. Although the founders agreed to sell just butter, sugar, flour and oatmeal, they also offered tallow candles for sale that night. They were forced to buy candles because the gas company refused to supply gas for the new group’s lights. The founders bought candles in bulk and sold what they didn’t use to their members.
The Rochdale Pioneers weren’t the first group to meet their needs cooperatively, but they were the first to develop an economic business model that would succeed and endure. They developed a list of operating principles governing their organization, forming the basis for today’s cooperative principles. Rochdale is considered the birthplace of the modern cooperative business movement.
Farmers Grow Cooperation in the United States
Most early American co-ops failed due to insufficient capital (money invested by the owners), poor management and a lack of understanding of the cooperative principles by their members. It wasn’t until the early 1900s that co-ops began to have true, long-lasting success in the U.S.
At that time, most co-ops were formed for the benefit of White farmers. Some co-ops helped farmers keep their costs low through joint purchases of supplies, such as feed, equipment, tools or seed. Some marketing co-ops helped farmers obtain the best prices for their goods by combining their crops and selling in large quantities. Others, such as grain elevators or cheesemaking co-ops, provided storage or processing services.
Since Black farmers were not accepted into White farmer co-ops, they organized the Colored Farmers National Alliance and Cooperative Union in 1886 in Texas. Later, in 1922, to increase Black farm ownership, Black farmers organized the National Federation of Colored Farmers.
Consumer Co-ops Make Waves
People in the U.S. began taking note of the early British food and supplies co-ops and the success of American farmers who worked together. They began forming “consumer protection associations.”
In rural and urban areas, consumer co-ops were first organized to give people control and to fight the unfair and/or racist practices of private and company stores. Over the years, consumer co-ops have experienced waves of growth and development, followed by periods of decline.
The first of these waves began in the early 1900s with what was called the Rochdale plan. Under this plan, consumers organized buying groups to purchase from a cooperatively owned wholesaler. The wholesaler would then gradually help these buying clubs convert their operations into retail outlets by supplying management, inventory and capital. In 1920 there were 2,600 consumer co-ops in the United States — all but 11 were general stores — and 80 percent were in towns with populations of less than 2,500. Combined annual sales volume for these stores was about $260 million, or in today’s dollars, over $4 billion. Unfortunately, when the wholesalers began having problems due to rapid growth, the whole system crumbled, and most co-ops were closed within the decade.
The first Rochdale plan co-op organized by Black people started in 1901 in Ruthville, Va., called the Mercantile Cooperative Company. In 1919, Black people in Harlem, New York, opened a small grocery store called the Pioneer Cooperative Society. It wasn’t until 1930, when civil rights activist and author, W.E.B. Du Bois, created the Negro Cooperative League, that Black-owned co-ops really took off. The league was a cooperative of many small groups that supported and promoted the growth and development of local consumer cooperatives by buying clubs for Black people in major cities across the country.
The Great Depression, Roosevelt’s New Deal, Start a Cooperative Wave
During the Great Depression of the 1930s, economic hardship initiated another great wave of co-op organizing in cities and rural areas of the U.S.
President Franklin Roosevelt’s New Deal supported the growth of urban co-ops. Some leading consumer co-ops were launched in this period — in Berkeley and Palo Alto, California; Eau Claire, Wisconsin; Hanover, New Hampshire; Hyde Park in Chicago, Illinois; and Greenbelt, Maryland. All of these stores survived to their 50th anniversaries! But in the 1980s, the co-ops in Berkeley and Greenbelt closed. The Palo Alto Co-op closed in 2001. The co-ops in Hanover, Eau Claire and Hyde Park continue to operate to this day.
During the Depression, Black cooperatives formed for just about everything — there were cooperative grocers, gas stations, credit associations and health insurance. Historically Black Colleges and Universities (HBCUs) taught cooperative economics and cooperative development during the 1930s and 1940s.
Cooperatives Advance Civil Rights, Environmental Action
Fannie Lou Hamer, a voting rights activist in the 1960s and 1970s, believed Black people would not win the right to vote until they had economic independence, through control of their land and food production through co-ops. Cooperative economics remained a strong component in the Civil Rights movement throughout — even Martin Luther King, Jr. was a fan of cooperatives.
In the late 1960s and 1970s, a new wave of consumer co-ops began. Born out of the ideas and philosophies of the 1960s counterculture, grocery stores were opened by young and idealistic members. Most of the new co-ops sold only whole, unrefined and bulk foods. Some stores had limited shopping hours, while others were open seven days a week. Some were run by volunteers, and others by fully paid staff. Their operating practices were diverse and experimental.
These co-ops began what is now called the “natural foods industry.” But not all were successful. Some failed because of their experimental structures and operating systems. Most were unable to escape the same problems that had troubled earlier consumer co-ops — insufficient capital, inadequate membership support, an inability to improve operations as the natural foods industry developed, a stronger commitment to idealism than to economic success, the lack of adequate support from their wholesalers and resistance to consolidation. But the “new wave” co-ops that survived are strong and well established.
Cooperatives Today
Cooperation as a practice still thrives. Although there are more than 30,000 cooperative businesses in the U.S., the consumer co-op movement in the United States has had mixed success in contrast to consumer co-ops in Europe and Asia. But each wave of cooperative growth produces renewed enthusiasm for a time-tested idea and innovations that prove successful in the consumer marketplace.
Food co-ops continue to be organized by communities across the U.S. today, anywhere people are interested in exercising more control over the kind of food they’re able to buy. In particular, Black-led food co-ops are resurging to counter food apartheid, the result of discriminatory policies and systemic injustice that has left many Black communities without access to fresh, nutritious food.
Special thanks to Karen Zimbelman for content contributions, Weaver Street Market for their “Beginning of Black Co-ops” article, and Dr. Jessica Nembhard, author of Collective Courage: A History of African American Cooperative Economic Thought and Practice (The Pennsylvania State University Press, 2014).