Endurance is at the heart of cooperatives globally, this trait also being very evident here in NZ, writes Cooperative Business NZ Chief Executive, Craig Presland.
With the co-op business model centred around member, as opposed to investor, ownership co-ops are here to serve their members who are either suppliers or customers, otherwise sometimes staff. Our NZ Co-op Family therefore includes other member-owned entities such as mutuals and societies, for example Farmers Mutual Group and Southern Cross Health Society. Here in NZ many co-op members within the agri-producer sector are inter-generational owners of farms, orchards, market gardens etc, with resilience being the key to endurance over the decades as payouts and weather patterns have and will continue to fluctuate year by year.
In terms of revenues, NZ’s largest 40 co-ops, mutuals and societies, generated over $48.4 billion NZD in 2017/18, this equating to around 16.0% of our GDP when assuming NZ’s GDP over the 2018 calendar year. Of these 40 co-ops, 35 are currently Full Members of Cooperative Business NZ, while of our Full Members over two thirds are now over 20 years old with 5 of these over 100 years old. SBS Bank, our oldest surviving co-op in NZ, is having its 150th anniversary later this year and big congratulations to this society in reaching this milestone.
So what does this mean for NZ and its people? When businesses and organisations are able to endure (some would say survive) over the long term, through good times and bad, they build up trust with their customers, suppliers, staff, local communities and NZ’ers in general. Trust from a consumer perspective in their brands, products and services. Trust from a staff perspective in terms of stable employment, fair and reasonable pay rates and work conditions. Admiration from local communities, and often across the NZ public, in terms of giving back to those most in need while investing in facilities and a wide range of social services that deliver such things as youth development programs, mental health and physical disability support, and rural crime prevention. All these things can only be good for NZ as a country.
Co-ops are usually here for the long term, owned by Members with “skin in the game”, as opposed to investor-led businesses and organisations which can be here today and gone tomorrow – just as investors are. Annual profits from co-ops are returned to members each year, after retention for capital projects and other investment requirements, by way of dividend (or rebate) are therefore retained locally. With foreign investors (owners) profits are often transferred overseas, our big 4 retail banks being a prime example with over $5 billion NZD in profits generated in 2017/18 – how much of that return has been re-invested back into NZ one wonders? Why aren’t more NZ’ers banking with locally-owned banks such as The Co-operative Bank, SBS Bank, TSB Bank, Kiwibank and local credit unions?
Co-ops usually have a clear long term vision and mandate of providing for future generations. While being highly commercially-driven they are also prepared to give back along the way, year by year, to local communities and often a wider sector of NZ, Fonterra’s Milk in Schools Program being a prime example. This business model, and way of thinking in a business sense, is contributing significantly to the strength of NZ’s economy and well as NZ as a country.
NZ’s co-ops are also contributing significantly in terms of driving environmental sustainability locally including the provision of fencing to keep livestock out of rivers and waterways, improved on-farm systems in the treatment and discharge of effluent, reduction in on-farm carbon emissions, reduction in the burning of fossil fuels, more efficient use of energy, the emergence of “clean” energy in the form of solar and wind power, introduction of electric delivery vehicles, re-cycling and reduction in the use of plastic packaging, banning of single-use plastic bags, and more responsible consumption including educating consumers on how best to reduce food wastage.
With an eye to the future, and underlying determination in driving true economic, social and environmental sustainability, it is no wonder NZ’s co-ops (and those globally) are well-known for their endurance and survival.